IBM (NYSE: IBM) the world’s largest computer-services provider, began cutting jobs in the U.S. and around the world Wednesday as part of a global restructuring plan announced in April, IBM acknowledged and workers reported.
Based on data gathered from around the world, Alliance at IBM estimates several thousand cuts already have been made or are planned.
A source familiar with the cuts said “hundreds” of jobs among IBM’s 10,000 work force in North Carolina would be cut.
The company is probably cutting 6,000 to 8,000 jobs globally, based on the $1 billion cost figure, said Laurence Balter, an analyst at Oracle Investment Research in Fox Island, Washington. That would represent less than 2 percent of IBM’s total workforce of 434,246 as of Dec. 31.
Based on internal IBM documents provided to Alliance at IBM, the union seeking to represent IBM workers, more than 1,600 layoffs have been confirmed in the first 24 hours.
The layoffs by group:
- STG Storage Systems Development: 121
- STG lab Services and Tech Training: 52
- STG Test Site Design: 59
- STG SSE Intellectual Property: 64
- BT/IT CIO Enterprise Transformation: 4
- Corporate Marketing and Communication: 83
- Software Group tivoli: 98
- Software group WW Services and Education: 22
- STG Semiconductor Research and Dev: 165
- SO Delivery Integrated Competencies: 46
- GPS Solutions and Delivery: 116
- Software Group Marketing: 222
- Research: 65
- GBS AMS IBM Global Account: 123
- STG Operations and Transformation: 34
- Software Group NA Software Sales: 63
- SO sectors (GSSR): 31
- Software Group Information Management: 137
- Software group Industry Solutions: 126
- Total cut so far: 1634
Media reports have said IBM is cutting 700 jobs in New York and 200 in Ottawa, Canada.
Several workers from across the U.S. and Canada told Alliance at IBM, the union seeking to represent IBM workers, that cuts were being made in numerous locations and across several work groups.
The reduction targets employees with a range of seniority, from rank-and-file staff to executives, a source who asked not to be named because the information is private told Bloomberg.
In a statement provided to WRALTechWire, spokesman Doug Shelton confirmed the restructuring but did not provide any details.
“Change is constant in the technology industry, and transformation is an essential feature of our business model. Consequently, some level of workforce remix is a constant requirement for our business,” Shelton said
“Given the competitive nature of our industry, we do not publicly discuss the details of staffing plans. IBM is investing in growth areas for the future: Big Data, cloud computing, social business and the growing mobile computing opportunity.
“The company has always invested in transformational areas, and as a result, we need to remix our skills so IBM can lead in these higher-value segments in both emerging markets and in more mature economies.”
Some U.S. workers began to receive notifications of the cuts last night, according to Lee Conrad, a coordinator for Alliance@IBM, an employee group. The restructuring will cost $1 billion worldwide, including severance expenses.
IBM announced the job-cutting effort after releasing disappointing first-quarter results in April. The Armonk, New York-based company posted profit of $3 a share in the period, missing the $3.05 predicted by analysts — the first earnings shortfall since 2005, according to data compiled by Bloomberg. IBM said at the time that the job reduction would be concentrated overseas and mostly complete by the end of June.
Recent media reports also have said IBM is cutting workers in Israel and other countries.
‘Workforce Remix’
Alliance@IBM said on its website that 121 employees were cut from a unit within IBM’s Systems and Technology group, the hardware division that saw revenue drop 17 percent last quarter.
“Change is constant in the technology industry and transformation is an essential feature of our business model,” IBM said today in a statement, without giving specifics on the job cuts. “Consequently, some level of workforce remix is a constant requirement for our business. Given the competitive nature of our industry, we do not publicly discuss the details of staffing plans.”
IBM shares fell 1.4 percent to $201.20 at the close in New York. The stock has climbed 5 percent this year, rebounding from a tumble in April following its lower-than-projected earnings.
The $1 billion plan represents an increase over IBM’s job- cut efforts in recent years. The company spent $803 million on workforce restructuring in 2012, up from $440 million in 2011.
IBM also has been cutting hours of its contract employees. CDI Corp., a Philadelphia-based provider of staffing and outsourcing services, told its staff working for IBM to limit their hours in May, according to a memo obtained by Bloomberg. IBM at the time said that the company relies on contractors to manage labor costs on information-technology projects for clients.
