IBM cuts jobs as new CEO seeks re­vival

San Francisco Chronicle - - BUSINESS -

AR­MONK, N.Y. — IBM told the Wall Street Jour­nal it is lay­ing off an undis­closed num­ber of work­ers across the United States.

IBM rep­re­sen­ta­tives did not re­turn calls and emails Fri­day to con­firm the job cuts, which were also re­ported by Bloomberg.

The al­ready­strug­gling tech giant’s new CEO, Arvind Kr­ishna, warned in­vestors last month of un­cer­tainty caused by the COVID­19 pan­demic, say­ing the com­pany made a “tough de­ci­sion” to with­draw rev­enue pro­jec­tions for the rest of 2020. The com­pany re­ported a 3.4% rev­enue de­cline in the Jan­uary-March quar­ter com­pared with the same pe­riod last year, blam­ing it in part on how the coro­n­avirus out­break was af­fect­ing sales.

The Jour­nal said IBM’S job cuts could num­ber in the thou­sands, cit­ing an un­named per­son fa­mil­iar with the com­pany’s plans. IBM had about 352,600 em­ploy­ees world­wide as of Dec. 31, ac­cord­ing to its an­nual re­port. Kr­ishna said in April that more than 95% of them are work­ing re­motely.

It is the lat­est ex­am­ple of the pan­demic hit­ting the tech in­dus­try, even as de­mand rises for on­line ser­vices and com­put­ing power to help home­bound peo­ple work, learn and en­ter­tain them­selves on­line. Hewlett Packard En­ter­prise of San Jose an­nounced planned cut­backs Thurs­day that are ex­pected to cost jobs and re­duce salaries.

These would be IBM’S first big lay­offs un­der Kr­ishna, who re­placed Ginni Rometty as CEO on April 6. Rometty re­mains IBM’S ex­ec­u­tive chair­woman through the end of the year.

Dur­ing his first quar­terly earn­ings call as CEO last month, Kr­ishna said the com­pany will con­tinue to elim­i­nate soft­ware and ser­vices that don’t align with IBM’S top two fo­cus ar­eas for growth: cloud com­put­ing and ar­ti­fi­cial in­tel­li­gence.

Once a house­hold name for its per­sonal com­put­ers, IBM shed its PC busi­ness in 2005 and has since be­come fo­cused on sup­ply­ing soft­ware ser­vices to big busi­nesses, gov­ern­ments and other or­ga­ni­za­tions. It worked to strengthen its cloud com­put­ing busi­ness un­der Rometty, but has strug­gled to com­pete with top cloud ri­vals Ama­zon, Mi­crosoft and Google.

Kr­ishna spoke op­ti­misti­cally early in May about how the 110­yearold com­pany could weather the pan­demic.

“The fact that IBM has been here be­fore gives me per­spec­tive and con­fi­dence,” Kr­ishna said at the Think con­fer­ence for IBM clients and de­vel­op­ers, held re­motely this year. “I be­lieve his­tory will look back on this as the mo­ment when the dig­i­tal trans­for­ma­tion of busi­ness and so­ci­ety sud­denly ac­cel­er­ated.”

Richard Drew / As­so­ci­ated Press 2019

IBM is fo­cused on two ar­eas: ar­ti­fi­cial in­tel­li­gence and cloud com­put­ing.

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