Big Round of Layoffs at IBM's Tech Services Division

Analyst says most cuts likely being made to jobs that can be outsourced overseas, such as sys admins and storage managers

Michael Morisy

March 4, 2016

2 Min Read
Big Round of Layoffs at IBM's Tech Services Division
Chairwoman and CEO of IBM Ginni Rometty speaks onstage at the FORTUNE Most Powerful Women Summit in 2013 in Washington, DC. (Photo by Paul Morigi/Getty Images for FORTUNE)

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IBM is positioning itself as a leader in cloud and artificial intelligence, but on the way there it's making some painful cuts.

Yesterday, numerous employees reported that the company was undergoing a massive layoff — or as IBM calls it, a Restructuring Action — in which it is making deep cuts across the company, particularly in Global Technology Services, where it had previously announced coming eliminations.

Mike Dorosh, a research director at Gartner who spent about 16 years at IBM, said that IBM's cuts have become regular occurrences, but that this one was particularly dramatic.

Every couple of years they reorient their organization around labor arbitrage, said Dorosh. Nobody's quite sure how many people have been laid off, but I heard from colleagues that it was pretty massive. He said that reports that it was as much as one-third of the company U.S. workforce, however, were inaccurate.

While IBM had declined to comment on the cuts to other outlets, it did point to a variety of openings across the company, and stated that it currently has 25,000 open positions.

Indeed, the company is spending heavily to acquire talent, IP, and data in areas of growth, with billions in acquisitions spent in its Watson Health initiatives.

Dorosh said the jobs being eliminated were likely ones like systems administration and storage management that could be off-shored to Hungary and India. US openings would likely be in hotter areas like OpenStack and virtualization.

But the cuts will be particularly painful for those let go this time around: As ZDNet reported in January, IBM has cut its severance from six months pay to just one month.

It sends a really strong message to the workforce that will be joining [IBM], said Dorosh. I worry that message is to be careful.

The Facebook page Watching IBM, pictured above, was sharing stories of those impacted by the cuts.

This first ran at

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