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In a significant development for the tech industry, IBM has reportedly initiated a large-scale layoff process, affecting thousands of employees across various locations in the United States. This move comes as part of a restructuring effort, particularly within its Cloud Classic division. While the exact number of layoffs remains undisclosed, sources suggest that it spans multiple states and departments, leaving many employees uncertain about their future at the company.
the Situation
According to a report from The Register, IBM is undergoing a substantial reduction in its workforce, with significant layoffs occurring in key locations including Raleigh (North Carolina), New York City and State, Dallas (Texas), and various parts of California. These cuts are primarily affecting employees in departments such as consulting, cloud infrastructure, corporate social responsibility, sales, and internal IT systems. Sources claim that the exact number of impacted employees is being kept private, but it is reported to be in the thousands.
A notable focus of the layoffs is in IBM’s Cloud Classic division, which was originally built on the company’s acquisition of SoftLayer in 2013. Sources familiar with the restructuring suggest that many of these layoffs are linked to a broader shift in IBM’s workforce strategy, with a growing emphasis on relocating jobs to India. A former IBM employee, who was recently laid off, described the situation as affecting roughly 10% of the company’s cloud division, with employees being offered separation agreements.
This restructuring effort also coincides with IBM’s new return-to-office policies, which require employees to be physically present at the office at least three days a week. Sources indicate that these changes are part of the company’s broader efforts to streamline operations and improve its competitive positioning in the cloud services market.
What Undercode Says: Analysis
The recent layoffs at IBM are not only a sign of internal restructuring but also a reflection of larger industry trends. As companies increasingly focus on cost-cutting measures and efficiency, we are likely to see more companies, especially in the tech sector, follow a similar trajectory. The shift to offshore operations, particularly to countries like India, is becoming a familiar pattern as companies look to reduce labor costs while maintaining global operations.
The emphasis on Cloud Classic layoffs is particularly noteworthy. Cloud infrastructure and services have long been a core component of IBM’s growth strategy, especially following its acquisition of SoftLayer. However, with the cloud market becoming more competitive, particularly with major players like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, IBM has struggled to gain significant market share in this space. It seems that the company is now focusing on restructuring its cloud services to adapt to changing market dynamics, including optimizing its workforce to stay competitive.
Another key point is the
Fact Checker Results
✅ IBM has confirmed the layoffs but has not disclosed exact numbers.
✅ Reports suggest that the job cuts are part of a broader restructuring effort in the Cloud Classic division.
❌ The shift of jobs to India remains speculative based on informal sources and has not been officially confirmed by IBM.
Prediction 📊
As IBM continues its restructuring efforts, we can expect more tech companies to follow suit in making tough decisions about their workforce. The trend of job cuts in cloud-related divisions, along with a focus on offshoring to reduce costs, is likely to gain momentum across the industry. Additionally, the push for employees to return to the office could signal a broader trend where hybrid work environments become less common, especially in larger corporations like IBM.
References:
Reported By: timesofindia.indiatimes.com
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