The news comes as other major tech companies downsize their workforces around the world in response to the gloomy global economic outlook and waning demand for some digital services following the pandemic. In a live streamed presentation to reporters, SAP CEO Christian Klein said that the restructuring was “targeted” and would allow the company to invest in the areas “where it really matters for SAP to be competitive in the future,” particularly its cloud business.Ī workspace inside Building 21 at the Microsoft Campus in Redmond, Washington, on Thursday, March 3, 2022. The restructuring will cost between €250 million ($272 million) and €300 million ($381 million) the company’s shares were down 3.3% in Frankfurt.
#IBM NEWS EXPLORER MATTEO SOFTWARE#
(SAP), Europe’s largest software company, will lay off 2.5% of its global workforce of 112,000, or around 2,800 employees, according to an earnings report published Thursday. (IBM) about $300 million this quarter, a spokesperson confirmed. Some 3,900 positions, or 1.5% of its global workforce, are expected to go. (IBM) announced the cuts Wednesday, saying they were related to the previously announced spinoff and sale of two business units. I could not be stronger in my endorsement of the move to two independent companies and look forward to the changes in the market.IBM and SAP are the latest tech companies to slash thousands of jobs, as they reorganize businesses and profits come under pressure from a slowing global economy. The action simplifies and optimizes Big Blue’s operating model, enabling speed and growth in IBM and NewCo. This most recent action in Big Blue’s strategic growth transformation over the past few years is significant. If it results in the increased execution capabilities that I expect, I think competitors in both business spaces need to take this very seriously. Two IBMs, which are unconflicted, are truly formidable. This separation of the businesses will bring much more formidable competition to the marketplace. So, it is a win-win-win, across the IBM spectrum. With the two businesses no longer combined, the stockholders will benefit. Arguably, by combining them (as was the case before this announced separation), the stockholders faced less value. This move is great from a stock perspective because a technology-based company’s value rather than a services-based company’s value is usually much higher. It will also accelerate their career opportunities. The separation into two independent companies simplifies their work lives and will allow them to execute better. The move is great for IBM employees, as they struggled with the internal operating conflicts between the two different businesses. Now, both organizations can deliver even more excellence because they will no longer be conflicted in their paths and focus. The separation into two companies frees IBM to operate at its best in both the legacy modernization space and in the open source and AI transformation space. It requires time to accomplish, requires disciplines and a different level of change management that is unlike partnering services for helping customers move down the open cloud platform and AI route. But its legacy infrastructure business required that the firm operate with stability and discipline.įurthermore, the business engaged in modernizing and migrating customers’ legacy infrastructures to the cloud.
For its AI and open source cloud platform business, IBM needed to be an agile IP-based firm. Fundamentally, the businesses tried to do different kinds of operations, made decisions and investments differently and partnered with customers differently. It was confusing for services customers with both businesses under one roof. Let’s consider in more detail the implications for all IBM stakeholder groups as well as its competitors.
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