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IBM to axe 10,000 staff in Europe ahead of legacy IT spin off

The majority of the cuts will reportedly be made in the UK and Germany

IBM is planning to cut around 10,000 jobs in Europe as it prepares to spin off its legacy IT unit. 

Bloomberg reports that the losses will affect about 20% of IBM staff in the region. The majority of the cuts will be made in the UK and Germany, people familiar with the matter told the publication, with IBM also planning cuts in Poland, Slovakia, Italy and Belgium.

IBM's legacy IT services business, which handles infrastructure operations such as managing client data centres and operating equipment, will be the hardest hit, according to the report.

The company announced in October that it planned to spin off this business into a separate public company in order to focus on AI capabilities and hybrid cloud, which IBM CEO Arvind Krishna described as a $1 trillion opportunity. The company hopes that separating its two businesses will help return it to revenue growth. 

This latest round of job cuts, which comes after IBM in May announced plans to reduce its headcount, was reportedly announced earlier this month during a meeting with European labour representatives, according to a union officer briefed on proceedings.

The jobs cuts are expected to be completed by the first half of 2021, while the tax-free spin-off of its legacy IT unit will be completed by the end of next year.

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