IBM mulls UK, Ireland staff cuts despite profit boom

IBM mulls UK, Ireland staff cuts despite profit boom

Summary: IBM is looking to axe a number of staff in the U.K. and Ireland, according to a report, despite booming profits in the company's recent Q2 earnings call.

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Computing giant IBM may cut hundreds of jobs in the U.K. and Ireland only days after reporting profits and healthy growth in the region.

According to The Register, U.K.-based employees of IBM's Strategic Outsourcing Delivery division will start an employee consultation period of one month in early August. Employees affected have been told of the plans, the report says.

Aside from the fact that the division sounds like a Mossad-style hitsquad, the staff outside IBM's employee culling unit may also face cuts, such as those working at the U.K. and Ireland's Software Group.

Why the U.K. and Ireland? It's not clear, nor does it make sense. IBM is looking to the U.K. as the bright spot on a mountain of flatlining growth. Having said that, to increase productivity and improve profit margins -- the report cites -- redundancies may be necessary to achieve such aims. 

In spite of a rocky global economy: "We had growth again in the U.K. and Spain, Germany was flat, while France and Italy declined," said IBM chief financial officer Mark Loughridge on the earnings call. Its U.K. business grew for the eleventh quarter in a row.

IBM's revenue by geography shows across the EMEA (Europe, Middle East, and Africa) region, sales were flat, compared to a 1 percent push in the Americas and 4 percent in Asia Pacific. 

The global technology giant, which has more than 430,000 staff worldwide, recently took a swipe at its employee base by shaving off 5,000 U.S.-based staff in 2009 and a further 1,200 across the world earlier this year.

An IBM spokesperson was unavailable for comment at the time of writing, but did tell The Register in an emailed statement: 

"Change is constant in our industry and transformation is a permanent feature of our business model. Consequently, some level of workforce remix is an ongoing part of our business. Given the competitive nature of our business, we do not publicly discuss the details of our staffing plans."

Well, that explains that then; clear as mud as always. We'll keep you in the loop on any further developments.

Topics: IBM, IT Employment, Tech Industry

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  • Glad I don't work for them anymore

    I spent 25 years at IBM, and have never looked back since I left. Their "growth" model is predicated on cost cutting, not gross revenue increases, and when they start losing business because they can't provide proper and timely support, they will be forced to change their philosophy. Usually, companies that try it find that cost cutting is not a path to growth.
    thetwonkey