Many IT companies, including giants such as Amazon, Meta (Facebook, Instagram), Microsoft and Alphabet (Google) have recently announced large-scale layoffs.
IT group IBM will cut around 3,900 jobs, a number that corresponds to just over 1% of its workforce, a source familiar with the technology giant’s plans told AFP on Wednesday.
The layoffs are related to the strategic change of direction implemented by the group, based in Armonk (state of New York).
Management did not specifically mention job cuts, but only spoke of an additional $300 million in spending.
According to the AFP source, this is about the cost of compensation.
Many IT companies, including giants such as Amazon, Meta (Facebook, Instagram), Microsoft and Alphabet (Google) have recently announced large-scale layoffs, following a wave of mass hiring during the pandemic, when it increased rapidly the demand for the services they offer.
In 2021, IBM separated from the rest of the group the activities of providing consulting services and maintenance of computer systems, a historical field of its own but less profitable than the services of the “cloud” (cloud), in which it invested massively.
The new entity resulting from the split was named Kyndryl and went public in November 2021.
The move is “entirely related to the spin-off of Kyndryl and the spin-off of our healthcare business,” a company spokesman said. It has nothing to do with “2022 performance or 2023 forecasts,” he clarified.
As for the activity related to the collection and analysis of data of a medical nature, part of the Watson Health division, it was sold in early 2022 to the investment company Francisco Partners.
Although the positions related to the planned job cuts and/or layoffs remained at IBM after the two spin-offs, they were related to the businesses that were separated, the source explained.
IBM yesterday reported slightly better-than-expected fourth-quarter revenue and earnings that broadly met analysts’ forecasts.
In after-hours trading on Wall Street, IBM shares were down nearly 2 percent.
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