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IBM Layoffs 2018: 10,000 Staff Cuts in Global Technology Services (GTS)?

IBM plans to cut roughly 10,000 Global Technology Services (GTS) jobs as part of a plan to redeploy about 30 percent of the group’s 100,000 employees, according to The Register. An IBM spokesman declined comment about the report, according to Reuters.

If accurate, the report highlights ongoing stress in the IT services market — where IT consulting giants are rebalancing or outright reducing headcount amid massive shifts toward IT automation and cloud services.

IBM had several rounds of layoffs in 2017, though the company never officially confirmed actual staff cut figures. The company has repeatedly leaned on “rebalancing” statements — claiming that it was trimming talent in legacy groups while ramping up talent in such areas as cognitive computing, cloud services, mobile and security services.

IBM’s overall revenues declined 22 consecutive quarters before the “rebalancing” and growth efforts in November 2017 effectively offset revenue declines across hardware, software and IT services.

Hardware, Software Industry “Rebalancing” Acts

Much like IBM, most of India’s major IT services organizations are facing similar challenges, while global systems integrators like Accenture are buying up growth-oriented consulting teams focused on cloud workloads like AWS, Azure, Google Cloud Platform, Salesforce, ServiceNow and WorkDay, among others.

IBM’s hardware peers also have evolved — with companies like Cisco, HP Enterprise and Dell EMC trimming their workforces at various times over the past two years (see technology industry layoff timeline).

So what’s next for IBM? The answers will likely surface at IBM Think 2018, a new conference in March that rolls together former conferences like World of Watson, Amplify and edge. ChannelE2E believes IBM PartnerWorld has also been rolled into that show.

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    Jane Miner:

    The sucking sound you hear are all the really qualified IBMers who can get a job elsewhere leaving the company. It is sad and depressing that IBM Management is a one trick pony- -it only knows how to cut staff.. I guess the answer to a poorly managed company is not to fix management, but to simply shrink the company. Gini has missed now 22 quarters in a row? Sad.. was once a great company,, now lost in the illusion that Watson is the answer to all problems.

      Joe Panettieri:

      In terms of IBM’s shrinkage, I don’t blame CEO Ginni Rometty. When she took the CEO post in 2011, she inherited a software, hardware and IT services company that was way-late to cloud services and OpEx business models. Blame former CEO Sam Palmisano for that. He put those earnings-per-share growth numbers ahead of R&D priorities, in my opinion, and downplayed the cloud’s impact on enterprise IT at a time when the market transition was becoming clearer and clearer.

      Rometty also held too long onto those earnings-per-share goals that weren’t reasonable. Still, the company over the past two to three years has made progress with its strategic initiatives across cloud, security, cognitive computing, etc. Nevertheless, I wish they were far more transparent about layoffs rather than constantly referring to “employee rebalancing” efforts. As far as I can tell, the rebalancing has triggered thousands of job losses…

        Chauncy Abercrombie:

        Interesting comment. I’d tend to agree if Ginni Rommety was dropped in to the CEO position from outside the company but she’s a long term IBM employee and a long term member of the executive board. She is as responsible for the “late to cloud” services as Sam was and some would argue she’s more responsible. She inherited the earnings per share philosophy from an executive board that she was a long time member of so please, cut her no slack. She continued to push the earning per share idea long after everyone in IBM knew it was a mistake. Her only answer to Cloud was to use IBM’s bank account to buy Cloud companies and pretend that IBM is now a leader in Cloud. IBM has shown for at least 15 years now that they follow and scramble and the only answer they have to a changing time is to continue to shed good employees who take their expertise elsewhere. Its time she left and its time a new executive was airlifted in from outside to steer IBM away from the ditch.

          Joe Panettieri:

          Chauncy: Your points are well taken. Perhaps I give Ginni too much benefit of the doubt.

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