IBM spinoff Kyndryl is the latest tech company to cut jobs in India. Sources told Business Today that the company will be paying 2-month pay in severance to laid-off employees.
“We were informed of the layoffs Wednesday morning (March 29). By evening we had to clear all dues and put in the papers. The company is offering 2- month severance,” a person aware of the matter told Business Today.
The layoffs are not limited to India. A company spokesperson said in a statement last week, “We are eliminating some roles globally – a small percentage – to become more efficient and competitive. This is in addition to the ongoing transformation work we have undertaken to streamline and simplify our processes and systems.”
Kyndryl employs roughly 90,000 people across its global operations. Around 50 per cent of its global workforce is stationed in India. Business Today has written to Kyndryl to enquire about the exact number of employees terminated in India. The story will be updated as and when they respond.
The above-quoted source also noted that the severance paid in India is relatively less compared to that paid to their global counterparts.
“I know people in US and UK teams, they are getting 6-month pay as severance, this is not equitable,” he said.
Another source said the majority of layoffs took place in marketing, administration, Human Resources, and other non-core verticals.
“Most impacted are non-core roles like marketing, admin, HR and all,” a source highlighted.
Kyndryl spun off from IBM in November 2021. For the quarter that ended on December 31, 2022, the company reported revenues of $4.3 billion, a YoY decline of 6 per cent. Furthermore, they reported a pre-tax loss of $138 million and a net loss of $106 million.
After announcing the results, Chairman and Chief Executive Officer Martin Schroeter said, “I am confident our bottom line will benefit from the value we’re creating for our customers, while better serving their mission-critical needs.”
The company said in its earnings report, “Adjusted pretax loss was $4 million, compared to pro forma adjusted pretax income of $65 million in the prior-year period. Currency movements had a negative year-over-year impact of approximately $90 million on adjusted pretax income. Adjusted EBITDA of $580 million compares to $679 million of pro forma adjusted EBITDA in the prior-year period, primarily driven by unfavorable currency movements of approximately $125 million. In the nine months ended December 31, cash flow from operations was $769 million, and adjusted free cash flow was $407 million.”