IBM is cutting ‘thousands’ of jobs across the US amid COVID-19 pandemic
Computer giant IBM, which has a large presence in Research Triangle Park, is laying off an unspecified number of employees, the company said Friday.
The company did not directly blame the economic downturn caused by the coronavirus pandemic for the layoffs. Earlier this year, the company told analysts it was restructuring parts of its business, including its Global Technology Services division, in a move that could lead to savings of $2 billion. In April, IBM took a $900 million charge against its first-quarter earnings in relation to that restructuring.
“IBM’s work in a highly competitive marketplace requires flexibility to constantly remix to high-value skills, and our workforce decisions are made in the long-term interests of our business,” IBM spokesman Ed Barbini said in an email to The News & Observer.
Barbini added that IBM recognizes “the unique current conditions” of the coronavirus, and the company is “offering subsidized medical coverage to all affected U.S. employees through June 2021.”
The layoffs were first reported by Bloomberg News. Citing unnamed sources, both Bloomberg and The Wall Street Journal said that the job cuts would affect several thousands of employees as well as offices across the U.S., like the one in RTP.
IBM’s presence in North Carolina
IBM employs more than 1,000 people at its RTP office, making it one of the largest and most important tech employers in the Triangle.
IBM has a history of periodically laying off hundreds of employees from its spread out workforce around the globe. It also consistently brings on new employees. The company is among the 10 largest hirers of tech talent in North Carolina, according to recent research by the N.C. Technology Association.
IBM employs more than 300,000 people worldwide. This is the first layoff to be initiated by its new CEO Arvind Krishna, who took over the company earlier this year and was the architect of the decision to buy Raleigh-based software company Red Hat for $34 billion.
Krishna has been tasked with turning around the performance of IBM, which under his predecessor, Ginni Rometty, saw its revenue consistently fall quarter to quarter.
These appear to be the first large layoffs since last June, when the company trimmed around 1,000 positions, The N&O previously reported.
In 2019, IBM also laid off about 300 employees in RTP that were part of a subsidiary called Seterus, which IBM sold to the mortgage services company Mr. Cooper Group.
So far, IBM has not filed a Worker Adjustment and Retraining Notification with the state’s Commerce Department, something that is required for certain large layoffs.
IT job openings shrinking
The layoffs also come as the number of IT job openings in North Carolina continues to shrink because of COVID-19. The number of open tech positions in North Carolina fell 25% in April, The N&O reported.
In an interview earlier this year, Red Hat’s new CEO Paul Cormier said he was committed to “taking care” of the thousands of Red Hat employees affected by work-from-home orders across the globe.
Red Hat, he said at the time, will pay all of its employees during this time regardless of whether “you’re 140% productive or 40% productive.” However, he said the pandemic was likely to affect the company’s ability to hire as aggressively in the coming months.
It is unclear if Red Hat is also cutting positions in conjunction with IBM. The company has not yet responded to a request from The N&O.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
This story was originally published May 22, 2020 at 9:38 AM.
