The new IBM entity will merge one-fourth of India staff
As per the announcement by Arvind Krishna, Chief Executive Officer, IBM, the company is splitting its business into two companies to build focus on hybrid cloud and artificial intelligence (AI), up to one-fourth of its India employees are expected to be part of the new entity. While IBM does not disclose the India headcount, it is estimated that the country accounts for about a third of its global workforce of over 350,000.
The split will have “no material impact" on India operations, Krishna said. Sectors such as telecom, banking, and government are driving the adoption of hybrid cloud in India, he added.
As part of this split, IBM will separate its Managed Infrastructure Services unit of its global technology services division into a new public company by the end of 2021. The new public company, yet to be named, has more than 4,600 clients in 115 countries and an order backlog of $60 billion, according to IBM.
Krishna said, “We are committed to our footprint in India. We also have a very large R&D presence in India and as our business begins to grow, we expect opportunity for people in India both in terms of employment and growth. The new company will have greater agility to design, run and modernize the infrastructure of the world's most important organizations. Both companies will be on an improved growth trajectory with greater ability to partner and capture new opportunities."
With tighter integration and focus on its open hybrid cloud and AI solutions, IBM will move from a company with more than half of its revenues in services to one with a majority in high-value cloud software and solutions, the company said. IBM will also have more than 50% of its portfolio in recurring revenues.
As part of this strategic move, IBM said it is trying to “simplify and optimize its operating model for speed and growth. This includes streamlining its geographic model and transforming its go-to-market structure to better engage with and support clients."
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