IBM will list its IT infrastructure services unit, which provides technical support to 4,600 customers in 115 countries, and has an accumulated balance of $ 60 billion, as a separate company with a new name by the end of 2021.
“The new company will have 90,000 employees, and its leadership structure will be decided within a few months,” Chief Financial Officer James Kavanaugh said. IBM – which currently employs more than 352,000 workers: it expects to register nearly $ 5 billion in Expenses related to separation of work and operational changes.
Investors welcomed the surprise move announced by CEO Arvind Krishna, who is the architect of IBM’s $ 34 billion acquisition of cloud computing company (Red Hat) last year, leading to a 7% rise in the company’s shares.
In a call with analysts, Krishna said, “We took inventory of networks in the 1990s, inventory of personal computers in the first decade of the twenty-first century, and semiconductors inventories about 5 years ago because all of them did not necessarily help support the integrated value proposition.
Krishna – who replaced Jenny Romty as CEO last April, added: “IBM’s software and solutions portfolio will make up the majority of the company’s revenue after the split.
In a blog, Krishna described the move as “a major shift in the 109-year-old company’s business model.”
IBM, which has sought to compensate for slowing software sales and seasonal demand for its central servers, has said it will now focus on open hybrid cloud computing and AI solutions that will account for more than half of its recurring revenue.
The company also added that it expects third-quarter revenue to reach $ 17.6 billion, and adjusted earnings per share of $ 2.58, roughly in line with Wall Street estimates.
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