IBM Says It Will Split Into Two Companies in Order to Focus on High-Margin Businesses
CC BY 2.0 / Patrick / IBM LogoTech10:48 GMT 09.10.2020Get short URLby Max Gorbachev
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The company’s shares went up 7 percent after the announcement. Experts praised the firm’s decision, touting it as IBM’s smartest, and something that will help the company withstand the impact of automation and cloud services.
IBM, the world’s first big computing firm, says it will split into two public companies in order to focus on high-margin businesses such as cloud computing and artificial intelligence. The move is part of IBM’s desire to rebrand itself and diversify away from its traditional businesses.
Arvind Krishna was instrumental in IBM’s acquisition of cloud company Red Hat last year.
As part of its renovation IBM plans to “simplify and optimise its operating model for speed and growth”, yet there has been no explanation so far if this will prompt layoffs. Currently, the company has 352,000 employees. It expects that the process of separation will cost almost $5 billion.
IBM’s IT infrastructure services unit will become a separate company. The unit, which currently provides technical support for clients in 115 countries, will be spun off and receive a name by the end of 2021. The new company will have 90,000 employees and its leadership will be assigned in November.
The company’s decision was welcomed by experts and its shares jumped 7 percent.