IBM plans to cut a quarter of its hardware division workforce as part of its radical restructuring plans that are geared towards an enhanced focus on new areas such as the cloud, analytics and cognitive computing.
A source familiar with IBM’s plans told CNET that the job cuts will see 25 per cent of the workforce lost in the Systems and Technology group that makes the company’s IBM servers and is commonly referred to as the hardware division.
The company itself wouldn’t comment on specifics when it comes to job losses and instead explained that it will be realigning itself to succeed in new areas.
“As reported in our recent earnings briefing, IBM continues to rebalance its workforce to meet the changing requirements of its clients, and to pioneer new, high value segments of the IT industry,” Shelton said. "To that end, IBM is positioning itself to lead in areas such as cloud, analytics and cognitive computing, and investing in these priority areas."
Job losses in the hardware division shouldn’t be a surprise since it sold its x86 server business to Lenovo last month for $2.3 billion [£1.4 billion] and as part of the sale an estimated 7,500 IBM personnel will be offered positions at Lenovo.
At the last check IBM employed 400,000 people around the world and Shelton was at pains to point out that its multi-billion dollar investment in Watson and its platform-as-a-service Cloud capabilities will bring countless jobs to New York state.
"In addition, just this week IBM announced a $1 billion investment in platform-as-a-service Cloud capabilities, as well as investments in areas such as nanotechnology which will bring hundreds of new jobs to New York state. This also creates new job opportunities at IBM. At any given time, IBM has more than 3,000 job openings in these and other growth areas in the US."
Alliance@IBM, a union that accounts for IBM employees, reports that workers in New York, Vermont and Minnesota will be the worst hit and this could just be the tip of the iceberg if IBM also chooses to exit the semiconductor manufacturing business as well.