IBM lays off nearly 4,000 employees

IBM is the latest US technology company to be affected by the wave of layoffs, laying off 3,900 employees, equivalent to 1.5% of employees.

IBM is the next big technology company to join the wave of layoffs with a scale of thousands to more than tens of thousands of people since the beginning of 2023. In the first 20 days of the year, the number of technology employees who were laid off was more. numbers for the first six months of 2022 combined. Google has laid off 12,000 employees, Amazon has cut contracts with 18,0000 people, and Microsoft has announced a reduction of 10,000 employees. Salesforce cloud computing company confirmed to adjust 10% of staff, equivalent to thousands of employees. Video-sharing platform Vimeo also laid off 11%.

In an announcement by IBM CFO James Kavanaugh on January 26, the company will cut the number of employees “equivalent to the number of spectators in a baseball field” by 3,900 people, accounting for 1.5% of staff. The layoffs took place across multiple divisions after the separation of the Kyndryl and Watson Health units cost the company about $300 million.

According to Mr. Kavanaugh, IBM hopes to still hire in higher-growth businesses. However, the CFO did not detail the areas of layoffs or new hires.

IBM forecasts that the company’s fiscal 2023 free cash flow is expected to reach $10.5 billion, and revenue will grow at a single-digit average. Bloomberg estimates that IBM could grow revenue by 1.2% this year.

IBM shares are down about 2%, now at $140.76 after the layoffs. Last year, IBM was one of the few big tech companies that increased in value for the year with a 5.4% gain.

IBM currently has 260,000 people globally, 22,000 more than 238,000 in December 2021.