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IBM announced on Wednesday that it has laid off 3,900 employees as part of its ongoing asset divestments. The company stated that these layoffs were related to the spinoff of its Kyndryl business and a part of its AI unit Watson Health.
The layoffs will reportedly result in a $300 million charge in the first quarter of the year, and IBM’s shares fell by 2% in after-hours trading. Despite missing its annual cash target, the company affirmed its commitment to hiring for client-facing research and development positions.
IBM’s annual revenue growth for 2022 was 5.5%, its highest in a decade, however, the company forecasted that the growth in the mid-single digits on constant currency terms is weaker than the 12% it reported last year due to cautious spending by clients amid rising recession fears.
James Kavanaugh told Reuters that the company was still “committed to hiring for client-facing research and development”. The analysts also say that IBM’s 2022 cash flow was $9.3 billion, below its target of $10 billion. According to them, this is because of the higher-than-expected working capital needs.
Across the globe, the lay-offs have become quite common and we have to see how we come out of this crisis.
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