Editor’s note: This article has been updated from the original version to include input from IBM.
The layoffs are said to be primarily at Cleveland-based Explorys and Dallas-based Phytel, IBM Watson Health divisions that IBM acquired in April 2015.
Employees at Merge Healthcare and Truven Health Analytics are also subject to the layoffs, according to the report. IBM Watson paid $1 billion for Merge and $2.6 billion for Truven in December 2015 and February 2016, respectively.
The report said 50% to 75% of IBM Watson Health’s employees would be let go. IBM did not announce the number of workers to be laid off, but it strongly denied those figures in a communication with CFO.
“IBM is continuing to reposition our team to focus on the high-value segments of the IT market, and we continue to hire aggressively in critical new areas that deliver value for our clients and IBM,” the company’s statement said. “This [layoff] activity affects a small percentage of our Watson Health workforce, as we move to more technology-intensive offerings, simplified processes and automation to drive speed.”
During an investor briefing in March, IBM finance chief Jim Kavanaugh said Watson was deployed in more than 155 hospitals and healthcare organizations and was trained on 13 cancers, compared to just four cancers about a year ago.
Explorys, a spinoff of the Cleveland Clinic, developed a secure cloud-computing platform used by 26 healthcare systems to identify patterns in diseases, treatments and outcomes.
Phytel, based in Dallas, sells cloud-based services that coordinate care to meet new healthcare quality requirements and reimbursement models.
In 2016, IBM doubled the size of the Watson Health business through acquisitions.