IBM lays off as big Triangle employer leans on AI and Raleigh’s Red Hat software
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AI-generated summary reviewed by our newsroom.
- IBM will cut a low single-digit percentage of its global workforce by year-end.
- Layoffs follow prior restructurings as IBM pivots to software and AI via Red Hat.
- Red Hat remains a top Wake County employer while contributing double-digit revenue.
IBM plans to cut thousands of jobs by the end of the year as the large Triangle employer and owner of the Raleigh software provider Red Hat continues its swing toward software and artificial intelligence.
Layoffs will affect “a low single-digit percentage of our global workforce,” IBM said in a statement Wednesday. “While this may impact some U.S.-based roles, we anticipate that our U.S. employment will remain flat year over year,” the company added.
IBM began this year with more than 270,000 employees worldwide, meaning even a 1% staff reduction could eliminate a few thousand positions. The company did not share layoff details by location or office. Bloomberg first reported IBM’s layoff announcement Tuesday.
The layoffs follow other recent IBM restructurings, which some employees internally refer to as “resource actions” or “RAs.” In January 2023, the company cut 3,900 positions as part of a workforce rebalancing. Last year, IBM announced layoffs in its marketing and communications divisions while it pursued “skills most in-demand among our clients, especially areas such as AI and hybrid cloud.”
IBM has made this software shift through Red Hat, a leading provider of enterprise open source software that IBM acquired in 2019 for $34 billion. Red Hat has consistently returned double-digit revenues for its parent company. It delivered 12% growth last quarter, which actually fell below investor expectations and prompted some to question its future growth projections.
“We do expect to see Red Hat returning to mid-teens or close to mid-teens growth,” IBM CEO Arvind Krishna said during an Oct. 22 earnings call. Krishna also noted the importance of artificial intelligence to his company’s consulting division, saying “clients need help designing, deploying and governing AI at scale.”
Red Hat is among the 20 biggest employers in Wake County, state data shows, and it maintains its headquarters in downtown Raleigh.
IBM is the 6th-largest employer in Durham County and one of the oldest tenants in Research Triangle Park. While it maintains RTP facilities, the company recently relocated the bulk of its local workforce to a leased four-building campus just outside the park.
