The Dow Jones industry average (DJINDICES: ^ DJI) it fell below 30,000 on Wednesday, a day after it first breached that level. The Dow fell about 0.63% at 12:40 a.m. EST.
The economic recovery from the epidemic appears volatile as COVID-19 cases accelerate across the country. The Department of Labor reported 778,000 initial claims for state unemployment benefits in the week ended Nov. 21, the second consecutive weekly increase.
Shares International Business Machinery (NYSE: IBM) sank with the Dow on Wednesday after news came that the company was allegedly planning to cut thousands of jobs in Europe. Shares salesforce.com (NYSE: CRM) also kept lower on the reports the software company speaks to Loose (NYSE: WORK) about a potential acquisition.
IBM plans to eliminate jobs before the hand
Bloomberg reported on Wednesday that IBM technology giant plans to cut jobs in Europe by about 10,000. The goal of the job cuts is to reduce the cost of the allegedly managed infrastructure services business, which IBM intends to select as a separate company by the end of 2021.
The redundancies will affect about 20% of IBM’s staff in Europe. Reductions are concentrated in the UK and Germany, although jobs will also be lost in Poland, Slovakia, Italy and Belgium. According to Bloomberg sources, the layoffs should be completed in the first half of 2021.
IBM service businesses are labor-intensive and have lower profit margins than software. The company has been turning to cloud computing, artificial intelligence and other high-value growth areas for years, and the spin-off will continue to focus IBM’s resources on the best growth opportunities.
The spin-off is the second big bet IBM has made on hybrid cloud computing, which blends on-premises hardware and cloud-based data centers. The first was the acquisition of the $ 34 billion Red Hat software company, which closed in 2019. Red Hat is known for Red Hat Enterprise Linux, the leading server operating system, and OpenShift, an on-premises deployable container platform. hardware as well as major public cloud platforms.
IBM shares fell about 0.6% by early Wednesday afternoon. The stock fell nearly 8% in 2020.
Salesforce was able to buy Slack
Citing CNBC’s Dow Jones, it reported on Wednesday that Salesforce’s customer relationship management software provider was recently in talks to acquire collaborative software provider Slack. Salesforce has made some major acquisitions in recent years, including MuleSoft and Tableau. The acquisition of Slack is probably the largest for the freshly beaten Dow component.
Shares of Salesforce fell about 4.5% by early Wednesday afternoon in response to the news, while shares of Slack soared by 25%. None of the companies have yet commented on whether negotiations are underway.
The loose competes Microsoft Teams, which is linked to parts of the technology giant’s Office 365 subscription. Salesforce competes in the CRM market with Microsoft as opposed to Microsoft Dynamics. If Salesforce still buys Slack, you can use your existing customer base to boost Slack’s growth. The company can even bundle Slack with its existing subscription offerings and bring with it the same trick that Microsoft uses to pressure Teams.
Salesforce’s stock rose 55% this year, though down about 10% from its most recent peak.