Big tech companies continue to announce layoffs, with SAP and IBM joining the list of firms such as Google, Microsoft, Meta, Amazon, and others who have recently made job cuts.
IBM on Wednesday announced 3,900 job cuts while SAP on Thursday said it planned to slash 2.5 per cent of its global workforce which will impact its 3,000 workers worldwide. These announcements come at the time when technology giants are struggling with the post-pandemic effect and aggressively looking at ways to withstand the anticipated economic slowdown in this year.
According to a Reuters report, IBM announced plans to lay off 3,900 employees as part of its effort to divest certain assets and reported that it did not meet its annual cash target. Despite beating revenue expectations in the fourth quarter, the news of layoffs and missed targets tempered the overall positive sentiment. The layoff will affect 1.5% of company’s global workforce. The company, however, is looking at hiring officials for client-facing research and development.
As per the report, IBM’s cash flow for 2022 was $9.3 billion, falling short of its target of $10 billion, as a result of unanticipated requirements for working capital. The company also predicted weaker revenue growth than it recorded in the previous year. This decline is attributed to the decreased demand for digitization of businesses as clients have become more cautious with spending due to concerns of a potential recession.
Christian Klein, CEO of SAP, stated that the company will make specific reductions in order to allocate resources towards becoming more competitive in its cloud business, as well as addressing challenges related to a slowing global economy. The news of job cuts at SAP comes a week after Klein, in an interview to CNN, said that company will avoid layoffs as it is in a very strong position.
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