IBM likely to lay off 5k employees in India

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BENGALURU: IBM is expected to lay off a few thousand people in India in the coming months as the company moves towards newer technologies such as cloud computing and mobile and as it seeks to deal with dropping revenues and growing margin pressures.

Multiple sources put the likely figure in India at about 5,000 employees, though they also said many of these could be replaced by contract staff. This will help margins, and facilitate just-in-time hiring in the current volatile market.

On Monday, Forbes carried an article by Silicon Valley technology columnist Robert Cringely who said that IBM was planning a transformation project – code named Project Chrome — that would reduce its global workforce by 26% or 1.12 lakh employees. IBM responded in an email to news agency Reuters that the company had “just taken a $600 million charge for workforce rebalancing” and this equated to job cuts of “several thousand employees, a small fraction of what’s been reported (by Forbes).” Most analysts have also dismissed the possibility of a layoff on the scale reported by Cringely.

“There is a strong movement towards contract staffing based on future business dynamics. Companies want to hire project-based staff rather than have permanent employees on their rolls,” said Ajit Isaac, chairman and MD of Ikya Global. Four big HR staffing firms — Web Development Company (part of Manpower Group), Magna Infotech, Artech Infosystems and Collabera — supply close to 7,000-8,000 people to IBM annually, said sources.

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