IBM and HP Conduct Large-scale Restructuring As Foreign Tech Companies Continue To Struggle In The World’s Most Connected Country

IBM Korea and HP Korea are curtailing their operations in Korea, demonstrating two further examples of overseas tech leaders that have struggled in Korea, a country proud of its domestic high-tech heritage. The cuts are the result of poor performance in both their HW and IT business in the Korean market.

Other overseas tech giants that have failed to engage with the Korean market include Yahoo, who withdrew entirely at the end of 2012 after a 15 slog to gain prominence, and Google that still only commands a 3% share of the search market in Korea, as I reported earlier this year.

It has been reported that IBM Korea is planning to conduct a large-scale restructuring again this year, following previous cut-backs in 2013. Similarly, HP also recently announced it would slash 5,000 jobs around the world, including in Korea.

Founded in 1967, IBM Korea, which has been the oldest multinational IT company in Korea, has been laying off a small number of staff each year since 2011, and since new CEO Shirley Yu-Tsui was appointed, downsizing has picked up pace.

“Last year many people from the GBS and GTS organization left the company,” an industry insider explained, adding that “IBM Korea had not filled up the vacancies.” Further staff-cuts are expected this year.

It has been said that previous restructuring had been the result of poor IT service and outsourcing performance by the company, and this year it’s attributed to the poor performance of the HW business. IBM Korea integrated the main frame ith the UNIX division, with the same planned for the PureFlex and x86 divisions. The organizational integration is expected to cost many more jobs over the coming months. IBM has blamed a double-digit decline in the past few years as the route cause for the job losses.

Additional resources:

Korea Stumbling Towards Monopolistic Situation In Internet Search – Google Nowhere To Be Seen

Is Korea a Hostile Environment for Foreign Companies? Yahoo’s Gone. Who’s Next?

Analysis of Korea’s Internet Landscape: Slideshare Post by Nathan Millard, beSUCCESS

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