Layoffs in the technology industry continue to grow. Microsoft was one of the first companies to carry out this measure, and it was followed by companies such as Google or Spotify. If we add the multiple resignations that have been caused by Elon Musk on Twitter and the poor health of Meta, the situation seems to have no end.
Now, a new company has joined the wave of layoffs in the sector: IBM. Thus, the company that works on the development of hardware and software for computers, and also offers infrastructure and consulting services, has announced a cut of 1.5% of its total workforce.
The reason is due to the results of the last year. Although IBM’s revenues have increased by 5.5% in 2022, profits have fallen to 71% compared to the previous year, with a total cut of 1,639 million dollars. The cause of this monumental drop is due to an extraordinary charge for the pensions of the workers.
The announcement was made by James Kavanaugh, the company’s chief financial officer. Kavanaugh has stated that 3,900 people will be laid off, and the majority will focus on workers who remained as a result of the division between the Kyndryl (for technological infrastructures) and Watson Health (Artificial Intelligence for healthcare) units.
However, for next year IBM expects to bill 10,500 million dollars, 5% more than its billing. In fact, the growth of its revenues is above the predictions of its team, so it could be said that the layoffs were a secret announced for some time.
Arvind Krishna, president and CEO of IBM, explains that “our solid performance in the fourth quarter has crowned a year in which we have grown in revenue, above our usual model. Customers around the world increasingly adopted our Cloud Computing and Artificial Intelligence projects, as technology continues to be a differentiating force in the current business environment.”
However, in the fourth quarter, their revenues stagnated, largely due to the good state of the dollar, which has caused their revenues in other currencies to be translated into a lower total amount. In addition, with the extraordinary charge of pensions, this has caused the need to execute layoffs.