IBM cuts 3,900 jobs
IBM announced today that it will lay off about 3900 workers, which is less than 2% of the global workforce. The company is the last technology company to lay off workers. IBM's workforce reduction is not as large as that of other major technology companies. Google-parent Alphabet announced 12000 job cuts, Microsoft 10000 and Amazon 18000.
The layoffs are mostly the results of earlier asset sales and less a result of the current market climate, according to IBM. IBM sold or restructured several assets in the last two years. The company's legacy technology services business was spun off in 2021 and its health care data analytics business was sold in 2022.
The layoffs will cost IBM about $300 million to pay for employee severance costs. The layoffs were announced during an investor conference call for the financial results of the fourth quarter of 2022. IBM is still committed to hiring "for client-facing research and development" according to the company's CFO.
The company's revenue and operating profits matched the predictions of analysts. IBM managed to earn $16.7 billion in revenue in the quarter, which was $0.3 billion higher than what Wall Street hat estimated. Earnings per share was $3.60, which beat analyst estimates by $0.02 per share. The operating pre-tax income was $3.8 billion.
CEO Arvind Krishna attributed the success to IBM's hybrid cloud and artificial intelligence strategy. Software revenue was up 8%, consulting 9% and infrastructure 7% according to Jim Kavanaugh, IBM's Chief Financial Officer.
Revenue by division for the fourth quarter of 2022 according to the published earnings report.
- Software: $7.3 billion
- Consulting: $4.8 billion
- Infrastructure: $4.5 billion
The company's shares fell more than 4% today and are trading at $134 at the time of writing.
IBM expects that its revenue will grow in the mid-single digits and that its free cash flow will grow to $10.5 billion in fiscal 2023. The free cash flow would increase by more than $1 billion if the prediction holds.
Chief Financial Officer James Kavanaugh revealed on Wednesday that the weak Dollar was helping IBM but that the currency effect would be neutral in 2023 overall. IBM plans to expand its strategic partnerships and increase investments in specific growth markets in 2023.
A full transcript of the earnings call is available here.
IMB? Who’s that?
Title … IMB –> IBM
Thanks, corrected ;)
Global recession anyone? You see it everywhere. Stop buying s**t you don’t need and you’ll be fine. While you’re at it, quit drinking and smoking too, eat healthy and go out jogging. Your body and mind will thank you.
@Gerhard Funker
You know eating healthy requires buying healthy food which is also getting expensive(healthy or not). Of course the two neurons are massively underqualified to understand inflation and all that. So I totally understand your comment.
Except eating healthy is actually cheaper than eating unhealthy. It just takes effort and discipline. Those last two things are the real hurdle for most people.
@Trey
So you’re one of those who thinks eating healthy is cheaper currently. Of course you forgot eating anything currently is more expensive than at anytime this century. Get your facts right before saying something. An opinion, pathetic and full of ignorance, doesn’t replace facts. Say hi to those two neurons for me.
@Trey:
“[E]ating healthy is actually cheaper than eating unhealthy.”
In the longer term, yes. The payoff is that you avoid obesity, insulin resistance, Type 2 diabetes, atherosclerosis, and more. But in the United States, at least, eating fresh vegetables, fresh fruits, whole-grain carbs, healthier oils [e.g., olive, flaxseed, avocado, grapeseed], meat from naturally fed animals, wild-caught seafood, etc., is *markedly* more expensive than eating processed foods high in salt, high-fructose corn syrup, potato starch and other refined carbs, and various chemical additives. Eating healthy is something everyone *should* do, but in the US, something that many people on the the lower end of the economic spectrum cannot realistically *afford* to do in the short term. That’s why poor Americans are so often obese.
“It just takes effort and discipline. Those last two things are the real hurdle for most people *who can afford to buy healthy food in the short term*.”
Fixed that for you. Just to reorient your perspective, a majority of American workers are one paycheck from eviction, and a majority don’t have enough cash on hand to cover a $400 emergency — and salaries for programmers at the companies doing the big layoffs are very comfortably in the top 10%. Programmers can eat healthy if they choose to; many people in the bottom 10% can’t.
BTW, Best Buy Canada (probably elsewhere too) is also laying off …
https://globalnews.ca/news/9436489/best-buy-layoff-canada/
My father has told me about the operative system of IBM, the OS/2. I have noticed that today IBM has its own OS named z/OS. I wonder if a review article about this z/OS would be possible. Thanks for the article.
The two operating systems are unrelated – OS/2 was mainly a desktop OS, whereas z/OS is a continuation of IBM’s line of mainframe OSs.
I agree, I think that Martin should buy a multi-million dollar mainframe computer so he can do OS reviews on it.
@Andy Prough, oh my dear bully, always chasing me around the whole Ghacks ecosystem, it’s mostly likely, or more likely to be smooth, than watching you getting a life.
>”@Andy Prough, oh my dear bully, always chasing me around the whole Ghacks ecosystem”
a) it was a joke, where’s your sense of humor?
b) the only other time I recall ever speaking to you was to agree with you on how Shaun’s articles have value
c) you are right about me not having a life. Which is why I want Martin to buy a multi-million dollar mainframe and do OS reviews, which I can then write meaningless comments on.
> “c) you are right about me not having a life. Which is why I want Martin to buy a multi-million dollar mainframe and do OS reviews, which I can then write meaningless comments on.”
Sorry about that, it’s hard to hear that things could be better for you. I send you some good encouragement and good luck too. However no comment is meaningless here. Some people write to demonstrate their knowledge, other people to show their opinions to the world, other to express only some little thoughts about whatever and the rest only write to spent some funny time while reading some articles. About the “bully” word, there is a guy here that uses different nicknames just to chase me since the very beggining — and it’s too odd.
My sense of humor is good, usually:
– Look at these famous pictures that was painted by Leonardo.
– Oh my Lord, was there ninja turtles in the XVI century?
>”About the “bully” word, there is a guy here that uses different nicknames just to chase me since the very beggining — and it’s too odd.”
That seems quite unfair, you shouldn’t have someone following you around trying to pick fights with you. Well, rest assured I am someone who comments here often, I always use this name (since it’s my name), and I hope we can be online friends going forward. If you find my attempts at humor to be abrasive, just speak up, I can tone it down.
@Andy Prough +1
I wonder how this is going to affect Red Hat Enterprise Linux now that it is part of IBM. A large part of the world’s servers and workstations relies on RHEL, will be interesting to see if development is going to suffer. They already had a big restructure of CentOS, the community spin of RHEL, removing the regular CentOS leading to another community spin called Rocky Linux.
@SCmCsyF:
I have a “selfish” reason for hoping that the cuts don’t affect Red Hat in any way: back when I was actively filing bug reports for LibreOffice, I noticed that the most responsive and effectual bug-fixers were “paid volunteers” from Red Hat. It’s obviously valuable for Red Hat itself and Linux in general to have a viable FOSS alternative to MS Office, so allowing paid staff to work on LibreOffice was not pure charity, but I appreciated it *very much* nonetheless.