IBM’s quarterly revenue beat analyst estimates this week, as the company enjoyed higher than expected growth in its software and infrastructure segments. But it was also revealed the tech giant plans to cut 3,900 jobs.
Analysts predicted IBM’s total revenue would fall for the first time in two years, but it was flat for the quarter, while net income rose 16% to $2.71 billion. Despite this, operating profit and free cash flow came in lower than projected.
IBM CEO Arvind Krishna said on an earnings call that the company saw “revenue growth across segments and geographies” and credited the strength of its hybrid cloud and artificial intelligence strategy.
Despite the boost in the top line, the company confirmed on Wednesday that it was cutting 1.5% of its workforce, claiming the job losses are related to a previously announced spinoff of its managed infrastructure business Kyndryl and the sale of two business units.
IBM’s software segment performed particularly well last quarter, posting $7.29 billion in revenue. The figure represents nearly 3% growth and beats the $7.12 billion predicted by Wall Street. Its infrastructure segment also outperformed expectations, generating $4.48 billion, beating estimates by almost 2%.
During the quarter, IBM announced a next generation quantum computer which featured 433-qubits, and the acquisition of Octo, one of a number of consulting companies acquired by the company since spinning out Kyndryl. The firm also revealed a plan to invest $20 billion in New York’s Hudson Valley area over the next decade.
IBM was one of the few tech companies to perform well on the stock market last year. In 2022, the worst year for the Nasdaq since 2008, IBM rose 11%, making it one of only two technology companies valued at more than $50 billion to enjoy gains.