Almost 4,000 axed from IBM payroll as big tech’s big layoffs continue

IBM has announced plans to cut 1.5% of its global workforce, amounting to 3,900 jobs. The layoffs will come mostly from its spin off businesses Kyndrl and a division of its AI unit, Watson Health, the firm added.

The move comes as “Big Blue” pivots to cloud computing from infrastructure and information-tech services.

In 2021, IBM spun out its managed infrastructure business Kyndrl into a new company while investment firm Francisco Partners completed the acquisition of IBM’s Watson Health business last January and rebranded it as a new standalone company, Merative.

The enterprise computing giant said that the layoffs in its divested companies are set to incur the firm a $300 million charge in the January to March period.

Reuters reported that shares of the company fell 2% in extended trading, erasing earlier gains on the largely upbeat results. Analysts said news of the job cuts and free cash flow miss was behind the drop.

Chief Financial Officer James Kavanaugh told the news outlet that the company was still “committed to hiring for client-facing research and development”.

The layoffs come as fellow big tech firms such as Twitter, Facebook, Amazon, Dell, Microsoft and Salesforce have all announced redundancies.