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IBM set to cut thousands of jobs as it pivots to hybrid cloud

(Image credit: Shutterstock / Laborant)

IBM has announced plans to cut approximately 10,000 jobs across Europe, with staff in Germany, Poland, Slovakia, Italy, Belgium and the UK set to be affected. The decision comes as the tech firm looks to reduce costs related to its legacy IT services business.

According to European labor representatives, the cuts were first announced earlier this month but remained private. Around 20% of IBM’s European staff are expected to be affected.

“Our staffing decisions are made to provide the best support to our customers in adopting an open hybrid cloud platform and AI capabilities,” an IBM spokeswoman said in an emailed statement to Bloomberg. “We also continue to make significant investments in training and skills development for IBMers to best meet the needs of our customers.”

In a tailspin

The job cuts are believed to be a precursor to plans that would see IBM spin off its IT services business by the end of 2021 to concentrate on artificial intelligence and hybrid cloud technologies instead. It’s hoped that the shift of focus will allow the company to streamline its operations and return to revenue growth.

Although IBM was once one of the leading technology firms, it has found itself overtaken by relatively new players like Amazon and Google. In particular, the company was slow to pivot towards cloud computing, focusing too many of its resources on the declining numbers of customers that continued to rely on legacy mainframe computing.

IBM’s new CEO Arvind Krishna, who took over in April, will have his work cut out to return the company to growth. The job cuts, which are expected be completed by the end of the first half of 2021, might not be the only difficult decision he has to make.

Via Bloomberg