January 30, 2023

International Business Machines announced Wednesday that it would cut 3,900 jobs, or 1.5 percent of its global workforce, adding to a growing list of companies announcing major job cuts. According to website layoffs.fyi, around 200 companies in the technology sector alone have announced 59,448 job cuts since the beginning of 2023.

In this March 18, 2019 file photo, the logo for IBM appears over a trading post on the floor of the New York Stock Exchange. IBM announced the layoff of almost 4,000 employees. [AP Photo/Richard Drew, File]

The announcement by the 110-year-old multinational, nicknamed “Big Blue,” came after the company’s share price fell sharply on Wednesday, even though it had reported net income of $3.3 billion for 2022, beating Wall Street’s expectations surpassed. Chief Financial Officer James Kavanaugh said the company, which reduced its global workforce by 22,000 between December 2021 and December 2022, will limit hiring to “higher growth areas”.

The new cuts focus on the workers remaining on IBM’s payroll following the spin-off of the company’s Kyndryl technology infrastructure and Watson Health units. The latter entity used artificial intelligence to streamline medical treatment decisions and forged lucrative partnerships with leading cancer facilities including Memorial Sloan Kettering in New York City and the Cleveland Clinic. However, the ventures failed and in 2022 IBM sold Watson Health, which was detailed in a 2016 wealth Article as a “cautionary tale of hubris and hype”.

IBM’s job cuts followed Minnesota-based 3M’s announcement that it would cut 2,500 manufacturing jobs worldwide in response to a sharp drop in demand for its products. CEO Mike Roman called it a “necessary decision to adjust to the adjusted production volume” after the year was “slower than expected” and the outlook for 2023 was bleak, the company said Minneapolis Star Tribune.

As a result of not taking any mitigation measures against the ongoing spread of COVID-19, the company’s sales of single-use respirators are expected to fall to pre-pandemic levels this year, with an estimated half-billion dollars in lost sales.

Roman said other factors depressed sales, including “the company’s withdrawal from Russia; the slow recovery from China’s COVID-19 lockdown; “aggressive” inventory reductions by retailers; stretched hospital budgets and healthcare workforce shortages; and weak demand from industrial customers”. Star Tribune reported.

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