[Hardware] IBM cuts thousands in Cloud Classic, other units: Report

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IBM is cutting thousands of jobs across multiple locations in the U.S., and its Cloud Classic unit hit especially hard, reports The Register. The company has not publicly acknowledged these layoffs, but insiders suggested to The Register it is part of an ongoing effort to restructure and shift jobs offshore, particularly to India. 

The report estimates that about 9,000 positions may be at risk, including a quarter of the Cloud Classic group and 10% of the Cloud group, which is a separate business unit. The job cuts are happening in cities like Dallas, New York, Raleigh, and various locations in California. Employees from several departments, including consulting, cloud infrastructure, corporate social responsibility, internal IT, and sales, have been affected. Some learned of their termination through individual notifications, while others heard about it in internal meetings. 

IBM's Classic Cloud is the company's original cloud infrastructure platform, formerly known as SoftLayer, which IBM acquired in 2013. This platform provides a range of services, including bare metal servers, virtual servers, storage, and networking solutions, all operating within a traditional cloud environment. While IBM continues to support and maintain its Cloud Classic infrastructure, the company has also introduced a more advanced cloud environment called IBM Cloud VPC (Virtual Private Cloud). This platform offers improved hardware, increased network performance (200 Gbps vs 25 Gbps), greater flexibility in resource management, and enhanced security features compared to the Classic. It is reasonable to expect IBM's Classic Cloud customers to shift to the Cloud VPC, which makes downsizing the unit logical. 

The company is making it difficult to determine how many people work in the Cloud Classic division, but The Register's sources indicate an aggressive push to relocate jobs overseas. For example, IBM has significantly more open roles in India than in the U.S., which reinforces suggestions that much of the work is being outsourced.

The layoffs extend beyond Cloud Classic, though. IBM recently cut positions in its marketing and communications department, as revealed in an internal meeting led by a senior executive. It also cut some 10% of staff in the Cloud group, as noted above. 

IBM has been using multiple tactics to reduce its workforce, including official layoffs labeled as 'Resource Actions,' as well as policies that encourage employees to leave voluntarily. One such policy is a new requirement for workers to be physically present in offices at least three days a week, with badge swipes being tracked. Only medical exemptions are allowed, but even those are reportedly discouraged by the middle management, according to the report. Also, instead of laying workers off, IBM asks them to sign a separation agreement, which reduces the company's risks. 

The Register's sources suggest that IBM's restructuring is far from over. The company is expected to continue layoffs as it chases acquisitions and phases out roles deemed obsolete or better suited for offshore teams. Employees remaining after this round of cuts are bracing for further reductions as IBM shifts its workforce strategy.

Link: https://www.tomshardware.com/tech-industry/ibm-cuts-thousands-in-cloud-classic-other-units-report