IBM India set to downsize workforce by up to 800

Written by fe Bureau | Bangalore | Updated: Feb 15 2014, 19:52pm hrs
IBM India, which is estimated to have a headcount of over 1 lakh employees spread across multiple locations in the country, is downsizing its workforce in India as part of its global rebalancing announced by its chief financial officer Martin Schroeter.

The rebalancing will see layoffs in the first quarter, the company had said earlier. The number of Indian employees being retrenched is estimated between 700-800, though there is no confirmation on the number yet.

Last years workforce rebalancing had hit more than 3,300 IBM employees in the US.

IBM was expected to lay off some of its STG group employees, since it has been bleeding for some time now. FE's questionnaire to IBM India remained unanswered at the time of going to the press.

IBM India follows a two tier model of employment which includes contractual or temporary workforce and permanent staff. Most of the employees who have been asked to leave belonged to the former category. The temporary workforce are sourced from various agencies and paid higher than the permanent staff but do not receive any long term benefits like insurance, provident fund or severance package.

It is understood that IBM has been downsizing in its network solutions group, which is part of its hardware division. IBM India has various divisions like IT services, systems and technology group (STG), which is largely the hardware segment, software and domestic market. The largest concentration of its people is in Bangalore.

A few employees FE spoke to said that the Performance Improvement Plan of the company has become harder of late. According to them, the company is following a passive retrenchment policy by not giving pay hikes leading to many employees leaving it.