IBM announces 3,900 job cuts as it misses annual cash target

New York: IBM has become the latest entrant to the list of technology company layoffs by announcing that it will cut about 3,900 employees.

Reported by wall street journal An IBM spokesman said the layoffs were due to Kyndryl Holdings, an IT services business that IBM spun off last year, and Watson Health, a healthcare division that incurred costs of about $300 million in the January-March period. .

According to IBM’s latest annual report, the job cuts will be a 1.4% reduction from 280,000 employees.

Why IBM announced 3,900 layoffs

According to news agency reports ReutersIBM said the layoffs of about 3,900 employees were part of an asset sale that failed to meet its annual cash target, dampening cheers on beating fourth-quarter earnings expectations. I was.

IBM was still “committed to recruiting R&D for clients,” Chief Financial Officer James Kavanaugh quoted in the report.

IBM’s cash flow for 2022 was US$9.3 billion, falling short of its US$10 billion target and triggering layoffs. This shortfall was due to higher than expected working capital needs.

American multinational technology company IBM, nicknamed Big Blue, is also forecasting mid-single-digit annual revenue growth, weaker than the 12% it reported last year.

IBM showed soft news bookings in Western Europe in October.

IBM shares drop 2%

IBM’s stock erased its previous gains, falling 2% in long trading. Analysts said news of layoffs and the failure of Free His Cash His flow were behind the fall in the stock price.

“The market seems disappointed with the size of the announced job cuts, which are only 1.5% of the workforce. said Jesse Cohen, senior analyst at .com.

IBM fourth quarter results

For the fourth quarter ended December 31, IBM’s net income was US$2.71 billion, or US$2.96 per share. A year ago he was worth US$2.33 billion, or US$2.57 per share.

Adjusted earnings were $3.60 per share. Meanwhile, revenue fell from US$16.7 billion to US$16.69 billion the year before.

With input from agency

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