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IBM is said to be planning to cut about 10,000 workers in Europe as it prepares to split off its traditional technology services business from the rest of the company.
IBM has been briefing works councils — committees that represent employees to management — in Europe, a step that large companies are required to take in advance of any significant layoffs, said a person familiar with the talks who spoke on condition of anonymity because he was not authorized to speak publicly on the matter. The largest cuts will be in Britain and Germany.
IBM declined to comment directly on the report of coming layoffs in Europe.
“Our staffing decisions are made to provide the best support to our customers,” the company said in a statement, adding that it would “also continue to make significant investments in training and skills development” of its remaining workers.
Bloomberg first reported the planned job cuts.
The company announced last month that it would spin off its basic technology services business, which maintains, supports and upgrades the computing operations of thousands of corporate customers. That business generated about $19 billion in revenue last year, accounting for about a quarter of IBM’s total revenue.
The remaining business, which will retain the IBM name, will focus on faster-growth fields like cloud computing and artificial intelligence. It will also include its hardware, software and consulting services units. The technology support business to be split off has not yet been named.
For more than a decade, IBM has taken annual charges of up to $1.5 billion for laying off thousands of workers. The yearly shedding of jobs is a process the company calls workforce “rebalancing” — cutting employment in slower growing operations and hiring workers in growing operations. IBM had 352,600 employees worldwide at the end of last year.
But the cuts in preparation for the spinoff will be deeper than in recent years. When it announced the breakup plan, IBM said it would take a $2.3 billion charge for “structural actions,” mainly severance payments for laid-off workers.
The separation into two companies is expected to be completed by late next year.
IBM executives have also said that the future of the legacy technology services company would be as a leaner operation, requiring fewer workers as more data center tasks are automated.
©2019 New York Times News Service
