IBM, Kyndryl Cut Jobs Even After Cutting Ties

IBM services spinoff Kyndryl has confirmed it's laying off staff while Big Blue is also shedding employees, as part of the industry-wide job cut contagion that has plagued the tech sector over the past few months.

Kyndryl told The Register said, "We are eliminating some roles globally – a small percentage – to become more efficient and competitive. This is in addition to the ongoing transformation work we have undertaken to streamline and simplify our processes and systems. These actions will enable us to focus our investments in areas that directly benefit our customers and position Kyndryl for profitable growth."

About a third of the company's 90,000 workers are based in India, according to The Hindu Businessline, which reports that those let go worked in administration, marketing, human resources, and other non-core vertical businesses.

With regard to IBM, accounts posted by people on social media suggest the North America IT support help desk team – about 100 people based in Austin, Texas – has been let go. Individuals on that team have posted that they're now looking for work.

The Register has heard from IBM employees that finance, operations, and developer roles have been affected.

IBM did not respond to a request to confirm the dismissal of its Austin IT support team, but a spokesperson did tell The Register that recently eliminated positions are the result of the company's commitment in January to cut the 3,900 jobs.

However, we heard from two current IBM employees who disagree.

"As best we can tell, these are separate and in addition to the 3,900 in January," a source involved in IBM's cloud business said, noting that the January layoffs appeared to be mainly targeting employees in Europe, the Middle East and Africa. "These cuts seem to be worldwide but heavily focused in the US, primarily in HR and other support roles."

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Told of IBM's response, our source said that current employees were under the impression that the 3,900 target cited in January had been hit already, "as that was review time, and many high performers received negative reviews to get rid of them."

A second IBM employee who got in touch also said that the current layoffs affecting IBM employees are unrelated to the January "resource action" – IBM's euphemism for layoff – which was linked at the time to the 2021 Kyndryl spin-off.

"Roles impacted are entirely unrelated and include IBMs core competencies, including software and hardware development, talent acquisition, and finance and operations, among others," our second IBM source said, adding that just months ago CEO Arvind Krishna told employees there would be no further resource actions.

Our first source in the cloud group said about half a dozen jobs were cut out of about 1,000. "These roles were people who were low contributors and/or didn’t really have a future home in the company," our first source said. "Essentially, the sacrificial lambs were offered up instead of it being a mass-casualty event."

There's been no internal communication other than direct meetings with affected employees, our first source said. "It’s complete radio silence on the internal message boards, actually too quiet."

Asked whether those affected appear to be disproportionately older workers – allegations that have shown up in numerous age discrimination lawsuits against the company – our first source said that was unclear.

"I don’t think they are specifically hitting older workers, but they are hitting a fair amount of high seniority workers (10+ years), which really has the same effect, in practice," our first source said. "That’s becoming more and more common, especially if you are months or a couple of years from retirement."

The Register confirmed with a former IBM employee still in touch with colleagues that high seniority IBM employees are seeing their roles eliminated.

Our first source continued, "With all the lawsuits and negative press on the age issue, it seems they’re quietly pivoting to high seniority (read: high salary) employees. If the roles get backfilled at all, they are backfilled with offshore resources. I’ve seen documents asking managers to backfill 80 percent of roles offshore, unless there is a need to have someone physically present in-country."

"Meanwhile, management ranks continue to swell. There are nearly weekly emails announcing org changes, mostly related to the slew of new middle and executive management-of-the-week." ®