{"id":40892,"date":"2020-05-22T10:09:50","date_gmt":"2020-05-22T10:09:50","guid":{"rendered":"http:\/\/icloud.pe\/blog\/?guid=436ffbef8b05238b8964b0a9a43399df"},"modified":"2020-05-22T10:09:50","modified_gmt":"2020-05-22T10:09:50","slug":"ibm-and-hpe-to-make-thousands-of-job-cuts","status":"publish","type":"post","link":"https:\/\/icloud.pe\/blog\/ibm-and-hpe-to-make-thousands-of-job-cuts\/","title":{"rendered":"IBM and HPE to make \u2018thousands of job cuts\u2019"},"content":{"rendered":"


\n Keumars Afifi-Sabet<\/a><\/span>
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22 May, 2020<\/span><\/div>\n<\/p><\/div>\n<\/div>\n

\n<\/a><\/p>\n

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Two of tech’s\u00a0biggest players have announced sweeping job cuts as the economic effects of COVID-19<\/a> continue to take their toll,\u00a0with IBM and HPE reducing its staff count by potentially thousands.<\/p>\n

IBM has already swung the axe, with the number of affected staff thought to be in the thousands, according to\u00a0people familiar with the company’s plans, speaking to\u00a0Bloomberg<\/em><\/a>. The publication spoke with a Californian-based worker who lost his job along with his entire team of 12. Job cuts are also being made across sites in other US states including Pennsylvania, Missouri, New York.<\/p>\n

The layoffs are thought to affect several divisions across IBM including its Global Technology Services division, which offers IT outsourcing, the Wall Street Journal (WSJ)<\/a> <\/em>also suggests.<\/em><\/p>\n

It\u2019s unclear how much of an effect the pandemic has had on IBM\u2019s plans, though the actions represent the first major staffing shakeup since CEO Arvind Krishna took charge in January 2020<\/a>. Krishna transitioned into the role with an ambition to revive growth at IBM, after recent quarters of declining revenue.<\/p>\n

\u201cIBM\u2019s work in a highly competitive marketplace requires flexibility to constantly add high-value skills to our workforce,\u201d an IBM spokesperson told Bloomberg<\/em>. \u201cWhile we always consider the current environment, IBM\u2019s workforce decisions are in the interest of the long-term health of our business.\u201d<\/p>\n

\u201cRecognizing the unique and difficult situation this business decision may create for some of our employees, IBM is offering subsidized medical coverage to all affected U.S. employees through June 2021.\u201d<\/p>\n

HPE<\/a>, meanwhile, has outlined plans to make severe cost reductions following a collapse in revenue in the latest quarter, falling 16% year-on-year $6 billion. As a result of job cuts, executive pay reductions, and other measures, the company expects to save between $1 billion and $1.3 billion over the next three years.<\/p>\n

In an earnings call, the firm announced it would be\u00a0reducing\u00a0employees\u2019 base salaries from 1 July through to the end of the year. The CEO and each executive officer at the executive VP level sustaining a 25% pay cut, while the base salaries of each executive officer at the senior VP level will suffer a 20% cut.<\/p>\n

HPE will also embark on an immediate \u201ccost optimisation\u201d plan which will involve realigning the workforce to \u201careas of growth\u201d and implementing measures to simplify the product portfolio, supply chain structures, and digital customer support model.<\/p>\n

Each of the company\u2019s divisions suffered losses in the last quarter, with High-Performance Compute & Mission Critical Systems revenue down the sharpest year-on-year, a fall of 18% to $589 million. This was followed by the Storage division which fell 16%, to $1.1 billion. Profit margins in both divisions also declined.<\/p>\n

The smallest drop in revenue was in the Intelligence Edge division, which declined 2% to $665 million. This equated with an 11% operating profit margin, however, compared with 5.3% from the prior-year period.<\/p>\n

HPE\u2019s recent financial performance, and the resultant cost-saving measures, have been pinned heavily on the coronavirus pandemic, and its effect on demand as well as the supply chain.<\/p>\n

As with IBM in recent years, HPE has suffered from consistent\u00a0falling revenues since splitting from HP in 2015. The firm has, however, made a series of moves in recent years in order to change its fortunes, including the acquisition of supercomputing behemoth Cray<\/a>\u00a0last year.<\/p>\n

Its CEO\u00a0Antonio Neri\u00a0declared in 2019 that\u00a0his vision for the company is one that champions a \u201ccloudless\u201d future<\/a>, adding that the cloud wasn\u2019t a destination, rather, an \u201cexperience\u201d, where businesses encounter true cloud interoperability. <\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Keumars Afifi-Sabet<\/p>\n

22 May, 2020 <\/p>\n

Two of tech’s\u00a0biggest players have announced sweeping job cuts as the economic effects of COVID-19 continue to take their toll,\u00a0with IBM and HPE reducing its staff count by potentially th…<\/p>\n","protected":false},"author":433,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-40892","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/40892","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/users\/433"}],"replies":[{"embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/comments?post=40892"}],"version-history":[{"count":3,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/40892\/revisions"}],"predecessor-version":[{"id":40898,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/40892\/revisions\/40898"}],"wp:attachment":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/media?parent=40892"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/categories?post=40892"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/tags?post=40892"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}