IBM has cut its blockchain team down to almost nothing, according to four people familiar with the situation. 

Job losses at IBM (NYSE: IBM) escalated as the company failed to meet its revenue targets for the once-fêted technology by 90% this year, according to one of the sources.

“IBM is doing a major reorganization,” said a source at a startup that has been interviewing former IBM blockchain staffers. “There is not really going to be a blockchain team any longer. Most of the blockchain people at IBM have left.” 

IBM’s blockchain unit missed its revenue targets by a wide margin for two years in a row, said a second source. Expectations for enterprise blockchain were too high, they said, adding that IBM “didn’t really manage to execute, despite doing a lot of announcements.”

A spokesperson for IBM denied the claims. 

“Our blockchain business is doing well, thank you,” Holli Haswell, a director of public relations at IBM, said via email. “We have realigned some leaders and business units to continue to drive growth – we do that every year.”

A former IBM staffer who had been working on enterprise blockchain, however, said there have been a succession of “Resource Actions,” or RAs, which basically means firing people based on business performance as opposed to personal performance. 

“I would wager less than 10% [of the blockchain product and engineering team] is still working on IBM Blockchain,” said the ex-IBM source. “There have been tons of reorgs. Pretty much everyone is gone. IBM is now 100% focused on hybrid cloud, so everything that doesn’t support that is deprioritized.” 

IBM has pumped a lot of money into blockchain since 2016, when it began talking about the technology’s potential to transform the way industries do business.

If IBM’s blockchain innovation work is now confined to some R&D, and does not even extend to consulting, as one of the sources said, this sounds an ominous note for the enterprise blockchain space in general – perhaps particularly for the Hyperledger collection of blockchains, to which IBM was a key contributor. 

In its recent full-year results statement, IBM as a whole reported revenue fell 6% on an annualized basis. Looking back to its 2017 financial statement, IBM called itself the “blockchain leader for business.” All mention of the technology is now absent from the company’s statements.

In the past several years, IBM has pushed ahead with a series of blockchain networks built on Hyperledger Fabric. Big Blue’s major blockchain networks are FoodTrust, a farm-to-supermarket tracking system backed by Walmart; and TradeLens, a shipping container logistics blockchain backed by Maersk. IBM has also added the Trust Your Supplier network and previously had a go at payments via World Wire.

While cryptocurrencies and public blockchain networks appear to have flourished in 2020, the economic shock of COVID-19 has impacted innovation departments inside large firms, to the extent that areas not immediately generating revenue – such as blockchain – have been trimmed. 

Another source, an enterprise blockchain engineer with former ties to IBM, estimated more than 100 blockchain-related jobs were cut at Big Blue over the last year. 

The source also pointed out that Jerry Cuomo, IBM’s head of blockchain and an evangelist for the tech going back to 2016, has been moved and is now working on artificial intelligence.

“Jerry is indeed overseeing additional strategic, high-growth parts of the IBM business but is still involved in blockchain,” said Haswell, the company spokesperson. “He is a very senior technical leader and that is what we do in IBM – people’s roles expand.”

After publication of this article, Haswell further disputed the reporting, adding:

Zack Seward contributed reporting.

UPDATE (Feb. 1, 19:42 UTC): Adds additional comment from IBM spokesperson Holli Haswell.