IBM will quietly send up to 6 thousand employees to the streets

IBM is laying off a significant number of employees, and is trying to do it without unnecessary publicity. According to The Register, the IBM Cloud team was primarily affected by the mass layoffs; in recent days, layoffs have affected thousands of people.

According to one of the publication’s sources, everything “happens in secret.” According to him, the manager informed him of the need to sign a non-disclosure agreement (NDA), prohibiting him from disclosing details of the dismissal to anyone. However, numerous messages on forums, social networks and other platforms suggest that we are indeed talking about large-scale layoffs.

Image source: Jornada Produtora / Unsplash

When asked by reporters about the likely cuts, an IBM spokesman said that earlier this year the company announced a “rebalancing” of the workforce, which would affect only a small share of the global workforce. The company’s Q1 2024 financial report states that it will spend $400 million on “rebalancing” related to planned layoffs. For comparison, in 2023, such a practice cost $300 million, when it was planned to fire 3,900 people.

At the same time, the company intends to finish 2024 with approximately the same number of employees as it started. Business optimization is taking place – probably a change in business strategy involves the dismissal of specialists in one profile and the hiring of another. At the end of 2023, the company employed 288 thousand people worldwide.

According to an IBM representative, this year we are talking about a single percentage of possible layoffs. In the case of a reduction of 1% of the staff, we can talk about 2880 employees, 2% – 5760 employees, 3% – 8640 employees, etc. If we assume that firing each of them this year will cost, on average, the same as last year, we can talk about sending 5,200 people to the streets based on the $400 million allocated for this, The Register calculated.

Image source: IBM

Last year, IBM CEO Arvind Krishna said he intended to replace about 7,800 employees with AI, but did not indicate when exactly this would happen. Now IBM representatives remain silent about exactly how many people will lose their jobs and what positions they will hire new ones in order, as stated, to maintain approximately the same number.

According to media sources, the cuts will primarily affect senior-level programmers, sales specialists and support staff. At the same time, recruitment will continue in India, where IBM has long been recruiting staff on a priority basis.

At the same time, according to sources, primarily people aged 50–55 years, who occupy fairly senior positions and receive high salaries, are being laid off. Despite past and current lawsuits related to layoffs, IBM insists that there is no systematic age discrimination at the company.