IBM has initiated a significant restructuring process affecting thousands of workers in the United States, with its Cloud Classic unit being one of the hardest hit. According to The Register, the company has not made a public announcement regarding these layoffs, but internal sources estimate that around 9,000 jobs could be at risk.
The cities most affected by these layoffs include Dallas, New York, Raleigh, and several locations in California. The cuts impact departments such as consulting, cloud infrastructure, corporate social responsibility, internal IT, and sales. Some employees received individual notifications, while others learned of the news through internal meetings.
The End of the Cloud Classic Era
IBM’s Cloud Classic unit, formerly known as SoftLayer, is the original cloud environment that the company acquired in 2013. This service offered bare metal servers, virtual servers, storage, and networking solutions. However, the company has focused its efforts on the IBM Cloud VPC (Virtual Private Cloud) platform, which offers higher network performance (200 Gbps compared to 25 Gbps for Classic), more advanced hardware, and enhanced security measures.
This strategic shift toward the VPC environment makes the cuts to Cloud Classic a logical business move as IBM encourages its customers to migrate to its new infrastructure.
Offshoring and Internal Pressure
Sources consulted by The Register indicate that the company is aggressively pushing for the offshoring of positions to India, where there are currently many more open vacancies than in the United States. This trend reinforces the notion that IBM aims to reduce costs by utilizing more affordable labor.
The cuts are not limited to Cloud Classic. The company has also reduced 10% of positions in its Cloud group and has impacted marketing and communications departments. In addition to direct layoffs—internally termed Resource Actions—IBM is employing tactics to force voluntary departures from employees. Notably, this includes a mandatory return-to-office policy requiring employees to be in the office at least three days a week, monitored through access control with ID cards.
A Process That Is Not Yet Finished
The same sources indicate that this restructuring process is far from over. IBM plans to continue adjusting its workforce by eliminating positions it considers obsolete or better suited for offshore teams. Meanwhile, employees who remain with the company are bracing for new waves of layoffs as the company continues to prioritize acquisitions and the outsourcing of services.
via: Tom’s Hardware