IBM Australia slashes jobs to rebalance workforce

IBM Australia is expected to cut 500 jobs as part of plans to move investments in areas such as cloud, analytics, and cognitive computing.
Written by Aimee Chanthadavong, Contributor

IBM Australia is reportedly expected to cut an extra 500 jobs, according to The Australian, following last year's cull of 1,500 employees.

While no further comments are being made, an IBM spokesperson provided ZDNet with an almost-identical statement to that given to US-based journalists at ZDNet's sister site CNET several days ago. The spokesperson said the expected cuts are part of the company's plans to "rebalance its workforce to meet the changing requirements of its clients, and to pioneer new, high-value segments of the IT industry".

The spokesperson also noted: "To that end, IBM is positioning itself to lead in areas such as cloud, analytics, and cognitive computing and investing in these priority areas.

"For example, already this year, we have committed $1 billion to our new Watson unit and $1.2 billion to expand our cloud footprint around the world."

IBM currently employs more than 400,000 people worldwide.

"IBM's total workforce has remained stable over the past three years," the spokesperson said.

The IT vendor reported a mix bag of fourth-quarter results in January, with earnings better than expected, but revenue missed the mark as hardware sales tanked.

For the fourth quarter, IBM reported earnings of $6.2 billion, on revenue of $27.7 billion, down 5 percent from a year ago. But its hardware division reported operating income of $206 million, down 79 percent from a year ago, on revenue of $4.3 billion, down 26 percent from a year ago.

Also, the company is also facing difficulties to grow its up-and-coming units like Watson, analytics, e-commerce, mobile, and cloud fast enough to offset its businesses that are struggling. Even more so, now that the company's Manoj Saxena, who oversaw development of Watson's artificial intelligence technology, has jumped ship to join The Entrepreneur's Fund.

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