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The company will take charge of $300m in the first quarter to pay for employee severance costs.
IBM is planning to cut 3,900 jobs as the technology giant surpassed expectations in its latest earnings report.
IBM’s quarterly revenue of $16.7bn was higher than analysts’ estimate of $16.4bn while net income rose 16pc to $2.71bn.
Software revenue was up 3pc, consulting revenue up 0.5pc and infrastructure revenue was up 2pc. Over the last fiscal year, IBM brought in $60.5bn in revenue – up 6pc over the previous year.
“Our solid fourth-quarter performance capped a year in which we grew revenue above our mid-single digit model,” said Arvind Krishna, IBM chair and chief executive officer.
“Clients in all geographies increasingly embraced our hybrid cloud and AI solutions as technology remains a differentiating force in today’s business environment. Looking ahead to 2023, we expect full-year revenue growth consistent with our mid-single digit model.”
Multiple media reports have confirmed the company is also laying off 3,900 employees, or 1.5pc of its global workforce. A New York Times report said the company described the job cuts as a final step after asset sales rather than a sign of weakness in its business.
IBM also said it would take a charge of $300m in the first quarter to pay for employee severance costs.
“[Our] revenue growth and operating profit in 2022 demonstrate the strength and multiplier effect of our platform-centric approach to hybrid cloud and AI,” said James Kavanaugh, IBM senior vice president and chief financial officer.
“Our client-focused portfolio and strong recurring revenue stream position IBM well for continued growth, solid cash generation and returning value to shareholders through dividends.”
IBM spun off its IT infrastructure business as Kyndryl in November 2021. The split in business was first announced in 2020 as a way to focus on AI and cloud.
According to CNBC, IBM was one of only two US tech companies valued at $50bn or more to see gains in 2022 – the other being VMware.
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