IBM starts cutting employees after first earnings shortfall in 8 years

IBM Engineers

For decades, International Business Machines Corporation, better known as IBM, has been one of the most solid representatives in the tech world from a purely business perspective. As the global restructuring plan that they announced two months ago starts to take effect, what does it tell us about the tech industry in general?

It isn’t just the executives or the base level employees that are getting cut, a distinction that often covers the cuts that companies make. Both ends of the spectrum are at risk. This move comes after their first earning shortfall since 2005 when they missed projections by $.05 per share in the first quarter of 2013.

Somewhere between 6000 and 8000 jobs are at risk with many of the letters sent out yesterday. It’s small by percentage, though, with 432,246 in their workforce in 2012.

“Change is constant in the technology industry and transformation is an essential feature of our business model,” IBM said yesterday in a statement. “Consequently, some level of workforce remix is a constant requirement for our business. Given the competitive nature of our industry, we do not publicly discuss the details of staffing plans.”

According to Bloomberg:

IBM also has been cutting hours of its contract employees. CDI Corp. (CDI), a Philadelphia-based provider of staffing and outsourcing services, told its staff working for IBM to limit their hours in May, according to a memo obtained by Bloomberg. IBM at the time said that the company relies on contractors to manage labor costs on information-technology projects for clients.

Written by Sal McCloskey

+Sal McCloskey is a tech blogger in Los Angeles who (sadly) falls into the stereotype associated with nerds. Yes, he's a Star Trek fan and writes about it on Uberly. His glasses are thick and his allergies are thicker. Despite all that, he's (somehow) married to a beautiful woman and has 4 kids. Find him on Twitter or Facebook,
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