UPDATED 12:18 EST / JANUARY 27 2016

NEWS

Report: Thousands to be let go from IBM’s services biz this week

It’s shaping up to be a tough week for the rank and file of the enterprise technology world. A day after VMware Inc. confirmed the 800 layoffs insiders have been warning about since last week, a new leak from IBM Corp. suggests that the employees at its Global Services (GTS) business should start bracing themselves for a similar announcement.

Lee Conrad, the head of an independent union representing the vendor’s U.S workforce, told the press this morning that Armonk plans to cut up to 20 percent of the staff manning the outsourcing unit of the division. Estimating the specific number of positions embodied by the figure is difficult because Big Blue doesn’t disclose the headcount of every group, but some educated guesses can be made based on its earnings data.

The Global Technology Services arm generated $8.1 billion in revenue during the fourth quarter of last year, or about two thirds of what the 190,000-strong GTS made overall. If the unit’s worker count is even remotely proportional to its share of sales, then the number of positions on the chopping block could measure in the tens of thousands. Conrad cited sources within IBM as saying that the restructuring is scheduled to be made public this Friday, less than a week after the maximum severance pay for dismissed employees was slashed to one-month’s pay.

Should the information turn out to be accurate, then the timing is unlikely to go unnoticed in the industry. Or for that matter among the new workers that the company is trying to hire in order to bolster growth businesses like the Watson division, which inaugurated its global headquarters only a few weeks ago.

Image via IBM

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