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IBM to lay off employees amid tech jobs bloodbath

Admire Moyo
By Admire Moyo
Johannesburg, 26 Jan 2023
Arvind Krishna, IBM chairman and CEO.
Arvind Krishna, IBM chairman and CEO.

Computing giant IBM is looking to lay off 3 900 employees.

According to a Bloomberg report, this was revealed by chief financial officer James Kavanaugh yesterday.

It says the job cuts will focus on workers remaining after spinning off the Kyndryl and Watson Health units, and will cost the company about $300 million.

The IBM announcement follows hot on the heels of its technology peers such as SAP, Microsoft, Meta (Facebook), Google, Amazon and Twitter swinging the axe on tens of thousands of employees.

A recent report by TradingPedia reveals more tech firms will let go of their employees this year, a trend that commenced in 2022.

According to TradingPedia, tech companies are in the top 10 organisations that had large-scale job cuts in 2022.

IBM yesterday also announced its fourth quarter 2022 earnings results.

“Our solid fourth quarter performance capped a year in which we grew revenue above our mid-single-digit model,” says Arvind Krishna, IBM chairman and CEO.

“Clients in all geographies increasingly embraced our hybrid cloud and AI [artificial intelligence] solutions, as technology remains a differentiating force in today's business environment. Looking ahead to 2023, we expect full-year revenue growth consistent with our mid-single-digit model.”

During the quarter, IBM posted flat revenue of $16.7 billion. It notes software revenue was up 3%, consulting revenue up 0.5%, while infrastructure revenue increased by 2%.

“IBM’s revenue growth and operating profit in 2022 demonstrate the strength and multiplier effect of our platform-centric approach to hybrid cloud and AI,” says Kavanaugh.

“Our client-focused portfolio and strong recurring revenue stream position IBM well for continued growth, solid cash generation and returning value to shareholders through dividends.”

On a consolidated basis, in the fourth quarter, the company generated net cash from operating activities of $4 billion, up $1.4 billion.

On a consolidated basis, for thefull year, the company generated net cash from operating activities of $10.4billion, down $2.4 billion.

IBM ended the fourth quarter with $8.8 billion of cash on hand (which includes marketable securities), up $1.3 billion from year-end 2021. Debt, including IBM Financing debt of $12.9 billion, totalled $50.9 billion, down $0.8 billion since the end of 2021.