IBM Confirms Layoffs, Reportedly Affecting 3,900

IBM is the latest tech giant to turn to layoffs, with about 3,900 workers – 1.5 percent of its workforce – getting cut.

IBM is the latest tech giant to turn to layoffs, confirming to CRN that the vendor plans to cut between 1 percent and 1.5 percent of its global workforce.

Multiple media reports put the number of laid off workers at 3,900 -- 1.5 percent of a global workforce of 260,000. The latest public employee disclosure from IBM showed about 282,000 workers at the end of 2021. Assuming the headcount is closer to that total, the layoffs would number between 2,820 people and 4,230 people.

The layoffs are related to the Kyndryl spinoff and healthcare divestiture and not based on 2022 performance or 2023 expectations, an IBM spokesperson told CRN in an email.

CRN has also reached out to Red Hat to see if the IBM subsidiary is part of the layoffs.

On IBM’s earnings call Wednesday for the fourth quarter of its fiscal year – the quarter ended Dec. 31 – company Chief Financial Officer Jim Kavanaugh said he anticipates a $300 million charge during the first quarter due to “remaining stranded costs” – which appears to be related to the layoffs, according to Reuters. Kavanaugh told Reuters that Armonk, N.Y.-based IBM will still hire in client-facing research and development roles.

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IBM To Lay Off 3,900 Workers

IBM saw $16.7 billion in revenue during the quarter, up 6 percent ignoring foreign exchange, the company reported Wednesday. IBM saw $60.5 billion in revenue during the year, up 12 percent year over year ignoring foreign exchange.

IBM’s stock traded at $137.66 a share after hours, down 2.2 percent after market close.

The vendor is the latest tech giant to announce layoffs as heightened demand for digital tools during the pandemic gives way to more spending caution with inflation rising in the United States. Others include Salesforce, Microsoft, Cisco, 8x8 and Sophos.