Tech layoffs: IBM latest firm to slash workforce by cutting 3,900 jobs
Global News
Chief Financial Officer James Kavanaugh told Reuters that the company was still "committed to hiring for client-facing research and development."
IBM Corp on Wednesday announced 3,900 layoffs as part of some asset divestments and missed its annual cash target, dampening cheer around beating revenue expectations in the fourth quarter.
Chief Financial Officer James Kavanaugh told Reuters that the company was still “committed to hiring for client-facing research and development.”
The layoffs – related to the spinoff of its Kyndryl business and a part of AI unit Watson Health – will cause a $300 million charge in the January-March period, IBM said.
Shares of the company fell two per cent in extended trading, erasing earlier gains on the largely upbeat results. Analysts said news of the job cuts and free cash flow miss was behind the drop.
“It seems as if the market is disappointed by the size of its announced job cuts, which only amounted to 1.5 per cent of its workforce,” said Jesse Cohen, senior analyst at Investing.com.
“Investors were hoping for deeper cost-cutting measures.”
From Big Tech to Wall Street banking majors, U.S. companies have been downsizing in earnest and slashing costs to better cope with the global economic downturn.
IBM’s 2022 cash flow was $9.3 billion, below its target of $10 billion, due to higher-than-expected working capital needs.
