IBM layoffs: Tech major fires 1.5% workforce – Check why it issued pink slips to nearly 4,000 employees
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The company anticipates a $300 million charge during the January-March period due to “remaining stranded costs” – which appear to be related to the layoffs. But on Wednesday the company’s chief financial officer, James Kavanaugh, told Reuters that the company would continue to hire in focus areas.
“Unlike many others over the last 2 to 2-1/2 years that were hiring in tens and thousands of people … we are leveraging digitization, AI automation, that drives efficiency, but we are committed to hiring for client-facing research and development,” he said.
The annual revenue growth projection for the company is in mid-single digits on constant currency terms, weaker than the 12 per cent it reported last year.
IBM also flagged softness in October in new bookings in Western Europe while peer Accenture Plc also noted weakness in its consulting business.
Layoffs in IT sector
IT companies at large have been affected by cautious spending by clients and their rising fears of a potential recession which has resulted in a wave of recent layoffs. IBM layoffs come days after Microsoft’s and Google’s announcement of plans to cut jobs.