Ginni Rometty, President and CEO of IBM, speaks at the @ Work event on April 2, 2019 in New York City.
Cindy Ord | CNBC
IBM confirmed on Thursday that a small percentage of its employees will be dismissed and confirmed reports that had appeared the previous day on TheLayoff, an online message board.
A person familiar with the matter said that the cuts affect about half of one percent of the workforce. According to its latest proxy statement, IBM has more than 340,000 employees, which means that the cuts would affect about 1
"We will continue to reposition our team to focus on the high-value segments of the IT market, and we remain aggressively engaged in important new areas of value to our customers and IBM," said one Company spokesman to CNBC in an email. The company's job page lists 7,705 job opportunities.
The final touch is that IBM is trying to develop its business through a larger acquisition and achieve its goal of increasing profits.
IBM shares have gained 16% since early 2019. In April, the company reported a 5% year-over-year decline in revenue and below analyst expectations in the first quarter.
IBM plans to acquire the open source software giant Red Hat for $ 34 billion. The closing of the transaction is planned for the second half of the year.
IBM has its own public cloud infrastructure for deploying applications. However, with the purchase of Red Hat, IBM has also tried to do business with companies using other public clouds like Amazon. According to the Synergy Research Group, Web Services and Microsoft Azure have a higher market share.
IBM announced 2016 and 2017 job cuts.
Earlier this month, Evercore ISI analysts Amit Daryanani and Irvin Liu highlighted the importance of the Red Hat deal when IBM's reporting was initiated:
"While IBM's stock is likely to be tied to the price range in the short term investors will remain marginalized until they better understand the financial profile of IBM after the conclusion of the Red Hat contract Our positive attitude is based on our positive assessment of the RHT deal, which has the potential to transform as it enhances capabilities and customer reach significantly expanded by IBM, "write Daryanani and Liu.  2] According to the annual report, Red Hat employed 13,360 people as of February 28.
In April, IBM announced that earnings per share are expected to be at least $ 13.90 in 2019, with certain items excluded. This would be an increase of $ 13.81 per share excluding certain items in 2018.
CLOCK: IBM's Ginni Rometty: AI Will Change 100 Percent of Jobs