IBM effectively shutters its blockchain division

The technology giant IBM has nearly entirely downsized the department focused on DLT technology. CoinDesk sources familiar with the situation attributed this to a 90% shortfall against the revenue target.

According to them, over the past year IBM has cut more than 100 blockchain-related positions in a ‘major reorganisation’.

The leadership took this step after the unit failed to meet expectations regarding financial performance over the past two years. The team ‘failed to meet the targets despite the closure of various deals’.

The company did not confirm these assertions.

“Our blockchain business is doing well. We reorganised some divisions and their leaders during the annual review,” said Holly Haswell, Director of Public Relations.

A former IBM employee told the publication that this is not a regular occurrence.

“In my estimation, only one in ten employees remains in the blockchain division after the reorganization. The company has focused on hybrid cloud computing, with the rest deprioritized,” he explained.

IBM first became a pioneer in the DLT space in 2016, investing substantial sums in a technology with the potential to transform business.

According to sources, the company’s activity has narrowed to research, while consulting has stopped. This casts a shadow over the use of blockchain in corporate solutions and the prospects for the Hyperledger consortium, of which IBM was a prominent participant.

If in 2017 the technology giant described itself as a ‘blockchain leader for business’, in the report for the past year it dropped any mention of DLT.

Over the past years, IBM, within Hyperledger Fabric, launched several projects, including with Walmart, the largest retailer, and Maersk, a leader in logistics. Sources say the strategic shift is explained by the COVID-19 pandemic and a focus on profitable units.

In late 2020, IBM released a report on blockchain applications in global markets.

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