When is IBMd hiring freeze ending
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IBM already sold 1/2 of its Kyndryl stock in June
https://www.barrons.com/articles/ibm-sold-half-stake-kyndryl-51654192378
I suspect the other 1/2 is already in play, and will have to go before the first week of Nov
As Kindryl continues to fall I am wondering how much of its stock IBM still holds - we supposedly had a 20% stake that was to be sold within 12 months and that deadline is in a month or so.
Kyndryl has to shrink by a LOT. She is carrying way too much body shop work which is break even at best given their current engagement mode. I expect Kyndryl to exit the body shop marketplace over the next two years via non-bids or a selloff, as they can’t compete (approx 9-10 billion in revenue sacrifice) They will most likely partner with another niche market place company who is also trying to exit the body shop marketplace. DXC anyone? Their GBS has a fair amount of Mainframe, plus the enterprise of HPE. Enterprise is where the money and automation is at.
She is ugly and cheap now - below $9/share.
Who is Kyndryl? Is she hot?
People seem to be forgetting Kyndryl
So easy to do.
Hiring freeze is already in place. People seem to be forgetting Kyndryl. A lot of headcount will be cut by letting contractors go and not backfilling those positions.
It would not be surprising that IBM has a hiring freeze on. Just look at the financial markets! They have to lower costs due to IBM’s longer term contracts locking them into positions that have moved. Given GBS’s very high attrition rate, a hiring freeze accomplishes what they are after (net out flow of revenue has to shrink to improve the bottom line). IBM has two major obstacles facing in in 3rd q. A strengthening dollar, and a doubling of interest rates. The dollar can be hedged to a certain extent, and the interest rates are spread over multiple offerings thus lowering risk. IBM can survive 1-2 quarters of this, and hide the results, but after that they will have to pony up the true financial picture. You are already seeing IBM take longer term actions to lower risk (selling off the pension plan, and restructuring USA retiree healthcare plans) Both of these actions lower longer term exposure and save short term cash. I expect IBM has also swung the PIP ax (most efficient reduction plan) at most measurable job titles to yet again make 3rd q numbers look better. Couple PIP actions with a hiring freeze or even a slow down, makes 3rd q numbers look better. If interest rates and/or the dollar continue down their current path, IBM will have to partner off some more of the legacy business. Not because it’s unprofitable, but because IBM will need the free cash flow and employee reduction. Essentially dumping legacy and harvesting the IP as it’s cash flow positive to IBM. Remember IP has almost zero cost components as they were amortized years ago.
Also, IBM has a tremendous amount of net debt, and interest rates are rising, so the cost of debt is rising - especially new borrowing. This means more cuts, not more hires.
lol we are heading into the recession and IBM has already started laying off people
forget that they are going to hire new people until the recession is over except for billable positions