In just the first month of the year there have been major job cuts at IBM already. The world’s largest computer company, IBM, has revealed intentions to lay off thousands of employees. But this is a different situation from what we’ve seen at other big companies like Intel and Microsoft.
Many businesses hired quickly to meet up with demand due to the increased use of hybrid working technologies and online transactions. As demand later declined, businesses were forced to make difficult financial decisions, like layoffs and reductions.
Despite the general slowdown in business, IBM’s reasons for employment reduction differ slightly from those of certain other companies.
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Major Job Cuts At IBM
The layoffs will primarily affect employees who formerly had roles in the Kyndryl and Watson Health divisions. These divisions have both been separated from IBM’s activities, according to a Bloomberg story.
The current “ballpark” estimate for layoffs is 3,900, or around 1.5% of the company’s workforce.
It’s a sizable figure, and the company expects the move to cost in the neighborhood of $300 million. But it’s not quite as drastic as other businesses, which have been laying off between 5% and 10% of their workforce.
However, IBM gave a positive prognosis for the coming year, so all is not lost. The corporation is expected to generate a free cash flow of $10.5 billion. This is an increase of almost $1 billion over last year.
As it prepares to offer cloud computing solutions in a growing market, the company has also been gradually devoting less attention to infrastructure. So far, so good, with hybrid cloud revenue accounting for $22.4 billion last year. More than a third of the company’s total revenue and a figure that’s up 11% from the year before.
While many businesses are battling strong economic headwinds, it is evident that IBM is preparing itself to weather a difficult year and concentrate on what customers actually want.
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