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IBM to pay shareholders cash dividend after lay offs

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IBM to pay shareholders cash dividend after lay offs

Armonk (NY) – Today, just one day after IBM announced they would lay off 2,800 people in North America, and just one week after they reported record earnings, IBM’s board of directors declared a $0.50 per common share dividend, payable on March 10, 2009 to shareholders on record as of February 10, 2009. With this payment, IBM will have paid consecutive quarterly dividends every year since 1916.

IBM currently has about 1.35 billion shares outstanding. This dividend payment of $0.50 per share could result in a $650 million charge, plus administration overhead added to that. [Note: $650 million would pay for 6,500 employees with $100,000 average annual salaries for one year.]

IBM reported its Q4’2008 earnings on January 21st. While 2008 resulted in record revenue, profits and earnings overall, Q4 was down 6% compared to a year ago. Its annual profits were $16.78 billion on $103.6 billion in revenue (16.2% net) with a record earnings of $8.93 per share. IBM predicted they would do even better in 2009, up 3% to at least $9.20 per share.

See IBM’s press release.