Managed services News
CDW Layoffs: 5 Things To Know
Wade Tyler Millward
CDW has cut employees who were with the company for more than 10 years and multiple employees involved with Digital Velocity and Microsoft Azure.
… And In Consulting
IBM, which announced its first-quarter earnings Wednesday, reported a “deceleration” and “weakness” in its consulting business but said that software demand remained “very steady.”
IBM CEO Arvind Krishna said on the earnings call that in the U.S., IBM “did see some slowing down in consulting projects,” but no project cancellations.
“I want to caution that weaknesses are shrinking,” he added. “Double-digit rates just went down into 6 to 8 percent, which is still healthy.”
He believes the consulting slowdown could spread globally, but it should not spread into the software segment.
“A lot of our software is running critical systems for our clients,” Krishna said. “And we don’t see those very subject to what we see in the current macroeconomic environment. And so that’s what gives us confidence.”
In March, Accenture announced the layoff of 19,000 employees. Although the solution provider giant – No. 1 on CRN’s 2022 SP500 – credited the layoffs to an effort to “streamline our operations and transform our non-billable corporate functions to reduce costs” after an acquisition spree, the company also reduced guidance for expected revenue growth for all of fiscal 2023 to 8 percent to 10 percent in local currency, compared to its earlier guidance of 8 percent to 11 percent.
In February, Cognizant reported that its net income fell 9.6 percent year over year in its fourth fiscal quarter to $521 million.
Total revenue for the quarter, however, grew 4.1 percent year over year ignoring foreign exchange. And net income for the 2022 fiscal year grew 7.2 percent year over year to $2.29 billion.
Full year revenue grew 7.5 percent to $19.4 billion. Full year free cash flow was $2.2 billion.
The solution provider – No. 7 on CRN’s 2022 SP500 list – forecasted that the first quarter of its 2023 fiscal year will see between a 1 percent decrease or, at best, flat year-over-year growth ignoring foreign exchange.
The company said it “is not providing full-year guidance at this time and intends to provide an update in its next earnings release in early May.”
Cognizant lowered annual guidance for the third straight quarter during its third fiscal quarter, according to The Economic Times. The company forecasted annual guidance of $19.3 billion.
In March, IT consultancy firm Thoughtworks announced the layoff of 500 employees, 4 percent of its global workforce. It also forecasted sales for its current first quarter 2023 of between $303 million and $305 million, which would reflect a year-over-year sales decline of between 5 percent and 5.5 percent.
