IBM has been a company adrift for the last several years with 22 straight quarters of declining revenue. Against that backdrop, The Register published an article yesterday suggesting there could be massive changes afoot for the company’s Global Technology Services group.
Global Technology Services is the business consulting arm of IBM that deals with infrastructure support and hardware consulting. As the company has shifted its emphasis to the cloud, GTS’s hardware focus is an area that will have less significance for the company moving forward.
This change would need to be seen against the changing backdrop of IT in general. The fact is that companies are moving away from running their own data centers and shifting to public cloud services. Having 100,000 employees focused on hardware deployment consulting doesn’t make a lot of sense in this context.
The Register article stated that the division was about to undergo a major change in focus resulting in a huge restructuring of the workforce. Further, the change was so large, the company has hired Bain to help them organize it. Some 30,000 people would be affected worldwide, according to the report.
Of that, 9300 jobs would be moved to areas where IBM is concentrating these days like cloud computing, while around 10,000 positions would simply not be refilled when the employees left. It’s less clear what happens to the remainder from the information in The Register article, but 6000 from cross-company or external services would be moved or eliminated. As for the remaining 5000 or so, it’s not explained what happens to them, or if there would be layoffs involved.
An IBM spokesperson reacting to questions on the accuracy of the article had this to say: “As you know, we do not comment on speculation. Many consultants recommend things to IBM, many of which remain merely recommendations,” the spokesperson told TechCrunch. That’s a carefully worded response to be sure.