IBM to Cut 3,900 Jobs Amid Broader Tech Slowdown

The layoffs would amount to a 1.4% reduction from its head count of 280,000, according to its latest annual report.

The information technology company posted flat sales in the fourth quarter after the strong U.S. dollar hurt its reported revenue by more than $1 billion.

IBM

IBM -0.52%

posted net income of $2.71 billion, or $2.96 a share, for the fourth quarter ended Dec. 31, compared with $2.33 billion, or $2.57 a share, a year earlier. Adjusted earnings were $3.60 a share, slightly above analysts’ estimates of $3.59 a share. 

Revenue edged down to $16.69 billion from $16.70 billion a year earlier. Analysts polled by FactSet expected $16.15 billion. 

Revenue for several of the Armonk, N.Y.-based company’s segments grew compared with the prior-year period. Software gained 2.8% to $7.3 billion; consulting added 0.5% to $4.8 billion; and infrastructure rose 1.6% to $4.5 billion. IBM’s financing segment slid 0.4% to $200 million from a year earlier.

Technology companies at large have been affected by a slowdown in spending as concerns about the economy and a potential recession linger, which has resulted in a wave of recent layoffs.

Microsoft Corp.

, which also announced plans to eliminate jobs, on Tuesday recorded its slowest sales growth in more than six years in its latest quarter as demand for its software and cloud services cooled. 

IBM said hybrid cloud revenue in 2022 grew 11% to $22.4 billion. 

IBM forecast adjusted revenue growth consistent with its mid-single digit model and about $10.5 billion in consolidated free cash flow for full-year 2023.

Write to Denny Jacob at [email protected]