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IBM reported considering "massive cuts" to Global Technology Services unit

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ROCHESTER, Minn. (KTTC) -

IBM is reported to be considering more big changes in the months ahead.  For the global computer services giant which uses "resource actions" to regularly shift or cull human resources and constantly re-make itself, such strategies are to be expected, but a report from London suggests that its pursuit of a return to top-line growth may prompt more drastic action.

Seasoned observers are signaling that plans are seriously being contemplated for what some call "massive cuts" in IBM's Global Technology Services unit in a response to lagging business demand and the transition to Cloud computer services.

In Rochester, what IBM is pursuing is a different kind of "transformation program."  In 2018, Big Blue will push forward to sell off its buildings at the sprawling campus at the end of 37th Street Northwest and lease back the space it needs for work units that will remain.  Its plans have been given the green light by City of Rochester and Olmsted County officials.

While the plan to rid itself of these physical assets becomes a reality, an even bigger change may occur this year inside IBM across the globe, specifically in its Global Technology Services division.  From London, an IT website called The Register this week published what appears to be an internal Bain Analysis confidential document suggesting that as IBM moves resources to cloud servers and redeploys employees internally, it would be possible for the company to shrink and shed more than 10,000 employees through attrition.  Should this path be followed, the analysis shown on the chart estimates that 1,700 of those IBM employees losing their jobs would come from the U.S. 

The chart appeared to be part of a slide show presentation in a meeting, perhaps captured with a phone camera.  Its title was “30% of SD&T (service delivery and technology) to be productively redeployed in 2018” and referenced an attempt to transform the company's service delivery model.

Whether IBM senior executives pursue such a strategy remains to be seen.  However, it is well known that leadership has been searching for ways to make the company more attractive to investors.  IBM is set to post its Q4 results next week.

KTTC has reached out to an IBM spokesman for a response or statement, and this story will be updated if and when we receive one.

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