IBM CEO Arvind Krishna is looking to right the ship and return Big Blue to profitability by reducing the workforce.
The Wall Street Journal (pay wall applies) reported that IBM will be cutting thousands of employees across several sectors at IBM, including the Global Technology Services (GTS) division, which offers IT outsourcing. Last month IBM announced it took a $900 million charge against earnings, largely to cover restructuring costs related to its GTS division.
“IBM’s work in a highly competitive marketplace requires flexibility to constantly remix to high-value skills, and our workforce decisions are made in the long-term interests of our business,” IBM’s Edward Barbini said in a statement, according to a story by CNBC.
Arvind Krishna, who previously led IBM's cloud computing business, took over as CEO on April 6 after Ginni Rometty announced in January that she was stepping down as CEO after four decades with the company.
IBM hasn't confirmed the number of jobs that will be eliminated, or what divisions will be impacted. At the close of last year, IBM had 352,600 full-time employees. IBM previously said 95% of its employees were working from home to due to the coronavirus pandemic.
IBM was one of the first large telecommunications companies to report earnings after the coronavirus pandemic had taken hold. During last month's earnings call, Krishna announced that Big Blue was suspending its guidance for the full year 2020 due to uncertainty related to the COVID-19 crisis.
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During the earnings call, IBM CFO Jim Kavanaugh said as the impact of COVID-19 intensified in March, some of Red Hat's enterprise customers began to de-prioritize their projects to focus instead on business continuity, minimizing cybersecurity risks, and reconfiguring their IT environments for cost efficiency and business agility.
For the first quarter, IBM reported total company revenue of $17.6 billion, down 3.4% year-over-year.