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May 23, 2016

Job cuts expected to top 14,000 as IBM continues layoffs

News: Shift to cloud and analytics is forcing Big Blue to cut workforce numbers.

By CBR Staff Writer

IBM has started another round of job cuts as part of the layoffs Big Blue announced last month.

The Wall Street Journal reported that the cuts impacted offices in North Carolina, New York City, Poughkeepsie, New York, and Boulder, Colorado.

The company is moving some jobs to India and Costa Rica. One IBM employee was quoted by the news agency as saying, "Their initiatives aren’t going as fast as they’d like them to and it’s affecting their revenue more than they thought."

The latest layoffs follow a round of job cuts in March that impacted about 5,000 workers.

IBM recently said it would shut down its Somers, New York campus and move those jobs to a facility in North Castle, New York.

Bernstein analyst Toni Sacconaghi estimated in March that IBM could cut at least 14,000 jobs overall.

The company had over 20,000 open positions. Two employees said that IBM’s internal job-search tool listed between 7,000 and 8,000 open positions.

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The job cuts come after the sixteenth consecutive quarter of declining revenues as the rise of cloud computing affects its software and services business.

IBM said it is restructuring workforce to retool for cloud services and data analysis. The company expects to hire an equal number of new employees by the end of the year. The company employed 377,757 people at the end of last year.

Net income for Q1 2016 fell 21% on a year-on-year basis to $2.3bn, while revenue for the quarter stood at $18.7bn, down 5% from the same period last year.

IBM’s continued difficulties have seen the company cutting its workforce in the UK with 185 jobs in its Global Technology Services division axed in February.

It is uncertain how many jobs will be cut as IBM continues its transformation but it is looking as though the shift to cloud and analytics will consume more time.

Unlike fellow technology firms Intel and Hewlett Packard Enterprise, IBM does not reveal how many jobs it plans to cut.

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