IBM is set to cut approximately 9,000 jobs in the United States as part of a significant restructuring strategy aimed at enhancing operational efficiency and reducing costs. This decision will primarily affect the Cloud Classic division, which has been a focal point for job reductions. A considerable number of these positions are expected to be relocated to India, where IBM has been expanding its workforce significantly.
The layoffs are part of a broader corporate restructuring plan, with reports indicating that nearly 25% of the workforce in the Cloud Classic segment could be impacted. Employees in consulting, corporate social responsibility, cloud infrastructure, and internal IT systems are among those affected.
This move aligns with IBM's ongoing strategy to shift jobs to India, where operational costs are lower and the talent pool is abundant. The company currently has more job openings in India than in the U.S., reflecting its focus on leveraging India's skilled workforce.
Job reductions have been confirmed in several key locations, including Raleigh, North Carolina, New York City, Dallas, Texas, and various areas in California.
IBM's CEO, Arvind Krishna, has previously emphasized the importance of India as a key talent center for the company. This strategic shift is seen as a way to capitalise on India's growing tech ecosystem.
The layoffs come amid a broader trend in the tech industry where companies are increasingly adopting a "global delivery model," outsourcing roles to regions that offer cost advantages and access to specialized skills.
The decision to offshore jobs raises important questions about protecting the technology base within the U.S. This shift could impact U.S. national security, innovation capacity, and economic stability as critical tech roles move overseas. Policymakers may need to engage in serious discussions about how to safeguard domestic employment while fostering an environment conducive to innovation and growth.
