IBM announces 3,900 layoffs after profits fall by 71.5%
The technology company reported that the cut is due to a pension settlement with its workers, which cost it some $5.9 billion last year.
Patrick Finnegan/ Flickr.
International Business Machines (IBM) has joined the wave of massive layoffs in Big Tech. The company announced a workforce reduction that will leave 3,900 people unemployed, equivalent to 1.5% of its global workforce.
The technology company's chief financial officer, James Kavanaugh, reported that the almost 4,000 layoffs - which will be made in the divisions of Kyndryl (information technology infrastructure services) and Watson Health (Artificial Intelligence) - will cost the company about 300 million dollars and that they remain "committed to recruiting people for customer-facing research and development" in "highest-growth areas."
71.5% drop in profits and investments
The firm posted a net profit of US$1,6 billion in 2022, down 71.5% from the previous year. Unlike most tech companies that attribute their falling profits to the pandemic, IBM says that its decline is largely due to a pension settlement with its workers, which cost it some $5.9 billion.
Since the announcement, its shares have fallen 2% on the stock market, which analysts attribute to the cuts and the failure to meet its liquidity targets.
By 2023, the multinational is estimating a steady revenue growth, with an increase of more than US$1 billion over last year. According to Arvind Krishna a CEO: "This year we will unlock greater productivity, expand our strategic partnerships and invest more in specific growth markets."
The company will invest $20 billion in the development of semiconductors, quantum computing and other technologies that are considered cutting-edge.
Big Tech crisis
The sector has shed more than 300,000 jobs in recent months, after closing 2022 with approximately 150,000 layoffs.
Until now,was the tech company that recorded the most significant mass layoffs (18,000 fewer workers), followed by Google (12.000), Microsoft (11.800), Meta (parent of Facebook, Instagram and WhatsApp) with 11,000. Of the big five technology companies, the only one that has not announced any layoffs at this time is Apple.
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