Big Tech Gets Smaller: IBM and TI Layoffs

By Douglas A. McIntyre Published Jan 22, 6:33AM EST

Big tech seems to get smaller and smaller, both in terms of sales and number of employees. International Business Machines Corp. (NYSE: IBM) said it would rebalance its workforce. Texas Instruments Inc. (NASDAQ: TXN) announced it would cut 1,100 people. These announcements come shortly after Intel Corp. (NASDAQ: INTC) said it would fire 5,000 people. While job cuts from the recession may have ended, old tech cannot afford to hold on to its workers.

IBM needs to cut staff. Revenue in the fourth quarter dropped 5% to $27.7 billion. Its old line System and Technology segment lost 26% of its revenue, down to $4.2 billion. The segment contains much of IBM’s hardware sales. Some of IBM’s revenue has gone to newer age companies like Oracle Corp. (NYSE: ORCL). That trend appears to have continued.

At Texas Instruments, revenue barely rose to $3.03 billion from $2.98 billion in the same quarter a year ago. The company blamed sales at its Embedded Processing business, although they grew slightly. TI has battled to get into newer consumer electronics devices. Arm Holdings PLC (NASDAQ: ARMH) and Intel have pressured TI’s sales in one of its largest segments.

And, of course, Intel continues to look for a way out of its reliance on PCs, which plagues the company more than any other trend.

As the growth of hardware has moved elsewhere, some of America’s most mature tech companies have continued to be eclipsed by ones that are only a few decades old — if that. What has been a worry has become an inexorable erosion of prospects. Layoffs may not be a hallmark of the overall tech market — considered one of the healthiest in the United States — unless a company lost its way several years ago and has paid the penalty recently.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.