American technology and business consultancy giant International Business Machines (IBM) has announced plans to split the entire business into two public companies. The decision will cost the firm more than £4bn.
IBM currently employs more than 352,000 workers across the world.
The aim of the move is an attempt to shift its focus to higher-margin businesses like cloud computing and artificial intelligence – and away from its traditional model, which has suffered in recent years.
As a result, the new company will focus on its legacy IT infrastructure. It will be given renamed NewCo and officially spun off in 2021.
IBM Chief Executive Arvind Krishna said: “We divested networking back in the 1990s, we divested PCs back in the 2000s, we divested semiconductors about five years ago because all of them didn’t necessarily play into the integrated value proposition.
“To drive growth, our strategy must be rooted in the reality of the world we live in and the future our clients strive to build. Today, hybrid cloud and AI are swiftly becoming the locus of commerce, transactions, and over time, of computing itself.”
IBM shares rose 6% following the announcement.