IBM employees have also been subjected to a massive layoff, as a part of some asset divestments.
The latest reports have confirmed that the company has laid off 3900 employees.
IBM Fires 3900 Employees For Asset Divestments
As a result of some asset divestments, IBM fired 3,900 employees.
Since the company missed its annual cash target, the excitement surrounding exceeding revenue projections in the fourth quarter has been dampened.
James Kavanaugh, the chief financial officer, stated that the business was still committed to hiring for client-facing R&D.
In a formal statement, IBM claimed that the layoffs were connected to the separation of its Kyndryl business and a section of Watson Health, its AI division.
According to IBM Corp., the layoffs will result in a $300 million charge between January and March, and reportedly, its shares also dropped 2% in extended trading.
According to a media report, approximately 200,000 IT employees have been let go since November of last year, including some record numbers at firms like Google, Microsoft, Facebook, and Amazon.
Some business insiders estimate that between 30 and 40 percent of them are IT professionals from India. There appear to be a sizable number of individuals with H-1B and L1 visas.
Market Unimpressed With IBM’s Job Cuts
According to Jesse Cohen, senior analyst at Investing.com, the market appears to be unimpressed by the size of the company’s announced job cuts, which only represented 1.5% of its workforce.
The analyst continued, “Investors were hoping for deeper cost-cutting measures.”
Due to higher-than-anticipated working capital requirements, IBM’s cash flow in 2022 was $9.3 billion, falling short of its target of $10 billion.
In the fourth quarter, IBM’s software and consulting business growth slowed sequentially, but cloud spending was a bright spot, with deal signings for setting up services with partners like Amazon.com’s AWS and Microsoft’s Azure doubling in 2022.
In the quarter that ended on December 31, its hybrid cloud revenue increased 2%. However, Refinitiv reported that its overall revenue for the period was flat at $16.69 billion compared to analysts’ estimates of $16.40 billion.
IBM reported revenue growth of 5.5% in 2022, the highest level in a decade.
