IBM workforce declined 12% in 2014; losses tied to corporate divestitures

Despite workforce decline, Big Blue said it hired 45,000 last year

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IBM's global workforce declined 12% last year, with most of the decrease due to corporate divestitures.

IBM is reporting its global headcount at 379,592, a decrease of 51,600 employees from the prior year. The data is included in the company's recently filed annual report for 2014. In 2013, IBM employed 431,212 globally.

Of this overall reduction, divestitures accounted for 35,000 employees.

IBM last year sold its x86 server business to Lenovo for $2.1 billion, and its microelectronics manufacturing unit to GlobalFoundries for $1.5 billion. There were other divestures as well.

As it made these cuts, IBM said it hired 45,000 people last year, "and the company currently has about 15,000 job openings around the world for new skills in growth areas such as cloud, analytics, security, and social and mobile technologies," said Clint Roswell, a company spokesman.

The company continues to point out that the hiring is evidence of an ongoing effort to "remix its skills" to adjust to marketplace changes. This ongoing remixing also means that as IBM hires, it also cuts workers on a routine basis.

IBM says it is shifting to "higher value segments of enterprise IT," and this has meant jettisoning those areas of the business that aren't producing high margins, such as the x86 server business, according to Charles King, an analyst at Punt-IT.

Its most recent divestitures are similar to previous ones, such as the 2005 sale of its PC business to Lenovo or the hard disk drive unit to Hitachi. It's not alone in this strategy. Hewlett-Packard did something similar last year when it announce plans to separate its PC and printer operations from its enterprise business, said King.

IBM "is placing a lot of bets on businesses it believes will deliver higher margins," said King, including analytics, cloud, social and security. But most of those markets, with the exception of analytics, are areas "where there is a great deal of promise that hasn't been entirely proved out yet."

It's hard to know how IBM's corporate direction is affecting its role as a major employer in the U.S. Similar to many of its corporate peers, IBM does not providing a breakout about its employment trends in the U.S.

Lee Conrad, the national coordinator for the Alliance at IBM, a Communications Workers of America local, estimates that there are approximately 77,000 U.S. IBM employees. In 2006, IBM employed about 127,000 in the U.S. It reported its U.S. workforce until about 2010.

"The Alliance has been tracking the downward trend of IBM employment in the U.S. for some time, from the selling off of business units, to forcing out employees through job cuts and offshoring," said Conrad. He said many jobs have been shifted to India and the Philippines.

Copyright © 2015 IDG Communications, Inc.

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