September 20, 2024
IBM has made headlines recently with reports of massive layoffs, with estimates suggesting that as many as 8,000 people may have lost their jobs. While the news may come as a shock to some, industry insiders are claiming that the move is not entirely unexpected. In fact, IBM had announced plans for a workforce rebalancing charge back in January, which would affect a small percentage of its global workforce.
A senior spokesperson for IBM, Sarah Minkel, confirmed the layoffs in a statement, saying that the company still expects to maintain roughly the same level of employment by the end of 2024. However, the statement did little to provide clarity on the number of jobs affected or the reasons behind the layoffs.
Jason Andersen, a former IBM manager and current VP/principal analyst at Moor Insights & Strategy, believes that the layoffs are related to the company's efforts to rebalance its workforce in response to changes in the market. Andersen notes that IBM has used similar tactics in the past to quietly lay off employees without drawing attention to the move.
The Register, which first reported the layoffs, estimated that the number of jobs affected could be as high as 8,640, based on IBM's global employment numbers. However, Andersen believes that this number may be too high and that the actual number of layoffs is likely to be lower.
One of the main reasons cited for the layoffs is the shift towards cloud computing and the need for companies to rebalance their on-prem versus cloud environments. Andersen notes that many enterprises went too far into the cloud at the beginning of the pandemic in 2020 and are now correcting this imbalance.
Another factor that may be contributing to the layoffs is the return to offices movement, which is seeing large tech companies encourage employees to return to their desks after years of remote work. Rafael Brown, CEO of Symbol Zero, believes that this movement is being driven by a desire to create a culture of fear among employees and that CEOs are hoping that a demand for five days in the office will encourage people to quit, rather than having to lay them off.
Despite the uncertainty surrounding the layoffs, one thing is clear: IBM is not alone in its efforts to rebalance its workforce. Many companies are facing similar challenges in the rapidly changing tech landscape, and the shift towards cloud computing and automation is likely to continue to drive changes in the industry.
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