IBM warns staff across the business of fresh 45-day redundancy consultations

Happy Xmas: So that's GTS, GBS, Systems, Channel and Cloud & Cognitive Software. Insiders say UK and wider Europe impacted

IBMers are telling us of widespread job cuts taking place right across the entire organisation in the UK and wider mainland Europe with Big Blue disptching memos warning of a looming 45-day consultation process.

Yesterday, The Reg revealed that IBM asked Global Business Services personnel to elect management and staff representatives for an Employee Consultation Committee (ECC) as they themselves embark on a one-and-a-half month’s worth of redundancy discussions.

Global Technology Services’ Infrastructure Services folk were also told late yesterday afternoon that they too will be undergoing a 45-day consultation from 25 November.

In a memo, Tosca Colangeli, GM for GTS UK, said:

“In order to meet our business objectives, GTS IS must improve our cost-competitiveness to win in a fiercely competitive IT landscape. GTS IS will achieve this through a number of initiatives including realising efficiencies in its organisational model which will enable it to meet clients’ evolving needs, while continuing to deliver exceptional service to them.”

Again, IBMers were asked to appoint ECC reps.

The changes to GTS aren’t entirely unexpected because the division is being spun out of IBM into a separately traded public entity, and Wall Street analysts estimated that 20,000 jobs could be chopped, based on the "business charge" IBM is preparing to take.

However, while GTS could be viewed as becoming part of IBM’s history when the business undocks from the mothership in December 2021, Cloud & Cognitive Software (C&CS) is billed as the future. Yet here too IBM is tightening its belt.

Sales and technical sales across C&CS, Expert Labs (sales and delivery) and Security received the dreaded memo yesterday as well.

“IBM must grow our leadership in the $1 trillion Hybrid Cloud platform opportunity as well as grow our leadership in bringing the benefits and power of AI to our clients. Combined with this, COVID-19 has had a significant and immediate impact on our business in the UK environment and further impacted results. Under these same challenging circumstances, we are seeing that our competitors are growing double-digit[s],” the memo states.

“To respond to this reality IBM UK needs to reset, reshape and prepare our company to seize the opportunities of the accelerated shift our clients are taking toward hybrid cloud and AI. We must improve our focus and our cost competitiveness to win in a fiercely competitive IT landscape. To contribute to these objectives, Cloud & Cognitive Software needs to simplify the structure and improve the cost competitiveness of our Go-to-Market organisation and shift the balance of skills towards individuals with the deep technical expertise to drive our leadership in Hybrid Cloud and AI in front of our clients and the market.”

For C&CS staffers, a 45-day consultation is due to launch on 24 November and an ECC is also under formation.

One impacted staffer jokingly asked if this was “further proof RedHat was a reverse takeover? Lol.” Gallows humour indeed.

According to several insiders, the Systems division, along with the Channel team and Partner Ecosystems are also preparing for a the same 24 November date to dig in for talks. We were further told that, as with GBS, job losses will additionally take place in mainland Europe.

“Martin Jetter, [senior veep and] chairman has sent a communication to the European Work Council outlining that IBM would be starting a large redundancy programme across Europe and UK and Ireland,” claimed one source. This remains unconfirmed by IBM.

“These consultations are all due to end [in the] second week of January so what a lovely Christmas period everyone will have,” the source added.

The fact each of these consultation periods are set at 45 days suggests IBM will be removing at least 100 heads from each UK division.

The Register asked IBM to comment on the actions being taken across multiple divisons.

“Our workforce decisions are made to best support our clients on their journey to adopting an open hybrid cloud platform and AI capability, and we are reinvesting in our business. We continue to make significant investments in education and skills development for IBMers to better meet our clients' needs.”

We also asked for comment on the consultation that IBMers told us are happening across Europe and will update when or if IBM responds.

IBM reported revenue of $53.253bn in the first nine months of 2020, down from the $55.37bn a year ago. Net income was $4.234bn versus $5.761bn. But this decline isn’t isolated: Big Blue hasn’t grown on a sustained basis since 2011 when revenues peaked at $107bn. In 2019, IBM’s turnover was $77.14bn. ®