Technology and consulting giant IBM has been hit by cuts from the so-called Department of Government Efficiency (DOGE). During the first quarter of 2025, the company canceled 15 of its federal contracts, representing between 5% and nearly 10% of IBM's consulting practice.
Technology and consulting giant IBM has been hit by cuts from the so-called Department of Government Efficiency (DOGE). During the first quarter of 2025, the company canceled 15 of its federal contracts, representing between 5% and nearly 10% of IBM's consulting practice.
The cuts amount to $100 million in future payments and are mostly for USAID, according to Reuters and Bloomberg. The company’s shares fell more than 6% on April 23 following the news.
According to the company's first-quarter 2025 results report, IBM's overall consulting revenue fell 2% to just over $5 billion. Overall, IBM's consulting business accounted for 34% of the company's revenue in the first quarter, TechCrunch reports .
Regarding the cuts, IBM CEO Arvind Krishna said: “We have had several contracts either with a technical specification or canceled, and our annual backlog is over $30 billion in total consulting services. That’s less than $100 million in backlog over several years. So, while no one is immune, we are fully focused on monitoring the dynamic development of identity. We are prudently cautious about consulting for this year.”
Despite this, Krishna expressed positive expectations for the current year.
“The diversity of our business positions us well in the current climate,” said Krishna. “Our portfolio and track record of delivering projects give me confidence in the next phase of our growth. I look forward to sharing our successes with you throughout the rest of the year.”
In March, it was announced that IBM was cutting about 9,000 jobs in the US . In September, the company laid off thousands of people and tried to keep it a secret. Sources reported that the cuts included experienced professionals (especially programmers) with more than 20 years of experience .
