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By | Paul Kunert 5th February 2016 09:02

IBM Global Tech Services staff at risk of redundo in Blighty

Staff council to be formed, 45-day consultation begins mid-Feb

IBM has entered into a 45-day consultation with UK staff in the Global Technology Services division, El Reg can reveal.

In a note sent to full-time staffers on 3 February, Martin Blackburn, GM of the local GTS operation, confirmed Big Blue is forming an Employee Consultation Committee (ECC).

This is to “represent the permanent employee population of the IS Delivery, Client Management and Client Excellence business areas in the UK,” he stated.

The ECC is to include elected reps plucked from management and the wider workforce, who will gather around a negotiating table to thrash out “proposals for the organisation to meet its business needs”.

Lovely corporate speak for IBM wanting to squeeze out more profits than the business unit is currently able to.

The consultation process commences on 15 Feburary and runs until the end of March. Sources told us one hundred plus employees are at risk of redundancy but this was unconfirmed at the time of writing.

"Immediate details are 'our cost level remains high', implying IBM management feel they they can get cheaper service elsewhere, even if service quality is lost," said one insider.

According to our source, IBM has undertaken "strategic 'resource actions'" every six months for the past year and a half

"This will make the fourth round within 24 months by the time this is complete," our source claimed.

GTS operates four service areas: Strategic Outsourcing, Integrated Technology Services, Technical Support Services (TSS) and GTS Delivery. It is not yet clear how the workforce cuts will be divided.

According to the Alliance@IBM union, GTS staff in the US are also entering into redundancy talks, estimating that up to 20 per cent of the division’s workforce is at risk. IBM has not confirmed this and it appears a little extreme.

As of calendar Q4, IBM had reported 15 consecutive quarters of revenue decline as it battles to offset falling demand for its technology with big cloud services contracts.

For the full year, GTS revenues fell 9.7 per cent to to $35.4bn, and gross profit margin was down to 37.4 per cent, which IBM said was related to data centre investments and the ramp of new contracts.

Major outsourcing companies have generally found big ticket deals harder to come by in recent years, as customers opted for less risky alternatives, breaking up contracts into smaller portions.

A spokeswoman at IBM sent us this statement:

"IBM can confirm that it plans to begin a consultation process with employee representative groups with a view to discussing business objectives in the UK." ®

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