IBM Announces First Job Cuts Under New Chief Executive
With new Chief Executive Officer Arvind Krishna, International Business Machines Corp. is laying off an unreleased number of workers in its first “major workforce reduction,” according to The Wall Street Journal.
An inside source told the Journal that the cuts are said to be laying off several thousand workers from IBM’s 352,600 employee network. While NY-based IBM reports the cuts to be for the company’s agility and reshaped operations, the coronavirus pandemic has forced many companies to furlough or lay off workers amidst large economic contractions. Yet, IBM’s issues of growth stem from before the pandemic.
Over the last 10 years, IBM’s share price has seen a small amount of change, all while most tech-companies have had stocks see tremendous growth. Mr. Krishna happened to enter IBM at a time of a global pandemic and historically falling revenue streams. With not even a month passing in his new role, CEO Krishna withdrew full-year guidance.
In a Thursday statement, IBM said, “IBM’s work in a highly competitive marketplace requires flexibility to constantly remix high-value skills, and our workforce decisions are made in the long-term interests of our business.”
IBM’s cuts are reportedly targeted at multiple units, one being the Global Technology Services Division. Another affected sector is IBM’s Watson artificial-intelligence unit. Employees took to online forums to announce such cuts, but the claims cannot be verified.
IBM will be offering subsidized medical coverage to laid-off workers in the U.S. (until June 2021). The layoffs follow Mr. Krishna’s comments last month that specified his interests in accelerating IBM’s cloud computing and AI projects, as well as possibly removing unnecessary business sectors.