Why IBM Stock Topped the Market on Tuesday

An apparent effort at trimming its workforce was the catalyst behind IBM (NYSE: IBM) stock's rise on the second trading day of the week. On reports that the storied tech company aims to reduce its headcount in certain divisions, investors traded the shares up by more than 3% on the day. That rate outpaced the performance of the S 500 index, which gained 1.1%.

Citing an unnamed "person with knowledge of the matter," CNBC reported that IBM informed its marketing and communications unit employees it was making cuts in the division. This was conveyed in a brief, in-person meeting led by the company's chief communications officer, Jonathan Adashek.

This hooks into a wider trend in the tech industry, which has been downsizing recently. According to data cited in a January article by National Public Radio, in 2023, more than 260,000 positions in the industry were eliminated. Several factors were and are playing into this -- a retreat from the elevated hiring levels of the coronavirus pandemic, inflation (which is slowly abating but still a worry for many businesses), and slumping customer demand.

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Source Fool.com