On Wednesday, IBM announced 3,900 job cuts, adding to the wave of layoffs among technology companies.
The cuts, according to the company, were primarily the result of earlier asset sales rather than a weakness in its business. IBM spun off its legacy technology services business, Kyndryl, as a separate company in 2021. In addition, IBM divested its health care data analytics business last year.
The company announced a $300 million charge in the first quarter to cover employee severance costs.
During a conference call to discuss its financial results for the fourth quarter of 2022, IBM announced the layoffs.
Operating profits and revenue were in line with analysts’ expectations, and operating earnings per share of $3.60 matched the Refinitiv consensus of analyst estimates.
IBM’s quarterly revenue of $16.7 billion was higher than the Wall Street estimate of $16.4 billion, representing a 6% increase in constant currency, but remained flat when adjusted for the strong dollar.
IBM reported solid growth in its cloud, artificial intelligence, and data analysis software businesses. Including the impact of foreign exchange, the company’s consulting business grew by only half a percentage point.
IBM shares fell about 2% in after-hours trading. During the regular session, the company’s shares fell 73 cents to $140.76 per share.