International Business Machines Corp (IBM) has announced plans to cut around 1.5% of its workforce after missing cash flow targets by close to US$1bln.
The American tech company revealed, in a conference call, that the job cuts will relate to a spin-off of IT company Kyndrl and AI healthcare business Watson Health.
James Kavanagh, chief financial officer, in an interview with Reuters said IBM was “committed to hiring for client-facing research and development.”
The New York based company indicated net cash flow for 2022 was US$9.3bln, lower than the US$10bln forecasted.
“We grew revenue above our mid-single digit model,” said chief executive officer, Arvind Krishna, in the trading update, adding: “Looking ahead to 2023, we expect full-year revenue growth consistent with our mid-single digit mode.”
IBM’s revenue grew by 6% in 2022 to US$60.5bln, the second consecutive year that sales grew after close to a decade of negative growth.
Pre-tax income however fell by 76% to US$1.15bln from US$4.8bln in 2021 while earnings per share also fell by 63% to US$1.95.
Big Blue’s share price is US$140.76, having increased by 4.8% in the past twelve months-outperforming rivals such as Intel (-42.5%), Apple (-11.1%) and Microsoft (-18.9%).