IBM Layoff: The 110-year old company, which makes more than half of its revenue outside the United States, said it expects a neutral foreign exchange impact on its business this year as the U.S. dollar weakens.
IBM Layoff: IBM Corp has also joined the ‘layoff drive’ as the company fired 3,900 employees on Wednesday. The tech hub said that the layoff drive was a part of some asset divestments. Chief Financial Officer James Kavanaugh said the cuts will focus on workers remaining after spinning off the Kyndryl and Watson Health units and will cost the company about $300 million. But Kavanaugh, told Reuters on Wednesday that IBM would continue to hire in focus areas.
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“Unlike many others over the last 2 to 2-1/2 years that were hiring in tens and thousands of people … we are leveraging digitization, AI automation, that drives efficiency, but we are committed to hiring for client-facing research and development,” he said.
The company also forecast annual revenue growth in the mid-single digits on constant currency terms, weaker than the 12% it reported last year, as pandemic-led demand for digitizing businesses has given way to cautious spending by clients in the face of rising recession fears.
IBM in October flagged softness in new bookings in Western Europe while peer Accenture Plc also noted weakness in its consulting business. Cognizant Technology Solutions Corp in November cut its 2022 forecast due to a pullback in contracts.
Still, Kavanaugh said that the company is seeing its consulting business grow in terms of cloud spending. Its deal signings doubled in 2022 for setting up services with partners such as Amazon.com’s AWS and Microsoft’s Azure.
Its hybrid cloud revenue rose 2% to $6.3 billion in the quarter ended Dec. 31. Total revenue was $16.69 billion in the period, compared with analysts’ estimates of $16.40 billion, according to Refinitiv.
The 110-year old company, which makes more than half of its revenue outside the United States, said it expects a neutral foreign exchange impact on its business this year as the U.S. dollar weakens. It booked a forex hit of more than $1 billion during the fourth quarter.
Meanwhile, Layoffs at Google’s parent company, Alphabet Inc., Microsoft Corp., Amazon.com Inc. and IBM combined have eliminated nearly 44,000 positions in January.
