Business

Is IBM Job Slicing a Silver Lining?

The computer company confirmed that it’s cutting jobs as it concentrates its efforts on “cloud analytics”. Cloud computing is good news, but not if you’re an IBM hardware employee who
24 Mar 2014 11:41

The computer company confirmed that it’s cutting jobs as it concentrates its efforts on “cloud analytics”.

Cloud computing is good news, but not if you’re an IBM hardware employee who is about to get the axe. IBM’s struggles come at a time of major upheavals in the server industry as more manufacturers (OEMs), partners, and companies rely less on hardware and more on the cloud and cloud services. In Fiji the hardware market place will also change as the Cloud products take hold. 
Cloud computing is Here.
This is a trend we’ll see play out many times over the next few years, as the traditional hardware providers find there is a diminishing demand for traditional hardware and software. This will be true around the rise of cloud computing, but also stems from the fact that international hardware manufacturers have been putting pressure on the US-based hardware providers, with lower priced gear.
The Lay-Off
IBM confirmed to CRN that it’s laying off an undisclosed number of its 431,212 employees. This round of layoffs could total 15,000.
Vermont’s CBS affiliate WCAX reported that more than 140 IBM employees will be laid off from the company’s Essex Junction plant. 
Internationally, Alliance@IBM reported that 1,500 IBM employees were let go in Brazil, 600 in Argentina, 480 in France, and 430 in Italy.
In addition to the large-scale Indian job cuts, Lee Conrad, the international coordinator for the IBM Global Union Alliance said that job cuts were ongoing in Europe, with countries hit so far including Norway (35 jobs), France (between 438 and 500), Belgium (105), Italy (430), and the Netherlands (240).
http://tinyurl.com/channelregister-ibm-india-euro

Lay-offs a Balancing Act?
Reacting to reports IBM has begun laying off as many as 15,000 employees as part of a $1 billion “workforce rebalancing” effort, IBM business partners say Big Blue’s loss could be their gain. IBM continues to rebalance its workforce to meet the changing requirements of its clients. 
IBM spokesperson Doug Shelton said that IBM has been very transparent in reporting their intent to restructure. 
As IBM refocuses and lines up its ducks to be the company it wants to be, it’s understandable it’s going to swallow some tough medicine and reduce headcount.
IBM’s Shelton said in an email that the workforce rebalancing is an attempt to position “itself to lead in areas such as cloud, analytics and cognitive computing”.
These layoffs and voluntary redundancy schemes are part of a larger shift by IBM away from low-margin commodity equipment and into lucrative software. This is motivated by sagging earnings in hardware and a commitment to attaining earnings of $20 per share to satisfy Wall Street shareholders.
http://tinyurl.com/crn-big-partners-silver-in

Effects of Lay Off
The more IBM decreases the direct side of its business the more it embraces partners to sell solutions.
On the other hand, if IBM’s cuts come too close to the bone there could be downside in the field as they typically serve their clients best when collaborating tightly with IBM’ers in the field.
If layoffs go too deep they risk disrupting product roadmaps and R&D which could convert upside to downside in the long run.    
The layoffs will disproportionately impact IBM’s hardware-centric Systems and Technology Group. CNET is reporting that nearly 25 percent in the Systems and Technology Group is on the chopping block.
IBM reported its revenues dropping from $29.30 billion a year ago to $27.70 billion in its most recent fiscal quarter which is the fourth straight quarterly sales decline. 
IBM’s System and Technology Group, saw revenue drop more than 26 percent to $4.26 billion during the quarter.
http://tinyurl.com/crn-blue-see-lining-in
IBM continues to rebalance its workforce to meet the changing requirements of its clients and to pioneer new, high value segments of the IT industry. Big Blue is positioning itself to lead in areas such as cloud, analytics and cognitive computing which are priority areas getting focus and investment.
Insider business news is now available at www.greymousefiji.com/fijisun. Just visit the site and sign up for your free news subscription.
nKelvin Davis is the director or Greymouse, a 24/7 outsourcing provider, with offices in Fiji and the Philippines.



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