IBM calls the allegations “baseless” and “ridiculous”, and says cuts are actually a small fraction of what’s been reported
IBM has dismissed allegations that it will be laying off 110,000 workers, calling the claims “ridiculous”.
“IBM does not comment on rumours, even ridiculous or baseless ones,” the company said in a statement yesterday.
“If anyone had checked information readily available from our public earnings statements, or had simply asked us, they would know that IBM has already announced the company has just taken a $600m (£398m) charge for workforce rebalancing. This equates to several thousand people, a small fraction of what’s been reported.”
The allegations first arose in a report by Forbes, which said that up to a quarter of IBM’s workforce will be let go, claimed the scheme is known internally as Project Chrome.
Robert X. Cringley, the author of the story, said: “To fix its business problems and speed up its ‘transformation’ … about 26 percent of IBM’s employees will be getting phone calls from their managers. A few hours later a package will appear on their doorsteps with all the paperwork. Project Chrome will hit many of the worldwide services operations.” He alleged the cuts will take place at the end of February.
Last week, IBM posted a 2015 profit target that fell short of analysts’ estimates alongside reporting an eleventh consecutive quarterly revenue decline.
IBM’s revenue fell almost 12 percent from the same time last year to £15.9bn in Q4. Annual revenue declined from almost £71bn in 2011 to £61bn in 2014. Net income was down 11 percent to £3.6bn in the same quarter.
The losses can be attributed to IBM’s complete restructuring of its strategy to become competitive in the cloud market, a U-turn for the tradition hardware giant.
This year, IBM’s cloud services will be pushed to 40 new cloud data centres to cater for ‘global demand’. A deal with data centre and colocation provider Equinix provides the backbone for this move.
“IBM recognises that businesses and governments need the cloud to help them innovate, grow and operate more efficiently in concert with their existing IT investments,” said Jim Comfort, general manager of IBM Cloud Services.
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