A leading tech company is now cutting a whopping 8,000 jobs, part of a plan to increase its AI output, sources confirm.
IBM told employees on Tuesday in its marketing and communications division that it is slashing the size of its staff, according to a person with knowledge of the matter.
Jonathan Adashek, IBM’s chief communications officer, made the announcement in a roughly seven-minute meeting with staffers in the unit, said the person, who asked not to be named because the news hasn’t been made public, reports CNBC.
In December, IBM CEO Arvind Krishna told CNBC that the company was “massively upskilling all of our employees on AI,” after it announced a plan in August to replace nearly 8,000 jobs with AI.
IBM said on its earnings call in January of last year that it was cutting 3,900 positions.
“In 4Q earnings earlier this year, IBM disclosed a workforce rebalancing charge that would represent a very low single digit percentage of IBM’s global workforce, and we expect to exit 2024 at roughly the same level of employment as we entered with,” IBM told CNBC in a statement.
The latest cuts come alongside another round of downsizing in the tech industry.
So far this year, some 204 tech companies have cut almost 50,000 jobs, according to the website Layoffs.fyi.
January was the busiest month for tech layoffs since March, as Alphabet, Amazon and Unity all announced massive job cuts.
IBM has returned to growth in the past couple years, but expansion remains muted, says CNBC.
“Revenue in the fourth quarter increased 4% from a year earlier even as earnings topped estimates. CFO James Kavanaugh spoke of workforce rebalancing on the earnings call.”
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Other Economy News Today
A massive beauty company now begins to liquidate and effectively ceasing all operations in the US, sources have confirmed.
The Body Shop’s US operation has been led into liquidation as its UK parent now takes its cash, reports Retail Dive.
The US subsidiary ceased operating as of March 1, and told a bankruptcy court it didn’t get advance notice of its British owner’s restructuring.
Of the 66 total locations in the United States, seven were in New York—the second-most of any state.
The Body Shop International Limited filed for administration under U.K. insolvency laws “with no advance notice to, or pre-filing discussion with” its wholly-owned U.S. subsidiary, per the filings.
Moreover, the companies’ business arrangement included a centralized money management system where the U.S. operation’s cash “was swept on a daily basis” to a concentrated account, then advanced back to fund U.S. expenses.
But the U.K.-based parent, having taken in all the U.S. cash prior to filing for administration, has held onto it since, “thereby preventing the [U.S.] Company from paying its vendors and satisfying other obligations,” per the filing.
In an unfortunate event, it has led to a Chapter 7 filing, the company said.
The U.S. operation has assets of between $50 million and $100 million, and liabilities of between $10 million and $50 million, according to court documents.
Previously, in a press release detailing its intention to file for bankruptcy in Canada, The Body Shop Canada Limited stated that, effective March 1, “The Body Shop US Limited has ceased operations.”
Unlike the situation in the U.S., however, The Body Shop Canada is open for business as it “evaluates its strategic alternatives and implements certain restructuring initiatives,” though its website is down and 33 of its 105 stores have been slated to close.
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