Earlier this month, Kyndryl reached for a specific phrase that is used in corporate America whenever bad news is imminent. “Workforce rebalancing.” Like adjusting weights on a scale, it sounds almost delicate. On the ground, thousands of people are going to lose their jobs in offices across India and the UK. On May 5, the company approved the action, allocated about $200 million for severance, and informed investors that by fiscal 2028, the entire process should reduce annual costs by $400 to $500 million. The stock fluctuated, dropping more than 12 percent in early trading following the announcement, and then steadied, as stocks occasionally do when a company makes a cut.
Kyndryl has never really moved away from its roots. When it was founded in late 2021 as IBM’s abandoned infrastructure division, it inherited a network of low-profit contracts and a culture that insiders, in their darkest moments, refer to as “IBM without the hardware.” After four and a half years, the company is still sorting through those old agreements and attempting to persuade the market that it is more than just the unglamorous business of maintaining airline systems and bank mainframes at three in the morning. The work is crucial. In certain areas, it is also consistently unprofitable, and this tension is at the core of everything that is going on right now.
Who is allegedly being asked to leave is noteworthy. The Register reports that delivery teams, including architects, consultants, and subject-matter experts, are being cut. One source, who wished to remain anonymous, described the actual workers as somewhat resentful. Kyndryl had appointed numerous new vice presidents who were unaffected, according to the same source. It’s difficult to tell if that’s a true reading of the entire image or just the view from one irritated corner. However, it encapsulates a sentiment that frequently appears in employee forums: the perception that those performing technical work are footing the bill for choices made far above their level.
The numbers don’t really calm people down. Fiscal 2026 revenue was essentially flat at $15.1 billion. The net profit decreased to $198 million. A services company’s lifeblood, signings, fell to $13.5 billion from $18.2 billion the previous year. In light of this, $200 million in severance is more indicative of a business attempting to defy its own gravity than it is of confidence. The accounting review regarding “potential weaknesses” in internal controls, which came with a reorganized finance team, and the postponed quarterly filing are other issues. Calm is not inspired by any of it.
And yet. Kyndryl continues to emphasize agentic AI, presenting autonomous IT operations as the industry’s future and the reason for using fewer human workers. That wager might be profitable. Perhaps a leaner Kyndryl, can accomplish more with less thanks to automation. It is feasible. Additionally, the market has already heard this story, which is currently being told by a dozen IT companies.
As this develops, it’s difficult to avoid thinking about everyone having to endure a 45-day consultation to find out if their position will be retained. There will be more euphemisms. The savings goal is genuine. The people are, too.
