Last Thursday, a technology blogger for Forbes magazine reported that IBM was planning to cut 26 percent of its total workforce — or some 112,000 jobs — in a "bloodbath" of layoffs that would begin this week. Headlines buzzed that this would amount to the biggest corporate layoff in history, and the stock appeared to rise on the news.
By Monday, however, IBM had sharply dismissed the report, calling the rumor "ridiculous" and "baseless," putting the number at more like "several thousand people," and noting it has 15,000 job openings, too. "If anyone had checked information readily available from our public earnings statements, or had simply asked us, they would know that IBM has already announced the company has just taken a $600 million charge for workforce rebalancing," the company said in an emailed statement.
That $600 million charge likely equals about 8,000 people, according to estimates from Sanford C. Bernstein analyst A.M. (Toni) Sacconaghi. If that number turns out to be correct, it's a long way from 112,000 — or any of the largest layoffs in the last two decades.
Another IBM cut, however, does top the list. In July 1993, under former CEO Lou Gerstner, the company cut 60,000 jobs: a mass layoff number that has yet to be surpassed since then, according to the outplacement firm Challenger, Gray & Christmas.
Here's a look at the biggest U.S. layoffs in the past two decades, according to Challenger's data:
|Date||Organization||Industry||Number of layoffs|
|Jan-93||Sears Roebuck & Co.||Retail||50,000|
|Sep-11||United States Army||Government||50,000|
|Dec-05||United States Air Force||Government||40,000|
|Jan-02||Ford Motor Co.||Automotive||35,000|
|Jan-09||Circuit City Stores||Retail||34,000|
|Sep-11||Bank of America||Financial||30,000|
|Mar-10||United States Postal Service||Government||30,000|
|Aug-09||United States Postal Service||Government||30,000|
|Jan-02||United States Postal Service||Government||30,000|
|May-12||Hewlett Packard Co.||Computer||27,000|
|Apr-03||Alameda School District||Government||25,000|
|Jun-05||General Motors Corp.||Automotive||25,000|
|Dec-08||Merrill Lynch (Bank of America Merger)||Financial||25,000|
|Jan-06||Ford Motor Company||Automotive||23,200|
|Aug-02||Ames Department Stores||Retail||22,000|
Job cuts — though common this time of year — have declined to their lowest level since 1997, according to recent numbers from Challenger. Still, the firm's report notes that the trends for large tech companies have been moving in the opposite direction. Job cuts in the tech sector rose 77 percent in 2014, with particularly high numbers of layoffs in the computer industry.
IBM's latest "workforce rebalancing," after all, comes not long after a separate $900 million restructuring charge it announced in the first quarter of last year. Between that round and this one, Sacconaghi estimates a total of 20,000 to 22,000 people were cut through the charges taken in 2014. He also expects more cuts in 2015.
An IBM spokesman declined to comment on those estimates beyond a company statement, which noted that Big Blue also hired 45,000 people last year.
Other tech giants also made big cuts in 2014. In July, Microsoft said it was slashing up to 18,000 jobs; and in May, Hewlett Packard said it was cutting up to 16,000. That was on top of the 27,000 job cuts HP announced in 2012, a number that was revised twice and ultimately reached 34,000.
These cuts, especially among the tech sector's giants, reflect an industry in flux, as companies try to shift from old-line hardware and software businesses to higher growth markets like cloud computing. "The large tech companies, particularly, are vulnerable right now because they're in a sector that moves so quickly," says John Challenger, the CEO of Challenger, Grey & Christmas. "Technology becomes outmoded much more quickly, leaving some of the big companies a little bit more susceptible to some of these large layoffs."
Challenger said his firm started tracking mass layoffs as the early 1990s recession, when a wave of "reengineering" efforts started producing eye-popping job cut numbers. He remembers the massive 1993 IBM layoff as a milestone moment, one that marked "the end of the era where lifetime tenure was possible."
Just two years earlier, before Challenger began tracking mass layoffs, General Motors had said it would eliminate 74,000 jobs. Then, a few years later, in 1996, Sunbeam's "Chainsaw" Al Dunlap announced a far smaller cut of 6,000 workers — but it was huge in percentage terms, making up roughly half the company's employees.
Challenger's list of the largest mass layoffs shows how they tend to result from seismic changes in certain industries, whether that be the tech sector's current shift or the U.S. auto industry's struggles. Yet it also reminds us of the painful job carnage that the financial crisis, the recession and the slow economy of recent years has brought. Nearly half of the mass job cuts on Challenger's list happened between 2008 and 2012. Citigroup, for instance, announced it would eliminate some 50,000 jobs in November of 2008, just after the financial crisis began, and General Motors said it would cut 47,000 jobs in February of 2009 amid further bailout requests.