Technology giant IBM has declared that it will be downsizing in order to cope up to its declining sales of servers and storage systems. Lee Conrad, International Coordinator at Alliance@IBM announced that an estimated 15000 personnel will be laid off their jobs. Employees in India, Brazil and Europe will be under the scanner.
Conrad said “(There are) no numbers yet on India job cuts. We do not have a clear number of employees by location because IBM does not disclose that data,” also adding that the IBM Global Union alliance will be meeting soon to discuss the issue.
Last month it was announced that the US-based firm will be initiating a one billion dollar restructuring program in the first quarter of 2014 and company bosses will forego their bonuses.
“As reported in our recent earnings briefing, IBM continues to re-balance its workforce to meet the changing requirements of its clients and to pioneer new, high value segments of the IT industry.”, said an IBM India spokesperson.
To expand its market the firm will be investing in Cloud, Analytics and Cognitive Computing. Already,$1 billion has been committed to the IBM’s new Watson unit and $1.2 billion to expand their global Cloud footprint.
Globally IBM hires around 4 lakh people. IBM India has about 1 lakh employees. Impact could be huge.
Much to the horror of IBM India employees, around 50 employees at Systems Technology Group(STG) in Bangalore have been handed pink slips on February 12, according to sources. Employees were confiscated off their official laptops and asked to leave premises immediately. This radical action is supposed to be a part of its global ‘Resource Action’ or restructuring program which came along with the sellout of IBM’s x86 server business to Lenovo. The x86 was a part of the STG.
IBM suffered a 5% drop in revenue (to $27.7 billion) last December which has led to a drive for $20(Rs. 1,024) per share in order to cover up the losses and hence the steps to downsize.
The bright side of this situation is that IBM CFO Martin Schroeter has promised that the most of the cuts will take place in the first quarter itself which will not be dragged over the year.
4,34,246 is the latest figure available for the task force of IBM as of 2012.
In a country like India where engineering students from private colleges are already suffering the burden of declining rates of campus recruitment, this news comes as a major blow. Students will be wary of the fact that with the downsizing in effect, fresh recruitment opportunities at IBM might decrease.
But according to an IBM spokesperson, these cuts don’t affect the total head count of the firm. Students might also find some solace in the fact that IBM is continuing its recruitment procedure in order to strengthen its task force in fresh hotspots such as cloud technology.