Reports: IBM swings the axe on hundreds of staff

Workers' alliance and reports suggest more than 1,000 staff have been let go, with UK heads also on the chopping block but IBM yet to respond

A US alliance of IBM employees has claimed that the storage giant has wielded the axe over hundreds of staff worldwide this week.

IBM was unavailable to confirm or deny the claims when contacted by CRN, but in its first-quarter earnings call last month (transcribed by Seeking Alpha), its chief financial officer Mark Loughridge claimed that an exercise in "workforce rebalancing" would be set for Q2.

IBM made the decision to trim its workforce "given [its] first-quarter performance", added Loughridge, after posting an annual net income dip of one per cent to $3bn (£1.92bn). Q1 sales were down year on year by five per cent to $23.5bn.

According to those recently posting on the Alliance@IBM group's website, which describes itself as an organisation aiming to preserve and improve the rights and benefits workers receive at IBM, some 1,634 staff have been laid off so far, mainly in the US.

Posts this week from UK-based Big Blue staff claimed that 76 employees were to be cut from its UK Software Group by 1 July.

One commenter said: "76 to go in UK SWG [Software Group] by 1st July as voluntary. Also announced [is] an involuntary structure for separation in August. But IBM [has] not yet indicated figures or confirmed if this is over and above the original 76 volunteers. IBM UK also has big plans to restructure... all managers have been briefed under NDA."

Another anonymous UK source posted on the site: "It looks like retention payments are being planned for chosen people in Systems Storage Development in the UK. Management are not discussing this with staff. [I] overheard a discussion between managers. They appear to be worried about the loss of experienced people and the increasing reliance [on] graduates."

A source speaking to Bloomberg said the cuts target both rank-and-file staff and executives.

The Alliance@IBM website claims the majority of the latest wave of cuts has come from the Software Group Marketing division, which is thought to have been trimmed by 222 heads. Its Semiconductor Research and Development and STG Storage Systems Development arms have also been affected heavily, it added, with 165 and 121 employees axed respectively.