A major and historic player in IT, International Business Machines Corporation, better known by the acronym IBM, is going to lay off some of its employees. A decision justified by a global strategy of cost reduction coupled with a reorientation of activity.
The announcement fell on Wednesday January 25: IBM will cut 3,900 jobs within its group, which would represent between 1 and 1.5% of its workforce, according to the New York Times who relays the information. The company said it would cover the costs of economic redundancy of its employees up to 300 million euros. The decision was announced during a conference call during which the group presented its results for the fourth quarter of 2022.
IBM justifies the job cuts by its previous reorganization and its new market strategy. In 2021, the firm from Armonk (United States) split its online service activity and created the Kyndryl company, an autonomous entity. In 2022, IBM also sold its medical data analytics business. The plan announced in recent hours is “fully related to the spin-off of Kyndryl and the sale of the healthcare business“, explains a spokesperson to AFP. And to add: “These measures were not taken based on 2022 performance or projections for 2023.“
A justification that seems plausible in view of the company’s latest financial results. With a quarterly turnover of 16.7 billion dollars, IBM exceeds the latest estimates of investors. Relatively stable growth driven by the sale of software for cloud computingartificial intelligence and data analysis.
More than 56,000 jobs cut in tech
In the tech sector, the causes are multiple, but the consequences are common. Amazon, Meta, Twitter, Alphabet… American technology firms have announced numerous layoffs in recent months. According to a count of Bloomberg19 groups cut more than 56,655 jobs.
In most cases, companies are implementing an aggressive cost reduction policy in order to compensate for the weak growth in their revenues over the past year. During the Covid-19 pandemic, many companies had hired with a vengeance to cope with strong growth. But with the end of the crisis and the start of the war in Ukraine in February 2022, inflation rose to sometimes historic levels in certain sectors, shifting consumer demand to more essential products.
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