Thread regarding IBM layoffs

I expect approx 35-40k worth of employees to be hit in the 2.3 billion restructuring That equates to 10k europe, 10k NA, and 20k Asia, India, rest of the world. That pretty much aligns with where head count was with GTS 90k Newco + 35k - 40k Layoff = 135 - 140k. GBS will go to bench management to cut there

Good. The only waste left in the West in GTS/New Co is in Germany because the works councils fought against layoffs for all these years. Believe me there are probably 4,000 who could go in Germany and the business wouldn’t skip a beat.

[Another English translation of an article with some extra details on the same story].

A quarter of all employees should go: IBM wants to cut 2300 jobs in Germany –
https://www.wiwo.de/technologie/digitale-welt/ein-viertel-aller-beschaeftigten-soll-gehen-ibm-will-in-deutschland-2300-stellen-streichen/26570908.html

The American IT group IBM is shedding almost a quarter of all jobs in Germany in the course of its split. If the volunteer program does not work, redundancies could follow.

Big changes are imminent at IBM, also in this country: According to information from "Wirtschaftswoche" and "Handelsblatt", the American IT group wants to cut 2300 jobs in Germany. The management is initially planning a volunteer program, writes the service union Verdi in a newsletter. Should this not be successful by the end of the year, redundancies are to be feared. The plans affect almost a quarter of the currently 10,000 IBM employees in the country.

The job cuts are in connection with the split of the entire group, which IBM announced at the beginning of October: According to this, CEO Arvind Krishn wants to split off the IT service business and put it on the stock exchange as an independent company; the rest of IBM should then focus primarily on cloud computing and artificial intelligence (AI). From the integrated technology group that offers everything from one source, from software development to consulting and system implementation to service, there is hardly anything left.

IBM in its current form should hardly be recognizable after the move. This can be seen in the German organization: Based on the group's figures, around 2,500 of the currently 10,000 employees in Germany are likely to move to the new company. If you take account of job cuts and fluctuation, only around 5,000 employees are likely to remain at IBM Germany by 2022.

To put it into perspective: According to calculations by “WirtschaftsWoche”, IBM reduced the number of its employees in Germany from 20,600 to 13,500 through divisional sales, outsourcing and job cuts - a minus of a third.

"Our personnel decisions are made in order to provide our customers with the best possible support on their way to the introduction of an open hybrid cloud platform and AI capability," said IBM's German headquarters in Ehningen near Stuttgart on request. "We will continue to make significant investments in training and education of IBMers in order to better meet the requirements of our customers."

Employee representatives believe the cuts are wrong. It is understandable that an innovative IT group is in a "constant transformation process", Verdi explained in the newsletter. "However, we ask IBM to involve its own employees and to keep their skills up to date with qualifications and other measures." There are alternatives to downsizing.

IBM Germany decided this week to raise wages for all employees by 1.9% from December 2020, despite falling sales.

This announcement was expected IBM pre-announced the 2.3 billion restructuring charge during the earnings call. If it is all taken for 1st world redundancy, we would be looking at 30-35k headcount cuts. GTS can’t exist as it does today. It shrinks 4-7% revenue wise year over year. Unless GTS can restructure itself to be competitive vs the Indian body shops, it’s just same ole same ole I expect Wipro to make a play for large portions of GTS/GBS as they are the major BPS player in the world. That means a whole lot of GTS management may soon be on the street as Wipro’s management structure is far thinner than IBM’s (7 layers vs 13). Good luck to all