According to TheRegister.com, IBM this week began notifying several thousand employees they’ll be laid off, with the cuts potentially affecting 2,700 to 5,400 workers globally. The company confirmed to Bloomberg this represents a “low single-digit percentage” of its workforce. Most impacted are the US infrastructure group, where sources say 45% of staff could be cut, and the US Cloud group under SVP Ric Lewis, where over 50% may be let go. Affected employees have 30 days to find other positions within IBM or accept severance. The company reported $16.3 billion in Q3 2025 revenue with $1.7 billion profit, while its infrastructure segment grew 17% to $3.6 billion with 57.2% gross margins.
Profitability Pressure
Here’s the thing that doesn’t quite add up: IBM’s infrastructure business is actually growing revenue pretty well at 17% year-over-year. So why the massive cuts? Former employees point to Lewis’s promise of profitability in the infrastructure business this year. Basically, it seems like IBM is trying to squeeze margins by cutting expensive US talent. And when you look at their current job openings – 2,840 in India versus just 376 in the US – the pattern becomes pretty clear.
Employee Reality
The human impact here is brutal. Imagine getting that 30-day notice and knowing there’s a 50% chance your entire department gets wiped out. Employees are already venting on forums like The Layoff and Reddit about the exhaustion of constant “Resource Actions.” One current employee described it as “the specter of layoffs” always hanging over them. And think about this: IBM had nearly 160,000 US employees back in 2002. Now they’re down to roughly 50,000 based on their 401K participation numbers. That’s a stunning decline.
<h2 id="bigger-tech-trend”>Bigger Tech Trend
IBM isn’t alone here – Amazon just announced 14,000 job cuts, Oracle’s been trimming too. But IBM’s situation feels different. They’re not a startup burning cash or a company in decline. They’re making solid profits and their cloud business should theoretically be growing. So what gives? I think we’re seeing the mature phase of cloud computing where the initial land grab is over and now it’s all about efficiency. Companies are realizing they don’t need massive US-based teams to maintain infrastructure when they can offshore or automate more. The careers page tells the whole story – the hiring is happening in lower-cost regions.
What’s Next
Looking at their financial reports, IBM’s infrastructure margins at 57.2% are actually pretty healthy. But apparently not healthy enough for Wall Street‘s expectations. The real question is whether cutting this deep will hurt their ability to innovate or support enterprise clients. When you’re dealing with mainframes and critical infrastructure, experience matters. Can they maintain quality while shifting so much work overseas? That’s the billion-dollar question nobody can answer yet.
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