IBM Layoffs Could Affect A Quarter Of Its Workforce

Andrew Heaton

Technology giant IBM may be about to undergo huge layoffs with reports stating the company is preparing to make more than 118,000 staff members redundant which accounts for 26 percent of its entire workforce.

The news comes after technology blogger Robert X. Cringely said that more than a quarter of its workers will be "getting phone calls from their manager."

"A few hours later a package will appear on their doorsteps with all the paperwork," Cringely said, referring to staff who could be affected.

While the U.S. will be hit the hardest, other countries will also feel the effects of IBM's massive layoffs, which could come as soon as next month.

A report from Sky says they are looking at a reorganization, which has been codenamed Project Chrome, and will mark the biggest redundancy in IBM's history since 1993 when more than 60,000 employees were let go. There was also a more recent incident when nearly 2,800 U.S. employees were made redundant in June, 2013.

A fall in company revenue is said to be one of the main reasons for the restructuring, with IBM's chip design and manufacturing departments said to be "unprofitable." Last year, the company reported that revenue had fallen from $107 billion to $93 billion, making it the 11th consecutive quarter of loss.

However, IBM has dismissed the news of the layoffs as rumors, according to a report from the Guardian newspaper. A spokesperson for the company denounced the speculations as "ridiculous" and "baseless."

"If anyone had checked information readily available from our public earnings statements, or had simply asked us, they would know that IBM has already announced the company has just taken a $600m charge for workforce rebalancing. This equates to several thousand people, a small fraction of what's been reported."

As a pioneer of technology, IBM -- whose initials stand for International Business Machines -- are responsible for many groundbreaking inventions, including the hard disk drive, floppy drive and the magnetic strip card.

However, they have struggled in recent years to make the shift from computer and hardware manufacturing to more modern ventures, such as cloud storage. As a result, companies such as Google are paving the way for modern technology, which means IBM's layoffs may not come as a huge surprise.