IBM planning to cut almost 4,000 jobs from spin-off of company, divestment from analytics business

IBM is planning to cut nearly 4,000 jobs as a result of one of its branches spinning off to become its own company and divesting a health care data analytics business. 

Tim Davidson, a spokesperson for IBM, said the company is laying off roughly 3,900 employees. The company is also taking on a $300 million charge through the first quarter of 2023 from its 2021 spin-off of Kyndryl, an information technology infrastructure company, and the divestment of its health care data analytics business, he said. 

Davidson said the layoffs are entirely related to these actions and not the company’s financial outlook. 

He noted that IBM still has a “robust” analytics business. He said the business formerly known as Watson Health, which is now called Merative, was the business that was divested.

The Wall Street Journal reported that the layoffs will account for 1.4 percent of the company’s total headcount of 280,000.

The European software company SAP also reportedly announced it will lay off 3,000 employees as a result of a decrease in revenue, according to the Journal.

SAP Finance head Luka Mucic said the layoffs will be spread throughout the company’s regions but happen mostly outside its base in Germany.

“The purpose is to further focus on strategic growth areas,” he said. 

The Journal reported that about 2.5 percent of SAP’s workforce will be laid off.

The Hill has reached out to SAP for comment.

The announcements come as several other notable Big Tech companies have announced they are undergoing layoffs, including Meta, Amazon and Twitter.

Updated at 5:45 p.m.