Enterprise software giant IBM Corp. might be on the verge of a return to revenue growth, but it’s also looking to cut much more on the cost side — namely jobs.

According to a report in The Register Thursday, IBM is planning to reassign more than 30,000 staff from its Global Technology Services division, which primarily offers hardware and infrastructure consulting services, to other roles within the company.

That amounts to about 30 percent of GTS’ overall staff, who are set to be “productively redeployed,” according to a leaked document (pictured). About 10,000 of the affected staff are said to be based in the U.S., The Register added.

The staff reassignments, expected to take place later this year, could ultimately see about 10,000 jobs lost through “attrition,” with no plans to replace departing employees. However, the overall head count could be even higher, as a document leaked to The Register shows that 5,000 staff have yet to be assigned new positions, which means they could ultimately be laid off. And of those that have been reassigned, some may only be moved to “short term” positions, said one unnamed employee.

The leaked memo, which was meant for senior executives’ eyes only, will surely create more doom and gloom among IBM staffers, who have survived multiple previous rounds of layoffs at the company.

Further antagonizing staff is the fact that IBM has reportedly hired consultants from Bain and Company to orchestrate the staff redeployments, despite the fact that it acquired PricewaterhouseCoopers’ consulting business back in 2002. One unnamed company insider told The Register it was “galling” that IBM had decided to hire Bain’s consultants at a likely cost of “tens of millions of dollars,” saying it would have been better if the company had used this cash to pay the salaries of those targeted for redundancy.

That’s most likely wishful thinking however, since the real reason for the restructuring is IBM’s massive and ongoing pivot to the cloud, according to one analyst.

“I see this more as an industry shift of businesses to the public cloud than an IBM failure,” said Patrick Moorhead, president and principal analyst at Moor Insights & Strategy.

Rob Enderle, president and principal analyst of the Enderle Group, concurred, saying that IBM’s focus on cloud growth meant that other businesses were being given a lower priority. He explained that although services generally pull in high revenues, they also tend to be low-margin, which means they cannot take much risk and remain viable at the same time.

“The need for these services is at risk,” Enderle said. “This means they have to adjust costs to offset that risk and that is what you are seeing here. In the end this should allow IBM to benefit more from their top-line cloud services growth because it will, if done right, reduce the drag that services has on that perceived growth.”

That’s not to say IBM is giving up on services altogether. The document shows that it’s aiming for a slimmed down GTS workforce distributed globally on a 20/20/60 ratio. In other words, the company plans to keep 20 percent of GTS staff onshore, 20 percent “near-shore,” and 60 percent offshore. The company is probably already quite close to achieving that ratio, as it’s said to employ around 122,000 workers in India.

When asked to comment on the news, IBM offered a guarded response: “As IBM has said in the past, we are focused on redeploying and reskilling our workforce globally, and IBM is substantially increasing its investment in professional development and technical training to focus on our strategic initiatives.”

IBM has now seen 22 straight quarters of declining profits, though it came very close to ending that streak in its third-quarter earnings report in October. The company is set to report fourth-quarter earnings on Jan. 18, when it may also outline its plans for redundancies.

Image: The Register