The IBM technology and council giant was not immune to the cuts of the Ministry of Efficiency (DOGE).
IBM had 15 of its federal contracts canceled due to cuts related to the Doge during the first quarter of 2025, according to Reuters and Bloomberg reports. These discounts represent $ 100 million in future payments, according to Bloomberg. Federal contracts represent between 5% and just under 10% of IBM consultation practice.
After being dotted with questions when IBM’s gains call on Wednesday, Arvind Krishna, CEO of IBM, said the cancellations were linked to the USAID reductions. Krishna and James Kavanaugh, IBM’s financial director, then led to minimizing the potential Doge impact on the company’s future affairs.
“We have had a handful of contracts, either a declaration of work, or by canceling and on our backdone annualized of more than $ 30 billion in total council,” said Kavanaugh. “It is like less than $ 100 million in backwards over a period of several years. So, even if no one is immune, we are absolutely focusing on monitoring the dynamic identity process. We are carefully cautiously by consulting for the year.”
IBM consulting activities represented 34% of the company’s revenues in the first quarter. Krishna added that the company’s federal government council contracts are largely focused on crucial areas.
“The vast majority is a critical work – we actually deal with the allegations of veterans,” said Krishna. “We help treat how the (general services administration) is supplying. We help implement the pay systems. I do not consider them optional. Now are there areas around the edges that could be considered discretionary? Yes. But in our case, it is the minority of our activities, not the majority. ”
IBM consultation revenues fell 2% in total in the first quarter, according to the results of the company’s first quarter. Council’s revenues in the first quarter exceeded just over $ 5 billion.
“The diversity of our business positions us well to navigate the current climate,” said Krishna. “Our portfolio and our execution history strengthen my confidence in this next chapter of our growth. I can’t wait to share our progress while we are progressing in the rest of the year. ”
