IBM is planning its largest staff layoff ever, with 111,800 roles said to be being cut this week, according to reports.
That amounts to 26 per cent of the company’s total 430,000 workforce, and will dwarf IBM’s last big layoff of 1993, when 60,000 staff were shown the door.
The redundancy was reported by journalist and “Silicon Valley iconoclast” Robert X Cringely for Forbes, and is being described as “Project Chrome” – a large-scale redundancy which Cringely claims to have been aware of “since before Christmas”, but which is now due to be auctioned.
How will this effect IBM’s recent acquisitions particularly in the Cloud arena, keep watching this space for updates on resellers dealers and hosting opportunities. But it will take the shine off IBM.
According to Cringely, this week the 26 per cent of the workforce will “be getting phone calls from their managers” followed by “a package” appearing on their doorstep with “all the paperwork”.
Cringely maintains that “the USA will be hit hard” by the layoff, but “so will other locations”, and IBM contractors “can expect regular furloughs in 2015”.
US layoff areas apparently include mainframe and storage roles so far.
Cringely also maintains that the layoffs will be ill-thought out and will “traumatise the corporation and put most accounts into immediate crisis”. Customers and investors, he says, should also be aware of incoming turbulence for the company as it attempts to redefine itself.
IBM reported its 11th consecutive quarter of declining revenue last week, falling short of analyst estimates, making only $24.1bn (£16.1bn) when $24.77bn was expected. Earnings were down 4 per cent, with Bernstein Research’s Toni Sacconaghi projecting that IBM was in for “a messy quarter”.