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IBM fires small-town workers

theguardian.com

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Re: IBM fires small-town workers

#21

Post by pesenti »

linuxhansl wrote: post #19

Typical scenario: - layoffs for short term EPS - current pipeline continues momentum for a bit - CEO gets credited with great success... and moves on to the next company - then the "oh shit" moment, when the lack of personnel becomes apparent Some CEOs are like locusts. Moving from company to company for a short term frenzy, then moving on to the next. I hope this is not happening here. Personally I do not quite foll…

The current CEO has been at IBM for 33 years while the previous one had been there for 39 years... So no, these CEO don't move on to the next company.

Re: IBM fires small-town workers

#23

Post by iends »

yeukhon wrote: post #4

To me, IBM is a dead company, no matter how cool Watson is. My perception of IBM is a consultant company. While IBM research still makes tons of awesome progress in AI and security, IBM looks like GE and Bell Lab to me. I don't know who is the legacy now... I wonder how IBM employees feel about their job.

IBM's Q4 revenue was $27.7 billion. The consulting branch, Global Technology Services brought in $9.9B of that revenue. The software group, SWG, brought in $8.1B in revenue. (IBM is only making ~33M per year on Watson right now)

IBM is a bit more than a consulting company. They are in the midst of trying to reinvent themselves as more of a software company because the margins are so much greater than hardware.

IBM is screwing it's hardware employees, but the writing has been on the wall for a very long time. IBM employees got used to the idea that they could work at IBM for life, and retire with the company. They've either missed the signals or felt like layoffs couldn't happen to them. Many of the groups affected by the layoffs in IBM had a furlough last August. I don't know about you, but the moment a company says don't come to work for a week with reduced pay is the moment I start looking for a new job. (I do realize that many people at IBM stay loyal because they are on a pension program and they lose significant income if they voluntarily leave).

Re: IBM fires small-town workers

#24

Post by iends »

fhars wrote: post #12
drpgq wrote: post #8

"Employees in the US, and in those small towns, also say they’re unhappy that IBM is shrinking in America while outsourcing to countries like India." Aren't they laying off in India now too?

You are probably thinking of Lenovo laying off the employees in the server division they bought from IBM.

IBM had a large layoff in india. IBM's india problems have been quite interesting. See: http://qz.com/173601/ibms-india-problem/

Re: IBM fires small-town workers

#25

Post by jedmeyers »

mattdlondon wrote: post #16

I was previously an IBMer (not US based) until I left a couple of years ago, and I know someone very close to me who has just been offered redundancy from IBM (also not US based). I appreciate the company's responsibilities are to the shareholders, but their approach seems to be short-sighted. The culture in IBM seems to be if you are a sales person or a project manager you are the well-treated elite, and anyone else…

>> They are only just getting their act together with cloud offerings whilst a bookshop has become a market leader.

Nice one. I can say similar things about SAP.

Interesting, possibly related fact - SAP was started by former IBM employees.

Re: IBM fires small-town workers

#26

Post by alexkus »

pesenti wrote: post #21
linuxhansl wrote: post #19

Typical scenario: - layoffs for short term EPS - current pipeline continues momentum for a bit - CEO gets credited with great success... and moves on to the next company - then the "oh shit" moment, when the lack of personnel becomes apparent Some CEOs are like locusts. Moving from company to company for a short term frenzy, then moving on to the next. I hope this is not happening here. Personally I do not quite foll…

The current CEO has been at IBM for 33 years while the previous one had been there for 39 years... So no, these CEO don't move on to the next company.

That's not quite the same thing.

You could replace the IBM CEO every week for many years to come with someone who has been at the company for 30+ years.

Re: IBM fires small-town workers

#27

Post by rayiner »

yeukhon wrote: post #4

To me, IBM is a dead company, no matter how cool Watson is. My perception of IBM is a consultant company. While IBM research still makes tons of awesome progress in AI and security, IBM looks like GE and Bell Lab to me. I don't know who is the legacy now... I wonder how IBM employees feel about their job.

Lol at GE being a dead company. How's the weather in lalaland?

Re: IBM fires small-town workers

#28

Post by iends »

dalke wrote: post #13
mseebach wrote: post #6

This sucks for the people concerned. But IBM's core responsibility can't be to maintain comfortable jobs that aren't sufficiently profitable. The world has changed dramatically and IBM hasn't changed with it. The longer you go without shedding the dead weight, the more painful it gets, but you still have to do it. The article suggests that shedding jobs equals not investing in the future, while also mentioning severa…

Without knowing the breakdown of which units are being laid off, how do you or the shareholders have the information to know if management is indeed "shedding the dead weight" or is instead tweaking the numbers to meet Wall Street expectations? You don't. Increased opacity makes it harder to make any judgements. For example, IBM is quoted as saying they have "more than 3,000 job openings", but those could be pro form…

The job cuts were largely in STG and GTS and these are the divisions with the most dead weight, so while it's possible IBM cut non-dead weight jobs these cuts do not seem to be random across the board cuts.

Re: IBM fires small-town workers

#29

Post by dalke »

iends wrote: post #28
dalke wrote: post #13

Earlier quoted context omitted.

Without knowing the breakdown of which units are being laid off, how do you or the shareholders have the information to know if management is indeed "shedding the dead weight" or is instead tweaking the numbers to meet Wall Street expectations? You don't. Increased opacity makes it harder to make any judgements. For example, IBM is quoted as saying they have "more than 3,000 job openings", but those could be pro form…

The job cuts were largely in STG and GTS and these are the divisions with the most dead weight, so while it's possible IBM cut non-dead weight jobs these cuts do not seem to be random across the board cuts.

Could you define "dead weight" in this context?

Is it that STG and GTS were a net loss to the company, or is it that those groups weren't profitable enough to make the alleged $20/share goal?

If IBM has decided to leave the hardware business as a long term goal, then is it fair to call the hardware people a "dead weight" if that part of the organization is still profitable? The term seems to imply that the people themselves are at fault.

Re: IBM fires small-town workers

#30

Post by gaadd33 »

mseebach wrote: post #7
pcurve wrote: post #3

When your compensation consists of $500,000 fixed salary with bonus of $2 mil - $5 million, naturally you're going obsess over Wall Street numbers. I think executives should be penalized for layoffs, because with proper resource management, layoffs can be greatly minimized. In fact, EPS increase through asset sales, layoffs, stock buyback should all count against their bonus figures.

> with proper resource management, layoffs can be greatly minimized. This is a pretty bold assertion. We're not talking about a few jobs at the margin, eg. one report speaks of 25% of the hardware business.

Is IBM selling or otherwise closing 25% of their hardware business? If not, haven't the executives horribly failed at resource management to have 25% of the workforce underutilized for a long period of time with no efforts to actual utilize them?
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