IBM plans to axe staff in UK, Ireland despite hefty profits

Big Blue bottom line means 'workforce remix'

Exclusive IBM is planning a round of redundancies in the UK and Ireland despite healthy growth in profits in the second quarter.

In company documents seen by The Register, employees in the UK-based Strategic Outsourcing Delivery division were told Big Blue will start an employee consultation period of 30 days on 2 August. El Reg understands workers have been told of the planned changes.

Staff aside from those in the outsourcing delivery unit may also be facing cuts, including employees from the Software Group in the UK and Ireland.

IBM is doing well considering the global economic conditions - but bosses appear to desire increased productivity and improved profit margins. In order to achieve these, IBM told its people that redundancies were likely to be a part of the consultation.

Big Blue has had a few rounds of layoffs recently, including 5,000 in 2009 across the US, and 1,200 globally in February this year.

The tech giant has continued to make good profits throughout the economic doom and gloom, but its roadmap demands that the company hits at least $20 earnings per share by 2015. IBMers have complained that the target is being achieved by killing raises or laying off staff.

A short consultation period of 30 days indicates a relatively small number of redundancies, as much as 100 heads. However, it's unclear how many departments will hold consultations and if they are all the same length of time.

During IBM's conference call for its second quarter results, chief financial officer Mark Loughridge said that the firm would be hiring 200 to 300 sales reps for its global software business every month until the end of this year, without saying where the hires would be made.

Asked for comment on the looming redundancies, Big Blue representatives told The Reg in an emailed statement:

"Change is constant in our industry and transformation is a permanent feature of our business model. Consequently, some level of workforce remix is an ongoing part of our business. Given the competitive nature of our business, we do not publicly discuss the details of our staffing plans." ®