IBM to cut thousands of jobs as coronavirus plays out

CEO has promised the 5% dividend will remain intact

Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.

Continue Reading Below

Layoffs at International Business Machines are in the works, the company confirmed to FOX Business.

"IBM’s work in a highly competitive marketplace requires flexibility to constantly remix to high-value skills, and our workforce decisions are made in the long-term interests of our business.  Recognizing the unique current conditions, IBM is offering subsidized medical coverage to all affected U.S. employees through June 2021" a company spokesman said in a statement.

TickerSecurityLastChangeChange %
IBMINTERNATIONAL BUSINESS MACHINES CORP.125.54+3.78+3.10%

IBM CEO WON’T CUT 5% DIVIDEND

The company declined to disclose where the cuts would take place, but Bloomberg which was first to report the developments said the reductions would be spread across at least five states, leaving longtime employees suddenly out of work as the coronavirus pandemic has chilled the economy. Employees in California, Missouri, New York, North Carolina and Pennsylvania were affected.

REUTERS/Brendan McDermid/File Photo

IBM WITHDRAWS 2020 FORECAST ON VIRUS UNCERTAINTY

The company withdrew its annual forecast last month as the pandemic slowed software sales. And CFO James Kavanaugh discussed the need to stay nimble. "We took structural actions to improve the competitiveness of our Global Technology Services business" he said during the April earnings call.

Earlier this month, CEO Arvind Krishna said IBM wouldn’t even be cutting its 5 percent dividend.

"I believe that we actually have enough financial stability, including a secure dividend," Krishna previously said on FOX Business Network's "Mornings with Maria." "The dividend is occupying a little bit more than half our free cash flow. It's not like it's occupying all of it, and that leaves enough flexibility for us to do it."

CLICK HERE TO READ MORE ON FOX BUSINESS