Tech giant, IBM lays off employees amid COVID-19
A fresh round of layoffs appears to have hit IBM this week, with Big Blue pledging to maintain medical benefits for employees who lost their jobs amid the current coronavirus pandemic.
But in a statement sent to a media firm, a spokesperson noted an extension of medical insurance benefits for employees who were recently let go from the company.
The number of job cuts is unspecified across the US, eliminating employees in at least five states. The company declined to comment on the total number, but the workforce reductions appear far-reaching.
The job cuts seem to be the first significant workforce restructuring to take place under Arvind Krishna as IBM’s CEO and James Whitehurst as its new president.
“IBM’s work in a highly competitive marketplace requires flexibility to constantly add high-value skills to our workforce. While we always consider the current environment, IBM’s workforce decisions are in the interest of the long-term health of our business,” company spokesman Ed Barbini said Thursday in a statement.
Recognizing the unique and difficult situation this business decision may create for some of our employees, IBM is offering subsidized medical coverage to all affected U.S. employees through June 2021.
In online forums, dozens of newly unemployed IBM workers, some who said they had been with the company for more than 20 years, lamented the situation and expressed fear over finding a new job in a recession. “With the COVID situation, it will be hard to find new opportunities,” one wrote.
Based on a review of IBM internal communications on the Slack corporate messaging service, the number of affected employees is likely to be in the thousands, said a North Carolina-based worker who lost his job along with his entire team of 12. “This was far-ranging — and historical employment ratings, age and seniority did not seem to matter,” he said. The person asked not to be identified on concern that speaking publicly may impact his severance package.
The cuts also affected employees based in Pennsylvania, California, Missouri, and New York, where IBM is based, according to people familiar with the matter.
Another worker who lost his job said the reductions mostly focus on IBM’s North American workforce. Half of his 70-person department were cut on Thursday and told their last day with the company will be June 22. The person asked not to be identified discussing a sensitive topic.
It’s unclear how many of IBM’s cuts are caused by the pandemic. The company has suffered years of falling revenue. In an earnings call in January, IBM discussed reducing costs through “aggressive structural actions” to improve the competitiveness of its Global Technology Services consulting unit, which represents about a third of revenue.
The tech industry has suffered widespread job losses after the coronavirus pandemic triggered a severe recession. Airbnb Inc. and Uber Technologies Inc. have cut about a quarter of their workforces. Earlier on Thursday, Hewlett Packard Enterprise Co. said it will eliminate some employees to save money, while Dell Technologies Inc. suspended several staff benefits.