IBM, Dow, SAP to cut thousands of jobs
IBM, SAP and Dow are cutting thousands of workers in the latest wave of layoffs as corporations look ahead to a possibly slowing economy.
The cuts come as large companies that grew during the pandemic slash staff in preparation for a possible recession ahead. Most of the layoffs are concentrated in the technology sector, with Amazon, Alphabet, Meta and Microsoft all cutting headcount in recent months.
IBM plans to cut 3,900 workers, according to Bloomberg and CNBC. The cuts amount to about 1.5% of the company's global workforce, and come even as IBM posted better-than-expected revenue for the most recent quarter. The Armonk, New York-based firm will continue hiring in what its financial officer called "higher-growth areas."
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On Thursday, materials science company Dow said it would cut about 2,000 jobs, or approximately 5% of its global workforce, as part of an effort to reach $1 billion in cost savings this year. The Midland, Michigan-based company currently employs approximately 37,800 people.
Dow Inc. will take a charge of $550 million to $725 million in the first quarter related to the measures. This mostly includes severance and related benefit costs; costs related to exit and disposal activities and asset write-downs and write-offs. Dow did not provide specifics but said it would evaluate assets with a focus on Europe.
The company also reported a fourth-quarter profit of $613 million, or 85 cents per share. Its adjusted profit was 46 cents per share, below the 57 cents per share that analysts surveyed by Zacks Investment Research were calling for.
Revenue totaled $11.86 billion, missing Wall Street's estimate of $12.03 billion.
"In the fourth quarter, Team Dow continued to proactively navigate slowing global growth, challenging energy markets, and destocking," Jim Fitterling, chairman and CEO, said in a statement. "In response, we shifted our focus to cash generation in the quarter as we lowered operating rates, implemented cost-savings measures, and prioritized higher-value products where demand remained resilient.
Across the Atlantic, SAP, Europe's biggest software company, said Thursday that it is cutting up to 3,000 jobs worldwide, or about 2.5% of its workforce. The Berlin-based company had a sharp drop in profits last year, with full-year profits falling 68% in 2022 from the previous year, to 1.71 billion euros ($1.87 billion).
"This was a difficult decision, and we are deeply aware of the personal impact of these changes," the Germany-based company said in a statement. "We will provide colleagues the care and support they need during this challenging time."
SAP said it is also exploring the sale of business software provider Qualtrics four years after it purchased the company.
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