IBM (NYSE:IBM) confirmed on Thursday that it’s laying off a small percentage of employees, confirming reports that appeared earlier in the day on TheLayoff, an online message board.
A person familiar with the matter said the cuts affect about one half of one percent of employees. The conglomerate known colloquially as “Big Blue” has more than 340,000 employees, according to its last proxy statement, which means the cuts would affect around 1,700 employees.
The trim comes as IBM seeks to evolve its business through a major acquisition and meet its goal of growing profits.
IBM shares are up 16% since the beginning of 2019. In April the company reported first-quarter revenue that was down 5% year over year and below analysts’ expectations.
IBM is in the midst of a plan to acquire open-source software giant Red Hat for $34 billion. The deal is set to close in the second half of this year.
IBM has its own public cloud infrastructure for deploying applications, but in buying Red Hat (NYSE:RHT), IBM has sought to also gain business from companies adopting other public clouds, like Amazon (NASDAQ: AMZN) Web Services and Microsoft (NASDAQ: MSFT) Azure, both of which have more market share, according to Synergy Research Group.
IBM announced job cuts in 2016 and in 2017.
Shares advanced $1.20 to $133.42
