International Business Machine (NYSE:IBM) reportedly laid off 50% to 70% of the workforce at its Watson Health operation, primarily at recent acquisitions for which the tech giant paid at least $3.6 billion.
The layoffs, according to a May 25 report in The Register, involve Cleveland-based Explorys and Dallas-based Phytel, which IBM acquired in April 2015 for undisclosed amounts. Cleveland Clinic spinoff Explorys developed a secure cloud-computing platform used by 26 healthcare systems to identify patterns in diseases, treatments and outcomes; Phytel provides cloud-based services to healthcare providers to coordinate care to meet new healthcare quality requirements and reimbursement models.
Employees at medical image and clinical systems company Merge Healthcare, acquired for $1 billion in December 2015, and the Truven Health Analytics business acquired for $2.6 billion the following February, are also subject to the layoffs, according to the website, which cited “inside sources” and posts on Facebook and TheLayoff.com.
Workers in Ann Arbor, Mich., and Denver were also affected, the site reported, although Worker Adjustment & Retraining Notification listings in Texas, Ohio, Michigan and Colorado showed no notices from IBM about layoffs this year.
IBM Watson Health general manager Deborah DiSanzo did not respond to a request for comment.
“Wanted to share anonymously about a massive layoff in Watson Health, potentially limited to Provider acquisitions (Phytel, Explorys, Truven). They are laying off 50-70% of staff today. Not sure about total affected since there’s no transparency, but our Dallas office has 230 people. Cleveland and Truven have more, I believe. I was laid off this morning,” read a post on the Watching IBM Facebook page.
“Axed last week. Watson Health… They are keeping about 15 people to close the shop, will happen in early 2019…. This round of cuts is much bigger than anyone is reporting, they care cutting deep and wide, there is no recovery from this one. I am talking, dev freezes, project shutdowns, deadlines and SLAs breached, etc… We all knew it was coming but nobody expected it’ll be this fast and rampant…,” read another post, on TheLayoff.com.
“can confirm, wife was laid off. there is a similar anon update WIBM as well. they cut everyone except the sceleton [sic] crew,” another poster responded.
Anonymous sources told The Register that IBM launched a “resource action” affecting multiple sites.
“IBM Watson Health has initiated a significant RA across multiple offices. The provider division in Dallas has seen at least 80 per cent affected, and 30 per cent in the Truven customer experience group. Awaiting confirmation of details on severance packages, but can confirm this was broad and not targeted at a specific demographic,” one source told the site.
“Over 50 years old. IBMer over 30 years,” said another. “The message was that there are about 7,000 people in Watson Health today and this was a cost-cutting exercise. 90 days’ notice with 30 days’ severance.”
“I just got notified that I am affected by a resource action. I am in the Platform for Health, LSC Infrastructure DevOps group, and have been working at IBM for two years and 11 months now,” a third told the website. “It looks like a lot of other people in Watson Health were affected. This could be huge.”