IBM is reportedly planning to cut 10,000 jobs in the European region that will affect employees in the company’s legacy IT services business. The decision was supposedly announced in a meeting with European labor representatives earlier this month. The change will reportedly affect close to 20% of employees in the region, with staff in the U.K. and Germany set to be impacted the most.
Bloomberg reports that the layoffs are meant to help cut costs in the services unit that the company is expected to spin off. The firm is supposedly planning to focus on its “hybrid-cloud computing and artificial intelligence unit” that will help bring revenue growth. The report adds that the company has already been laying off employees this year but has not disclosed any numbers.
In an email statement to Bloomberg, a spokesperson for IBM said that the firm’s “staffing decisions are made to provide the best support to [its] customers in adopting an open hybrid cloud platform and AI capabilities”. CFO James Kavanaugh said in an earnings call in October that the technology giant is “taking structural actions to simplify and streamline” its business, likely hitting at the potential changes.
These changes will reportedly be the first big move by IBM CEO Arvind Krishna who took over the post from Ginni Rometty in April. A person familiar with the matter told the publication that the layoffs should be completed by the first half of 2021.