More than a quarter of IBM’s employees could be laid off later this week, according to a column on Forbes‘s website penned by well-known technology industry author and columnist Robert X Cringely.
That’s 112 000 jobs that could be on the line if the report is correct. IBM employs more than 430 000 people worldwide.
But late on Monday evening, IBM appeared to rubbish the Forbes piece, telling Reuters that the company “does not comment on rumours, even ridiculous or baseless ones”.
“If anyone had checked information readily available from our public earnings statements, or had simply asked us, they would know that IBM has already announced the company has just taken a US$600m charge for workforce rebalancing. This equates to several thousand people, a small fraction of what’s been reported.”
Cringely — the pen name for veteran technology journalist Mark Stephens — recently published a book on the company called The Decline and Fall of IBM.
In Forbes, he writes that the company is poised to announce plans to retrench about 26% of its workforce in an effort to “fix its business problems and speed up its ‘transformation’”. This follows the 11th consecutive quarterly decline in revenues.
If the quantum of the planned job cuts is correct, which IBM has rubbished, it will be the largest number of layoffs in corporate history. IBM retrenched 60 000 workers in 1993.
IBM has struggled to adapt to the shift in recent years to cloud computing.
An IBM South Africa spokesman did not return calls seeking comment on how a restructuring might affect the local operation.
“IBM’s contractors can expect regular furloughs in 2015. One in four IBMers reading this column will probably start looking for a new job next week,” Cringely writes in his now-disputed piece. “Those employees will all be gone by the end of February.”
In the US, big cuts will be made to IBM’s mainframe and storage teams, he says.
In his piece, Cringley is scathing of the company’s plan to cut jobs. “[It] appears to be a pure accounting resource action — driven by the executive suite and designed to make IBM’s financials look better for the next few quarters.”
He says IBM’s outsourcing arm, Global Technology Services, is haemorrhaging customers and warns that the organisation has a “very obvious customer relationship problem”.
IBM’s share price has declined by 12% in the past 12 months. In the same period, the Nasdaq Composite index has climbed by 15% and the Dow Jones Industrial Average has added 11%. — © 2015 NewsCentral Media
