IBM to cut 3,900 jobs, linked to its strategic reorientation

The IT group IBM will cut some 3,900 jobs, or just over 1% of its workforce, as part of a layoff plan linked to its strategic reorientation, a source familiar with the matter told AFP on Wednesday.

The Armonk (State of New York) company did not expressly mention these job cuts either in its results press release, published on Wednesday, or during the conference call presenting its quarterly accounts.

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The leaders only mentioned an exceptional charge of 300 million dollars, which corresponds, according to the source, to the cost of the social plan. This cost “is entirely related to the split of Kyndryl and the sale of the health business,” a spokesperson told AFP. “These measures were not taken based on 2022 performance or projections for 2023,” he said.

Turnover slightly higher than expected

In 2021, IBM split off its information systems consulting and maintenance activities from the rest of the group, one of the company’s historical branches but less buoyant than remote computing (cloud), in which it has invested. massively. The new entity resulting from this split was named Kyndryl and went public in November 2021.

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As for the activity relating to the collection and analysis of data in the medical field, which was part of the Watson Health division, it was sold, in early 2022, to the investment company Francisco Partners. If the positions concerned by the social plan had remained in the bosom of IBM after these two separations, these are functions related to these two activities, according to the source.

IBM on Wednesday released slightly better-than-expected fourth-quarter revenue and net profit in line with analysts’ forecasts. During the earnings conference call, Chief Financial Officer James Kavanaugh said it was “cautious” to expect growth at the lower end of the group’s usual range.

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In electronic trading after the close of Wall Street, the title IBM lost just under 2%.

Amazon, Meta, Microsoft and Alphabet (Google) have all recently launched sweeping redundancy plans, after ramping up hiring during the pandemic to meet increased demand for digital services.

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