IBM disclosed this week that it is putting its Systems and Technology Group staff on unpaid furlough for a week in late August as a cost-cutting measure. The move, coming on the heels of layoffs of some 1,700 employees earlier this summer, shows how much IBM is struggling to turn around its declining hardware business.
With the global server market declining almost 8 percent in this year's first quarter, according to market researcher IDC, IBM isn't the only IT vendor that's wrestling with slowing server sales. As customers move more of their compute operations to the cloud and consolidate data centers around fewer servers, due to virtualization and other technologies that boost efficiency, that challenge isn't going to get any easier.
IBM's layoffs and other cost-cutting actions have IBM solution providers worried that the company is in danger of losing top talent and expertise.