International Business Machines Corporation (IBM) has announced plans to reduce approximately 1.5% of its global workforce.
The strike will affect 3,900 workers, adding to the thousands of job cuts announced by major technology companies since the beginning of the year.
According to the company’s Chief Financial Officer, James Kavanaugh, the cuts will target workers who remain after the spinoff of the Kyndryl and Watson Health units and will cost the company approximately $300 million.
However, Kavanaugh stated that IBM will continue to hire in “higher-growth areas.”
Financial result: IBM announced job cuts shortly after releasing its Q4 2022 financial results. According to the company, revenue in the fourth quarter remained unchanged at $16.7 billion.
In 2022, hybrid cloud revenue was $22.4 billion, up 11% from the previous year. Software sales increased 2.8% to $7.29 billion, while infrastructure sales increased 1.6% to $4.48 billion.
According to IBM’s forecast, free cash flow in fiscal 2023 will be $10.5 billion, with revenue increasing in the mid-single digits.
Global tech companies have seen a slowdown in spending as concerns about the economy and a potential recession persist, resulting in a wave of recent layoffs. Microsoft Corp., which also announced job cuts, reported its slowest sales growth in more than six years in the most recent quarter, as demand for its software and cloud services slowed.
Big layoffs: More than last year, tech companies have laid off a large number of employees since the beginning of this year. Google recently announced a 12,000-person workforce reduction.
Prior to that, Microsoft announced 10,000 job cuts, affecting nearly 5% of its workforce, following Amazon’s decision to cut 18,000 jobs, or 1.2% of its global workforce. Amazon and Google’s layoffs surpassed the 11,000 announced by Facebook’s parent company, Meta, last year, which was considered the largest layoffs in the tech industry at the time.