IBM to take on-fourth of its India employees into new entity

IBM Corp. will take up one-fourth of its India employees into its new entity, says CEO Arvind Krishna. He said the split will have no material impact on India operations. The company is splitting its business into two companies with focus on hybrid cloud and artificial intelligence (AI). Its Managed Infrastructure Services unit will be made into a new public company by the end of 2021; its yet to be named.

Krishna said the separation would come into effect in the second quarter of 2021, it will create two companies globally as well as in India with different heads. “We will have two entities in India, but it will take a year to play out. I expect most people to find a place in one or the other company,” he said. “We have not done the full employee split but close to 100 per cent of our clients get touched by our infrastructure-managed services employees. Maybe about one-third to one fourth of our India employees will be part of the new company.”

The CEO said sectors such as telecom, banking and government are the driving force for the adoption of hybrid cloud in India. “IBM is laser-focused on the $1 trillion hybrid cloud opportunity,” Krishna said. “Client buying needs for application and infrastructure services are diverging, while adoption of our hybrid cloud platform is accelerating.” He feels now is the right time to create two market-leading companies focused on what they do best. Krishna said the company is committed to its footprint in India. “We also have a very large R&D presence in India and as our business begins to grow, we expect opportunity in India both in terms of employment and growth.”

Krishna disclosed IBM will focus on its open hybrid cloud platform and AI capabilities. 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.