ibm layoffs 2023 american technology giant to cut 3,900 jobs
According to a Wall Street Journal story cited by news agency ANI, International Business Machines (IBM) has joined the tsunami of businesses making layoffs. It stated that the company would eliminate roughly 3,900 workers. The job layoffs would result from the healthcare divestiture and IBM’s spinoff of Kyndryl Holdings, its IT services division, which will cost the company around USD $300 million, an IBM spokesman told WSJ.
According to Reuters, despite exceeding revenue forecasts in the fourth quarter, the corporation has announced 3,900 layoffs due to some asset sales and missed its annual cash objective.
According to James Kavanaugh, the chief financial officer, the business is “dedicated to hiring for client-facing research and development.” Falling IBM Share Price 2% In extended trading, the company’s shares decreased by 2%, wiping off earlier gains on the generally positive results.
Analysts claimed that the decline was caused by news of the layoffs and a negative free cash flow.
According to Jesse Cohen, senior analyst at Investing.com, “it seems as though the market is dissatisfied by the scale of its announced job losses, which only amounted to 1.5% of its staff.”
Investors expected more extensive cost-cutting efforts.
U.S. businesses have been actively cutting expenses and shrinking their workforces to better adapt to the global economic crisis, from Big Tech to the main Wall Street banks. Due to higher-than-anticipated working capital requirements, IBM’s 2022 cash flow was $9.3 billion, falling short of its forecast of $10 billion.
In constant currency terms, the company also predicted yearly sales growth in the mid-single digits, weaker than the 12% it reported in 2017. This is because the pandemic-driven need for enterprises to digitise has given way to a cautious consumer market amid mounting recession fears.
While competitor Accenture Plc highlighted the deterioration in its consulting business in October, IBM noted a slowdown in new bookings in Western Europe. Due to a decline in contracts, Cognizant Technology Solutions Corp. reduced its 2022 projection in November. In the fourth quarter, IBM’s software and consultancy business growth fell sequentially, but cloud expenditure was a bright light, with deal signings for setting up services with partners like Amazon.com’s AWS and Microsoft’s Azure doubling in 2022. Revenue from its hybrid cloud increased 2% in the quarter ending December 31.