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IBM Watson Layoffs 2018: Health Staff Members Cut

Ginni Rometty, formerly CEO, IBM
IBM CEO Ginni Rometty

The IBM Watson Health team has experienced layoffs in recent days, according to multiple reports. The May 24 cuts come even as the technology company announces hires in other areas of its business.

The IBM Watson Health cuts, according to The Register, include:

  • medical data biz Truven, which was acquired in 2016 for $2.6 billion;
  • medical imaging firm Merge, bought in 2015 for $1 billion; and healthcare management business Phytel, also purchased in 2015.

Office regions that suffered layoffs include Research Triangle Park in North Carolina, along with such office locations as Dallas, Texas; Ann Arbor, Michigan; Cleveland, Ohio; and Denver, Colorado, according to The Register and WRAL reports.

IBM Staff Cuts: Multiple Rounds in 2018?

IBM did not publicly announce the layoffs, so exact headcount reduction figures are not disclosed. The company has had multiple layoff rounds this year. In March, the Watson and cloud teams both had cuts. In January, rumors swirled that massive technology services staff cuts were on the way.

In recent years, IBM has been known to "rebalance" its workforce -- cutting in legacy IT markets while ramping up for strategic growth opportunities. But from time to time, even the growth-oriented business units have suffered cuts.

Some critics allege IBM's staff cuts sidestepped employment regulations in recent years -- a claim that the company has strongly denied.

IBM Returns to Growth

John Teltsch, GM, Global Business Partners, IBM

Amid the staffing adjustments, IBM has nevertheless halted a sales slide and boosted revenues in Q4 2017 for the first time in 23 quarters. At the same time, IBM GM John Teltsch has built partner relationships with MSPs and ISVs.

More recently, IBM in April announced Q1 2018 revenue of $19.1 billion, up 5 percent from Q1 2017. Also, there are signs of hiring -- including 1,800 new positions in France focused on artificial intelligence, blockchain, cloud computing and the Internet of Things.

Still, competition with Microsoft Azure, Amazon Web Services and traditional IT companies remain fierce. In an alleged quest for faster growth, recent rumors suggested IBM is seeking a CEO to succeed Ginni Rometty -- but here again, the company denies the rumors.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.