Out with the old, in with the new. That could be the motto for IBM these days.
Even as the company lays off thousands of people in various business units — it is hiring thousands of people for other, brand-new business units.
IBM has more than 3,000 job listings right now, even though as we previously reported, it is in the midst of a layoff that will cut a significant number of employees.
The bulk of that layoff happened on Monday, some sources say.
An IBM spokesperson tells us:
IBM is positioning itself to lead in areas such as cloud, analytics and cognitive computing and investing in these priority areas. For example, already this year we have committed $US1 billion to our new Watson unit and $US1.2 billion to expand our cloud footprint around the world. In addition, just this week IBM announced a $US1 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 U.S.
When it comes to the cuts, however, IBM will not discuss the details.
It won’t say how many jobs it is eliminating, in what states or countries or what business units. Wall Street analyst Toni Sacconagh estimated that IBM will cut “at least 13,000 heads” worldwide.
Sources tell us that layoffs are going on now at IBM’s troubled Systems and Technology Group. CNET reports that 25% of this year’s layoffs were aimed at the STG unit.
Layoffs in that unit were also confirmed by Lee Conrad, the National Coordinator for the [email protected] union that seeks to represent IBM employees. In an emailed statement, Conrad told Business Insider:
The red tide has started in STG sales. Mainframe, Power and Storage teams are getting their calls this morning. … One long-term manager characterised it as the broadest and deepest … ever seen at IBM.
That this unit is seeing cuts, even big ones, is not surprising. That unit’s revenues declined by over 18% year over year, IBM reported. It has since agreed to sell one of its computer server businesses to Lenovo and will shift about 7,500 people off its payroll with that sale.
Sources also say that a small number of employees in New York were cut.
Earlier this month, IBM entered into an agreement with the governor of New York in which IBM promised to maintain at least 3,100 employees in New York through the end of 2016, including the 500 new jobs to Buffalo. This led to speculation that New York employees could be entirely spared, but that didn’t happen, according to sources. IBM is a huge employer in New York, with about 7,500 in one county alone, The Poughkeepsie Journal says.
STG wasn’t the only business unit to show declining revenues and it’s not the only one being cut. Plus, IBM CEO Ginni Rometty said the top brass would forgo its annual performance bonuses.
An IBM spokesperson says that between the cuts and the jobs it adds, IBM has more than 400,000 employees worldwide, and that total headcount of the workforce has remained basically the same for the past three years.
That said, the company has promised investors that it will deliver $US20 earnings per share by 2015, a program internally called Roadmap 2015.
Until Rometty’s investments in cloud, Watson and other areas pick up steam, the company is focused on managing expenses to deliver the profit it promised to shareholders.