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Coronavirus effect: IBM cuts jobs in US as new CEO eyes revival

IBM reported a 3.4 percent decline in revenue for January-March quarter on a year-on-year basis, citing fall in sales due to Covid-19 pandemic

twitter-logoBusinessToday.In | June 10, 2020 | Updated 08:00 IST
Coronavirus effect: IBM cuts jobs in US as new CEO eyes revival

American multinational technology company IBM has laid off an undisclosed number of workers across the US. IBM in April announced that it would withdraw revenue projections for the rest of 2020 considering the uncertainty caused by coronavirus pandemic. IBM reported a 3.4 percent decline in revenue for the January-March quarter on a year-on-year basis, citing decline in sales due to the COVID-19 pandemic.

According to the Wall Street Journal, IBM's job cuts could be in thousands.

IBM had 3,52,600 employees worldwide as of December 31, according to its annual report. CEO Arvind Krishna said in April that over 95 percent of them were working remotely.

Hewlett Packard Enterprise is also likely to cut jobs and reduce salaries to weather the pandemic.

These are IBM's first big layoffs under Krishna, who on April 6 replaced outgoing CEO Ginni Rometty.

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During the company's first quarterly earnings call in April, Krishna said that IBM would eliminate software and services that are not linked to the MNC's top two focus areas for growth: cloud computing and artificial intelligence.

IBM, which was once known for its personal computers, shed its PC business in 2005 and has since focused on supplying software services to big businesses, governments, and other organisations.

The firm's focus was to strengthen its cloud computing business under Rometty, but it struggled to compete with top cloud rivals Amazon, Microsoft, and Google.

In May, Krishna revealed how the 110-year-old company could weather the pandemic.

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"The fact that IBM has been here before gives me perspective and confidence," Krishna said at the Think conference for IBM clients and developers, held remotely this year. "I believe history will look back on this as the moment when the digital transformation of business and society suddenly accelerated."

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