IBM (NYSE:IBM) layoffs will see the tech company cutting 3,900 jobs, which represents about 1.5% of its workforce.
According to IBM, these layoffs have to do with its spinoff of the Kyndryl and Watson Health units. This will see the company adjusting its global workforce to take into account employees leftover after the spinoffs.
IBM notes that it will cost about $300 million to lay off these employees. The company also says it still intends to hire new employees, but only in higher-growth areas. All of this comes amid a string of layoffs from tech companies as inflation weighs on the economy.
The IBM Layoffs Follow an Earnings Miss
This layoff news also follows an earnings miss from IBM. Specifically, the company’s $10.4 billion in net cash from operating activities and $9.3 billion free cash flow came in below estimates. This had analysts expecting IBM to announce a larger number of layoffs in an effort to cut costs.
As that didn’t happen, traders are reacting to the news negatively today. That brings with it heavy trading of IBM stock as investors sell shares. Some 8 million shares are on the move as of this writing. To put that in perspective, the company’s daily average trading volume is closer to 4.3 million shares.
IBM stock is down 4.9% as of Thursday morning.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.