IBM’s Korean office shakes up workforce in difficult times

Summary:IBM’s Korean office is realigning its business to stay relevant in the country amid mounting difficulties, reports ZDNet Korea’s Jaehwan Cho.

According to sources familiar with the matter, the company has recently reallocated over 60 of its employees from its software division to its customer call centers.

In January last year IBM named Shirley Yu-Tsui as new general manager in Korea. Under her tenure, the company sacked 200 employees to lower costs.

ibm-kr-gm
Shirley Yu-Tsui, general manager of IBM Korea

"She was basically sent to restructure IBM Korea. There was a general feeling that there was way too much unnecessary workforce," said an IBM Korea insider.

Early this year, the company started taking volunteers for early retirement. As of 2013, the company had 2242 employees in Korea.

IBM Korea made 1.2 trillion won ($1.2 billion) in revenue last year, a slight drop of 1.2 percent from the previous year.

Meanwhile, IBM reported a ninth-straight quarter of profit decline.

The company is steadily losing customers for its mainframe systems, previously its bread-and-butter, due to the emergence of more cost-efficient competitors.

KB Kookmin Bank, South Korea’s largest bank and one of IBM’s most important clients here, is considering changing to a Unix based IT system from IBM’s main frame.

The bank said IBM did not follow through on a promise to lower service prices, and has currently filed a complaint to the Fair Trade Commission.

"Many consider Yu-Tsui’s incompetence as the main reason for the conflict with KB Kookmin Bank. Losing such clients will have major repercussions," said the insider.

Martin Schroeter, the chief financial officer of IBM said in July: "South Korea and Australia were slow in the second quarter, both countries show degradation."

Spokespersons for IBM Korea did not pick up their phones despite numerous calls made for comments.

Topics: Korea, IBM

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