IBM has recently announced that it has taken the decision of laying off around 1,000 of its employees. A small percentage of its employees will be laid off this week. It has been confirmed that the layoff only affects one half of 1% of its employees. The company has over 340,000 employees which mean that cutting own around 1.700 of them could not bring much of a loss for the tech giant. The basic plan is to reposition the team so as to align them with the eye set on the high-value aspects of the IT market. IBM is still continuing to hire people for the critical new positions with the hope of delivering excellent results to all its clients. The company has its website showing vacancies for 7,705 employees.
IBM is basically in the phase where it is trying to revolutionize the business through either the acquisition deals or achieving goals of growing profits. At the start of 2019, IBM showed a rise in the shares by 16%. But, in April, the first-quarter revenue showed a drop of 5% in the consecutive years when compared to the analysts’ expectations. The tech giant is, currently, in the middle of the plan of acquiring an open-source software firm, Red Hat, with an investment of $34 Billion. By the second half of this year, the deal will be completely closed.
The company has its very own public cloud infrastructure so as to create use of applications, however, the Red Hat acquisition has given IBM a gain in business by adopting the company’s other public clouds including Microsoft Azure and Amazon Web Services, as both have a higher market share. IBM had announced a similar layoff plan in 2016 and 2017 as well. Evercore ISI analysts Irvin Liu and Amit Daryanani have confirmed that the Red Hat agreement can initiate a coverage gain for IBM.
The IBM stock will range during the year and the investors come into play after understanding IBM’s financial sketch after the closure of the Red Hat acquisition. The deal is believed to be quite positive for IBM in terms of advancing its capabilities and customer reach. The 13,360 employees of Red Hat will now be reporting to IBM. After the acquisition, the tech giant hopes to earn around $13.90 in revenue per share excluding some of the terms in 2019. The company had earlier in 2018 earned $13.81 per share after omitting certain items.