News: IBM asks employees to volunteer for layoffs, targets 80% cuts in key departments, including HR

Talent Management

IBM asks employees to volunteer for layoffs, targets 80% cuts in key departments, including HR

IBM is inviting employees to opt for voluntary redundancy instead of undergoing involuntary termination for those opting to stay. The company has yet to confirm any specific figures.
IBM asks employees to volunteer for layoffs, targets 80% cuts in key departments, including HR

IBM is asking employees who are willing to take voluntary redundancy to step forward as the company starts another round of global job cuts, particularly targeting positions in Europe and certain departments anticipated to bear the brunt of the reductions.

The ‘Resource Action,’ IBM's preferred term for layoffs, shouldn't come as a significant shock, as it was hinted at during a Q4 earnings call last month. 

According to the Register, the current initiative is viewed as "transformative" rather than solely financial. However, back in January, CFO James Kavanaugh explicitly mentioned IBM's goal of achieving a "$3 billion annual run rate in savings by the end of 2024," which represents a significant increase from the original target. 

It is understood that 80 per cent of the reduction target is directed towards Enterprise Operations & Support (EO&S) and Q2C missions, as well as Finance & Operations, which includes Procurement, CIO, HR, Marketing & Communications, and Global Real Estate. 

According to an IBMer, the European Works Council has conveyed to staff that approximately 50 per cent of IBM's reduction goal will affect staffing levels across Europe, revealed the same report by The Register.

Additionally, IBM is seeking employees willing to take voluntary redundancy rather than involuntarily terminating those who wish to remain. The company has not confirmed any figures. 

Slovakia is expected to bear the brunt of the cuts, with approximately one-third of IBM's European reductions affecting its International Centre in Bratislava. Additionally, the Centre in Hungary supporting EO&S/Q2C and the Finance function in Bulgaria are slated to undergo significant staff reductions.  

IBM responded through a spokesperson, asserting that the initiative is not solely focused on cost-saving measures. "In 4Q earnings last month, IBM disclosed a workforce rebalancing charge that would represent a very low single digit percentage of IBM’s global workforce, and we expect to exit 2024 at roughly the same level of employment as we entered with. This rebalancing is driven by increases in productivity and our continued push to align our workforce with the skills most in demand among our clients, especially areas such as AI and hybrid cloud,” said the spokesperson, reported The Register. 

IBM reported a four per cent revenue growth to $17.4 billion for calendar Q4, with an operating profit of $3.75 billion. While IBM originally aimed for run rate cost savings of $2 billion by the end of the year, it has extended this target to $3 billion. 

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Topics: Talent Management, #Layoffs, #HRTech, #HRCommunity

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