IBM Layoffs: Now round of retrenchment in IBM, decided to lay off 3900 employees

Job loss, reduction in the number of employees is considered a sign of economic recession. Recently Microsoft, Google, Amazon, Swiggy share chat fired their employees saying that it is necessary to do so for the safe job of other people. Now in this sequence, IBM has also decided to lay off its 3900 employees. IBM ...
 

Job loss, reduction in the number of employees is considered a sign of economic recession. Recently Microsoft, Google, Amazon, Swiggy share chat fired their employees saying that it is necessary to do so for the safe job of other people. Now in this sequence, IBM has also decided to lay off its 3900 employees. IBM said about its decision that this decision has been taken after failing to achieve the annual cash target. Amidst all this, the company’s CFO James Cavanagh says that despite all these circumstances, the company is committed to hiring for customer-related R&D.

cost reduction exercise

IBM said in the statement that most of the layoffs occurred in the January-March period due to the spinoff of its Kindle business and a $300 million charge for a portion of AI unit Watson Health. The company’s shares have declined by 2 per cent. Analysts said reports of job cuts and reduction in free cash flow were behind the decline. As per the information, it seems that the market is troubled by the size of the announced layoffs which was only 1.5% of its workforce. Investors were expecting deep cost-cutting measures. From Big Tech to Wall Street banking giants, US companies are cutting costs to better deal with the global economic downturn.

shortfall in cash flow

IBM’s 2022 cash flow was $9.3 billion, well short of its $10 billion target, due to higher-than-expected working capital needs. The company also anticipates mid-single-digit annual revenue growth in constant currency terms. This is weaker than the reported 12%. Last year, pandemic-led demand for businesses digitizing businesses gave way to cautious spending by customers amid fears of a recession.

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