IBM's Kyndryl in Trouble: Mass Layoffs, Payroll Problems, Buybacks (in Company Whose Debt is Almost Twice Its Total Value), and Soon $9 Per Share (Down Over 80%)
Kyndryl is done. Stick a fork in it.
Days ago: Discussions About When the Axe Falls at IBM/Kyndryl (11,000 Layoffs Estimated)
Kyndryl - coming from IBM - is a sign of what will happen to IBM afterwards. Same management. Same accounting tricks. They're intertwined, they're just a "legal hack" (offloading "toxic" things).
Kyndryl is allegedly struggling to pay salaries to its staff now. The mass layoffs mean severance payments, but can this company afford it (more debt)? What about the 'buyouts' and buybacks (embezzlement)? Taking debt to fake one's worth is likely accounting fraud.
As an extended recap of what insiders are saying: "Rumors [of mass layoffs] are first week of June for exit by end of June, but let’s see. I’m more interested in seeing who is picked off. I don’t have a lot of faith in our management and this place already has far too many people in roles they are not qualified for. Management should be doing everything they can to hold on to people who can actually get the work done, but performative posturing is what is rewarded, not substance. I don’t have any faith this time will be different."
There seems to be consensus, except on the date.
On salary delays and priorities:
The stock is in a freefall this week, as we noted days ago, so insiders say "under nine digits" or "can smell nine digits." (Below $10 a share)
Hours ago somebody wrote: "Yup, this may come soon indeed. The 400mio spent on buybacks overall (and about 50 in last Q), and the market is yet resistant to buy the stock (GAAP vs "adjusted") - buying the story. And it sinks further then. Given the cooked books (aka repainting GAAP to "adjusted“) - conspiracy proven by SEC, the market is waiting on the SEC results and lead plaintiff damage summary. This will set the next trajectory. Not any good for the true folks inside there for now."
"Can you smell that 52 week low coming? I can."
Not just 52-week low but an all-time low. The company is already fiscally insolvent due to its giant debt.
Some people already worry the company is too broke to pay severance (in case they get sacked). One alleges that in the US severance is only a one-month one-time payment, which is ridiculous stingy and possible incompatible with American labour law in all states:
I am not a labour-related or work-centric lawyer by any stretch of imagination, but in most US states (assuming the above is true) it's likely illegal. The same goes for flouting the WARN Act, yet IBM gets away with it. Those impacted can sue, but taking an IBM offshoot to court is very expensive and IBM is notoriously aggressive (lawyering up) towards its workers. █