June 7 (UPI) -- Tech giant IBM says it will lay off about 1,700 employees in its third job cut in the last four years.
IBM is making the cuts as part of a streamlining process it hopes will spur new growth. First-quarter revenues for IBM were down 5 percent, below analyst expectations.
"We are continuing to reposition our team to align with our focus on the high-value segments of the IT market and we also continue to hire aggressively in critical new areas that deliver value for our clients and IBM," the company told CNBC.
The planned layoffs come as IBM aims to acquire open-source software giant Red Hat for $34 billion, a deal expected to close later this year.
IBM has lagged in the cloud sector behind Amazon, but it still dominates the mainframe market. By acquiring Red Hat, IBM could go after public clouds, a $1 trillion market, and better compete with Amazon and Microsoft.
"Our positive stance is based on our favorable view of the [deal]," wrote analysts Amit Daryanani and Irvin Liu. "[It] has the potential to be transformational as it significantly broadens IBM's capabilities and customer reach."