On May 6, 2026, Kyndryl Holdings (NYSE: KD) announced a "workforce rebalancing" alongside its Q4 fiscal 2026 earnings release. The company disclosed approximately $200 million in severance and related charges, primarily landing in Q1 FY27 (April through June 2026). Kyndryl said the action would deliver $400 to $500 million in annualized run-rate operating expense savings by fiscal 2028. The 8-K authorizing the action was approved on May 5, 2026 and announced publicly on May 6.
The company did not disclose a specific number of jobs affected. The $200 million figure is the only quantitative disclosure on the size of the action. Based on Kyndryl's own prior pattern of approximately $19,000 in severance and benefits per cut, that points to roughly 10,000 jobs as the implied count.
The workforce action was announced into a weak print. Q4 revenue came in at $3.75 billion, down approximately 5% in constant currency year over year. Adjusted earnings per share were $0.18, against a consensus estimate near $0.45, a roughly 60% miss. Shares fell 10 to 12% on the announcement and are down approximately 45% year to date. Full year FY26 revenue was $15.1 billion with net income of $198 million.
One bright spot inside the disclosure: hyperscale cloud revenue rose 57% to $1.9 billion. Outside that line, the rest of the business is flat to declining. FY27 guidance came in at $600 to $700 million in pretax profit, below LSEG consensus of about $672.7 million.
| Metric | Q4 FY2026 | Full year FY2026 |
|---|---|---|
| Revenue | $3.75B | $15.1B |
| Revenue change YoY (CC) | -5% | flat |
| Adjusted EPS | $0.18 | $0.85 |
| Net income | $17M | $198M |
| Hyperscale cloud revenue | $1.9B (+57%) | growing |
| FY27 pretax profit guidance | - | $600-700M |
Kyndryl was spun off from IBM on November 4, 2021. It inherited IBM Global Technology Services, the slow-growth managed-infrastructure-services arm. IBM's stated rationale for the spin was direct: parent revenue would have grown about 2.5% without the unit versus 0.3% with it. The spinoff was the point. The original baseline was approximately 90,000 employees in 63 countries, serving roughly 4,400 customers including 75% of the Fortune 100. Wall Street called it a "garbage truck" at the time.
Cumulative workforce reductions since the spin now look like this:
| Round | Severance | Implied count |
|---|---|---|
| FY24 | $190M | ~10,000 |
| FY25 | $100M | ~5,200 |
| FY26 (smaller) | ~$60M | undisclosed |
| FY27 (this round) | ~$200M | ~10,000 (est.) |
| Cumulative since 2021 | - | ~25,000 |
From a 90,000-person baseline at spin to roughly 73,000 today, with another 10,000 implied to come.
This is the part that matters and the part the headline number hides. Per Kyndryl's FY2025 10-K, filed May 30, 2025, approximately 90% of Kyndryl's workforce works outside the United States. Total headcount stood at roughly 73,000 as of March 31, 2025 and has been confirmed roughly flat at March 31, 2026. That implies approximately 7,300 US employees against roughly 65,700 outside the United States.
The 10-K names the workforce hubs explicitly: India, Poland, Brazil, Japan, Czechia, and Hungary. The Indian sites disclosed include Bengaluru, Hyderabad, Pune, Mumbai, Chennai, Gurugram, and Noida. Kyndryl's own marketing language refers to "tens of thousands of Kyndryls across India."
The growth direction is clear. In April 2024, Kyndryl opened a 250,000 square foot Bengaluru office sized for approximately 3,000 employees. In August 2025, Kyndryl announced a $2.25 billion India expansion to be deployed over three years. H-1B usage is tiny: 17 H-1B petitions in FY25. Kyndryl moves work to India, not Indians to the United States.
Per reporting in The Register from May 2024, five EEOC charges have been filed against Kyndryl, with a sixth pending. Allegations include age, race and national origin, and disability discrimination. A November 2023 incident involved an alleged "kill list" that cut an entire India cost center, terminating 11 employees who were reportedly all born outside the United States. Severance agreements force arbitration, so no certified class action has been filed. Parent company IBM is in active class-action litigation over age discrimination affecting more than 20,000 US workers. Kyndryl has not been found liable in any of these matters; the charges remain allegations.
Cognizant announced "Project Leap" on April 29, 2026, with 12,000 to 15,000 layoffs and $230 to $320 million in severance. Kyndryl's announcement landed seven days later. Both companies framed the cuts in agentic-AI productivity terms, though Kyndryl's 8-K avoids attaching the AI label as explicitly as Cognizant's. Two of the three largest IT services workforces are restructuring within a week of each other, which is the more important data point than any single headline number. The cost base of global IT services is being reset.
This is the IBM offshoring playbook reborn under a different ticker. A US-listed parent company spun off the unit it did not want, the unit then reduced its US footprint to roughly 7,300 people, scaled India past 250,000 square feet of new office, committed $2.25 billion to further India expansion, and is now executing its third major workforce action since the spin. The $200 million severance number is the headline. The roughly 90% non-US workforce share is the structure underneath it. Both are in the public filings.