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IBM will push through a major restructure at the IT outsourcing business it’s spinning off, with 20,000 or more staffers facing the chop, an analyst estimated.

The Global Technology Services (GTS) division, minus a few elements, will be carved out into a separate public company. For now it’s called NewCo, though IBM CEO Arvind Krishna said in a conference call with stock-market analysts last week, when the deal was announced, that a new name will be sought.

After the spin-off, which is expected to be finalised before the end of 2021, IBM will consist of: its Cloud and Cognitive software divisions; its Global Business Services consultancy; its Systems and Global Financing wings; and support services, which includes the Technical Support Business residing in GTS.

The NewCo – with a $60bn services backlog, 4,600 clients including 75 per cent of the Fortune 100, a reach into 115 countries, and for now 90,000 staff – will “build on its core strengths, managing complex and mission critical infrastructures,” said the CEO.

The exec-level spin on the company being spun out is that it will be good for everyone involved: customers, investors, and employees.

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