IBM layoffs: Why the tech major reportedly plans to slash nearly 9,000 jobs in the United States

In the latest round of corporate restructuring, IBM is laying off approximately 9,000 employees across multiple locations in the US. The employees who are likely to exit comprise a quarter of staff working on the corporation’s Cloud Classic operation, according to a report by The Register.

Teams that are at risk of the axe are believed to consist of those responsible for consulting, corporate social responsibility initiatives, sales, cloud infrastructure offerings, and people who report to IBM’s CIO and work on internal systems. It is also being claimed that 10 per cent of the Cloud group (which is not the same as Cloud Classic) has been asked to exit.

Reason for huge IBM layoffs

The report said one of the reasons behind layoffs in the IBM Cloud Classic, the infrastructure-as-a-service (IaaS) outfit built on IBM’s 2013 acquisition of SoftLayer, is the organisation transferring employment to India “as much as possible”. The tech giant's layoffs could happen in locations like Texas, California, New York City and State, Dallas, Texas, and Raleigh, North Carolina. IBM has a massive presence in cities like Pune, Bengaluru, Chennai and Hyderabad.

IBM has not issued an official statement regarding layoffs, but the company has recently stated its motive isto lower its workforce. In January, its chief financial officer, James Kavanaugh, said that he anticipated the ‘workforce rebalancing’ to be consistent, considering recent years.

Those who have kept from receiving the pink slip in the latest wave of layoffs confront a new compulsion from the company. The employees are anticipated to participate at an IBM office at least three days per week by the end of April, the report added. It cited its source familiar with the development, saying, “Management is monitoring badge swipes and only allowing medical exemption, which is being frowned upon by executives and even discouraged by middle managers." It further mentioned, “Concrete numbers are being kept private. It is in the thousands.”

IBM's revenue

IBM's revenue for the October-December 2024 period increased by 1 per cent to $17.6 billion, while its software revenue rose by 10 per cent. IBM's consulting revenue fell by 2 per cent, while infrastructure revenue declined by 8 per cent. According to a report, it is taking place at a time when IBM CEO Arvind Krishna has got a 23 per cent salary increase, making his total compensation to $25 million.

Meanwhile, reports suggested that numerous major tech companies, including HP, Meta, and Amazon, have also been mulling significant layoffs in recent months as part of their ongoing restructuring plans.