IBM says it can “rebalance” its workforce in 2014 after a steep slide in hardware sales, but additionally put money into cloud, mobile, analytics, big data, and security to fireside up growth.

IBM keeps meeting ever-higher earnings-per-share targets, but after reporting another year of declining growth in 2013, the corporate on Tuesday announced plans for “workforce rebalancing” — code words for layoffs — in addition to new investments in emerging areas aimed toward returning the corporate to growth.

Its lackluster performance in 2013 was marked by a 5% year-over-year decline in revenue (2% in constant currencies) to $99.8 billion. Operating income was up 2% from the prior year to $18 billion, despite a whopping $1.7 billion decline in profit tied to IBM’s struggling hardware business.

Declining sales and currency headwinds notwithstanding, IBM managed to tug out a 7% (non-GAAP) year-over-year increase in earnings per share to $16.28. That financial feat was achieved through a mix of share repurchases, positive tax windfalls, and margin improvements.

[Want more on IBM’s SoftLayer growth plans? Read IBM Bets Big On Global Datacenter Network.]

The bad news is that things are going to worsen before they recover, with an anticipated $1 billion workforce action expected in IBM’s historically weak first quarter. the same $1 billion effort within the second quarter of 2013 eliminated 6,500 to eight,000 positions across IBM’s massive global workforce of greater than 430,000 employees.

IBM will shift some employees to growth areas. As an example, it has already announced a $1.2 billion plan to construct more SoftLayer cloud datacenters around the globe. IBM’s cloud business was up 69% in 2013 to $4.4 billion, with $1.7 billion of that total tied to software-as-a-service (versus cloud infrastructure services, integration services, and personal-cloud technologies). Earlier this month, IBM announced a $1 billion investment to create a brand new Watson Group if you want to offer cloud-based applications in keeping with the company’s cutting-edge cognitive computing technology.

The biggest drag on IBM’s leads to 2013 was the Systems and Technology (hardware) business, with revenue off 18.7% year over year to $14.3 billion. The unit was particularly hard hit by declining sales in China, where nearly half sales are for hardware. The facility Systems server business is suffering the main. Despite efforts to shift Power from Unix to Linux workloads, Martin Schroeter, IBM’s senior VP and CFO, said the business isn’t more likely to return to prior sales volumes, making it a possible target for what he called “rightsizing” efforts.

IBM’s x86 server business can be struggling, and the Wall Street Journal and Bloomberg BusinessWeek reported this week that Lenovo Group is once more rumored to be in discussions to purchase the business from IBM. Both companies went through months of on-again, off-again negotiations last year, but IBM ultimately announced in May that it now not anticipated what could have been a $5 billion divestiture. BusinessWeek put the present value of the business at $2.5 billion to $4.5 billion.

IBM is relying on its Software and Global Business Services units for growth in 2014. The highly profitable (88% margin) Software unit saw revenue increase 2% year over year to $25.9 billion in 2013. Analytics, mobile, big data, and security-related software led growth, in line with Schroeter. Global Business Services revenue was down 1% in 2013, however the business turned up within the second 1/2 the year and had a healthy backlog of systems integration business going into 2014.

True to form, IBM another time promised higher earnings per share for the year ahead, with a target of $18 for 2014. Meeting that longstanding goal of $20 per share by 2015 would definitely please investors, but IBM competes in an industry wherein vendors don’t always put investors before their position within the industry. SAP on Tuesday rolled back profit expectations so it is able to grow more aggressively within the cloud. Meanwhile, cloud pure-plays like Salesforce.com and Workday routinely run within the red, keeping investors at bay with strong growth and cash-flow figures and the promise of an extended-term payoff.

IBM is a blue-chip giant that’s designed to throw off profits, but financial analysts on Tuesday’s call seemed skeptical that the corporate could keep meeting higher earnings targets without sizeable increases in top-line growth.

Doug Henschen is executive editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data, and analytics. He previously served as editor-in-chief of Intelligent Enterprise, editor-in-chief of Transform magazine, and executive editor at DM News.

Interop Las Vegas, March 31 – April 4, 2014, brings together thousands of technology professionals to find the most up-tp-date and cutting-edge technology innovations and techniques to drive their organizations’ success, including BYOD security, the most recent cloud and virtualization technologies, SDN, the net of factors, Apple within the enterprise, and more. Attend educational sessions in eight tracks, hear inspirational and industry-centric keynotes, and visit an Expo Floor that brings over 350 top vendors together. Register for Interop Las Vegas with Discount Code MPIWK for $200 off Total Access and Conference Passes.