IBM is latest tech giant to lay off staff amid pandemic

NEW YORK • International Business Machines (IBM) cut an unspecified number of jobs across the United States, eliminating employees in at least five states. The company declined to comment on the total number, but the workforce reductions appear far-reaching.

"IBM's work in a highly competitive marketplace requires flexibility to constantly add high-value skills to our workforce. While we always consider the current environment, IBM's workforce decisions are in the interest of the long-term health of our business," company spokesman Ed Barbini said on Thursday in a statement. "Recognising the unique and difficult situation this business decision may create for some of our employees, IBM is offering subsidised medical coverage to all affected US employees through June 2021."

Based on a review of IBM internal communications on the Slack corporate messaging service, the number of affected employees is likely to be in the thousands, said a North Carolina-based worker who lost his job along with his entire team of 12. "This was far-ranging - and historical employment ratings, age and seniority did not seem to matter," he said. The person asked not to be identified on concern that speaking publicly may impact his severance package.

The cuts also affected employees in Pennsylvania, California, Missouri and New York, where IBM is based, according to people familiar with the matter.

Another worker who lost his job said the reductions mostly focus on IBM's North American workforce. Half of his 70-person department were cut on Thursday and told their last day with the company would be June 22.

The tech industry has suffered widespread job losses after the coronavirus pandemic triggered a severe recession. Airbnb and Uber have cut about a quarter of their workforces. Earlier on Thursday, Hewlett Packard said it would eliminate some employees to save money, while Dell suspended several staff benefits.

It is unclear how many of IBM's cuts are caused by the pandemic.

The company has suffered years of falling revenue. In an earnings call in January, IBM discussed reducing costs through "aggressive structural actions" to improve the competitiveness of its Global Technology Services consulting unit, which represents about a third of revenue.

In online forums on Thursday, dozens of newly unemployed IBM workers lamented the situation and expressed fear over finding a new job in a recession.


A version of this article appeared in the print edition of The Straits Times on May 23, 2020, with the headline 'IBM is latest tech giant to lay off staff amid pandemic'. Print Edition | Subscribe