US: IBM cuts 3,900 jobs

The IT group IBM I will abolish about 3,900 jobs, a number that corresponds to just over 1% of its staff, layoffs linked to the strategic change of direction it is implementing, a source familiar with its plans told AFP on Wednesday.

The Armonk (New York)-based company did not explicitly mention the job cuts either in its earnings release, which was released Wednesday, or in its quarterly earnings conference call.

Her address only spoke of an additional expenditure of $300 million. According to the AFP source, this is about the cost of compensation.

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.

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.

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.

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.

Source: RES-MPE

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