After software giant, TCS made the headlines for its recent large-scale retrenchment of employees; it’s the turn of IBM now. Faced with dropping revenues and growing ‘margin pressures’, IBM may lay off close to 5000 people in its India operations. India accounts for about 1.3 lakhs employees out of the total workforce of approximately 4.5 lakh employees.
On the whole, IBM will be reducing its employee strength by 26% which means around 1.12 lakh lay-offs. This is part of a transformation project of the company code-named ‘operation chrome’ according to which the future emphasis of the organization will be on hiring project-based staff rather than permanent employees. IBM’s global revenues have dropped for eleven successive quarters.
The $93-billion company is focusing on newer digital imperatives like cloud, mobility and analytics. “Previously there was higher tolerance towards mediocre skillsets. That’s not something companies want to live with. They want employees to be flexible and take on lateral roles. Many companies hired aggressively in the past and now they are sitting on huge manpower that’s not scalable or flexible,” said Rituparna Chakraborty, cofounder of Team Lease.