IBM Starts New Round Of Layoffs

IBM confirmed that it is undergoing layoffs as part of a “workforce rebalancing” disclosed earlier this year.

IBM has quietly started a new round of layoffs as part of a previously disclosed “workforce rebalancing” effort.

The layoffs appear to be focused primarily on senior-level programmers as well as sales and support personnel, according to The Register, which first reported the cuts.

IBM, responding to a CRN request for comment, emailed a statement in which a spokesperson wrote that layoffs are happening.

“Early this year, IBM disclosed a workforce rebalancing charge that would represent a very low single-digit percentage of IBM’s global workforce, and we still expect to exit 2024 at roughly the same level of employment as we entered with,” according to the spokesperson.

In the first quarter of this year, IBM disclosed that it would take a $400 million hit in workforce rebalancing charges. That’s up from the $300 million in workforce rebalancing charges during the first quarter of 2023.

While IBM is not discussing the latest round of layoffs in detail, it is filing a number of public notices via WARN (Worker Adjustment and Retraining Notification) letters in some states.

In California, for instance, IBM on Tuesday reported 54 permanent layoffs in Santa Clara County via the California WARN system. Two days earlier, the company reported 57 permanent layoffs in San Francisco County. Meanwhile, in Washington state, IBM filed a WARN notice when it laid off 63 people starting in mid-August.

In the WARN notice IBM sent to California’s Employment Development Department, which makes such notifications available to the public, the company wrote that “all employee separations will take place on November 18, 2024.”

In its letter to the California EDD about its San Francisco layoffs, the company included a list of impacted positions. While a variety of sales and technical positions were identified, including six related specifically to software, also included were some very highly skilled positions including an AI engineer and a data scientist.

IBM in January confirmed an earlier round of layoffs accounting for 1.0 percent to 1.5 percent of its worldwide staff. Multiple media reports at that time suggested the total number of layoffs would be 3,900 workers, less than 1.5 percent of its total workforce.

Last year, IBM CEO Arvind Krishna said he planned to suspend or slow hiring for about 26,000 non-customer-facing back-office roles—which amounted to roughly 10 percent of the company’s total workforce—that AI and automation can do instead of people.

Krishna said he “could easily see” 30 percent of those roles—roughly 8,000 employees—replaced by AI and automation over the five years.

IBM Chief Financial Officer Jim Kavanaugh told investors and analysts in the firm’s last earnings call in July that “driving productivity is core to our operating and financial model. This includes enabling a higher-value workforce through automation and AI, streamlining our supply chain, aligning our teams by workflow and reducing our real-estate footprint.”

Kavanaugh added that “these actions allow for continued investment in innovation with R&D up 9 percent in the first half.”

IBM, which reported revenue of $15.8 billion in its second quarter, will report its third quarter earnings results on Oct. 23.

The company’s stock has been on a tear so far this year, up about 33 percent since early January to $216.81 a share as of Friday afternoon, Eastern Time.

David Harris contributed to this report.