IBM is planning to lay off thousands of employees across its Cloud Classic segment in the United States, according to a recent report by The Register. The employees were reportedly asked to train Indian employees on their job roles as they would have to exit the company soon.
Teams that are at risk of layoffs are believed to consist of those responsible for consulting, corporate social responsibility initiatives, sales, cloud infrastructure offerings, and people who report to IBM’s Chief Information Officer and work on internal systems. It is also being claimed that 10% of the Cloud group (which is not the same as Cloud Classic) has been asked to exit.
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According to the report, one of the reasons behind layoffs in the IBM Cloud Classic, the infrastructure-as-a-service (IaaS) built on IBM’s 2013 acquisition of SoftLayer, is the department transferring employment to India “as much as possible.” The tech giant’s layoffs could take place in locations like Texas, California, New York City and State, Dallas, Texas, and Raleigh, North Carolina but the exact number of employees affected is estimated to be around 9,000.
The Register also noted that IBM has also listed 173 open positions since January with 2,946 openings available since November 2024.
While IBM hasn’t put out an official statement regarding the layoffs, its Chief Financial Officer James Kavaunagh has said that he anticipated the “workforce rebalancing” to be consistent, considering recent years. However, a former employee said, “everyone I know that was affected, myself included, was simply offered a separation agreement,” and estimated that around 10% of IBM’s Cloud division was impacted.
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This comes with sources alleging a strategic move to relocate jobs to India. “They have been making a lot of changes to shift employment to India as much as possible,” one insider claimed. IBM joins many tech startups and established companies planning to relocate their hiring to India and Mexico, including Tesla, Salesforce and Google.
Employees are also currently grappling with a stricter return-to-office mandate requiring them to be present three days a week starting in April. Reports indicate that badge swipes are being monitored, and management has allegedly denied medical exemptions.
