Thread regarding IBM layoffs

Two changes have occurred since IBM purchased Redhat, BUT they are fundamental in understanding how IBM manages the business.

1. IBM will purchase innovation vs developing it in house.
2. Costs are everything, and must be driven to the absolute lowest no matter the consequences.
   This is all you need to know. Look at any IBM decision since 2019 and ask yourself Did IBM buy innovation (cost of purchase doesn’t matter as IBM will make it up in being a distributor) and what costs were impacted by that innovation decision (eg could they lower existing legacy costs with the new purchased innovation via outsourcing , offshoring, partnering, layoffs, pip, etc etc The answer to both of these questions is easy since 2019. IBM did both, and the consequences were devastating to the existing workforce. NOTE the repetitive workforce in India will feel this pain going forward as AI is just an excuse to lower costs. Will the skilled workforce in India grow? Of course because they cost less (approx 1/3 vs first world skills) There you have it IBM’s go forward strategy for the next 2-5 years.
   Offshore repetitive and/or skill

@e5

You said something that I don't want to ignore and I forgot to recognize in my previous cost: the impact on America's middle class.

It appears our fellow Canadian colleagues are now understanding (perhaps? hopefully?) what we were saying all along? Canada is now seeing the consequences (the UK as well). Higher unemployment, tech jobs being taken away, youth employment is practically non-existent... the unemployment lines in Canada are way too long even for starter jobs. BTW, 20% of recent immigrants in Canada live below the poverty line.

@e5

Oh, yes, fully aware and so is the gov at this point in time. So it can be changed if they want to in a matter of minutes. It's one of those things that everyone knows, so we are in a "just fix it already" moment.

It wasn't always like that up until 15+ years ago. Indians have received the majority of H1Bs approvals every year since at least 2010. The trend of Indian citizens dominating H1B approvals has been consistent over the past decade and a half.

No other country has a change, between India and(73%-74%) and China (12%-14.3%), no other country has a chance. Good workers with intelligence and real degrees are left out.

But my point about making them pay for the delta stands. If they want to hire a bunch of people somewhere else with fake certifications, fake experience, fake talent, fake IQ be my guest, but pay the delta. All they have is that they are cheap.

I did notice that many Indians (and sometimes other outsourced resources) became / are increasingly arrogant and condescending (without the quality of work). they save money, but it comes at a cost.

@bf "You also need to prove that you tried to hire locally and you couldn't find the talent"

That's how it is today with H1B and PERM and it's the reason why 80% of jobs posted on LinkedIn are fake jobs that the poster has no intention of filling with a new hire American. It's too easily gamed, we need to do much more to stop our middle class from being destroyed.

@bh
they will spend a fortune on lawyers to find loopholes

thank goodness the money wasn't spent on actual employees
that would create something new and useful

@bg

I'd like to add one more thing. The Hire Act needs to be solid in terms of potential loopholes. These companies re already engaged with lawyers and counselors to figure out workarounds.

It may reduce "some" but it won't reduce "most". Plus, they will turn around and go south, as they are already doing.

@bf

So, further info:

Hiring costs in the US, including salaries and operating expenses, are significantly higher than in India, especially for technology roles.

Even with recent increases in Indian salaries, the base compensation for equivalent roles remains much lower when adjusted for purchasing power parity (PPP). This provides a massive cost advantage for companies that outsource work to India.

The difference in cost can be substantial. For example, some reports estimate that hiring in India can reduce costs by nearly 60% compared to the US. Other data show US software engineers earning an average of $140,000 annually, versus $45,000 for their Indian counterparts, though the gap for entry-level roles is much wider.

My point about the HIRE Act is this:

The bill would impose a 25% tax on payments made by US companies to foreign service providers and make those payments non-deductible. Analysts estimate this could increase the effective cost of outsourcing by 58% or more, nearly doubling the cost for some firms.

While significant, this increase is not large enough to erase the entire cost disparity for most roles, given the initial low cost of labor in India.

Other Factors: The bill's outcome is uncertain, as it is still in the legislative process. If passed, companies may explore workarounds, such as adjusting payments or shifting contracts to Indian vendors.

So, basically:

Even with a 25% outsourcing tax, the fundamental economic drivers of lower labor costs in India are likely to keep the cost gap intact for the foreseeable future. The decision to hire in the US or India involves more than just cost, including factors like skill specialization, time-zone alignment, and communication. However, a US company's decision will still primarily come down to a cost-benefit analysis that, for many roles, continues to favor outsourcing.

TO SUMMARIZE: The Hire Act is not enough.

@b9

You said: "The HIRE Act is coming. I just wish the tariff on offshoring was 200% instead of 25%."

I'd suggest: It has to be an equalizer, meaning, if you hire in India you need to pay the difference or delta in salaries and benefits in the form of taxes (tariffs). You also need to prove that you tried to hire locally and you couldn't find the talent. But AT LEAST, pay the delta of what it would cost in the US - India (Latin America, etc) cost in the form of taxes (tariffs). Example, if it costs 100 to hire in the US, but 25 to hire in India (or Argentina, Mexico, Costa Rica, Brazil, Uruguay, etc) then there is a 75 delta, that has to be taxed (tariffed).

It is not our fault that there is a lack of opportunity in many other countries, we would love to help, but we need to think about American workers first.

Does it mean that all American workers are lovely? Nope, but right now, a lot of good people are being affected.

The entire issue is that the people being outsourced (offshoring and near-shoring) are not geniuses, they are not Elon Musks or Einsteins or whatever. They are just cheap.

Just my 2 cents...

Since, it can take more than 6 Indian engineers to do the work one American engineer can do, I think, the ratio for jobs openings is 50/50.

@b9

Yeah, the Hire Act got blocked in the Senate (for now). Senator Jacky Rosen said they’re still serious about cracking down on outsourcing and supporting American workers, but they want to do it in a bipartisan way instead of fast-tracking it without debate.

Here's the YouTube where it shows the debate.
YouTube link: https://www.youtube.com/watch?v=_TSOmU6Wj8g

The HIRE Act is coming. I just wish the tariff on offshoring was 200% instead of 25%.

@OP

with your long winded essay, how could you forget that IBM stands for Indian Business Machines ? Did you lose your train of thought somehow and ignore what was staring at you in the face.

AK said: “American employees are too expensive, complacent and tend to complain too much compared too my younger countrymen…so we are doing the meaningful to make our numbers for Wall Street “

If you train your own Indian replacement ===> you are on the upcoming lay off list

@av

I wanted to share this link instead, as someone shared here today the same sentiment: https://www.thelayoff.com/post/@j4+1k57k4772

@ak

100% correct.

It seems you are not alone: https://www.thelayoff.com/post/@aa+1k5bwg1n0

The quality is always lacking, but they are very good at politicking (for themselves).

@ac

IBM is no longer innovating, it is marketing with the intent to help the stock price and the likes.

If the information you have provided is indeed the case (no doubt based on everything we have experienced), the above will be also the case, very much indeed.

@a5

In the event the information may be removed:

https://unstop.com/blog/ibm-hiring-software-developers-2025

IBM, is expanding its workforce in India with over 2500+ job openings across all departments.

IBM Hiring 2025: Job Openings by Departments
IBM’s latest hiring spree covers a variety of roles across domains, including:

Division/Team No. of Openings
Software Engineering 1080
Consulting 632
Enterprise Operations 474
Infrastructure & Technology 190
Data & Analytics 183
Project Management 21
Sales 13
Product Management 7
Security 3

Some key open roles include:

Package Consultant
Strategy Consultant
Delivery Consultant
Application Developer
Data Engineer
Technical Support Professional
Infrastructure Specialist
Process Delivery Specialist
Campaign Specialist
Process Innovation Professional
Functional Manager
Project Manager/ Group Manager
Territory Partner Sales Specialist
Brand Sales Specialist
Product Manager/ Senior Product Manager

i heard cio wants 90% non americans

@a8

Thank you very much. The data you provide means that India now has 3X more employees than the US (let that sink in). IBM is no longer a US firm.

I'm sorry that I have to point this out, but this move triggered IBM's decline, there is a clear correlation between the start of this so called trend and the company's deterioration.

Thanks to Ginni and Tonic, his heir AK and McKinsey for the outcome (sarcasm on).

To other companies following this trend: It doesn't work.

@OP

1) Jobs are being created @ American corporations, but EXPORTED.

2) Jobs are being destroyed @ American corporations, but EXPORTED.

From: US (plus: Canada, UK).
To: Cheaper (and less qualified) markets that have no ability to create their own jobs (that's why they need us to provide such jobs). This also comes with a transfer of knowledge and loss of competitive edge, IP, trade secrets.

Export of services = tariff for US companies, importers of such jobs and intermediaries that provide HR services to businesses to facilitate global hiring, outsourcing, near-shoring, offshoring.

@a6 Thanks for your post. I think you could loop two more sources of info into the “whats know” categories.

1. IRS 5500 info is out for 2024 headcount’s (eg 2025 data Yes it’s runs a year behind) and IBM’s USA headcount appears to be hovering between 49k and 53k. That’s an approx 3k reduction from the 2023 numbers and is consistent. The inputs are labeled IBM short term disability (49.5k), IBM long term disability (50.6k), and IBM Group life insurance (52.2k). What the real actual number is, is anyone’s guess but there is a very very high probability that 49-53k works and that’s before the 2025 8k layoff.
2. IBM’s general manager in charge of India several months ago confirmed during a posting that IBM India was in the 130-135k headcount range.

These two data points seem to confirm what we all know is going on. IBM is aggressively outsourcing to India and the USA headcount is much lower than most folks think. My back of the envelope analysis says 43k USA headcount after the 2025 layoffs, and 135k India employee base after the 2025 USA RA’s

@OP

The thread in response to @OP with further statistics is long and I apologize for it (profusely), but it intends to put all info and its sources in this thread.

Apologies for the inconvenience of a long post.

@OP

Let's summarize what we know here (this thread):

It is a fact that IBM is undertaking layoffs in the US and expanding its operations and hiring in India. We are not more ons (they may think we are, but we are not).

This has also created a severe level of uncertainty for US-based employees due to ambiguous messaging and (so called) "strategic" changes.

While IBM continues to keep their US-based employees uninformed and confused, and it continues with the US layoffs, IBM is shifting a significant portion of affected roles to India. What do we know and they can't deny?

In July 2025, IBM announced over 2500+ job openings in India across various departments, including engineering, consulting, and operations. This indicates a continued focus on hiring in the region. Back in January, IBM announced plans to increase its workforce in India by a similar number, focusing on "talent development and expansion" in Tier-2 cities like Bengaluru, Kochi, and Ahmedabad.

Source (worth checking): https://unstop.com/blog/ibm-hiring-software-developers-2025#:~:text=IBM%2C%20a%20global%20leader%20in,Brand%20Sales%20Specialist

Regarding the number of employees in India, IBM does not publicly disclose the precise figure. However, several sources offer estimates and insights:

Estimates of Employee Count: By most estimates, IBM has close to a third of its global workforce (at least 100,000 employees) in India, potentially more than in the US.

Hiring Trends: In March 2025, IBM reportedly had significantly more job openings in India (3,866) than in the US (333), suggesting an active hiring drive in the country.

Historical Growth: Between 2003 and 2007, IBM's headcount in India grew by almost 800%, reaching nearly 74,000 in 2007 (Wikipedia).

Since 2006, IBM has been the multinational with the largest number of employees in India.

This workforce restructuring affects various departments, including Cloud Classic Operations, Consulting, Corporate Social Responsibility, Sales, and Internal IT Teams.

The restructuring is expected (Yahoo Finance) to further create and expand roles in India, especially in cloud computing, infrastructure, sales, and consulting. While IBM has confirmed "workforce rebalancing," the exact number of job cuts in the US has not been officially and openly disclosed.

Many other American corporations are doing exactly the same. But that doesn't excuse IBM.

Sources:

https://en.gamegpu.com/iron/IBM-is-mass-firing-employees-in-the-US-and-taking-on-personnel-in-India#:~:text=Sources%20say%20the%20layoffs%20are,the%20total%20number%20of%20layoffs.

https://finance.yahoo.com/news/ibm-slash-nearly-9-000-130352744.html#:~:text=“They're%20trying%20to%20move,the%20company's%20global%20workforce%20strategy.

https://www.hrgrapevine.com/us/content/article/2025-03-25-ibm-to-cut-9000-us-jobs-as-workforce-shifts-abroad#:~:text=IBM%20is%20rumoured%20to%20be,must%20be%20reinstated%2C%20Judge%20orders

https://www.linkedin.com/pulse/major-layoffs-us-opportunities-india-ibms-latest-move-sparking-sx8yc#:~:text=Staffing%20Partners:%20Reliable%20&%20Cost%20Efficient,an%20affordable%20labor%20market%20scenario.

https://en.wikipedia.org/wiki/IBM_India#:~:text=Between%202003%20and%202007%2C%20IBM's,there%20than%20in%20the%20US.

https://timesofindia.indiatimes.com/technology/tech-news/ibm-reportedly-cutting-jobs-and-trying-to-keep-it-/articleshow/113517842.cms#:~:text=IBM%20confirms%20job%20cuts,made%20public%20by%20the%20agency.

https://www.thehindu.com/sci-tech/technology/ibm-to-layoff-thousands-of-us-employees-as-hiring-shifts-to-india-report/article69385319.ece#:~:text=IBM%20has%20also%20listed%20173,hiring%20has%20continued%20in%20India.

https://www.thehindu.com/sci-tech/technology/ibm-layoff-hits-thousands-as-company-tries-to-keep-it-under-wraps/article68672900.ece#:~:text=The%20company%20reportedly%20took%20a,the%20first%20quarter%20of%202024&text=Credit:%20Kesavan%20A%20N-,IBM%20is%20quietly%20laying%20off%20thousands%20of%20employees%2C%20mainly%20impacting,5%2C200%20employees%2C%20the%20report%20said.

https://m.economictimes.com/tech/information-tech/ibm-looks-to-groom-indian-talent-for-global-roles-and-key-missions/articleshow/117064563.cms#:~:text=IBM%20plans%20to%20increase%20its,president%2C%20software%20products%20at%20IBM.