IBM sustained its nearly decade-long streak of earnings growth in numbers reported Wednesday, but expect more layoffs in the remainder of the year. Though profits declined, it sustained profit through cutting costs and jobs — an unsustainable strategy long term, analysts told The Poughkeepsie Journal.
Software was the only unit that did not show a decline, with a revenue level at $6.2 billion, so you can bet that's the safest place to be in the company. Software is expected to account for more than half the company's profit by 2015, up from about 42 percent now, according to an Associated Press story.
As the AP put it, Mark Loughridge, the company's chief financial officer, said the company plans to "trim" jobs in other parts of the company, "mostly outside the U.S.," to ensure that earnings continue to rise. That means some U.S. jobs will be cut.
Of course, Big Blue has been quietly moving jobs offshore for years. Since it doesn't comment on that, it's hard to keep track of the layoffs. Based on numbers from Alliance@IBM, an IBM employee advocate group, Business Insider reported in March that at least 1,790 jobs in the U.S. and Canada had been cut in 2012. IT Jungle called the March layoffs "almost a traditional rite of spring at IBM." It reported the Global Technology Services (GTS) division was hit hardest with 691 jobs lost. GTS employees were told in June not to expect raises.
Also, a Tucson call center was closed in June, though the company did not release the number of jobs affected, according to the Arizona Daily Star. It did, however, say that its storage-systems development center there was not affected by those cuts.
So where will IBM be hiring? In sales. Loughridge said the company will hire 200 to 300 software salespeople a month through the end of the year. About half those positions will be in the United States.