IBM is going to cut around 1.5 percent of its jobs. Unlike other big tech companies, which lay off people because of the economic outlook, IBM says it is laying off thousands of people because it has previously sold or divested business units.
Chief financial officer James Kavanaugh tells Bloomberg the layoffs will be “focused” on people who work at IBM from Kyndryl and Watson Health. Kyndryl was formerly the managed infrastructure services arm of IBM, which was spun off in November 2021 into a standalone company. Watson Health was the health arm of the company and was sold last year.
Kavanaugh expects the layoffs to cost IBM $300 million. The layoffs fit a trend of large tech companies announcing large rounds of layoffs. Google’s parent company Alphabet, for example, cuts twelve-thousand jobs, at Microsoft needs to around ten thousand people gone and Spotify is talking about 6 percent of its job base, or six hundred people. Most tech companies say they have to cut jobs because too many people have been hired in recent years and the economic outlook has deteriorated. IBM therefore gives another reason and also says it will also hire people in parts of the company for which relatively high growth is expected.
In the past quarter, IBM had a turnover of 16.7 billion dollars, or .3 billion euros. This is the same as the year before. Net income for the quarter was $2.9 billion, up 17 percent from a year ago. Converted, this amounted to net income of 2.7 billion euros. The annual turnover was 60.5 billion dollars, or 55.5 billion euros. This is 6 percent higher than one year previously.
