IBM to cut 3,900 jobs amid broader tech slowdown: WSJ
Jan 26, 2023
New York [US], January 26 : The International Business Machines (IBM) has joined the wave of companies conducting layoffs, saying it would cut about 3,900 jobs, the Wall Street Journal said.
The job cuts will stem from Kyndryl Holdings, the IT services business that IBM spun off last year, and its healthcare divestiture, from which the company will incur about a USD 300 million charge, an IBM spokesman told WSJ.
The layoffs would amount to a 1.4 per cent reduction from its headcount of 2,80,000, according to the IBM's latest annual report.
The information technology company posted flat sales in the fourth quarter after the strong US dollar hurt its reported revenue by more than USD 1 billion, according to WSJ.
IBM posted net income of USD 2.71 billion, or USD 2.96 a share, for the fourth quarter ended December 31, compared with USD 2.33 billion, or USD 2.57 a share, a year earlier. Adjusted earnings were USD 3.60 a share, slightly above analysts' estimates of USD 3.59 a share, according to the WSJ report. Revenue edged down to USD 16.69 billion from USD 16.70 billion a year earlier. Analysts polled by FactSet expected USD 16.15 billion.
Revenue for several of the Armonk, New York-based company's segments grew compared with the prior-year period. According to WSJ, software gained 2.8 per cent to USD 7.3 billion; consulting added 0.5 per cent to USD 4.8 billion; and infrastructure rose 1.6 per cent to USD 4.5 billion. IBM's financing segment slid 0.4 per cent to USD 200 million from a year earlier.
The Wall Street Journal has said technology companies at large have been affected by a slowdown in spending as concerns about the economy and a potential recession linger, which has resulted in a wave of recent layoffs.
Microsoft Corp, which also announced plans to eliminate jobs, on Tuesday recorded its slowest sales growth in more than six years in its latest quarter as demand for its software and cloud services cooled.
IBM said hybrid cloud revenue in 2022 grew 11 per cent to USD 22.4 billion.
According to WSJ, IBM forecast adjusted revenue growth consistent with its mid-single digit model and about USD 10.5 billion in consolidated free cash flow for full-year 2023.
