Two more tech players announce culling of thousands of jobs, with IBM letting go 3,900 positions and SAP cutting 3,000
More bad news about layoffs for the tech industry, as two big name companies confirm the axing of thousands of jobs.
IBM on Wednesday revealed that it will axe 3,900 jobs as part of some asset divestments and missed its annual cash target, Reuters reported.
It comes after Google this week became the latest tech giant to announce major job cuts, as tech companies retrench after their surge of growth during the pandemic. CEO Sundar Pichai said Google would cut about 12,000 jobs, or roughly 6 percent of its global workforce.
Alphabet’s announcement follows the announcement of 10,000 job cuts at Microsoft last week, affecting nearly 5 percent of its workforce, and Amazon’s move to cut 18,000 jobs, or 1.2 percent of its worldwide staff, in early January.
Apple remains the only one of the biggest tech firms yet to announce layoffs.
And now Big Blue has confirmed it axe nearly 4,000 jobs.
Chief financial officer James Kavanaugh told Reuters that the company was still “committed to hiring for client-facing research and development.”
But the IBM layoffs are reportedly related to the spin-off of its Kyndryl business (IBM’s former infrastructure services business) and a part of AI unit Watson Health.
IBM will take a $300 million charge in the January-March period for the layoffs.
Shares in IBM had fallen 2 percent in extended trading, reportedly due to investor concerns that Big Blue was not cutting more jobs, only 1.5 percent of its workforce.
SAP will also reportedly explore the sale of its remaining stake in Qualtrics, as it looks to cut costs and focus on its cloud business.
“We expect only a moderate cost saving impact for 2023, and a more pronounced one in 2024, about 300 million euros to 350 million in run rate savings as of 2024,” chief financial officer Luka Mucic was quoted as saying during a call with journalists.
In Germany, where SAP is headquartered, the company will cut slightly more than 200 jobs.
The layoffs come after SAP reported a 30% revenue increase in its cloud business in the fourth quarter, helped by strong demand for its software.