New Delhi: Tech giant IBM is laying off 3,900 employees, which is a spinoff of IT infrastructure services provider Kindril business and part of an AI unit called ‘Watson Health’. According to IBM chief financial officer James Kavanaugh, the layoffs will cost the company $300 million in the January-March period.
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“We’ve taken a number of significant portfolio actions over the past few years, which have resulted in some trapped costs in our business,” he said during the company’s earnings call late Wednesday. “We expect to address these remaining stranded costs early in the year and charge approximately $300 million in the first quarter,” Kavanaugh said.
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IBM joins a host of tech companies such as Meta, Alphabet, Microsoft and others in laying off thousands of employees amid global economic headwinds. In its quarter ending December 31, 2022, the company delivered revenue of $16.7 billion, operating pre-tax income of $3.8 billion, and operating earnings per share of $3.60.
“In our strongest quarter seasonally, we generated $5.2 billion of free cash flow,” the company said.
Revenue for the quarter was up more than 6 percent at constant currency. IBM President and CEO Arvind Krishna said that to strengthen the software portfolio, we have invested in hybrid cloud and AI capabilities.
“This year, we will unlock more productivity, expand our strategic partnerships, and invest more in specific growth markets. For 2023, we project consistent revenue across our mid-single-digit model range and free cash of approximately $10.5 billion Let’s see the growth. Flow,” Krishna said.