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By | Jack Clark 12th February 2014 19:36

IBM job cuts: Big Blue starts 'slaughter' of Indian and European workforce

Redundo reaper makes appearance after Lenovo sell-off

IBM has begun slicing away at its workforce in India and Europe, as the company tries to shift its business to more lucrative, higher-margin technologies.

The job cuts were confirmed by a representative for the IBM Union Alliance to The Register by email on Wednesday after a report was published describing a mass layoff in India that seemed more like a "slaughter house".

"We have been getting reports from IBM India employees for the past 2 days," Lee Conrad, the international coordinator for the IBM Global Union Alliance, told us. "They say the cuts are very large, although we do not have any numbers yet."

In addition to the large-scale Indian job cuts, Conrad told us that job cuts were ongoing in Europe, with countries hit so far including Norway (35 jobs), France (between 438 and 500), Belgium (105), Italy (430), and the Netherlands (240).

"We expect more in other countries. The number could reach 15,000 world wide," he said.

Reports and rumors point to the Indian cuts slicing into IBM's Systems and Technology Group – which seems likely, given IBM's recent sale of one of the group's main technical assets, the System X server unit, to Chinese manufacturing giant Lenovo.

"STG INDIA operation has started and people with 12+ years with POWER Firmware not spared ... Operation still in progress and numbers are huge," wrote one anonymous whistleblower.

At the time of writing IBM had not responded to requests for information by El Reg.

These layoffs and voluntary redundancy schemes are part of a larger shift by IBM away from low-margin commodity equipment and into lucrative software. This is motivated by sagging earnings in hardware and a commitment to attaining earnings of $20 per share to satisfy Wall Street shareholders.

"We'll acquire key capabilities, we’ll divest businesses, and we'll rebalance our workforce, as we continue to return value to shareholders," IBM's chief financial officer said recently.

In related news, IBM was recently rumored to have retained Goldman Sachs to help it price up its chip division for a possible sale.

If true, by the end of this year IBM's grim redundancy reaper will likely need a lie down to recover from its bleak "returning value to shareholders" scything. ®

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