Going ahead with its ‘rebalancing’ act, tech biggie IBM is planning massive layoffs worldwide, with India being the first casualty.
Analysts estimate that IBM, which employs over 4.34 lakh workers, will cut 13,000 jobs, under its so-called ‘resource action’ (RA) under which they will keep USD 1 billion aside for the rebalancing after the company posted another quarter of disappointing earnings.
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In India, Systems Technology Group (STG), IBM’s troubled hardware group which sells low-end x86 server business to Lenovo for USD 2.3 billion, may be worst affected, said a Wral Tech Wire (WTW) report.
According media reports, IBM has already asked about 40 people at one of the Bangalore centres of STG to leave.
Terming the layoff as ‘slaughter’ and ‘massive’, the Bangalore employees said they were asked to leave suddenly and unceremoniously. Their laptops were confiscated and they were asked to vacate the premises immediately, said the WTW report.
Lenovo is in the process of buying IBM’s x86 server business, which is part of the STG group. About 2,000 employees in Research Triangle Park are expected to be transferred to Lenovo, which operates its executive headquarters in Morrisville, said the report.
IBM’s total revenue fell 5% to USD 27.7 billion in the fourth quarter ended December 31, missing analysts’ expectation of USD 28.25 billion, according to Thomson Reuters. This was on the back of weak demand for servers and storage in emerging markets like China. Revenue from IBM’s system and technology unit, which includes servers and storage, fell 26.1% to USD 4.26 billion.
According to WTW website, IBM has already begun layoffs in Brazil, after job cuts in other countries like France, Italy, Netherlands, Belgium and Norway.
Speculations are rife that the company may start job cuts the US would either on February 19 or 26, the website said.
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