As it continues to work its way through its transition to higher value business initiatives, IBM also has been overhauling its workforce to focus on areas such as the cloud, cognitive computing, mobile and more.
As part of its “workforce rebalancing” effort—as IBM refers to it—the company has eliminated several positions and replaced them with new, different jobs that focus on the company’s strategic imperatives.
In a July 18 email to the IBM staff, Ginni Rometty, chairman, president and CEO of IBM, said the company has added more than 30,000 new employees in the first half of this year.
The email, obtained by eWEEK, said:
“In the second quarter we also continued to make meaningful progress in how IBMers work and contribute to this success. With Checkpoint, all IBMers are getting and giving faster and more frequent feedback. 130,000 IBMers have been trained in agile, 70,000 IBMers have chosen to work with Mac products, and more than 250,000 IBMers are using Box. Almost all IBMers participated in Cognitive Build, helping 20,000 colleagues collaborate on nearly 3,000 cognitive start-up projects. And we continue to invest in our people, with IBMers benefitting from 9 million hours of learning in the first half, and with more than 30,000 new IBMers joining the company.”
IBM has taken heat for layoffs in recent months. The company does not disclose details on the number of positions it rebalances. However, in a statement earlier this year, the company said: “IBM is aggressively transforming its business to lead in a new era of cognitive and cloud computing. To this end, IBM currently has more than 25,000 open positions, many in these key skills areas. If we meet our hiring targets, we expect our employee numbers to be roughly the same at year-end as they were in 2015.”
That was in keeping with the information shared by Martin Schroeter, IBM’s CFO, during the company’s first-quarter earnings call in April where he discussed IBM’s first quarter 2016 financial results. Discussing the company’s second-quarter results, Schroeter noted that IBM’s workforce rebalancing is about “rebalancing skills more than capacity reduction.”
IBM continues to overhaul its workforce to address the emerging demands of its customers as both IBM and its customer base transforms.
This is an issue that underscores IBM’s long-term commitment to growing its business and the value of its operations for shareholders, said Charles King, principal analyst at Pund-IT.
“It also firmly undermines criticism that the company has been ‘cutting its way to profitability,'” he said. “Overall, this highlights how IBM is determined to evolve and expand its business on its own terms, and is willing to make the technology and workforce investments necessary to achieve its goals.”
IBM Adds 30,000 New Jobs This Year
For the second quarter of 2016, Schroeter said revenues from the company’s strategic imperatives—cloud, analytics and engagement—increased 12 percent year to year.
Over the last twelve months IBM’s strategic imperatives delivered $31 billion in revenue, and now represent 38 percent of the company. Growth was led by cloud. Cloud revenues—public, private and hybrid—for the quarter increased 30 percent. And cloud revenue over the last 12 months was $11.6 billion. Meanwhile, revenues from analytics increased 5 percent, revenues from mobile increased 43 percent and revenues from security increased 18 percent.
Chris O’Malley, CEO of Compuware, which sells software to support mainframe users and developers, said of IBM, “They’re trying to change a tire on a moving car; it’s a hard effort to retool in a way that they’re trying to do.”
He said IBM’s strategic imperatives that are dominated by cognitive and analytics—with Watson being the centerpiece—as well as the movement of an increasing amount of work to the cloud, are bold moves for any one company to try to pull off at once.
Judith Hurwitz, president and CEO of Hurwitz and Associates, told eWEEK that at a recent IBM Cloud analyst meeting the IBM management team confirmed that they have adopted a cloud first strategy.
“I think that cloud will be a source of an increasingly large percentage of revenue as we are already starting to see,” she said of IBM, noting that cloud software can be extremely profitable because of the recurring revenue combined with add-on services. “I think that the focus on cloud and cognitive are critical,” she said.
Moreover, Hurwitz noted that she believes cognitive is not just a single tool or technology; cognitive is a foundational platform that will be used to create a large number of applications in areas such as healthcare and financial services. These will be big ticket solutions, she said.
It appears that the transformation is paying off, too. “I think that IBM is definitely making progress,” Hurwitz said. “It is difficult to transform an enterprise company with as much legacy hardware and software as IBM has. It is not easy.”
Meanwhile, IBM has no choice but to continue to rebalance or retrain its workforce as it makes its way through the transformation, said O’Malley.
“With the strategic imperatives that they’re pursuing, they’re trying to basically take the resources they have internally or go get new ones to pump up the volume in those areas,” he said. “The risk that you run is that you so overly disrupt the core elements of the business that have made you incredibly successful for the last 100-plus years that IBM’s been in existence.”