IBM Layoff Epidemic Spreads Worldwide

Watson team and Silicon Valley Labs not immune this time

3 min read

IBM's watson computer
Photo: Carolyn Cole/Los Angeles Times/Getty Images

Last month, I reported on a wave of IBM layoffs hitting U.S. facilities. Cuts were happening all across the country, and one source told me he’d been informed that one-third of the U.S. workforce would be affected. IBM quickly denied that number, and other reports put the numbers of those severed in the 20 to 25 percent range—something like 18,000 to 25,000 in the United States.

(We’ll never be able to know the exact percentage, simply because IBM no longer releases a U.S. headcount; worldwide, as of the end of 2015, the company had approximately 378,000 employees.)

At the time, U.S. employees suspected that what the company called “workforce rebalancing,” in order to “aggressively” focus on cognitive and cloud computing, had less to do with focusing on cloud and cognitive and more to do with moving jobs to countries like India, Brazil, and Costa Rica.

Here we are six weeks later. IBM has said little more about the layoffs publicly, yet they don’t appear to be over. The March round appears to have been the beginning, not the end. A Facebook group, Watching IBM, is gathering reports from around the world. These dispatches are by no means comprehensive, but are at least painting a rough picture of what is going on.

Generally, the layoffs are affecting employees in many of the higher-wage countries in which IBM does business. For example, Watching IBM’s job-loss tallies include 233 in Belgium, 160 in Denmark, 360 in France, 900 in Germany, 225 in Sweden, and 100 in Switzerland. The Channel Register  reports that 400 workers have been laid off in the UK, including some at UK Labs. A Dutch-language publication in the Netherlands says 770 jobs there have been transferred to India—a report IBM has denied. And, according to the UK’s IB Times, more cuts in IBM’s European workforce are planned.

Watching IBM has received anecdotal reports about Canadian layoffs beginning in Toronto, Markham, Ottawa, Winnipeg, and Montreal. And reports on the site indicate that 185 layoffs have been announced for Australia and New Zealand; three more rounds planned for this year will bring the total to 600.

Back in the United States, it appears that the March layoffs were just the warmup. A new round is reportedly either quietly underway, or imminent, according to reports on Watching IBM. And even the Watson team, initially thought to be untouchable, now appears to have lost its immunity. One worker reported to Watching IBM that some employees within Watson are being told they have 30 days to find a new job in another division. Also, he notes, “Several project managers and consultants [have been] let go. Seems to be a cost cutting measure to make Watson look profitable.”

And the Silicon Valley Lab in Coyote Valley, Calif., is reportedly getting hit this time as well, according to the Silicon Valley Business Journal. The company is laying off 109 workers there, the Business Journal indicates.

Why are journalists and tech workers paying so much attention to the IBM layoffs? One reason is the strong suspicion that IBM’s secrecy about the cuts—the company is making numbers public only when local laws require, and has refused to break down its head count regionally—is designed to cover some less than admirable behavior.

Perhaps, it’s been suggested, the whole “rebalancing” effort actually means pushing jobs to low-cost regions. Writes Steve Pitcher in MC Press Online: “Leaked documents show IBM India now has more workers than IBM in the U.S. Why? Take a guess. The average IBM India employee is paid $17,000 per year.”

Or, perhaps the effort is designed to remove older, more expensive workers: Journalist and IBM watcher Robert X. Cringely is trying to determine whether IBM has violated age discrimination laws with this year’s layoffs. He’s trying to gather evidence, and suggests that soon-to-be-former employees over 40 force an investigation by the Equal Employment Opportunity Commission (EEOC), by filing a charge of age discrimination against the company.

The Conversation (0)