Lay Offs
This is a part of IBM’s strategy to focus on emerging technology capabilities and reduce exposure to traditional services.

IBM India has announced that it is letting go of 300 personnel from their software services section. The company says its focus is shifting to emerging technologies like Artificial Intelligence and those among this batch of employees who want to be retained in these areas will be given that option.

IBM is trying to play down this move to reduce the headcount in its software services division as being part of it looking to reinvent its Indian operations. On the other hand, the company would like to give the impression that it is also simultaneously hiring personnel with exposure to AI and cloud computing technologies. It is in this context that the present action (of downsizing by 300 personnel) has to be viewed.

This is not a one-off issue with IBM alone. The IT sector has been witnessing the change from some of the traditional technologies to the latest ones. The demand side from the customers’ end has been of this nature and companies have to adapt themselves to suit the needs of the consumers of their technology. This kind of churning, therefore, cannot be avoided.

It is now for the employees to re-learn their skillsets and go back to the classrooms to acquaint themselves with emerging technologies. IBM is offering to do this with their existing staff as well.

There is a cost element to this trend as well. Legacy contracts don’t deliver the kind of values needed to bear the increasing HR costs. New age technologies like AI can be billed at much higher rates if the company has the necessary skilled manpower to deliver the services. This is the crossroad all companies are confronted with, including IBM and they have very little option but to go for these reorganisations.