IBM has been laying off a substantial number of employees this week and is trying to keep it quiet, sources have said.

One IBM employee has said that IBM Cloud experienced “a massive layoff” in the past few days that affected thousands of people.

“Unlike traditional layoffs, this one was done in secret,” the insider said. “My manager told me that they were required to sign an NDA not to talk about the specifics.”

Multiple posts on layoff-focused message boards and corroborating accounts with other sources familiar with the IT giant’s operations suggest the cuts are large.

Asked to confirm the layoffs, an IBM spokesperson said, “Early this year, IBM disclosed a workforce rebalancing charge that would represent a very low single digit percentage of IBM’s global workforce, and we still expect to exit 2024 at roughly the same level of employment as we entered with.”

IBM’s first-quarter 2024 earnings report said that the mainframe goliath took a $400 million “workforce rebalancing” charge to cover the cost of planned layoffs. That’s after a $300 million “workforce rebalancing” charge in 2023. At the beginning of 2023, IBM announced plans to cut 3,900 jobs.

With about 288,000 employees worldwide at the end of 2023, the “very low single digit percentage” possibilities for 2024 might be 1 percent (2,880 layoffs), 2 percent (5,760 layoffs), 3 percent (8,640 layoffs), or more. Assuming a fixed cost per employee, last year’s charge and job cut disclosure suggests about 5,200 positions would be eliminated with a $400 million charge.

Last year, CEO Arvind Krishna said IBM expected to replace around 7,800 jobs with AI, though no specific time frame was provided. His corporation’s stock price is up 33 percent year to date to $215 a share.

IBM’s spokesperson did not respond when asked to be more specific about the number of layoffs and to explain where new roles were being hired to maintain a flat headcount.

According to the source, the job cuts have been directed mainly at senior-level programmers, sales, and support.

This individual’s job is headed to India, we’re told, reflecting a hiring freeze in the US. But hiring is said to be ongoing in India.

IBM has a history of moving jobs to India.

As with prior layoffs, or “resource actions” to use IBM’s euphemism, we’re told those affected are substantially in the 50-55 age bracket with 20-24 years of seniority.

“It seems exclusively people in L7 and L8 and L9 bands, at the top of the band in payment structure,” the insider said.

Despite numerous past and ongoing age discrimination lawsuits, IBM maintains it does not systematically discriminate on the basis of age.

Businesses that fall victim to a data breach can expect a financial hit of nearly $5 million on average — a 10% increase compared to last year — according to IBM’s annual report on cybersecurity incidents.

The tech giant worked with the Ponemon Institute to study 604 organizations affected by data breaches between March 2023 and February 2024. The breaches — affecting 17 industries across 16 countries and regions — ranged from 2,100 to 113,000 individuals records leaked. The researchers also interviewed 3,556 security and C-suite business leaders with firsthand knowledge of the data breach incidents at their organizations.

What stood out most to IBM was the jump in the global average cost of a data breach, which reached $4.88 million and was the biggest jump since the pandemic. In 2023 the cost was $4.45 million.

IBM has announced that its software portfolio in AWS marketplace is expanding, and is now available in 92 countries.

The software is currently available in Denmark, France, Germany, United Kingdom and United States. However, the expansion beyond these countries aims to make procurement easier for clients, streamline purchasing and create new efficiencies, while allowing them to use their AWS committed spend for IBM software purchases.

The expansion will provide clients with more access to IBM’s AI and data technologies within a portfolio of 44 listings and 29 SaaS offerings that are available for purchase. These include components of the watsonx AI and data platform, which allow enterprises to build, scale and govern AI workloads.

For example, Watsonx.data is a fit-for-purpose data store built on an open data lakehouse architecture, and Watsonx.ai is a next generation enterprise studio for AI builders are available in AWS Marketplace, alongside two of IBM’s AI Assistants – watsonx Assistant and watsonx Orchestrate. Watsonx.governance is expected to be available soon.

Other software includes IBM’s flagship database Db2 Cloud Pak for Data as well as a portfolio of automation software including Apptio, Turbonomic and Instana, and the IBM Security and Sustainability software portfolios – all built on Red Hat OpenShift Service on AWS.

The company is also launching 15 new IBM Consulting professional services and assets on AWS Marketplace, exclusively designed for AWS. To align with client needs and demand, the offerings focus on data and application modernization, security services and tailored industry-specific solutions – with generative AI capabilities included in select services.

Matt Yanchyshyn, general manager, AWS Marketplace and partner services, AWS said: “IBM’s global expansion with AWS Marketplace opens up innovation opportunities for our joint customers across the world.

“By leveraging the speed and simplified procurement capabilities of AWS Marketplace, customers can now more easily access IBM’s cutting-edge solutions, enabling them to accelerate their digital transformation and drive innovation at scale. This expanded collaboration between AWS and IBM reflects our shared commitment to empowering customers with the tools and resources they need to succeed in today’s fast-paced environment.”

Nick Otto, head of global strategic partnerships, IBM, said: “By expanding the availability of our software portfolio in AWS Marketplace, organizations around the world will have greater access to a streamlined way to procure many IBM AI and hybrid cloud offerings to help propel their business forward.”

A Fifth Circuit panel ruled Tuesday that a federal court improperly awarded $1.6 billion to BMC Software, a Houston-based software company, over a licensing and competition dispute with tech giant IBM.

Both companies had worked on AT&T’s mainframe systems, with BMC licensing its software to the telecommunications company and IBM providing the hardware. In 2008, the two companies agreed to let IBM use BMC’s licensed software for its own IT business when working with BMC’s customers. The two companies amended a key part of their contract regarding outsourcing in 2013 and 2015.

As part of that 2015 amendment, BMC laid out a provision that said that IBM couldn’t replace BMC’s licensed software on AT&T’s system with their own. The provision also stated that “while [IBM] cannot displace any BMC Customer Licenses with [IBM] products, [IBM] may discontinue use of BMC Customer licenses for other valid business reasons.”

Following a federal court ruling in favor of BMC that left IBM on the hook for $1.6 billion, IBM’s attorney argued before the Fifth Circuit last September that because AT&T had initiated the project to switch from BMC’s software to IBM’s, rather than IBM themselves, IBM did not violate the provision.

The panel sided with IBM in a ruling authored by U.S. Circuit Judge Edith H. Jones, based on a holistic reading of the language used in IBM-BMC contract.

“IBM could replace BMC software with IBM software in AT&T’s mainframe at AT&T’s request. The phrase ‘other valid business reasons’ unambiguously requires this result,” Jones wrote in deciding at IBM did not violate the contract as the agreement does not unequivocally prevent IBM from replacing the BMC software.

“Because the client made that decision without unfair influence from IBM, BMC lost out to IBM fair and square. Under these circumstances, there is no legitimate reason to enforce Section 5.4 against IBM,” Jones wrote.

According to the panel, BMC’s interpretation of the “other valid business reasons” phrase in the provision would have either rendered it superfluous or far too narrow. Beyond that, the panel found that BMC’s narrow interpretation of the difference between “displace” and “discontinue” did not fully explain the non-displacement provision’s meaning.

In 2017, BMC sued IBM in the Southern District of Texas for breach of contract — including violation of that non-displacement provision — after learning of a 2013 project between AT&T, IBM, and other partners to replace BMC’s mainframe software in AT&T’s systems with competing products, including IBM’s own software.

Though the project did not get completed, as AT&T opted to renew its contract with BMC, the Houston company sued after learning about IBM’s involvement.

IBM appealed a May 2022 ruling from U.S. District Judge Gray Miller that focused on the non-displacement provision and had determined the project had “displaced BMC Customer Licenses with IBM products when it implemented Project Swallowtail at AT&T” in violation of the contract between BMC and IBM.

Miller ordered IBM to pay BMC $718 million in license fees for actual damages, an equal sum in punitive damages and $168 million in prejudgment interest, for a total judgment of just over $1.6 billion.

IBM has been accused of cheating its executive assistants by denying them overtime pay and meal breaks and retaliating against them for accurately reporting their working hours.

A lawsuit filed last Tuesday in New York City alleges IBM broke the federal-level Fair Labor Standards Act and local labor laws by denying non-exempt employees overtime pay, unlawfully making deductions from their wages, and filing inaccurate wage statements.

Such practices amount to wage theft. According to the non-profit Economic Policy Institute, “between 2017 and 2020, more than $3 billion in stolen wages was recovered on behalf of workers by the US Department of Labor, state departments of labor and attorneys general, and through class and collective action litigation.”

Wage theft takes several forms, including minimum wage violations, overtime abuse, off-the-clock violations, meal break violations, illegal salary deductions, tip-related violations, and employee classification issues.

Faced with a series of overtime lawsuits in 2008, IBM reportedly allowed workers to be classified as “non-exempt” – so they were eligible for overtime – while slashing their salaries to compensate for the expense. In 2020, Big Blue was forced to shell out about $9 million in backpay to underpaid IT staff in Australia.

According to a paper by Rutgers researchers that was published in The Economic and Labour Relations Review (July 2021), “Wage Theft in the United States: towards new research agendas,” lax enforcement of labor laws has meant that wage theft is seldom detected and rarely has economic consequences for employers.

“Even if an employer is caught, the penalties are generally not severe enough to change their future behavior,” state authors Joy Jeounghee Kim and Skye Allmang.

The current complaint against IBM in the US was filed on behalf of plaintiff Cheryl Burgard, who worked as an executive assistant at Big Blue for 37 years until she left in February 2023. Her responsibilities included managing executives’ schedules, coordinating their travel, and submitting expenses.

Executive assistants report to IBM’s Global Administration department in Armonk, New York. They’re paid hourly and typically work Monday through Friday, 0830 to 1715, with a 45-minute unpaid lunch break, though it’s argued they often work outside that schedule.

According to the complaint, Burgard “worked off the clock because IBM made clear that it would not allow her to log significant overtime without retribution.”

IBM allegedly required Burgard to log her hours using electronic timekeeping software, and has logged evidence of hours worked using access badge reader data and other electronic interactions with its systems.

Yet, the complaint contends, when managers in IBM’s Global Administration met Burgard, they “made clear that, if she logged her true hours worked, it could cost [Burgard] her job.”

When Burgard complained to Global Administration and Human Resources, she, like other executive assistants, allegedly faced retaliation in the form of negative performance reviews.

IBM, the complaint says, “discouraged [Burgard] from reporting her true hours worked and complaining about nonpayment of her wages by issuing her negative performance reviews which had direct financial consequences.”

And it is further claimed Burgard regularly worked for 30 minutes during her 45-minute unpaid lunch break but had that full period deducted from her paid time.

The lawsuit seeks to be certified as a class action. If approved by the judge, that would allow the attorneys to seek damages for denied wages on behalf of an estimated 400 to 600 executive assistants employed by IBM over the several-year period covered by the applicable statute of limitations.

IBM did not respond to a request for comment.