As IBM makes a broad shift in its strategy the company also plans to cut around 10,000 jobs in Europe. This comes after the last month’s announcement that the organization will be spinning out its infrastructure services business next year.
While IBM did not confirm the layoffs, a company spokesperson remarked that there are broad structural changes ahead for the company as it concentrates fully on a hybrid cloud approach.
He added that the staffing changes and decisions at the company are carried out to provide the best support to their customers to adopt an open hybrid cloud platform and AI capabilities.
IBM CEO Arvind Krishna referred to the changing scenario and said, “The Red Hat acquisition gave us the technology base on which to build a hybrid cloud technology platform based on open-source. With the success of the acquisition, we can then take the next larger step, of taking the managed infrastructure services out. This means that now the rest of the company can be clearly focused on hybrid cloud and artificial intelligence.”
Holger Mueller, an analyst at Constellation Research said, “The story has always been the same around IBM layoffs, that as they make the transition to a new model, it requires excluding positions that don’t fit into the new vision.”
This means basically if some don’t have the currently required skill set, chances are they might not fit with the new version of IBM.
Mueller also said, “At present, IBM is into one of the biggest transformations in history. The company is making its move from services to software and specialized hardware with Quantum. It requires a different mix of skills in its employee base and the repercussions of that move will manifest in the form of layoffs that IBM has been doing, quietly, for the last 5+ years. IBM CEO Arvind Krishna needs to rework his group.”
It is easy for the workers involved. It’s never a good time to lose a job, but the timing of this lay off is worse. In the middle of a recession brought by COVID-19, and as a second wave of the virus overtakes Europe, it’s extremely difficult.
IBM has reported a number of IBM layoffs over the last five years. In May, it confirmed layoffs but did not confirm numbers. In 2015, they reported a 12,000 employee layoff.