On-going Restructure
According to industry sources, IBM Korea is splitting its four divisions – covering hardware and system technology, software, global technology services, and global business services – into 13 solution-specific units since earlier this month, in accordance with instructions from the IBM headquarters.
The purpose is to boost profits by concentrating on promising sectors such as big data, cloud computing, mobility, analytics, and security, while trimming down less lucrative ones. The hardware and software groups have already been consolidated, with the system business division, and the reshaping of the remaining ones is slated to be completed early next month.
IBM Korea’s quarterly sales dropped for 11 quarters in a row until the last quarter of 2014, and the company announced earlier this month that it would carry out business reorganization.
Under the circumstances, rumors about a large-scale layoff are circulating. IBM Korea let more than 200 employees go last year, and the number is predicted to increase to 250 or so this year in view of its ongoing poor performance.
Industry insiders are focusing on the fact that the process is being led by a vice president sent from headquarters, instead of IBM Korea CEO Shirley Yu-tsui. “This has been unprecedented and seems to signal major restructuring,” one insider commented.