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Tech layoffs: IBM to lay off 3,900 employees as it misses annual cash target

Tech layoffs: IBM to lay off 3,900 employees as it misses annual cash target

Tech layoffs 2023: IBM Chief Financial Officer James Kavanaugh said that the company was still "committed to hiring for client-facing research and development".

IBM to lay off 3900 employees IBM to lay off 3900 employees

IBM announced on Wednesday that it will lay off 3,900 employees. This comes amid a wave of layoffs by tech companies that include names such as Google, Amazon, Microsoft, Spotify and more. IBM’s layoffs came as it missed its annual cash target. IBM Chief Financial Officer James Kavanaugh said that the company was still "committed to hiring for client-facing research and development".

Share of the company fell 2 per cent in extended trading, eroding earlier gains on upbeat results. 

The company said that its layoffs, related to the spinoff of Kyndryl business and part of AI unit Watson Health will cause a charge of $300 million in the January-March period. 

The layoffs in IBM came as its 2022 cash flow was $9.3 billion, which was lesser than its target of $10 billion. The shortfall was the result of higher-than expected working capital needs, according to a report in Reuters. 

IBM also forecast an annual revenue growth in mid-single digit, which was, again, weaker than the 12 per cent it reported last year. It also flagged softness in new bookings in Western Europe in October. 

Its software and consulting business also slowed down sequentially in the fourth quarter. Its bright spot, however, was its cloud spending with deal signings doubling in 2022. Its hybrid cloud revenue rose 2 per cent in the quarter-ended December. 

While analysts predicted revenue estimates of $16.40 billion, it recorded a flat $16.69 billion. 

IBM’s revenue growth was 5.5 per cent – the highest in a decade. 

(With Reuters inputs)

Also read: 'Work for money and move on': Google, Microsoft, Amazon layoffs leave behind disillusioned employees

 

Published on: Jan 26, 2023, 8:03 AM IST
Posted by: anwesha madhukalya, Jan 26, 2023, 7:59 AM IST