Bangalore: IBM India, whose employee base had risen to the highest among MNCs in the country at close to 1.5 lakh, is now witnessing layoffs. The company is said to be retrenching employees in the systems & technology group (STG). The exact numbers are not clear, though some sources said it could be close to 50. IBM did not respond to questions at the time of going to print.
STG, the division that sells and supports hardware like mainframes, servers and storage, has about 300-400 employees in India. The volume segment of the division lower end servers – was sold recently to Lenovo for $2.3 billion.
Lenovo had said it would absorb many in this division. It is not clear if the current layoffs are related to the sale to Lenovo, or part of IBM’s larger plan, announced last month, to downsize. After reporting lackluster fourth quarter results in January, the $100-billion company had said it would cut jobs and take about $1-billion in charges from the re-organization effort.
IBM’s last quarter revenue fell the most in four years, and the worst performing division was hardware, where revenue declined 26%. The hardware business is seen to be struggling to respond to technological advances such as cloud computing, and slowing demand in emerging markets, especially China.
Some analysts have said the biggest job cuts will happen in the UNIX server division and in the storage division. The Financial Times reported last week, quoting sources, that IBM has hired Goldman Sachs to find potential buyers for its semiconductor business.
This is the second successive year in which IBM has laid off people. Last year to the deep cuts had impacted employees in India, though again, precise numbers are not available.
Bureau Report
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