IBM (NYSE: IBM) declined to say whether the
layoffs impact Austin operations.
Translation: there will be significant impact to the Austin operations.
https://www.bizjournals.com/austin/news/2023/01/26/ibm-joins-flood-of-tech-layoffs.html
By: Lauren Ohnesorge and Will Anderson –
Jan 26, 2023
It was a year of unexpected hits — but IBM Corp. CEO Arvind Krishna said his team prevailed even though nearly 4,000 job cuts are looming as Big Blue joins the flood of layoffs hitting the tech industry.
The company, a significant technology employer in Austin, is shedding 3,900 jobs total, about 1.5% of its workforce. Krishna said the move was related to the spin off of its legacy managed infrastructure services business, called Kyndryl, and the sale of its health analytics business — but not a sign of weakness in its overall position.
IBM (NYSE: IBM) declined to say whether the layoffs impact Austin operations. The company employed 6,000 locally at last count and occupies an office near The Domain in North Austin, although IBM is seeking a new home for its regional hub.
Krishna, on a Jan. 25 call with analysts after markets closed, boasted about his team’s efforts in 2022. In response to the war in Ukraine, IBM made the decision to exit a profitable business in Russia. And it came in spite of a strong dollar and inflation.
Krishna said outside factors — including wage inflation — put numbers slightly below expectations to start the year.
"An answer could have been to not hire people … but that would have resulted then in lower capacity at the end of this year, which would not have allowed us the confidence in the growth, both in consulting and in software, that we are now committing for 2023," Krishna said.
He said the business decision in this case is to say "we are going to keep going on increasing capacity."
Executives said on the earnings call that the plan is still to invest and hire in IBM’s high-growth areas.
"Our perspective is clear," Krishna told analysts. "Hybrid cloud and AI are the two most transformative technologies for business today."
The cloud opportunity is particularly relevant, as it’s driven by Red Hat, which grew its revenue 15 percent in the quarter, led by both OpenShift and Ansible.
The Russia business and U.S. dollar appreciation had a $600 million impact on profit and cash, executives said.
In terms of numbers, IBM reported $16.7 billion in revenue, just beating analyst expectations. Net income rose 16% to $2.7 billion.
IBM shares were down about 4% as of mid-afternoon Jan. 26. To track the price yourself, go here.