Computing giant IBM Australia recorded a net profit slide of $122 million for the year to December 31 but it wasn’t all doom and gloom despite the prospect of more job cuts.
IBM said net profit was $233 million last year, compared with $355 million in 2012, after deducting income tax expense of $95 million against $137 million over the same period, according to documents filed with the Australian Securities & Investments Commission.
Revenues dipped but remained consistent, above the $4 billion mark achieved by former boss Glen Boreham. IBM registered $4.12 billion in revenue last year, compared with $4.53 billion in 2012.
The company is investing in new growth areas such as cloud computing, analytics and cognitive computing, and recently reaped the rewards of its investment by bagging a five-year, multi-million-dollar deal with Coca-Cola Amatil.
IBM will provide cloud computing services to CCA across the South Pacific, which includes Australia, New Zealand, Indonesia, Papua New Guinea, Fiji, and Samoa.
It also counts Qantas and National Australia Bank as clients but has paid a heavy price in Queensland for the Health Department’s payroll blunder where government officials have criticised the organisation’s role in the saga.
The company will also invest in developing data centres in Australia as such hubs are the backbone of cloud computing services.
Globally it has committed $1 billion to a new Watson artificial intelligence unit and $1.2 billion to expand its cloud computing footprint.
IBM has been active in the mergers and acquisitions stakes: Chinese IT behemoth Lenovo’s $US2.3 billion acquisition of IBM’s server business is expected to be completed in the second quarter of the year. IBM expects to transfer more than 7000 workers to Lenovo as part of the transaction.
With the dive in profit, all eyes will be on further “resource action” — IBM-speak for culling jobs. The company says it continues to hire in key areas but its workforce has had to be “rebalanced” to cater to new business opportunities. The Australian reported in March that IBM was set to cut a further 500 jobs after culling more than 1500 last year.
Unions in the US, Australia and other countries have called on IBM to be more transparent with its plans to reduce staff.
To date, it is unclear how many workers worldwide have actually lost their jobs as the company keeps a tight rein on information.
IBM has more than 400,000 staff globally but gives no local numbers. The retrenchments are happening at a global level as the firm seeks to relive its glory days.
In January, IBM global chief Ginni Rometty said she would forgo her annual bonus as the company disappointed analysts for the third straight quarter.
Forbes magazine put Ms Rometty’s total compensation for 2013 at about $US14 million.