IBM Faces Sixteen Quarters of Declining Sales; Plans to Reorganize Business Stucture

IBM - or known to many as the Big Blue - made an attempt to re-organize its business and focus on its Watson cloud-AI-offering service. Unfortunately, such move did not help the giant company rise up from fifteen quarters of falling revenue, making it sixteen consecutive quarters of low profit.

The Register reports that Big Blue has been letting go of job positions as a way of restricting and cutting its costs. "As we transform our business and move into new areas, we need to transform our workforce," CFO Martin Schroeter said. "Not only the types of skills, but how we operate."

On the other hand, according Bloombergview, IBM's lack of revenue growth is partly caused by the company's conscious choices. It can be recalled that IBM, in 2005, sold its personal computing division to Lenovo. Former Chief Executive Officer Sam Palmisano believed that the company's growth would occur elsewhere.

IBM said that they are focusing on growth markets such as cloud services and cognitive tools. However, the Q1 2016 report does not seem to reflect such. In March 31, the company's revenues went down by five percent (US$18.7bn) when compared to last year's. This figure represents technology services and cloud revenues of $8.4bn and cognitive solutions revenue of $4bn.

Despite these dwindling figures, CEO Ginni Rometty remained calm. "We are pleased with the progress we have made helping our clients apply new cognitive solutions and hybrid cloud platforms," Rometty said. "IBM has established itself as the industry leader in total cloud, analytics and cognitive, all of which helped drive our strategic imperatives revenue growth at a strong double-digit rate, substantially faster than the market."

On the brighter side, these sixteen quarters of falling profits is still better to where IBM was 18 years ago. The company's earnings are now more than twice what they were back in 1998. 

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