IBM to Remove 26% of Staff in Largest Employment Purge
David Curry | | Jan 26, 2015 11:34 AM EST |
IBM announced $3 billion investment into Internet of Things.
IBM is preparing the largest purge of employees ever, beating its own record of 60,000 layoffs in 1993. This time, IBM will remove 26 percent of its workforce, or around 111,800 employees.
Most of the employees are based in the United States, although IBM will be shortening its workforce in other countries as well, following the 11th straight quarter of declining revenue.
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Codenamed 'Project Chrome' internally, all 26 percent of workers will be laid off in one month, which could lead to mass unemployment if these IBM workers cannot find jobs elsewhere.
IBM is also cutting various areas of the company not performing well, potentially due to overzealous investments on cloud infrastructure and storage.
Outsourcing is also seeing negative revenue drop, as IBM fails to secure contracts with new companies, who would rather work with UK-based Accenture or other alternatives.
The plan for Project Chrome is to fix some of the weak points and make the company structured and focused. However, some critics see it as a poorly thought plan, incapable of doing anything but scaring IBM employees.
Removing a quarter of the staff at any company is very meaningful and represents a dramatic shift in interests, considering the removal could backfire and cause even more people to leave and find more secure opportunities.
Competition in the enterprise market has been increasing over the last 10 years, ever since Microsoft, Amazon and other multi-billion dollar companies started investing heavily in the area, forcing IBM to focus more heavily.
The introduction of a partnership between IBM and Apple looked to be promising, but the 6,000 employees working on applications for iPads and iPhones may be part of the employee purge.
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