- DOGE canceled contracts could cost IBM up to $ 100 million
- IBM consulting activities are worth 5.1 billion dollars, down 2% from one year to the next
- IBM is still in order to grow income, noting that interest in artificial intelligence
IBM financial director James Kavanaugh revealed that 15 federal contracts between the US government and the technology giant had been canceled, arrested or suspended following the Doge Elonk efficiency initiative, which potentially costs the company up to $ 100 million.
Kavanaugh and IBM CEO, Arvind Krishna, then minimized the impact of Doge cuts, citing them as a small fraction of their $ 30 billion consultation.
“It’s like less than $ 100 million in backwards over a period of several years,” said Kavanaugh.
IBM loses contracts from the American government due to Doge
The news occurred while IBM announced its first quarter results for the 2025 financial year, noting a low increase of 1% from one year to another of its revenues to $ 14.5 billion.
Speaking of lost contracts, Kavanaugh said: “Although no one is immunity, we are absolutely focusing on monitoring the dynamic identity process.”
According to Techcrunch Report, federal contracts represent approximately 5 to 10% of IBM’s advice activities, but Krishna stressed that most contracts are intended for critical services such as the advantages of veterans, GSA supply and pay systems, therefore only a small part of its contracts is considered vulnerable to cuts.
The company’s consultation revenues in the first quarter were $ 5.1 billion, or around 35% of its total income, but they fell 2% in annual sliding. Its infrastructure activity experienced a higher drop by 6% of quarterly income, while software increased with a 7% increase in revenues to $ 6.3 billion.
“Although the macroeconomic environment is fluid, depending on what we know today, we maintain our annual expectations for income growth and available cash flows,” said Krishna, noting that the interest in generating AI continues to increase.
The news arrives in the same month that the US Defense Ministry shared $ 5.1 billion in savings by canceling contracts, bringing saved saving at nearly $ 6 billion.
