IBM has announced almost 4,000 layoffs after failing to hit its annual cash target for 2022.

The company confirmed to Reuters that it will cut 3,900 staff – around 1.5% of its global workforce – as part of wider asset divestments. The layoffs are specifically related to Kyndryl, the IT infrastructure services provider created from the spinoff of IBM’s infrastructure services, Merative, formerly IBM Watson Health.

The cuts will come with an associated cost of $300 million for the first quarter of 2023.

In comments to Reuters, finance chief James Kavanaugh said that IBM was still "committed to hiring for client-facing research and development".

IBM becomes the latest major US-based tech player to announce job cuts, following the likes of Meta, Microsoft and Alphabet. In total, the US tech sector has slashed over 200,000 jobs in recent months.

In terms of its financial results, IBM’s 2022 cash flow missed its target of $10 billion by $700 million as a result of higher-than-expected working capital needs. The company has forecast annual revenue growth in mid-single digits, a far cry from the 12 per cent it reported last year. It attributed the drop to cautious spending by clients amid rising recession fears.

The company’s total revenue remained flat at $16.69 billion, beating estimates of $16.40 billion. IBM recorded a decade-high revenue growth of 5.5 per cent for the year.

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