Reports indicate that around 9,000 employees may be affected, with layoffs anticipated in key IBM locations, including:
- Raleigh, North Carolina
- New York
- Dallas, Texas
- California
While IBM has not officially confirmed the scale of the layoffs, CFO James Kavanaugh previously hinted at a "workforce rebalancing" strategy during earnings calls, similar to past practices.
IBM’s Shift in Business Priorities: Declining Consulting & Infrastructure Revenues Despite the impending layoffs, IBM’s revenue grew by 1% in the last quarter of 2024, reaching $17.6 billion, primarily driven by a 10% increase in software sales. However, other areas of the business showed signs of decline:
Consulting Revenue: Dropped by 2%
Infrastructure Revenue: Declined by 8%
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These trends suggest that IBM is shifting its focus toward high-margin software and AI-driven solutions, potentially at the cost of its traditional services workforce.
Cloud Classic Team Faces Heavy Layoffs: What's Next?
The most affected department appears to be IBM’s Cloud Classic unit, which is expected to bear the brunt of the job cuts. Analysts believe that IBM is pivoting its focus toward hybrid cloud solutions and AI-driven technologies, reducing dependence on legacy systems and traditional cloud services.
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