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IBM top executives to forgo bonuses as profits fall | |
(about 7 hours later) | |
The chief executive and senior management of IBM, the world's biggest computer-services provider, have said they will forgo their bonuses for 2013. | |
The move comes as the firm reported a 5% drop in sales and 1% decline in net profit for 2013, from a year ago. | |
Its performance was dented by falling profits in emerging economies - where a slowdown in economic growth in recent years has hurt demand. | |
Revenues from these markets fell 9% from a year earlier. | |
The big drop came from the so-called Bric countries - Brazil, Russia, India and China - where sales declined by 14% during the year. | |
"While we made solid progress in businesses that are powering our future, in view of the company's overall full year results, my senior team and I have recommended that we forgo our personal annual incentive payments for 2013," Ginni Rometty, chief executive of IBM, said in a statement. | |
'Continue to transform' | |
However, the firm reported better-than-expected results for the October-to-December quarter. | |
It made a net profit of $6.19bn (£3.75bn) during the period, a 6% jump from a year ago, boosted by higher revenue from software sales. | |
The firm said it expected its operating profit for 2014 to rise by more than 10% as it looks at new avenues for growth. | |
"We will continue to transform our business and invest aggressively in the areas that will drive growth and higher value," Ms Rometty said. | |
IBM recently said it would invest more than $1.2bn (£735m) expanding its data centres and cloud-storage business, building 15 new centres. | |
That would bring the total number up to 40 during 2014. | That would bring the total number up to 40 during 2014. |
Businesses are increasingly leasing data storage, computing power and web-hosting services from a growing number of specialist cloud companies - effectively outsourcing their IT needs to cut costs and improve efficiency. | |
IBM expects the cloud-services market could be worth $200bn by 2020. It said it had added 2,400 new clients since it acquired Dallas-based SoftLayer. | |
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