IBM and SAP Announce Thousands of Job Cuts as Economic Slowdown Looms

International tech giants IBM and SAP are the latest companies to announce job cuts as they prepare for a possible economic slowdown.

IBM, the American multinational technology company, announced Wednesday that it will cut 3,900 positions, or 1.5% of its global workforce. The restructuring will cost between €250 million ($272 million) and €300 million ($381 million), and the company’s shares were down 3.3% in Frankfurt.

The cuts come even as IBM posted better-than-expected revenue for the most recent quarter. IBM is also spinning off and selling two business units, which is expected to cost the company $300 million this quarter.

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. The move is part of a larger restructuring effort and will cost the company €1.2 billion ($1.3 billion).

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. Dow, a chemical company, is also cutting thousands of jobs as part of a restructuring effort.

The job cuts come as large companies that grew during the pandemic now prepare for a possible recession ahead. It is unclear how the job losses will affect the global economy, but the cuts are a sign of the uncertain times ahead.