The COVID-19 crisis is jolting every market sector hard, and now the dominos have been triggered – as several small, medium, and large businesses stare at uncertainty and some shuttered- tech firms that rely on enterprise clients are themselves taking heavy losses and laying off employees.

Both Hewlett-Packard Enterprise (HPE) and IBM have announced significant cost-cutting measures, including pay cuts and significant job losses, reports Ars Technica.

IBM announced its layoffs late Thursday. In a statement, the company said
“While we always consider the current environment, IBM’s workforce decisions are in the interest of the long-term health of our business,” said the company, adding that the “highly competitive marketplace requires flexibility to constantly remix high-value skills”.

“Recognizing the unique and difficult situation this business decision may create for some of our employees, IBM is offering subsidized medical coverage to all affected US employees through June 2021,” said a company spokesperson.

IBM was not in the best of financial situations before COVID-19 hit. The company’s CEO, Arvind Krishna, has been with the company for decades but only stepped into the top seat in April, saying at the time he was focused on building up the parts of the company that support cloud computing and artificial intelligence and was willing to move away from the rest.

IBM, however, did not disclose how many workers are affected but both The Wall Street Journal and Bloomberg News report thousands of employees were affected in five states: California, New York, North Carolina, Missouri, and Pennsylvania.

HPE also announced its cost-cutting plans “as part of its more recent quarterly earnings report”. The company will cut some salaries through October 31, with executives taking pay cuts of 20 to 25 per cent.

According to Patrick Moorhead, principal analyst at Moor Insights & Strategy, he is hearing it’s a balancing act between business units.