IBM plans on laying off 3,900 workers, joining other tech giants in recent staff cutbacks.
Those 3,900 employees, which represent around 1.5 percent of IBM’s global workforce, will come from two business units currently being sold off: Kyndryl (IT infrastructure services; spun off as its own company) and IBM’s healthcare data analytics business (sold to a private equity firm).
However, IBM doesn’t view itself as subject to the same market forces currently impacting companies like Meta, Google, and Microsoft, all of which have announced thousands of tech layoffs over the past few months. “The reason that we are remaining in this optimistic frame of mind [is] we have no consumer business,” IBM CEO Arvind Krishna said, according to CNN. “So I think, consequently, we might be seeing a little bit different subset of the economy than those who might have a large direct exposure to a consumer business.”
However, IBM is still competing against those tech giants in arenas such as A.I. and the cloud. Over the past few years, some of its biggest cutting-edge projects have experienced some setbacks, costing it market share at a critical moment. A years-long effort to turn its A.I. platform Watson into a cancer diagnostic tool resulted in canceled contracts. Meanwhile, its attempt to compete against the likes of Microsoft Azure and Amazon Web Services (AWS) with an enterprise-grade cloud also smacked into problems, including an ill-conceived decision to develop two separate cloud infrastructure designs in parallel.
If IBM wants to compete against those tech giants, it will need to continue paying out competitive compensation to software engineers and other tech specialists. According to levels.fyi, which crowdsources tech professional compensation, IBM lags its competitors somewhat when it comes to pay for software engineers—but it’s also known for paying extraordinary salaries to A.I. researchers and other experienced specialists in key roles.