Coronavirus: IBM cuts jobs around US as new CEO makes ‘tough decision’

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IBM told the Wall Street Journal it is laying off an undisclosed number of workers across the US.

IBM representatives didn’t return numerous calls and emails on Friday to confirm the job cuts, which were also reported by Bloomberg.

The already-struggling tech giant's new CEO Arvind Krishna warned investors last month of uncertainty caused by the COVID-19 pandemic, saying the company made a “tough decision” to withdraw revenue projections for the rest of 2020. The Armonk, New York company reported a 3.4 percent revenue decline in the January-March quarter from the same time last year, blaming it in part on how the coronavirus outbreak was affecting sales.

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The Journal said IBM’s job cuts could number in the thousands, citing an unnamed person familiar with the company's plans.

It is the latest example of the pandemic hitting the tech industry, even as demand rises for online services and computing power to help home-bound people work, learn and entertain themselves online. Hewlett Packard Enterprise announced planned cutbacks Thursday that are likely to cost jobs and reduce salaries.

These would be IBM's first big layoffs under Krishna, who on April 6 replaced outgoing CEO Ginni Rometty. Rometty remains IBM’s executive chairwoman through the end of the year.

Krishna said in April at his first quarterly earnings call as CEO that the company will continue to eliminate software and services that don't align with IBM's top two focus areas for growth: cloud computing and artificial intelligence.

Read more: Coronavirus: Layoffs in US swell to nearly 39 million

Once a household name for its personal computers, IBM shed its PC business in 2005 and has since become focused on supplying software services to big businesses, governments and other organizations. It worked to strengthen its cloud computing business under Rometty but has struggled to compete with top cloud rivals Amazon, Microsoft and Google.

Krishna spoke optimistically earlier in May about how the 110-year-old company could weather the pandemic.

“The fact that IBM has been here before gives me perspective and confidence,” Krishna said at the Think conference for IBM clients and developers, held remotely this year. “I believe history will look back on this as the moment when the digital transformation of business and society suddenly accelerated.”

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