IBM (NYSE:IBM) becomes the latest tech company to join the layoff bandwagon as it reportedly plans to reduce its global headcount by 1.5%, or about 3.900 employees. The company expects to incur a one-time charge of nearly $300 million in the first quarter.
The layoffs will target those who remained after the spin-off of Kyndryl Holdings Inc. in late 2021 and the sale of its healthcare unit. Nevertheless, IBM would be hiring employees for client-facing research and development roles, Reuters reported.
The company recently delivered upbeat fourth-quarter results, as both earnings and revenue climbed on a year-over-year basis. IBM’s plans to bolster hybrid cloud and AI strategies helped offset the impacts of inflation and supply-chain issues.
Moreover, IBM remains optimistic about its performance in 2023. It expects revenue to rise in the mid-single-digit range from the prior year. Meanwhile, cash flow is anticipated to grow by $1 billion year-over-year to $10.5 billion.
Is IBM a Buy, Sell, or Hold?
Wall Street’s Hold consensus rating for IBM stock is based on one Buy, three Holds, and one Sell. The average price target of $147 implies 4.43% upside from current levels.