It Looks Like IBM Is Cutting Jobs Again, With Classic Cloud Hit Hard

IBM insiders believe Big Blue is laying off thousands of people at various locations around the US, including a quarter of staff at the corp's Cloud Classic operation.

"Concrete numbers are being kept private," a source told us. "It is in the thousands."

There's been no public announcement and it remains difficult to assess if these layoffs are a specific round of layoffs, trimming teams on older products, or the ongoing process of shedding staff that IBM conducts through both “Resource Actions” (Big Blue-speak for layoffs) and incentivized attrition through Return-to-Office rules and Co-Location requirements.

IBM did not respond to requests for comment but the company has publicly stated its intention to reduce its workforce: In January CFO James Kavanaugh said "We expect workforce rebalancing fairly consistent with prior years."

Based on our estimates job cuts IBM made in 2024, around 9,000 or workers are at risk.

We’re told staff have been let go in Raleigh, North Carolina; New York City and State; Dallas, Texas, and California.

Our sources’ reports of new layoffs come after last week’s The Register news of firings in IBM’s Marketing and Communications group that were apparently disclosed during an internal conference call held by SVP Jonathan Adashek.

We understand people in other groups have been notified individually by managers.

Affected teams are said to include those responsible for consulting, corporate social responsibility initiatives, cloud infrastructure offerings, sales, and folks who report to IBM’s CIO and work on internal systems.

Unverified reports to this effect can be found all over social media channels.

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With regard to IBM Cloud Classic – the infrastructure-as-a-service (IaaS) outfit offering built on IBM’s 2013 acquisition of SoftLayer – another source told us: "It's a resource action. I don't know how many people are in IaaS classic. They don't typically make that information easy to find. What I can say is that they have been making a lot of changes to shift employment to India as much as possible."

A third source, newly let go by Big Blue, said it was fair to characterize this a layoff. "Everyone I know that was affected, myself included, was simply offered a separation agreement," this individual said, estimating that 10 percent of the Cloud group (which is not the same as Cloud Classic) has been let go.

Our first source told us those spared in this wave of redundancies are expected to attend an IBM office at least three days per week by the end of April.

"Management is monitoring badge swipes and only allowing medical exemption, which is being frowned upon by execs and even discouraged by middle managers," we're told.

Legacy layoffs?

At its February Investor Day, IBM said it would no longer report revenue separately for Hybrid Platform & Solutions or for Security, which are segments within its Software group.

Companies typically stop revealing details of business units revenue when numbers are heading south, as often happens when products age and sales stall.

Asked about claims by others that roles were being moved offshore, our third source noted that IBM has many times more open positions in India than in the US. Our source reminded us that IBM CEO Arvind Krishna " has been very open about shifting labor focus to India. I don't even think that's inside information."

Our first source expects the employee shedding will continue as the company pursues acquisitions and phases out certain skills or shifts associated roles offshore.

"This comes after increased frustration among IBMers at the CEO," our first source said. "Many are scoffing at [Arvind Krishna's] salary increase [amid continued layoffs, forced RTO, and outsourcing]. People also are skeptical of the CEO now saying AI will boost programmers, not replace, at a recent appearance at [conference] SXSW." ®