IBM announced that 3,900 employees would be let go. This occurs amid a round of layoffs at tech firms including Google, Amazon, Microsoft, Spotify, and others. As IBM missed its yearly cash target, it announced layoffs. IBM’s Chief Financial Officer James Kavanaugh stated that the business was still “dedicated to hiring for client-facing research and development” regarding tech layoffs in 2023.
In late trading, the company’s stock plummeted 2%, erasing gains made earlier on the strength of encouraging results.
According to the corporation, the layoffs associated with the spinoff of the Kyndryl business and a portion of Watson Health’s AI section will result in a $300 million charge between January and March.
IBM announced job cuts as its 2022 cash flow was $9.3 billion, below the $10 billion it had aimed for. According to a Reuters story, the gap was brought on by greater than anticipated working capital requirements.
In addition, IBM projected yearly sales growth in the mid-single digits, which was once lower than the 12% it posted in the previous year. Additionally, it signaled a softening of new reservations in Western Europe in October.
In the fourth quarter, its software and consultancy businesses also experienced a sequential slowdown. The spending on cloud technology was a bright feature, with deal signings doubling in 2022. In the quarter that concluded in December, it saw a 2% increase in hybrid cloud revenue.
Analysts expected revenue forecasts of $16.40 billion, but it actually came in at a constant $16.69 billion. The biggest sales growth for IBM in a decade was 5.5%.
