IBM is again forecasting cost savings in the coming calendar year, which likely means one thing for its legions of workers – pedal fast and keep your heads down because headcount reductions may be on the way once more.
Despite a share price bump of nine percent following publication of Big Blue’s Q4 and full-year financial results ending December 31, the IT mammoth assured analysts on an earnings call that senior management will again look to chop operating expenses.
“Our productivity initiatives have enabled investments in innovation, skills, and go-to-market capabilities, including our ecosystem,” said CFO James Kavanaugh. “We have accomplished this while simultaneously growing our operating profit margin and free cash flow, which in turn has increased our financial flexibility.
“This remains our playbook going forward, having executed on $3.5 billion of annual run rate savings exiting 2024, supporting our strong free cash flow growing in excess of revenue.”
Free cash flow was $12.7 billion, which IBM says is its strongest in years.
“We expect workforce rebalancing fairly consistent with prior years,” said Kavanaugh. “We are also ramping on the $241 million gain from the divestiture of The Weather Company.”
In 2024, IBM quietly laid off a low single-digit percentage of the workforce. IBM had 288,000 staff at the end of 2023 and no newer numbers are available.
Kavanaugh also confirmed: “We are cutting back on discretionary-based spend, so we can fuel investment into digital transformation and GenAI overall.” Clients are doing the same thing. “We’ve been seeing that play out throughout 2024,” he added.
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From the article:
IBM is again forecasting cost savings in the coming calendar year, which likely means one thing for its legions of workers – pedal fast and keep your heads down because headcount reductions may be on the way once more.
Despite a share price bump of nine percent following publication of Big Blue’s Q4 and full-year financial results ending December 31, the IT mammoth assured analysts on an earnings call that senior management will again look to chop operating expenses.
“Our productivity initiatives have enabled investments in innovation, skills, and go-to-market capabilities, including our ecosystem,” said CFO James Kavanaugh. “We have accomplished this while simultaneously growing our operating profit margin and free cash flow, which in turn has increased our financial flexibility.
“This remains our playbook going forward, having executed on $3.5 billion of annual run rate savings exiting 2024, supporting our strong free cash flow growing in excess of revenue.”
Free cash flow was $12.7 billion, which IBM says is its strongest in years.
“We expect workforce rebalancing fairly consistent with prior years,” said Kavanaugh. “We are also ramping on the $241 million gain from the divestiture of The Weather Company.”
In 2024, IBM quietly laid off a low single-digit percentage of the workforce. IBM had 288,000 staff at the end of 2023 and no newer numbers are available.
Kavanaugh also confirmed: “We are cutting back on discretionary-based spend, so we can fuel investment into digital transformation and GenAI overall.” Clients are doing the same thing. “We’ve been seeing that play out throughout 2024,” he added.