IBM to cut 3,900 jobs as it reorganizes business; SAP cut 3,000 jobs

IBM will slash some 3,900 jobs, slightly more than one percent of its workforce, related to businesses it has divested, a source close to the matter told AFP on Wednesday.

The computing company based in New York state did not talk of job cuts in its quarterly earnings report published Wednesday, however, nor in a call with analysts to discuss the financial results.

IBM said it would take a one-time $300 million charge in its first quarter this year, which the source said was related to the layoffs.

This cost is "entirely related" to the spin-off of Kyndryl and the disposal of health data and analysis businesses, an IBM spokesperson told AFP.

"It is not an action based on 2022 performance or 2023 expectations," the spokesperson added.

The more than century old technology firm reported profit of $2.9 billion in the final three months of last year, some 17 percent higher than the same period in 2021 despite revenue remaining flat at $16.7 billion.

"Clients in all geographies increasingly embraced our hybrid cloud and AI solutions as technology remains a differentiating force in today's business environment," IBM chief executive officer Arvind Krishna said in an earnings release.

The company founded in 1911 announced late last year that it will invest $20 billion in semiconductors, quantum computing and other cutting-edge technology in New York state.

Krishna unveiled the spending, which will take place over a decade, in a speech alongside US President Joe Biden in the tech giant's Poughkeepsie facility.

Biden hailed the pledge from the "iconic American company" as another sign that his strategy of rebuilding the US innovative edge is working.

The Democratic president has made a priority of encouraging growth in high-tech manufacturing, hoping to rebuild domestic supply chains in crucial components such as microchips that for years have been left to foreign companies based as far away as Taiwan.

Meanwhile, tech giants have been tightening belts and laying off workers to endure tough global economic conditions and a return to pre-pandemic lifestyles less dependent on internet services.

Amazon, Meta, Microsoft and Google's parent company Alphabet have all recently laid out plans to reduce workforces, after hiring heavily during the pandemic to meet increased demand for digital services.

German software giant SAP to cut 3,000 jobs
Frankfurt, Germany (AFP) Jan 26, 2023 - German software giant SAP on Thursday said it planned to cut some 3,000 jobs this year, joining a wave of layoffs in the global tech sector.

The Walldorf-based group, which offers both traditional software and cloud-based computing services, said it planned to carry out a "targeted restructuring programme" to "strengthen its core business" and improve efficiency.

"The programme is expected to affect approximately 2.5 percent of SAP's employees," it said in an earnings report unveiling full-year results for 2022.

SAP has a workforce of around 120,000 employees worldwide, meaning it plans to shed some 3,000 jobs.

The move follows similar cuts announced by tech giants Meta, Amazon, Google, IBM and Microsoft as the once-unassailable sector girds for an economic downturn.

SAP said its jobs cull would cost the company between 250 and 300 million euros ($270-330 million), mainly in the first quarter of 2023.

The restructuring is expected to lead to annual savings of 300-350 million euros from 2024, "which will help to fuel investments into strategic growth areas", SAP said.

SAP also said it would explore a sale of its Qualtrics subsidiary, which specialises in online market research software.

A sale would further allow SAP to focus more on its core cloud business, it said.

For the whole of 2022, SAP announced revenues of 30.9 billion euros, up 11 percent on a year earlier.

Operating profits came in at just over 8 billion euros, down two percent compared with 2021.

For 2023, SAP expects operating profits to increase by 10 to 13 percent.

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