Tech and advisory giant IBM was not immune to the cuts of the Ministry of Government Efficiency (Doge).
IBM had canceled 15 of his federal contracts due to doe-related cuts during the first quarter of 2025, according to the report of Reuters And Bloomberg. These cuts are $ 100 million in future payments, per Bloomberg. Federal contracts represent between 5% and slightly less than 10% of IBM’s advisory practice.
After he was peppered with questions during IBM’s profit Wednesday, Arvind Krishna, the CEO of IBM, clarified that the cancellations were related to cuts at USAID. Both Krishna and James Kavanaugh, IBM’s CFO, then proceeded to play down the potential impact of Doge on the future activities of the company.
“We have had a handful of contracts, the statement of work, or canceling and at our annual backlog of more than $ 30 billion in total consulting,” said Kavanaugh. “This is as less than $ 100 million in disadvantaged for a duration of several years. So although no one is immune, we are absolutely focused on monitoring the identity dynamic process. We are careful for the advice for the year’s advice.”
The IBM consultancy company was 34% of the company’s turnover in Q1. Krishna added that the company’s federal government contracts largely focus on crucial areas.
“The vast majority is crucial work – we actually process veteran benefits claims,” said Krishna. “We help process how the [General Services Administration] does purchasing. We help implement wage systems. I do not consider this to be optional. Are there now some areas on the edges that can be considered discretionary? Yes. But in our case that is the minority of our company, not the majority. “
IBM’s consulting income fell by 2% in the first quarter, according to the results of the company in the first quarter. The turnover from advice in the first quarter was just over $ 5 billion.
“The diversity in our company positions us well to navigate through the current climate,” said Krishna. “Our portfolio and track record of implementation strengthen my confidence in this next chapter of our growth. I look forward to sharing our progress while we walk through the rest of the year.”