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International Business Machines Corporation (IBM) - free report >>
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IBM Job Cuts to Reportedly Reach 14 K amid Transition
As per The Wall Street Journal, International Business Machines (IBM - Free Report) has reportedly eliminated quite a few jobs last week with most cuts coming at the New York City, Poughkeepsie, N.Y, Research Triangle Park campus NC, and Boulder, CO.
Media reports suggests that some of the jobs might be moved to cost effective places like India and total layoffs could be as high as 14K. In March, the company reduced 5,000 positions.
IBM on Friday said that a refocusing is going on and it will employ more staff in newer and key areas like cognitive cloud computing and added that it had 20,000 open positions. However, Wall Street Journal, citing two unnamed employees, stated that IBM’s internal job search tool listed between 7,000 and 8,000 open positions.
IBM reported first quarter 2016 results wherein both earnings and revenues beat the Zacks Consensus Estimate but fell year over year. In fact, this is Big Blue’s sixteenth consecutive quarter of decline in revenues and the worst quarterly revenue seen in the past 14 years.
The company under CEO Virginia Rometty has embarked on an ambitious but a very time consuming turnaround. IBM has been moving away from its traditional businesses to newer (read lucrative) business avenues like cloud and data analytics. Though IBM’s Strategic Imperatives are performing well but these are not enough to make up for the weakness in its traditional business.
Further, currency fluctuations continue to wreak havoc on IBM’s results as a considerable part of its revenues is generated from international markets. Intensifying competition in the cloud computing &data analytics arena is adding to woes.
At present, IBM carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include Facebook Inc. , NetEase, Inc. (NTES - Free Report) and Ellie Mae, Inc. . All these sport a Zacks Rank #1 (Strong Buy)
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