As a step towards lowering costs, IBM intends to slash 10,000 jobs in Europe at all its slow-growth service units, while preparing for its new division.
Germany and the UK will be the most affected by the job cuts that will see a 20 per cent reduction in staff in Europe, that is, about one in five employees in the region. Italy, Poland, Belgium and Slovakia will also be impacted.
This move comes after a meeting with European labour representatives in early November. The tech giant had announced last month that it plans to focus on a new hybrid cloud computing and AI unit, which is expected to help the Company recover its profits. It is projected that the move will cost IBM $ 2.3 billion in the fourth quarter.
IBM shares had been sinking, with an 8.6 per cent decline this year. The downsizing decision will hit its legacy IT services business, handling its everyday infrastructure operations. The layoffs come after almost a decade of IBM reporting losses with no major strategy to revive growth. Its presence has been fading with the emerging tech overshadowing this blue-chip company. The company had cut thousands of jobs earlier this year.
The current round of job cuts will be completed by mid-2021. The highest publicly disclosed layoffs for IBM took place in 1993, with 60,000 dismissals.
IBM reported $ 17.6 billion revenue in its third quarter with a drop of 2.5 per cent that has been a constant year after year.