- IBM is cutting nearly 4,000 jobs as a result of Kyndryl’s spin-off and divesting Watson Health.
- IBM spokesperson stated that layoffs are not related to the company’s financial outlook.
- The company also announced its fourth-quarter and full-year financial results.
Shortly after many other tech giants, IBM also announced that the company is laying off approximately 3,900 employees. However, IBM’s situation is a little bit different. IBM spokesperson, Tim Davidson stated that the layoffs aren’t related to the company’s financial outlook.
Kyndryl and Watson Health
IBM’s layoffs are mainly focused on roles in the Kyndryl and Watson Health units. Both brands are now detached from IBM’s operations. IBM decided to spin off Kyndryl, its information technology infrastructure company. Also, investment firm Francisco Partners announced the close of IBM’s Watson Health assets acquisition and launched a new standalone data analytics company, named Merative. 3,900 jobs that are being laid off roughly equates to 1.5% of the company’s total number of employees.
IBM also announced its fourth-quarter and full-year financial results. According to the report, the company increased its revenue by 6%, or by 12% at constant currency to $60.5 billion. The company also announced its expectations for the next year. IBM expects constant currency revenue growth consistent with its mid-single digit model and about $10.5 billion in consolidated free cash flow, up more than $1 billion year to year.
- Revenue of $16.7 billion, flat, up 6 percent at constant currency
- Software revenue up 3 percent, up 8 percent at constant currency
- Consulting revenue up 0.5 percent, up 9 percent at constant currency
- Infrastructure revenue up 2 percent, up 7 percent at constant currency
- Revenue of $60.5 billion, up 6 percent, up 12 percent at constant currency (about 4 points from sales to Kyndryl)
- Hybrid cloud revenue of $22.4 billion, up 11 percent, up 17 percent at constant currency
Arvind Krishna, chairman and chief executive officer of IBM said,
« Our solid fourth-quarter performance capped a year in which we grew revenue above our mid-single digit model. Clients in all geographies increasingly embraced our hybrid cloud and AI 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. »