In a piece of news that comes as a shock to the Indian IT community, tech behemoth IBM has recently downsized 300 employees from their services division. According to a report in a noted financial daily, IBM has taken this drastic step to “re-invent” itself and meet the changing needs of their customers.
This news comes close on the heels of reports that US-based IT services company Cognizant is planning to let go of a huge chunk of their mid-level employees. Another report by a financial newspaper has suggested that the mid-level officers are the ones who are going to be affected by it the most.
IBM has chosen to downsize these 300 employees from the software services department, because, the company wants to focus more on emerging technology capabilities. Reportedly, the company is looking at adding fresh talent who are trained for technologies like artificial intelligence, machine learning and cloud, among others. IBM is retraining and helping existing employees to upskill in these areas to meet the growing demand.
An IBM spokesperson told the newspaper, “This in accordance with IBM’s strategy to re-invent itself to better meet the changing requirements of our business and to pioneer new high-value services. And we remain committed to being an essential part of India’s growth.”
A report by McKinsey & Company had suggested that nearly half of the workforce in the IT services firms is likely to become irrelevant by 2020-21. It had suggested that the Indian IT service players may have to re-skill significant chunks of their workforce to drive upcoming digital technology transformation.
Given the significant shift in technology over the past few years, the biggest challenge for big IT firms is to re-train more than half of their existing workforce. The report pointed out that while the industry employs 3.9 million people, a majority of them have to be retrained on most levels. As the IT industry is witnessing an uncertain time with the growth in digital technologies, companies are struggling to keep both the new developments and traditional technologies in the business.