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By | Kat Hall 22nd February 2016 14:01

IBM UK puts 1,352 Global Tech Services heads 'at risk'

Punters demanding better prices and services, 'we need to throw costs overboard'

IBM is to cut 185 jobs in its Global Technology Services division in the UK – the latest swing of its corporate axe over the last 24 months.

The company started the 45-day redundancy notice period with GTS staff on 15 February after forming a Employee Consultation Committee earlier this month, as we revealed.

According to the latest internal memo seen by The Register, Big Blue is actually putting 1,352 staff in Blighty at risk.

In the document, IBM stated GTS "continues to drive an aggressive agenda to transform its operational model to maintain our competitive advantage.

"UK is a contracting market and to improve our position and competitiveness we need to accelerate our own transformation. Our clients continue to demand annual improvement on price and service," it added.

To meet the "objectives" the UK subsidiary needs to "drive margin growth in 2016", and this will "require cost reduction to support these objectives".

"To support the cost reduction in 2016, UK IS is driving a series of parrallel initatives across our labour and non-labour cost base and driving to a standard global blueprint," the missive continued.

IBM confirmed in the staff memo that based on the "current business situation", the job cuts will be achieved through an "involuntary redundancy programe".

Statutory redundancy terms will be applied those that leave, with payments based on length of services capped at 20 years or a total payment of £14,250.

GTS operates four service areas: Strategic Outsourcing, Integrated Technology Services, Technical Support Services (TSS) and GTS Delivery. It remains unclear how the workforce reduction will be cut.

The division is not exactly one of the growth engines at the company; for 2015, s 9.7 per cent to $35.4bn, and gross profit margin was down to 37.4 per cent, which the company said was related to bit barn investments and a roll out of services contracts.

One of our sources previously said IBM has undertaken "strategic 'resource actions'" every six months for the past year-and-a half, with the latest cuts being the fourth round of redundancies in 24 months.

At the end of January, Lee Conrad, national coordinator of the Alliance@IBM union, said that staff had told him that up to 20 per cent of the GTS workforce is at risk in the US.

Conrad has also warned GTS, which employs 190,000 worldwide, could be sold off completely.

A spokeswoman at IBM, said the company "continually remixes skills - our clients expect no less as they look to IBM to help them take advantage of innovations and new technologies. IBM continues to hire aggressively in key skills areas."®

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