IBM Australia revenue drops $400 million

IBM Australia saw its revenue slide by $400 million in the 2017 financial year, with product sales and services both taking major hits.

The Australia arm of the global company reported revenue of $2.79 billion for the year ending 31 December 2017, down $402 million from $3.19 billion reported in 2016.

IBM Australia’s parent company, IBM A/NZ Holdings reported a similar decline in revenue, with revenue falling $416 million from $3.47 billion in 2016 to $3.05 billion in 2017. IBM Australia is roughly 10 times larger than its New Zealand counterpart. 

A declining trend in the company’s headcount also continued. In May last year, CRN reported the A/NZ entity employed 5980 employees in 2016, which was down by 1803 staff from prior year’s 7783. In its 2017 report, IBM A/NZ reported employing 4913 staff, indicating a decrease of some 1000 staff from the year before.

IBM A/NZ paid $18.1 million in termination benefits in 2017, down from $49 million paid across the group in 2016.

In its consolidated income statement, IBM A/NZ reported a $6.25 million profit for the 2017 financial year, up from an $87.4 million loss in 2016.

However, after listing further expenses and other incomes, including a $10 million cost recorded as “translations of foreign operations to the presentation currency”, IBM A/NZ was left with a total comprehensive loss of $2.45 million for 2017, still showing recovery from its $82 million comprehensive loss in 2016.

More job cuts were flagged earlier this month, with CRN's sister publication iTnews reporting IBM had made dozens of staff from its analytics pre-sales and technical support areas redundant over the past several weeks.

In December, the Australian Taxation Office listed IBM A/NZ holdings as having paid no tax in the 2016 financial year, and the company’s recent financial report shows an income tax benefit of $7.74 million in 2017 and $13 million in 2016.  

In October last year, IBM Australia and New Zealand revealed David La Rose had been appointed as the company's new managing director, with Kerry Purcell departing for a senior leadership role with IBM Japan after two-and-a-half years in the job.

Purcell's departure followed a rocky year for IBM in Australia, particular facing intense criticism over its handling of the botched eCensus, which led to a "substantial" settlement with the Australian government.