I have perhaps a unique perspective on this, as I was part of IBM in Asia and left in November 2013. I witnessed the 2013 layoff action and witnessed many good people in Australia and Singapore laid off in the name of cost-cutting. It is mentioned in the article that for this 2014 round, people with even PBC 1 and 2 were fired, which would have been the top performing people on their teams. I worked as a project manager doing datacenter/infrastructure work for IBM and was based in China. On my most recent PBC before I left, my manager gave me a 1, and I was managing a program for innovation projects in the Asia Pacific, as well as in charge of quality control work as part of IBM's global quality program called Global Delivery Framework (GDF). Project team members under me came from Australia, China, India, Malaysia, Singapore, South Korea, and Japan.
Firstly, it is not surprising that this is happening. The technology in the IT industry has changed, and IBM was late to the cloud party. We were still manually building servers for projects as of the end of 2013. I myself was put in charge of a large project to virtualize hundreds of internal IBM application servers. Let's say that again: as of 2013, there were still hundreds of mission-critical IBM internal applications running on physical hardware until I was given the project to transition them to virtual servers. They now have the ability to run stuff virtually thanks to some new hardware they've installed, but processes are still very manual. As I was leaving, I told all of my teammates to be careful and get out while they could, because as soon as IBM went full-steam into cloud, all of their jobs would get automated. It takes anyone a few minutes to get a server with applications running on a cloud service. At IBM, it took me a month because everything had to be installed and configured manually, and the teams were always so busy that you had to wait until someone was available to do their part, whether it was installing AIX, installing DB2, configuring monitoring agents, configuring backup agents, doing BAU handover checks, whatever. If you were IBM's execs, which would you choose? The writing was on the wall for a long time. And while elephants can take a while to get moving, it is true that they can eventually dance, though they can cause a lot of damage when they finally do get going (and need to dance more frenetically to make up for lost time).
Secondly and more importantly, it's sad that India was hit first in such a massive way, but it's not unexpected. I have nothing against Indian people and I think the situation is unfortunately more to do with IBM than it does with India. IBM was truly scraping the bottom of the barrel for their hiring, and in India, they went below the barrel in order to cut costs. It wasn't enough, as they went too far and hired too many people who were not capable of actually doing their jobs. I have plenty of examples, but we had sysadmins with senior in their titles that rather deserved to be labeled junior. My colleague beside me, a program manager of another program, turned to me exasperated when one of the Indian project managers in her program couldn't figure out how to fill out a project change request template. So the project manager wanted my colleague the program manager to fill out the form instead. Templates are there to make it clear what you're supposed to write. This level of incompetence was a trend, but I want to make it clear again, this is not the fault of the Indian people. This is the fault of IBM deciding to not have high standards. When the entire Domino team in Australia was let go (Domino is IBM's mail server) and replaced with a new, inexperienced, and untrained team in China, yet another colleague was again exasperated. Maintenance work that required only 6-hour change windows in her project became such that they needed 2 entire days because the new Domino team didn't know what they were doing. Again, it's not that the Chinese people were the problem. It's that IBM wasn't willing to pay to hire high-quality people, nor invest into training the people they did hire. As for why I think the issue of high/low standards is a bigger issue than technological change, I point you to an anonymous posting I made on Quora once. Being anonymous doesn't seem so important now. http://www.quora.com/IBM/What-are-the-weaknesses-of-IBM
I tried copy-pasting the Quora post here, but then HN told me that my comment was too long. :D
edit: clarification