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Out with the old: IBM grabs axe and resumes 'rebalancing' act

Big Blue quietly lays off more employees as it attempts to physically drag itself into the 21st century

Big Blue continued its efforts to become Medium Blue this week, with another wave of stealthy job cuts.

IBM declined to say exactly how many employees will be facing the axe, but according to Tony Sacconaghi, senior research analyst at Bernstein, the total figure could be as high as 14,000.

The Armonk, New York-based company’s most recent round of layoffs came in March and affected roughly 5,000 employees. At the end of 2015, the company’s global workforce stood at 377,757. When Ginni Rometty took over as CEO in 2011, that figure was closer to 434,000.

According to the Wall Street Journal, the latest cuts will affect workers in the Research Triangle of North Carolina; New York City; Poughkeepsie, New York; and Boulder, Colorado.

The cuts follow four consecutive years of declining revenues as the tech giant struggles to keep up with the pace of change. Even an impressive $10.2bn in cloud sales last year, was not enough to offset the decline in its legacy business. The lay-offs form part of a somewhat cold ‘rebalancing’ strategy, as IBM looks to plough its resources into new technologies. IBM has stated that for all of the redundancies made, it will hire an equal number of new employees with right skills to drag the company into the 21st century.

“As we transform our business and move into new areas, we need to transform our workforce, not only the types of skills but how we operate,” said Martin Schroeter, SVP and CFO, in a briefing call with analysts last month. “This quarter, we took significant actions to transform our workforce and shift our skills base to new areas and to improve our structure primarily outside the US.”

The company has already posted around 7,000 positions online but says that more positions in the high growth areas will open up shortly. The WSJ has reported that, all-in-all, IBM expects to fill around 20,000 new positions.

The latest round of cuts follow news last week that Big Blue will be closing its Somers, New York, campus, shifting the 2,000 employees to a nearby facility in North Castle, New York.

The firm has spent $9 billion on acquisitions in the past 12 months as it looks to bolster its cloud, security, and analytics capabilities.

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