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With the firing of 3,900 workers on Wednesday, IBM Corp. joined the “layoff campaign” alongside other tech companies. According to the IT hub, the asset divestments included a layoff campaign.
The company failed its yearly cash target, which has dimmed the excitement over exceeding revenue projections in the fourth quarter.
Chief Financial Officer James Kavanaugh said with Reutersthe, the company was still dedicated to hiring new employee for client-facing research and development.
In an official statement, IBM claimed that the layoffs were associated to the separation of its Kyndryl company and a portion of Watson Health, its AI division.
According to IBM Corp., the layoffs will result in a $300 million charge between January and March, and according to Reuters, its shares also dropped 2% in extended trade.
According to Jesse Cohen, senior analyst at Investing.com, the market appears to be unimpressed by the scale of the company’s planned job cuts, which only represented 1.5% of its staff.
The analyst continued, “Investors were hoping for deeper cost-cutting measures” .
In contrast to its expectation of $10 billion, IBM’s cash flow in 2022 was $9.3 billion due to higher-than-anticipated working capital needs.
IBM’s sales growth for 2022 was 5.5%, the highest in a decade.
