- Doge canceled contracts could cost IBM up to $ 100 million
- The IBM consulting business has a value of $ 5.1 billion, 2% less year after year
- IBM is still depositing income growth, noting that interest in artificial intelligence continues
The Financial Director of IBM, James Kavanaugh, has revealed 15 federal contracts between the United States government and the technological giant had been canceled, arrested or suspended as a result of Elon Musk’s dogal efficiency initiative, which could cost the company up to $ 100 million.
Both Kavanaugh and the IBM CEO, Arvind Krishna, then minimized the impact of Doge’s cuts, citing them as a small fraction of their accumulation of consulting of $ 30 billion.
“This is like less than $ 100 million of orders for a duration of several years,” Kavanaugh said.
IBM loses US government contracts due to doge
The news occurred when IBM announced its results of the first quarter for fiscal year 2025, pointing out a small increase of 1% year after year in revenue at $ 14.5 billion.
Speaking about lost contracts, Kavanaugh said: “While no one is immune, we are absolutely focused on monitoring the dynamic identity process.”
According Techcrunch Reports, federal contracts represent around 5-10% of the IBM consulting business, but Krishna emphasized that the majority of contracts are for critical services such as the benefits of veterans, the acquisition of GSA and payroll systems, therefore, only a small portion of their contracts are considered vulnerable to the cuts.
Consulting income for the company in the first quarter were $ 5.1 billion, or about 35% of its total income, but fell 2% year after year. Its infrastructure business saw a more pronounced 6% drop in quarterly income, while software increased with a 7% increase in revenues to $ 6.3 billion.
“While the macroeconomic environment is fluid, according to what we know today, we maintain our expectations of the whole year for the growth of income and free cash flow,” Krishna said, and pointed out that the interest in the generative AI continues to increase.
The news occurs in the same month when the United States Department of Defense shared the amazing amount of $ 5.1 billion in savings when canceling the contracts, raising their savings fed with duxtor to almost $ 6 billion.
