IBM’s big layoff-cum-reorganization called Project Chrome kicks-off next week when 26 percent of IBM employees will get calls from their managers followed by thick envelopes on their doorsteps. By the end of February all 26 percent will be gone. I’m told this has been in the planning for months and I first heard about it back in November. This biggest reorganization in IBM history is going to be a nightmare for everyone and at first I expected it to be a failure for IBM management, too. But then I thought further and I think I’ve figured it out…
I don’t think IBM management actually cares. More on this later.
IBM really does not know how to do reorganizations, which are mostly political realignments. They come up with these ideas of how to group people. They make a big deal about it. Then for years the new organization figures out what it’s actually supposed to be doing, how it’s supposed to be done, and they spend a lot of time fixing problems caused by the reorganization.
Here are some examples of what I mean. In the USA, mainframe and storage talent will see deep cuts. This is a bit stupid and typical for IBM. They just announced the new Z13 mainframe and hope it will stimulate sales. Yet they will be cutting the very teams needed to help move customers from their old systems to the new Z13.
The storage cuts are likely to be short sighted too. Most cloud services use different storage technology than customers use in their data centers. This makes data replication and synchronization difficult. IBM’s cloud business needs to find a way to efficiently work well with storage systems found in customer data centers. Whacking the storage teams doesn’t help with this problem.
Meanwhile the new IBM security business has a tremendous number of open positions, are promising promotions and pay increases, etc. They are going after every security skill in the business. The collateral effect of this is most IBM services contracts will lose their security person and won’t be able to replace him/her. This will hurt a lot of contracts and put IBM in an even worse position with the customer. Creating this new business unit will be destructive to other business units and alienate existing customers. The size of the new security business is impressive. It will have to sign a lot of new business for it to break even and pay all those salaries. The giant assumption is there is that much business to be signed. In a year or two this business unit could be facing huge layoffs. This is the classic — shoot, ready, aim.
In one of the new business units I’ve heard that everyone is going to be interviewed and will have to give a sales pitch. If you can’t sell, you’re out. Clearly IBM’s declining revenue problem is tempering the organization of this unit. This team will fix the problem by getting rid of the people who can’t sell. This is the classic treat the symptom and ignore the cause way of thinking. There are reasons why customers are buying less from IBM. Working harder to sell won’t fix those problems. If anything it will probably increase IBM’s problems with its customers.
The new cloud business is particularly troubling. This business unit is based on the assumption that cloud is the universal solution, now tell me what you need. What if my application won’t work in the cloud? There are common things used in many business systems that do not exist in cloud services, anyone’s cloud services (Amazon, Microsoft, IBM, anyone!). New IBM organizations are being built to push cloud business whether it works in a given situation or not.
IBM has a sales culture. This reorganization was designed with a sales mindset. IBM has decided what it wants to sell. It assumes its customers will want to buy it. It completely ignores the fact there are other factors involved in running a successful company.
Now to why I think there’s a good chance none of this actually matters to IBM management. Investors and analysts alike have to stop believing everything they hear from IBM. Big Blue is a master at controlling the discussion. They state or announce something, treating it as fact whether it exists or not. They build a story around it. IBM uses this approach to control competitors, to manage customer expectations, and to conduct business on IBM’s terms.
So while IBM is supposedly transforming, they are also losing business and customers every quarter. What are they actually doing to fix this? Nothing. In saying the company is in a transition and is going to go through the biggest reorganization in its history, will this really fix a very obvious customer relationship problem? No, it won’t.
Transformation at IBM appears to me to be a smoke screen to protect management that doesn’t actually know what it is doing.
Here’s a similar view from one IBMer that came in just this morning. Notice how he/she refers to IBM in the third person:
…the only thing IBM is doing is playing its balance sheet… to show good profits and play with the amount of shares in the market… ergo manipulate EPS (earnings per share)
If you look at this you realize we have already lost the battle
IBM spent 2.5 times the amount of money on EPS manipulation than on CAPEX and overall it spends less than half of what competitors are spending on R&D
Where IBM competitors show double digit growth, IBM shows revenue decline….. so, IBM is outgunned and outsmarted… simple as that
So, only two scenarios… IBM is serious about a turn around and will try to find a new equilibrium and thereafter growth path… this means revenue will continue to decline as it changes the revenue mix before it can grow… or management does not care (or has no clue)… and will try to maximize bonus and get the hell out.
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Why is IBM even relevant enough to discuss any more? Every large company mainly exists to manipulate stock price, because that is what management is incented to do. This one is just a bloated dinosaur that is slowly dieing.
Bob, articles like this show your knowledge of technology is as outdated as IBM. Tell us what new things are on the drawing board. You can’t, can you? Because you are an outsider to cutting edge companies and technology. So you have nothing left but to re-hash the same old themes. Prove me wrong.
it’s relevant because IBM doesn’t do squat with pizza parlors, nail salons, and traveling salesmen. IBM lies at the beating heart of mission-critical business, holding the jewels of the empire in its disk drives. “You can’t go wrong buying IBM” has industries tied to the big iron, with many others have IBM support doing all the real work, and a few code monkeys chattering in their cubes. the more dysfunctional IBM gets, the more threatened banking, telecom, commodity markets, global commerce is. it’s not all in the cloud, or on Linux or Windows Server, yet. and enough of that alternative OS stuff is running in partitions on a Z-system.
IBM is a has been . The crown jewels were sold and the security team that was watching them were layed off. When you hear about IBM these days it is not about new technologies or great products it is about cutting jobs and selling off more parts of the business.
IBM is in most if not all of the Fortune 500. Even if internal systems run on Linux, Linux might run on IBM hardware or use IBM storage. I thought mainfarms were dead too, but I’ve seen a lot of 50% mainframe and 50% Java/Linux recently.
Ranked by revenue, IBM is the 5th largest IT vendor I the world; ranked by market capitalisation they are fourth; and ranked by employee numbers they are second (at least for now) – reference: http://en.wikipedia.org/wiki/List_of_the_largest_information_technology_companies.
That makes IBM relevant to the IT industry, and when they make a big move it qualifies for analysis and commentary. What would you prefer: a review of Samsung’s new phone? There is plenty of news about new products in the media but little analysis beyond the specs. Why don’t you go read another tech column if you don’t like the information here rather than complaining about something you didn’t pay for?
Because it lost a previous age discrimination lawsuit, IBM is legally required to give current and future laid-off employees a list of the names and ages of all those subject to “resource actions” (i.e., layoffs). The most recent round of laid-off workers should have received such a list in the packets they got from the company the day after their managers called them to tell them they were being terminated. But the list of names/ages was not included in the packets. Looks like IBM may be headed for another age-discrimination lawsuit. Wonder why the media hasn’t been all over this one?
And to add insult to injury, the managers who laid off admin assistants and others who had been with the company more than three decades wanted to send out “retirement announcements” on their behalf and hold a retirement lunch or dinner for them.
All this while Ginni Rometty collects a $3.6M bonus and a 6.7% salary increase…
Perhaps that’s because the official layoffs are only a small fraction of the number of people losing their jobs.
IBM verse is just a webmail, what is not new. Here is the thing. IBM again try to wake workspace a live, which was poor invest in begin of 2000 and was forgotten soon. Verse will come and kill all. Sure, but not in this and next year. IBM has b-culture that customer and end user will fix what come along with new products. Verse version 10.01 will be fine, but no version 1.0.
“Big Blue is a master at controlling the discussion. They state or announce something, treating it as fact whether it exists or not. They build a story around it. IBM uses this approach to control competitors, to manage customer expectations, and to conduct business on IBM’s terms. ” Gee, that sounds a whole lot like Oracle. Or Microsoft. Or Google. Or, truth be told, even Apple.
Just sayin’.
But those companies actually DO the things they announce, or at least ATTEMPT to do the things they announce. Sometimes those things are failures…but failing means that an attempt was made (if even a feeble one). Bob has been saying for years that IBM makes pronouncements while having no intention to follow through on them. Even Microsoft does not rely on lip service to the extent of IBM; Apple & Google certainly do not.
IBM Mangement is not working toward IBM success. they are working for there growth.
IBM mangement is not working toward customer success now a day. they working only towards saving money.
There is no bonding between managment and the staff. IBM 1st and 2nd level mangement is not so mature.
IBM is manager driven company. Because of this we got this stage.
GDF is failure is the big hit back. 1st and 2nd line managers are make big blander here.
IBM spent huge money on GDF and they try to force GDF on customer.
Lost customer reputation.
Totally we have stupid management in the IBM.
I am about to become an ex-IBMer.
Was the worst job I’ve ever had in 20 years. I lasted a year.
IBM to me seems like decoration of the company. the company blog, the HR policies, the timesheets, the logos. There is no evidence of any philosophy driving business. It’s a shell.
Top heavy and getting even more top heavy. At some point is a break point.
Cringley has a point. Exec Management has a view – layoff expensive employee .. get rid of the chefs, waiters and rest of the remaining will manage..covering these roles. .. Good for business…. Sigh.
It comes to a point where it sounds better to talk to a wall than …..
As an ex-IBM’er (who was targeted at a previous cull but survived) my view is that once IBM started viewing ‘benefits’ as ‘liabilities’ then the company’s attitude to employees shifted and contractors became more attractive. Just as components became non-proprietary, so employees have become more dispensable, IBM really does not care about its employees any more, it would quite happily have three quarters of the workforce employed as contractors.
Re: ” it would quite happily have three quarters of the workforce employed as contractors” If that makes more business sense, why not? Companies hire employees as long as it’s cheaper than available contractors. IIRC, some former IBM employees were hired by other companies, who were sub-contractors to IBM.
From an accounting perspective, benefits *are* liabilities. Always have been. I’m not sure what you think changed there. Management attitudes when everyone lost out on their hoped-for legendary IBM retirement plan, including their own?
Remember that first ever IBM lay off? I was one of them and it did not bother me too much to loose my job after 17 years but, when at the exit interview they asked me to fill out a form with the heading “How did we do” then I knew, IBM has lost ALL credible standing.
IBM’s quoted investment in R&D is misleading. As perhaps the last great, privately held R&D organization, it has also become a sacred cow. Unfortunately IBM R&D provides almost no value to its services organizations, and limited value to the software business. So quote whatever investment figures you want, it is money poorly spent on projects that for the most part have no business impact. Watson is the potential exception, but expectations grossly outstrip its likely reality.
Any layoff hurts the services organizations which run at a utilization rate matched only by southeast Asian garment sweatshops. There’s no one on the bench, and anyone laid off is someone getting pulled from a revenue generating client projects.
As I former IBMer I went through a small re-org in 2011 and it happened exactly the same time of year. While it certainly rang of a political driven re-org I was given an opportunity to remain with IBM if I was able to find a new place or team within the organization who needed by skill-set. While that seemed to be a good opportunity you seemed to get blocked from making moves. The writing was on the wall so I took the package and hit the road.
After years of piecemeal layoffs of Americans and hiring binge in South Asia, IBM has more south asian employees than Americans.
So if project Chrome is real, then the giant layoffs may be coming in South Asia instead of the US.
If IBM fails to fight off the South Asian invasion, then IBM deserve to suffer horrific disasters,
just like Target, Homedepot, JPM Chase, Sony. All these companies share the same South Asian
IT departments, and all get hacked.
Corporations and governments should no longer trust IBM, Microsoft, VMWare with its most important tech,
unless they want to become Target, Homedepot, JPM Chase and Sony.
Layoffs are not something that management gets excited about. There are times when they are required to keep a company going. In my short time at Oracle, I learned much from Larry Ellison. IBM, as Oracle has done, needs to concentrate on their core business differentiators. We all talk about agile computing but what about agile business. Continuous adjustment to the business needs of key customers. Humans do not inherently like to change but understanding and adapting to it are key. And change will always happen. I may be out of a job in the coming weeks. However, I don not sit and cry over it but determine to learn from it (business analytics) and adjust my life accordingly. These are hard decisions that someone must make but may not adequately represent what is in their heart.
A sad tale. I don’t know IBM, but a 26% layoff will still be bad for the 74% who survive it.
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Sounds like you’re saying IBM is betting on growth in security services and I’m very sorry to hear it and hope it’s not true, meaning I hope we all really don’t need to hire more security people because hackers will keep taking us down. Security is something the tech industry needs to do better, but it’s also something I’m fatalistic about. The bright people who make great stuff will also always IMHO be able to figure out how to hack that stuff.
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More security people is just another sign of less trust in the world. As trust evaporates when will techno-terrorism turn to real terrorism?
I think it’s worse to remain behind sometimes.
Bob, “Big Blue is a master at controlling the discussion. They state or announce something, treating it as fact whether it exists or not. They build a story around it. IBM uses this approach to control competitors, to manage customer expectations, and to conduct business on IBM’s terms. ” — Isn’t that just a less undeservedly generous way of saying “politics”? I mean, if you put it like that, you’ve described most of the USA, and most of what you’ve said about IBM’s sensibilities in the micro certainly applies to the nation in the macro.
In any case, if they’re going gung-ho about security and heave-ho about all else, I presume they’re retooling into a national security posture. One wonders how extraordinarily well Keith Alexander’s new “security”/”insurance” firm is working out if IBM’s potentially betting the company on it.
We are not talking about glorified security guards; rather about automated security that will foil attacks or detect and trace them in real time.There is real security research going on out there, as such research has been going on since before the first worm or hack attempt was inflicted upon the world. Security work can be pretty sophisticated stuff, involving cutting edge math, programming, and analytical skills.
Security innovation has always accompanied other computing innovations. It has nothing to do with decreased trust in the world, or the breakdown in society. You need not lament the state of the (cyber) world.
Kris (assume Lovejoy) stop drinking what Watson Research is brewing.
I wasn’t talking about IBM so much as general security research, which is as respectable a sub-field of inquiry within computer science as others like programming languages, artificial intelligence, and networking. The OP seemed to be lamenting the very existence and necessity of security science. As if smart people working on cryptography, cryptanalysis, attack pattern detection, etc. have been wasting their time in fruitless pursuits. That’s as kooky as lamenting AI research as an unnecessary distraction that exists only because some lazy human beings want to outsource their thinking to machines.
Fer sure it is.
IBM policy Is simply to grow share price at all costs nothings else matters it is how senior managers are incentivesed
Redundancies are removing cost but they are not increasing sales
Delivery is grinding to a halt and customers are falling over themselves to leave IBM.
It is a very slow and painful demise but IBM will fold in a few years if it carries on.
I miss the old IBM. They had good people, good products, and were good to do business with as both a VAR and an end user.
Me too! It was the best job and company I ever worked for. I left in 96; so sad…
The IBM glory days of the 60s, 70s and 80s are long gone. I truly feel deep down that this is the last gasp of IBM. What customer with a brain would trust this new organization?
I managed to hang in at IBM for nearly 37 years until they decided my job could be done better (read cheaper!) by a 24-year-old Indian with 6 months of experience. During my earlier years in the 70s and 80s I was as happy as could be, and could hardly believe I got paid to get up every morning and do something I enjoyed so much. By the early 90s, when heads first began to roll, it was no longer as much fun. When they finally decided they had had enough of me in 2010 I was well ready to go. These days I hardly care what IBM is up and and would NEVER recommend it as a place to work to any young person. Just as long as I keep getting my (meager) pension, LOL. I do feel sorry for the 26%, but in the IBM environment of the last years everyone just assumes they will get the axe at some point, it’s just a matter of when.
When I joined IBM as an FE – I thought I’d died and went to Heaven – all for $1200 a month! I spent 31 years at Big Blue. Some of the best years of my life, and some of the worst. It’s sad that the company that had employee dinners, booked the Dutchess County fair grounds, had country clubs at it’s major plants, has become just another company.
The Elephant is no longer dancing. Mr. Watson is crying.
26% ? It seems like all the US fat will go away. At least IBM will be mainly Europe & India based.
The ones good at office politics will be remaining behind. Those techies with limited social skills will be out the door.
Europe is being hit too. The UK is definitely being Chromed.
Good luck getting rid of everyone by the end of February then – there’s a minimum 45 day ‘consultation’ period before anyone can get made redundant.
Lucent seemed to forget about this when they issued a ‘get out now’ edict many years ago, and had to pay through the nose to make everyone go away quietly (It was a 90 day period back then).
Perhaps in Europe, but in Boulder employees get 30 day notice to find a new job before their release date, plenty of time if done next week.
Does that matter for employees who are let go due to performance reasons? All IBM needs to do is give you a low grade for your appraisal and it is on record that you were not performing up to expectations. Coincidentally, this is about the time of year that appraisals are going out.
So there’s a certain number that are not being laid off, they’re being let go for performance reasons.
IBM workers in the US are the most productive and hardworking people I know – I think the overseas employees will get hit harder – do you recall that last year they laid off thousands in one day in India and escorted them out the door the same day – more and more of our US customers want US-based resources – they are tired of the poor service received from overseas.
It doesn’t matter how hard-working US employees are, or how disgruntled customers are with non-US and non-Euro employees. Management has always had the misplaced notion that overseas cheap labor would offset the negative work performance. When you see the writing on the wall, as with any job, you have to find something new that works for you and get started. It’s a lot easier when you make that choice for yourself. I’m making less than minimum wage operating my own business, but no one own’s me. It’s fantastic.
IBM doesn’t care about productivity of its employees it is purely cost. The SKILLS system and other software introduced by Moffet into IBM commoditized employees. To them an employee is no different than a nut or bolt used to build machines. You buy the part at the least cost. To give you an idea, during the Sam years I was having a conversation with a division VP. He was under direction at that time to look at offshoring 20% of his development work to Eastern Europe. When I brought up the skills gap the response I got was “I can hire 5 or 6 people there for what it costs me to hire one person here. Assuming I lose some and end up with only one or two employees I still come out ahead budget wise even after accounting for lost training costs”. India changed the ratio to 9 or 10 people. Tomorrow some other country will have a better ratio and you will see IBM moving work there. Until the current executive team and much of the management below it are gone none of this will change.
if you think there is any “fat” left in IBM US or any other part of the world, it is clear you do not have close knowledge of the company.
As always Bob nails it on the subject of IBM. Very accurate and insightful on the sad state of affairs within IBM.
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I was employed by them for 5 years, following their acquisition of Cognos. Before that I along with the rest of the Cognos staff were so happily employed & productive for what was the truly great company: Cognos.
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Cognos was known as an industry leader in the BI space, innovating every year, and releasing impressive new versions on a regular basis with new features and improved usability. The work environment was amazing with a good & experienced workforce that was motivated, productive, and very good at what it was doing.
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Once IBM took over Cognos, it was a continuous train-wreck after a train-wreck, for the Cognos customers, & employees. IBM brought it’s non-sense processes and procedures, that lead to continuous loss of customers, and then they tried to fix it by getting rid of productive and experienced employees on a regular basis. The product lines got stalled, quality went down, work environment morale plummeted, then more re-orgs happened trying to fix things, yet with each “Cognos” re-org things got worse and worse.
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Following the IBM acquisition of Cognos, in the 5 years that I was there, the products were in a sad state, no new features, quality got worse and worse, instead we had to put up with those endless & useless procedures, bureaucracy, and non-sense that was stressful to say the least . People had lost their enthusiasm…
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When I got the chance to get out, I was glad to leave, and felt really sorry for the people that had to stay behind, dealing with that toxic environment, further tainted by that poisonous PBC system.
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To make matters worse, at each round of layoffs, some of the people leaving were so happy to get out, it was as if they had won the lottery. There were people that were very disappointed at each round of layoffs that they weren’t the ones let go as well. They desperately wanted to get out with that envelope in hand.
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Literally IBM has repeated the same story with most of their acquisitions: paying top dollar for amazing companies and then literally destroying them. It makes no sense to “sabotage” your investments that way.
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In the end I feel that the top management only cares for their short term gains (2-5 years) and pocketing the hundreds of millions of dollars in salaries, bonuses, stock options, etc… and then exiting for the next poor chap to fix the mess. The customers, and employees already got screwed badly for the last number of years.
Now it’s about to be the turn of the shareholders to get whats coming to them. Shareholders, like Mr. Buffet should have really been paying more attention to what was really happening in IBM for the past 10-20 years.
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Cheers & all the best!
Keep up the good job Bob.
We have been customers of two products that IBM acquired – DataStage and Cognos. In both instances services went from top-tier and stellar before each acquisition to pretty much non-existent afterward. Well, we would get service but often from staff that didn’t know the product very well. We ending up abandoning both products.
Add me to the disappointed Cognos customer list. Cognos was a great product and company. It’s a shadow of it’s former self now. IBM continues to tweak with the licensing model to maximize revenue (squeeze current customers). Support is rough, training/education has been outsourced, and the sales team cares about one thing. Selling anything to hit their number. Worst partner I have right now – Pentaho research has commenced.
Another ex- Cognos and ex-IBMer here. Cognos wasn’t perfect but it was making good cash and had great retention before IBM came along. Slowly IBM brought in “IBM” managers who either pissed off the old Cognos management or laid them off. Anytime a good product or feature would come out of Business Analytics (Cognos) it would get destroyed by integrating this or that or because it wasn’t some other groups idea. I was a consistent PBC 1 and after little to no raises I looked around and realized how much I could be making as a developer else where… I’m happy I’m out of there but feel bad for some of the good people left behind. I have much better job satisfaction, make more money and don’t have to deal with the tools that are now running BA.
The exact same happened with their acquisition of Initiate Systems; I could take your whole comment, replacing ‘Cognos’ with ‘Initiate Systems’ and it would be just as true…
The IBMer who was quoted may have used the third person when antiseptically and unemotionally describing the situation and forecasting IBM’s future actions, but was emotionally evoking the first person when it came to the statement that really came down to the crude and bare reality of what is happening:
“If you look at this you realize we have already lost the battle”
Unfortunately the individual commenting now realizes the pickle that they are in personally which is going to hurt them professionally and they know they were part of the reason it came to fruition, even if only by association as a lowly employee.
I’m not sure what you are saying Darth. It sounds like you are shooting the messenger or trying to ascribe blame to a person who has observed a problem, on the basis that they were in the position to observe the problem. Maybe I am on a limb, but your tone could also resemble a middle management passive aggressive attempt to refute the observation.
Bob, in his intro to the quote, made the point about it being written in the third person. Darth merely pointed out one sentence that used “we”.
Having survived a massive IBM divisional re-org in the past. I can vouch for managements failure to understand the consequences. Fifty people were told to find new jobs that their managers would help them. There were no jobs, managers too had been told to look for jobs so they were in self preservation mode. When the dust started to settle there was belated realization that what once had been a productive, cohesive organization no longer existed. Business processes that others depended upon now had no one left who knew what to do. There was no thought for training of replacements. Over the next two years another forty people left further damaging it. For those that remained there grew a survivor mentality and suffering workplace PTSD.
This culture started with Sam Palmasano and has continued with Ginny Romettty, I was in Global Services under Lou Gerstner then Sam. I left when Ginny took over. The PWC acquisition was the beginning of the end for Global Services. IBM was successful, PWC was near bankruptcy yet Sam and Ginny put PWC culture, organization, policies, and management in place over the New Blue culture that Lou had created. Things quickly changed and a brown nose nepotism culture took root. Protecting those above you while those above you didn’t care about you became the norm. It’s been over 10 years now since I left, and I see this PWC culture has successfully wrecked the company that I was once very proud to work for. I feel bad for those on pins and needles waiting for their phone call and package to arrive. Advice to them, there is life after IBM. You will find companies that will scoop you up gladly.
Amen to that. I left about half way through Sams tenure. I saw the company go from forward looking to inward looking. Process was all that mattered, productivity and actually delivering good service were alien. It only mattered that you followed process.
So true. I stepped into a business that was a customer of the IBM/PwC global services, and that project was utterly mismanaged from the IBM side. The former PwC people at the top who we spoke to were utterly clueless in managing a project or providing useful or actionable feedback to their own staff. The individual contributors often seemed to have either the requisite skills or a set of deep skills that were perhaps useful for some other discipline, but they were unaware of key deliverables, didn’t have access to relevant background data, and regularly came to the table without understanding the program’s goals.
At a subsequent company, another group of these IBM/PwC folks came and pitched for our business, and they were far and away the worst of the sales teams we saw. The pitch team didn’t understand our business, they didn’t understand (and possibly hadn’t read) the detailed company and program information, and they proposed solutions that were out of step with our needs. Needless to say, IBM did not win our business.
You nailed it with Sam screwing up the company. While Gerstner did some horrendous things as to how he handled the pension plan changes he did a good job of turning IBM around and changing its culture. When he came in I went from nine people from first line to CEO to five. Calculated risk taking was encouraged and Lou seemed to realize that research was the lead in to new products and markets. With Sam and Ginney I see a lot of the pre-Gerstner IBM culture having returned and IBM again stagnating with management that has no idea what’s going on so they don’t have any hope of fixing anything. Just to frame this, when I retired four years ago I had eleven levels of management from my first line manager to the CEO. The result was nothing could get done as each level was more interested in protecting itself than taking risks to earn new revenue. To me none of this will change until IBM brings in a new CEO from outside and eliminates much of the bureaucratic layers. Only then can IBM go back to being International Business Machines Corp from its current I’m Big Management Corp.
Until you get out, you really don’t have any idea of the scope of this craziness. To those of us that are on the outside, this seems alarmingly clear and crazy beyond comprehension. About the only thing that comes to mind is that all management needs an emergency glassectomy.
https://www.urbandictionary.com/define.php?term=glassectomy
Forget IBM and join new tech companies….IBM is old school….BTW, I made a website that shows all salaries as reported by US department of labor….tech salaries are through the roof….now is the time to be a software engineer….check out the website http://salarytalk.org/search
– Respect for the individual
– The best customer service in the world
– Excellence
Old School as you call it beats new tech companies hands down… being able to “Think” rather than brainwashed into nonsense is half the problems with the US Tech Sector…
IBM never recovered from outsourcing after selling off pretty much everything what will be left..
Sadly, those values you have listed were “old” IBM. The new HR / Management policies don’t include respect for employees or top customer service. Very sad.
I just completed my first year of retirement from IBM and all I can say is … boy am I glad to be gone. I would offer a couple of thoughts here. First, I’m not sure if you whack every 4th person you can even have a company any more; it’s almost an admission that the next thing that happens is the doors are locked and the lights are off. Second, a very astute friend of mine who climbed quite a long way up the greasy pole before getting disgusted and leaving made an interesting observation about IBM reorgs to me once, years ago. It was that the further up in IBM one goes, the less real change you can effect, but that no one cares if you fiddle with the org chart, ergo, execs diddle with the org chart to show they’re doing something. Over the course of parts of four decades, fewer truer statements were ever made; I lived through dozens of them and nearly none of them had any real effect. That being said, this one has all of those hall marks. Whomever it was that made the observation that ‘The ones good at office politics will be remaining behind. Those techies with limited social skills will be out the door.’ was spot on.
Couldn’t agree with you more. I left almost one year ago, and it was the best thing that happened to me. I had worked for three large IT firms in my career (DEC, Sun, and IBM), and I have to say that IBM was the most atrocious company I ever worked for. Management at all levels was totally inept, and while I was offered chances to go into the management ranks, I refused in all cases. The saddest part is that after the years at DEC and Sun I have a lot of good memories of those companies. After seven+ years at IBM I have zero positive memories of that company. Sad, particularly since my late father was there for almost 35 years after WWII, and that IBM was very good to him and my mother. But alas, that company has not existed for some time, particularly under the reign of Palmisano and now Rometty.
The history of IBM re-orgs is long, or at least going back to the early 90’s when I recall a meeting to announce a re-org.
The meeting was deemed so important it was held off-site. The purpose of the re-org — I was then at IBM Research — was to coordinate all the teams working of parallel computing. (I was then a member of the PTRAN team).
It all looked very exciting. I though RES had finally gotten this act together.
But within two or three months the two most senior managers had moved on, one to leave IBM, the other to a new position.
Then things fell apart…
Which is what I expect will also happen to this re-org as well.
All this recalls some sage advice I once received from a senior IBM attorney, who had received the same advice from one of his law school professors:
IT IS NOT FORBIDDEN TO THINK!
thanks,dave
Nevermind, I realized it’s the same author.
Dave, was that the all hands off site meeting at SUNY Purchase?
Those were the early days of MDQ (Market Driven Quality) that started IBM down the path to perdition.
Employee badges were re-issued with a blue circular arrow symbol.
Folks should read https://books.google.com/books?isbn=0875846548 to learn about those days.
Yup, the big white building to the left as you leave 684 to go on the Hutch.
dave
RE MDQ, the real bear was six-sigma back in the 80’s. I recall a year when two IBM Research folks wne Nobel Prizes, then realized that to maintain six-sigma, RES would have to win them all the following year.
dave
That was the two Swiss guys for the scanning tunneling microscope. I recall the joking that their performance plan required winning another Nobel prize. Being made IBM fellows wasn’t a bad consolation prize.
MDQ, Six Sigma, ISO9000, teams, team leaders, so much spinning of the wheels and lost productivity. The beginning of the exhortations to “do more with less”.
IBM Australia has already been hit. Lay-offs announced Wednesday this week.
http://fortune.com/2015/01/22/customers-ibm-cloud-business/?xid=yahoo_fortune
You have to look at the numbers in terms of length of contract. Not be dazzled by the big numbers.
For example it’s a $500 Million “win”. However over a lets say five year term that’s only $100M revenue per year of which $25M per quarter revenue is the only number that counts.
Add in the uncertainty quotient, IBM looses a large number of customers due to dissatisfaction. so they may not realize the full $500M.
To the remaining 74%, make a plan now to get out. You will be better off in the long run. There is a lot of pain and suffering to come. IBM’s past reorgs and layoffs have been mild compared to what lies ahead. They have been busy over the past 5 years cooking the EPS books, During this time, they destroyed top customer relationships, divested from key technologies and layed off critical personnel that are the prerequisites to selling and delivering any new emerging services. Simply put, the baby has been thrown out with the bathwater.
What we all are seeing now is a fender bender compared to the massive train wreck to follow!
It’s time for the board to step in and ask Ginni and her ‘team’ to move on.
I completely agree. IBM has a deep management problem at the top, and that must be cleaned up, for the company to have any chance to regain its former glory. This is ripe time for another Lou Gerstner.
I agree that an outsider is probably best to lead IBM right now, but Lou Gerstner is not the best example. IBM started down their current path with him. He is how the Sams and Ginnis got to where they were/are.
You mean the board that’s been sitting and watching this for the past couple decades, reaping the windfalls along side other senior managers? Somehow I don’t expect them to suffer any sudden onset of insight. Theyre a large part of the story.
MY ADVICE:
Anyone getting laid off from IBM should contact a labor lawyer.
Protect yourself.
Having IBM on your resume these days is a negative and a career killer.
Disagree with the comment having IBM on resume is a career killer. There’s recognition on the professional services areas I play in that ex-IBMers on Delivery side are generally VERY Good / superior resources. What you say may hold true in some areas, but not the area I’m seeing.
Let’s all hope Rometty gets her walking papers by September this year or sooner.
But whoever the next CEO of IBM is, it will probably be more of the same.
Industry-wide this will probably set off a bunch of companies to do the same.
Classic corporate trick is to get a CEO to “break the culture” and then the new guy/girl comes in like a shining light on a white steed to save the day.
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Australian example was Sol Trujillo for Telstra, swooped in sacked a whole heap of people, tanked the share price, off sided the government, made no real strategic product changes, then pissed off. The new guy Thody was all softly softly, revenue is up, employees are happy, share price is up and he’s made a lot of strategic plays, his local cloud for example..
That would be David Thodey who moved there from running IBM Australia (for those who are overseas). A lot of my ex-IBM friends work at Telstra now.
& has brought in the same slash & burn strategy as IBM (along with all he bad friends from IBM), get rid to anyone that knows what they are doing & offshore anything thats not nailed down !
Great strategy for growth ! (/sarcasm)
I would agree, after leaving IBM for Telstra in 2005. I realised by 2010 that pretty much all of IBM AU top management had ended up in Telstra, pulling the same old schtick that was happening at IBM early to mid 2000s. David Thodey (formerly IBM AP GM?) put Brendan Riley (formerly GM of IBM GS AU) in charge of Telstra Operations, where they decided everything Network Operations needed to be done by a partner company in Bangalore. The slash and burn continues.
Ah yes, Solomon D. Trujillo, who sold US West out to Qwest for a $25 million golden parachute. guy who’d have a tech say hi to him in a corridor and shake his hand as if to flick off the pests two steps past. went to Orange in France on the mobile side, promptly dissed the wireline folks in his first interview and put in a backroom cage for the required year his contract ran. went to Austrailia and almost ran Telestra into the ground. yeah, I remember False-jillio. is he on the IBM board? it’s his kind of reorg.
A few comments. If the layoffs are that large in the US, the WARN act is triggered and the employees get 90 days not 30 days notice before leaving. February is off the table April is on, there is only so much diddling of the numbers that can be done to evade WARN and 25% makes evasion nearly impossible unless the layoffs are spread over a lot of time.
Second, a few states have traded tax advantages for employment numbers. Laying off too many people in those states can cause tax consequences; it is rumored that NY governor caused some heart burn by wielding the tax warning about a year ago. The wack-a-mole just meant targets outside of the protected states got the hammer because someone’s PBC must have depended on making numbers.
Finally, for the z13, the development groups are done with the z13 (or should be once it ships, not being software the machine actually has to work when it ships). So those people aren’t working on the z13 any more but are working on the z14 machine 8-12 quarters away and can be cast aside as unnecessary baggage so far as the next couple of quarters is concerned. Sure, you can’t design a z14 using empty cubicles, but that is a problem for later! Surely enough Elbonians can be hired to do the work a few quarters ahead of z14 shipment.
IBM gets around this by moving people to different managers and putting the numbers at the location that the manager is at. If you suddenly get a new manager, then you know.
The WARN Act is only applicable when there is a plant closure or a 33% reduction of personnel.
I was hit by the first 15%-17% a year and a half ago and we got 30 days.
They illegally waived that for the military sequester because Obama didn’t want notices to go out before the election. IBM probably has the connections to ignore that requirement.
Bob, you said about two years ago that IBM was going to have layoffs amounting to 50%. Well I was hit by the first round 15%. Then last year they had another round at 10% and now 26% for a total of 51%. That’s one hell of a prediction, too bad it turned out to be true.
Your mathematics is off. You have to re-scale subsequent layoffs to the original population, if you are comparing against the population at the first layoff.
2nd layoff of 10% is effectively (1-0.15)x10 = 8.5%
3nd layoff of 26% is effectively (1-0.15)x(1-0.1)x26 = 19.9%.
Total number of people laid off over the 3 layoffs was equivalent to just pushing 15+8.5+19.9 = 43.4% out the first time.
I’ll bet Bob’s 50% number is pretty much spot on if you include the many (including myself) who got fed up and left. This week is the 1 year anniversary of me turning in my letter of resignation, and I could not be happier. I spent 25 years as a customer and 15 as an employee, and it saddens me to see an organization I once respected and admired turn into this – I was so proud the day I put on my first IBM badge.
I new when I wrote this that someone would reply like you did. It was just to give Bob some props!
26% or over 100k you say in a month………….
This would have been mentioned in restructuring set asides in the 4Q results but was not just hints of some more (as usual).
With such a one time cut the company would collapse due to confusion and chaos; the only thing close was in 1993 when 100k were axed over a year timeframe in a base global headcount of over 300k. There was a tremendous amount of fat in IBM then but not now………..
This number is pure HYPERBOLE to get attention for the author………………
I am skeptic as well.
He usually knows his stuff, so let’s wait and watch, but I can’t possibly see how they could sack an employ every four and still function as a company, just restructuring teams to be operative again would take six month.
Either those are the number for a single geography, a single division or focused on the acquihires. Heck, I’d go as far as imagine this as a sting operation where they gave some false number around to find the mole before believing they are really going to pull off 100k severance in a week.
I think that they’ll get around that by using performance based terminations for a large amount of that. This drops the actual RA number considerably.
Wait, they’re hitting the mainframe people? There’s no one left there! How are they selling a service with no people in the service?
Every quarter when there is to be a layoff the CFO announces a workforce rebalancing charge in the investor briefing statement. 3Q earnings release last year there was up to $600M provision for 4Q which now is stated as $580M actual and it appears much of this is to be spent now in Q1 Nothing was in the 4Q announcement so where is the money coming from. What now appears to be fact is that 10% of the workforce are being put on PBC 3and will be put on Performance Improvement Plans. So perhaps 5% RA and 10% forced out? Still doesn’t get to 25%.
I WORKED FOR IBM 35YEARS STARTING IN 1951. I TOOK SO MUCH PRIDE IN THE FINEST COMPANY IN THE WORLD. IBM UNLIKE ANY OTHER COMPANY HAD MORE TO DO WITH THE TECHNOLOGICAL WORLD WE HAVE TODAY. TOP MANAGEMENT SINCE GERSTNER HAS LEAD THIS GREAT COMPANY DOWN THE PATH OF MEDIOCRITY, ALL I CAN SAY IS THAT THE GHOSTS OF TOM WATSON JR. VIN LEARSON, BOB EVANS AND THEIR ILK ARE ACCUSING AND GROANING
Agreed. It was a fantastic company and I was proud to be a part of it when I was in it.
Sad state now.
Any ideas on what percentage are leaving for Global Foundries? And what percentage are retiring or being forced to retire? People were told this past week in NY that they were retiring in February and will receive a small package (3 months).
I just got hold of the server provisioning times for the IBM Managed Server Services on SoftLayer offered by IBM Global Services. A minimum of 10 days for a few production servers and THREE months for over 50 servers!!! If you lift the cover under this it is not Cloud, rather old fashioned hosting and there are no funded staff to deliver the managed platform services and provisioning is all done manually – they get staffed when contracts are won and they have no agreement in place with SoftLayer to interlock their operations seamlessly. So if you want 10 servers on a managed OS, there are too few staff to be able to respond and SoftLayer treats IBM Services internally as if they are just another Joe with a credit card looking to provision servers. There is apparently vague talk of some automated provisioning at some stage. The key point, the Delivery is all being done on a shoestring budget.
Meanwhile the fat layer of ‘staff’ people and Senior Managers who planned this mess get to keep their jobs in a new organization that is stuffed full of VPs and GMs. A small fraction of the billions spent on share buyback would help solve this staffing problem (they are delivering it all from low cost countries).
What really makes me laugh is all of the highly paid Wall Street analysts and companies like Gartner who are incapable of lifting the covers on these basic failings. Hell, I suspect IBM is even booking this hosting revenue as ‘Cloud’. It is all one big con trick.
“If you lift the cover under this it is not Cloud, rather old fashioned hosting and there are no funded staff to deliver the managed platform services and provisioning is all done manually”
Oh man. You just reminded about a DevOps position I was asked to consider in 2013. It was for running the ‘cloud’ version (on SoftLayer) of what was originally a classic on-prem solution. I knew the classic product pretty well, so asked them to draw me an architecture diagram of the cloud version, as I knew about all the hurdles they would have needed to overcome in order to ‘cloudify’ it (multi-tenancy, performance bottlenecks, security, single points of failure etc.). They drew the regular on-prem architecture. When I asked about adding capacity and additional customers they basically said they would manually add a machine per customer and additional machines for performance as required. I walked away from that ‘opportunity’…
Any SoftLayer people on here? I imagine they must weep when they see what classic IBM tries to pass off as cloud.
“If you lift the cover under this it is not Cloud, rather old fashioned hosting”
-Wall of text warning-
The same is true for all cloud. Although fancy networking is allowing cloud network to connect to your datacenter’s private network, it should be no surprise to any sys admin that the cloud is offering (almost) nothing new. There is almost nothing done on the cloud which is not the same thing as was done before the cloud, on your own hardware. Using more SAN and having a nice web interface for the user is not revolutionizing anything.
I will admit cloud does offer some advantages in logical global content distribution such as AWS CloudFront. That has value and is not something that can be compared to smaller web hosting, but that and other useful cloud features are only recent additions. Managing things with system tools using API’s is also nothing that was not covered by bash/python scripting since 1980, or ground that was broken with puppet/chef/ansible. This is why myself and many other sys admin hate(d) the talk of “cloud” when everyone started hyping it years ago when it was literally nothing more than a marketing ploy.
Cloud will develop into something useful and superior now that the whole world is throwing all their cash at it, but from the start cloud was mostly a move by big business to jack all the money that was being made by smaller web hosting companies. As if GoDaddy et all were not already killing them.
My career focus is cloud now. Before it was public facing apps on linux. Since employers stuff is now on cloud, I am now a cloud engineer and when I make my next job move I will be targeting that title and the 20%+ pay raise that will come along with it.
This post is so bloated, may as well mention IBM’s model for hybrid cloud does not appear to be integrated into their softlayer offerings. Meaning they are taking an archaic approach to cloud where the customer will be married to internal IBM cloud engineers. Softlayer appears to be an isolated and separate offering intended to more directly compete with AWS. AWS meanwhile, the successful giant in the cloud, has a very logical model which any organization can use to integrate their own stuff with their own engineers. And AWS VPC can connect to your internal network, which I am guessing steals about 99.9% of the IBM hybrid thunder.
IBM has no choice but to transform around the new market realities, we work with IBM since 20 years and some of their people are really out of touch with the market advances, Ginni Rommetti’s fault is that she was part of the management team that did not realize the sudden shift in the IT industry in the days of Palmisano, If she remains in her job and if IBM transforms well “hope it is not too late”, she would have managed the most complex transformation in the history of Corporate America. We will see………………
A lot of IBM’ers are “in touch” and have desperately trying to talk some sense into management. Finance and the obsession to turn in good quarterly earnings statements is what really decides what is done in IBM. We know our products are out of date and falling behind. We know they need to be refreshed. There’s no money or no people to do it. Then a few years later when the bottom falls out on a product, senior management panic’s. “OMG — we not making our sales numbers!” Their first reaction is to throw people under the bus and make those that are left to “sell harder.” I’m sorry, but it is the customer who makes the final decision. If your stuff is crap, its not the sales person’s fault. Its not the divisions fault. It is managements fault for choking the life out of the business. The dropping revenue is senior managements fault. Every product, every service in IBM has this problem. Customers are speaking loudly with their checkbooks. Why can’t Wall Street hear this message? Why can’t IBM’s board hear this message?
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This is a big problem for existing products and services. Just try to get a “new” idea through IBM. It is 1000x harder. The new ideas that do get through are sucked into the political system and are horribly mismanaged. The lost cloud deal to the CIA is a good case study.
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A lot of IBM’ers ARE in touch. Please understand we are working for a lot of unscrupulous used car sales people. Our leadership is completely okay with selling a piece of crap, charging too much, and lying through their teeth to the customer.
There is no drastic change in the industry. We have computers, software, networks, and users. I’ve been in this industry since 1972 and it’s the same. People who are trying to use these things need help and support. It doesn’t matter if the software runs on a box near their feet or in a data center a thousand miles away. I have been helping people get value out of this stuff one user at a time, and that will never change. I have been doing it for 15 years at IBM with no change visible to my customers in all of the reorganizations. Layer after layer of pointless process has been piled on me. I ignore as much as I can, but still spend at least 50% of my time on useless overhead, like 40 hours of training I don’t need.
It would be great to see open discussion about next week’s events in the IBM group on Yahoo:
https://groups.yahoo.com/groups/IBM/info
I have posted links there and look forward to joining in on some discussion.
Dear World:
All of the reason that have been presented in this article would have been attack very differently by Mr. Tom Watson Jr and Tom Watson Sr.. To the Watsons, the customer was the number one priority. IBM was an institution selling to customer because anybody that was an Systems Engineer or a Field Engineer or a trainee were always educated to sell as part of their training. Customer became the best IBM salesman do to their experiences with the reliability of the Hardware, their software in the AS400, DOS/VSE and MVS environment. IBM lost it focus starting with Lou Gershnner who was a financial professional and did not come from IBM and did not understand the culture and the decision made were very short termed.
Everybody in the Information technology world knows that what drives your business are the applications and IBM has not made any investment in this development areas, yet they want to participate in any Outsourcing, Cloud Projects or any MRP systems with Oracle project, SAS.
I have 40 years experience in the IT business and I have seen the good the bad and the ugly in this business. I believe the term going back to basic is what applies to IBM instead of lets get rid extra baggage.
It is sad to see the cost cutting measures at IBM by reducing staff. The problem in IBM has been buiding up over many years since the first cost cutting operations in the 90s where the senior executives were driven by the short term goal to make money and not the long term goal to mainatin a steady business that would be there 20 years from the date. IBM forgot its own marketing pitches in the sale of computers–applications. I have seen several mainframes replaced over the past two years as a result of a lack of a competitive application being available for the mainframe. New applications are being developed for Windows and Unix platforms but not for mainframes. IBM should go out and buy third party software companies with a mission to port and/or develop applications for the mainframe. It should give away time and resources to individual developers to be able to develop applications and packages for the mainframe. Finally, it should give education of their products for free. Education should be treated as a marketing expense–it is in the best interest of IBM for clients to use the latest version of their software. Like Microsoft, the gross profit on the mainframe operating system is quite high–you need to sell a lot of servers and clouds to offset this income.
Here is what I see: IBM chopped up and sold to the highest bidder. They have become a company that has one focus: the shareholder. Because of this, they no longer sell products or services (of course they think they do), they move numbers around on a balance sheet. When you reward mediocrity and punish excellence you will lose and they have lost. It’s like management is working from a playbook written by Kafka.
I’ve been following the comment stream on both here and on Forbes, and I find it very interesting that a significant number of Forbes people outright disbelieve the article. Not so much over here.
same at MarketWatch, the stripper version of WSJ. it’s all “IBM is the poster child of perfection, they will write business cases on this.” yeah, in blood on pressed-fire paper.
I suspect that the techies and people in the trenches come here, whereas the managers and stock buyers go to those places.
which should leave you wondering whether Dow 17,000 is really Dow 6 or Dow 25…
I saw this catastrophe coming years ago and got out. I still follow the ongoing tragedy with keen eyes (all the while laughing under my breath) and my new co-workers curiously ask why? When I try to reconcile in my own mind why I do this, it repeatedly comes back to watching this thug management gang try and make a game of it. But I do agree with Bob, executive management doesn’t care as they are just pushing any agenda they possibly can to pump the stock, line their fat useless pockets and get out before the rat-infested ship sinks to the bottom. I feel sorry for my many friends who are still there but needless to say, I tried on multiple occasions to encourage them to do what I did: get out of that political waste dump while you still can. If ever a misguided clueless incompetent management team ran a company vessel into a reef, history will show IBM in the 21st century as the poster child for such a decline.
Misty, I too have the same fascination watching this train wreck unfold. From the outside it’s very clear, but apparently the picture is much less clear when viewing from the inside. Too busy with one lifeboat drill after another. I laughed at Ginni’s claim that Z and Storage were all important going forward and then listened dumbfounded as friends and former colleagues reported support and development teams were randomly castrated. Supported configurations go down, new features/functions are cut or pushed out, competition finds more holes in the big sales picture and customers have less reason to chose Blue. Snowball, fast rolling downhill. Lately all I’m hearing is a train horn and there is plenty of stuff on the tracks.
as an employee here at IBM, I see exactly what is happening and agree with many of the above comments. The problem starts at the top. IBM cannot be run by an IBMer that grew in the ranks and retains all the values learned through her tenure (political in nature). She is not a Leader nor was she trained to run a company the size of IBM. Engineers do not make good leaders, they make good engineers. The only success IBM will have is if it replaces its CEO and gets back to business through R&D. IBM products are weak at best and the sales forces are focused on daily forecast inspections. Forecasting on a daily basis=failure.
Interesting comments. It’s clear that Bob knows the score, and whom to blame. It’s also clear that NONE of the comments mention the 15 year campaign to unionize IBM in the US. Curiously, the comments also DO NOT blame the employees for the massive failure and disconnect with customers and Wall street. It’s curious and ironic because the employees AND the customers are the ones that are “punished” for this massive Idiot Business Massacre of sensibility and sanity. I just have to laugh because the organization, Alliance@IBM CWA Local 1701 has been posting comments from employees (pro-union and anti-union) since 2003, and those comments have told the inside story–never mind the pundits and the Cringleys (no offense Bob, you do a great job anyway). Will a union fix this? Not likely. But if the employees manage to actually unite and stick together and organize, it could prove to be very interesting when they “walk on the field of play’, game ready.
But as a poet I know once said, “Alas, the funeral of fate is one I can’t attend”.
If the union site looked like a professionally done website done by, say TECHNICAL PROFESSIONALS, instead of some 10 year old’s class project then maybe the union might have creditability.
The Alliance Job Cuts Reports page has been a good source of advance information about layoffs over the years, often predicting to the day when a major RA will take place, but you have to sift through a lot of noise to find the useful information. Lee really should have a separate forum for general grousing, and limit the Job Cuts page to reports of actual cuts – and maybe some reports of upcoming cuts that look legitimate. All these histrionics about how Ginni and her band of top execs are lying corrupt thieves add nothing to the discussion and make the employees look like a bunch of children. The Alliance site, and the IBMers who post to it, lose a lot of their credibility just by their writing. The posts of these self-proclaimed 1 and 2+ performers are full of spelling and grammar errors that would earn them a failing grade from an elementary school English teacher. A union is unlikely to win in a head-to-head confrontation with management. The Alliance needs to focus on presenting themselves as a group of experts who want to use their talents to help save the company. I don’t know if any execs or board members would be willing to listen, but as the company goes further into decline, they may be willing to take whatever help they can get.
The job cuts report is okay but it is still censored by the people who run the site so you’ll see very few of the comments questioning their actions/motives/leadership getting through. I also think the site has to go a lot further than just separating out the comments. Updating the site to maybe some HTML5 tools from the 21st century might help.
I’m all for an open discussion on organizing but it should be open. This particular group has been at it for 15 years and have not a single organized IBM site to show for it. Maybe it’s time for a group that can show some results. It’s just all too ironic having this group spout on about a lack of leadership when they themselves continue to collect money and show zero results.
Best thing that ever happened to me was to get out-sourced by IBM back in 2004. As an ex-IBMer I had instant street cred and was able to increase my income every year for the next 10 years. And I am still working, and IBM is still laying off their best and their brightest.
I have to agree. The best thing I ever did was to leave that hell hole.
First, until we know which 26% are getting whacked, we haven’t a clue what the final outcome is going to be. There were years when we could easily have RIF’d 26% of the company and emerged a lot stronger, leaner, and better able to execute.
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I haven’t a clue who is left, though many of my former co-workers have been moved onto new “opportunities” in the post-IBM world. I was RIF’d in ’09 at the bottom of the Great Recession and have since re-established myself in an entirely new industry, and many of my “best and brightest” IBMer friends have made similar transitions. Some people that I couldn’t understand how or why they were still around when I was RIF’d are now working jobs commensurate outside IBM with the same lack of skills they demonstrated before and after I was RIF’d.
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Cringley forgets that every customer is a salesperson. I had engineers under me, when Gerstner was CEO and we were all fat, dumb and happy, who thought their paychecks somehow came out of Lou’s personal checking account (or were plucked from a tree), not by convincing customers we were the best in the industry and they should just hand us all their money. So, yeah, drag everyone in the company into a room and ask them to explain why customers should hand IBM money.
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Maybe I’m wrong, and maybe this is just another RIF to reduce expenses, crank up EPS, and get millions of dollars in bonuses for senior management. But if the mentality that I’ve seen above is prevalent at IBM, there are surely enough IBMers in need of moving on that a 26% RIF could just be an improvement.
is this a follow on leader from last weeks prediction column ? maybe 2016: The sale of IBM mainframe assets to Amdahl or Huwei ? The software to Microsoft. Is there anything left ? Oh yes, the executives. Recruited by pressure groups/lobbying firms ?
Every day there are many communications about various promotions and changes in who reports to whom in the upper layers. It now takes 3 full pages to show all the SVPs, VPs, GMs, directors reporting to one executive. It may not take 2 pages to list the competent technical staff left in some of the organizations. Rumor has it that no one in the director level or above will be let go.
It is so amusing to think that soon IBM technical support will be provided by SVPs, because that will be all that is left. Wouldn’t it be fun to hear those conversations – see if the SVP can figure out why a CICS region on one LPAR is running hot, while others are not getting any work. Or why a storage array crashed, losing all information from the mobile customers. And the surprise on the part of that poor SVP when the realization hits that he/she is all alone, and has no staff to bail him/her out.
Amusement aside everyone hopes the numbers being reported are exaggerated.
When Gerstner came in as a consultant he was dealing with a true crisis as IBM was hemorrhaging 8B/yr. He fired 100k IBMers in 1993 because he had to. Then he turned it into oligarchy where execs were separated from staff and rewarded strictly on financial metrics; remember when they had the same benefit programs?.
Later the all mighty EPS was the key metric they were measured on and they did their best to increase it leading to the roadmap 2015 debacle where they were liquidating the company and staff with morale along with it.
We all respond to our measurements and my hope is that Ginny now rebalanced those metrics to include revenue as well as profit growth. We soon see otherwise she is history because the BOD is under such pressure now…………..
What specifically is IBM offering to customers in the cloud space? Will they be directly competing against the cloud offerings of Google, Amazon and Microsoft? Virtual and cloud hosted systems which run their Mainframe and Power operating systems would be a good business.
The 26% number is phony. It will be more like 10-15%. Still a huge number and maybe devastating but nowhere near 100K globally.
Cringley always seems to have a anti-IBM viewpoint. Find it interesting how he says “IBM really does not know how to do reorganizations, which are mostly political realignments.”. As I look at his credentials to make this statement he must have experience as a turn-around specialist, conducting M&A or other heavy business tactics. Instead he describes himself as “The sex symbol, airplane enthusiast and adventurer continues to write about personal computers and has an active consulting business in Silicon Valley, selling his cybersoul to the highest bidder.”
He simply seems like a guy who likes to hear himself talk, thinks a lot of himself and will write a hit piece if sponsored by a competitor. I view him as a small person with a small mind just like his perspective being built on PC’s or personal computers as he himself states.
With regard to IBM, as somebody who does not work for IBM I do see them making mistakes. Ginny inherited the crazy $20 EPS in 2015 fiasco from Sam. She stepped behind the helm to pilot the proverbial boat heading towards a iceberg. The ship is big and actions take time. Thank goodness she abandoned the $20 EPS fiasco finally in 2014. Where I see them making the same mistakes as other companies like Sun, HP and others is they are handicapped by labor laws forcing them to layoff large swaths of people instead of just under-performers. I still see people at IBM that boggles the mind how they continue to survive the grim reaper whereas other tremendous talent is tapped on the shoulder. Is there politics involved in who is selected for RA? Well, are their cliques in school? Is everybody likeable? Are there some people who seem to go out of their way to make themselves unlikeable? Part of this is just life. This is where the executive team should be leading to create & foster a culture that focuses on retaining & nurturing the top talent and performers.
Admittedly it seems like that crazy $20 EPS goal drove behavior that was suspect at best. Many of the “senior” people who were laid off would argue a conspiracy to rid the business of their higher costs to the business. Plus, they have been driving much of their business off-shores. Set aside this article being about IBM and lets discuss about every other technology company that also doesn’t use off-shore resources for support or manufacturing to reduce labor costs driving profits. This is more of an indictment on public companies beholden to shareholders. Hardly unique to IBM so why tar & feather them?
IBM should have the right to make money. They should have the right to fire people who they want. Employee’s should have the right to get paid what they negotiate, work for and earn but they also have the right to quit. See how that works – both sides have rights. Unfortunately, many employees identities become so intertwined with their employer they can’t disassociate their identity from the company. “I am a IBMer”. Thus, when IBM does something they disagree with or impacts them they become resentful as if it was a “cheating” husband. Do both IBM a favor and yourself; ‘Divorce’ yourself from IBM and move on. I guarantee IBM would be a better and stronger company while you would be much happier.
You read plenty of comments about this article where people were RA’d or otherwise left IBM who actually turned out ok…they are much happier. This is not unique to IBM…same at Sun (when it was around and laying off people), same at HP and all of the other companies continually evolving the business.If they don’t they end up like Sun; up for sale. Why don’t you take control of your destiny instead of hanging out to an employer where you are miserable? Then if you are RA’d it is the employers fault and you are the victim. IBM has been around for 100+ years by shedding their business of legacy technologies. Mainframe, Storage, Power technology, Software, Services and Finance are not legacy businesses. They each are core technologies that every business needs, offering differentiating value to businesses from the commodity players. There technologies may not be right for your business and you may just not like their company – fine, like a Ford while they are a Chevy company, whatever. But, IBM has created many of the technologies you use today and because of their presence they drive competition that makes what we all use better. For example, I guarantee the reason their Power8 servers can do twice the work of Intel on a core for core basis that it will drive Intel to improve their core strength. Because IBM has opened up Power technology with the OpenPower Foundation will put pressure on Intel to reconsider how they are becoming more closed reducing and eliminating innovation and partners as they try to own all of the silicon.
Cringely is a nobody, I’m a nobody – we both have an opinion. Evaluate each business and their technology on its own merits. Test everything you hear, whether it is from EMC, Hitachi, Lenovo, HP, Dell, Cisco, NetApp, Oracle (especially Oracle), SAP and yes, IBM to determine how much is hype and vaporware vs a track record of delivering product and value.
Looking at the length of your comment, I would say you should not comment on someone else wanting to hear themselves talk too much. Now get back to your job of calling the people under you and fire them and then tell them they can come back next week as a contract empl.
Clever. Given the length of your comment one can surmise you like to drive by making comments for comments sake.
There is a lot of good IBM talent and a lot ARE in touch, however, as a Client we felt the previous IBM Management got too relaxed milking every penny at every quarter due to a stupid EPS target and missing a gigantic shift in the IT industry under Palmisano. I guess when you are relaxed you do not take risks and fail to see the changes coming. Rommetti was part of it and Yes she is part to blame, she should have relinquished the EPS plan immediately and started this overhaul a long time ago. But, she owed it to Palmisano for backing the first woman CEO in IBM. Now, it may be a little too late. A lot of IBM sales people made a lot of easy Money milking the existing Client base selling to IT departments while the value shifted to the Line of Business Managers through the cloud. IBM’s challenge is how to transform these Sales People to sell value in this new era and transform their ageing product portfolio to work in the new world. The old will not work anymore.
The minute there was an alternative computing model and a new innovative way to use IT, clients jumped on board.
Now where does IBM go from here? The plan in place is absolutely essential even with layoffs “Sorry IBM employees” for IBM to remain relevant. Should it be done with existing Management I do not know but we should never argue that it should be done or not. As for My Cringely, I read his book and while some of the arguments make sense I do not agree with some of it.
– Continuing to invest in Intel Platform, Well we buy the cheapest, and IBM cannot be a commodity player it just does not work
– The Software portfolio needs update ASAP to work in the Cloud
– IBM should invest in “Business Applications” that Gerstner shed off
etc….
IBM should move fast, overhaul the organization, and while this will hurt some employees in the near term, it just may save the company. Doing it with the existing management who as Mr Cringely puts it was responsible for the problem in the first place, is an Open Question.
Re:”The plan in place is absolutely essential even with layoffs “Sorry IBM employees” for IBM to remain relevant.” Not sure what you mean by “the plan in place”. Bob and nearly all the commenters agree that the plan has been for some time to fire the expensive engineers who serve customers with a real knowledge of their systems, but keep the clueless managers, and hire clueless cheap labor to replace the competent, but expensive, engineers. Is that your understanding of the plan in place?
I think your numbers are way off – this would be the death of IBM-customers would drop like flies if this was the case. I am sure layoffs are coming next week, but there are no WARN acts filed-which would had to be done 60 days ago – I checked my state and nothing filed, so most likely pockets of employees here and there in the US to be under the clip level for filings. You have stirred up a hornet’s nest with your article and frightened way too many people. Maybe you are correct, but I hope not!
Jazzy, The WARN Act only applies to RA’ed employees that are simply separated, and potentially given pkgs and possibility of collecting UI benefits.
It’s NOT the case with poor performance firings terminations. IBM took a $600ml charge to pay for RA’s. It doesn’t cost IBM one dime to fire someone or thousands of employees for poor performance. Based on what I’ve heard from inside IBM, PBC ratings (performance) at #3 have been numerous, and have also been trumped up by FLM (first line maganement). The best PBC would be #1 the worst is #4; but IBM uses #3 if the employee gets two 3’s in a row of evaluations to either recommend for RA or worse, poor performance.
This time around, IBM is trying to save themselves some money and focus on poor performance rated IBMers to throw out the door—even if it’s a lie (which many IBMers have claimed recently). Some former 2+performers, 5 years in a row, have all the sudden this year been rated a 3. They are now in jeopardy of being rated poor performers. There is also “Transition To Retirement” program that is also being used to get rid of long term IBM service employees, including a 3 for poor performance. This situation shows IBM’s nasty side, by not allowing the T2R IBMers to gracefully leave and collect their pension and UI benefits.
Poor performance does not *necessarily* make a person eligible for UI benefits either, depending on state of residence. These are all “chess moves” by IBM to get themselves out of trouble by punishing employees for the poor performance of their CEO and VP executives. Both CEO and Execs should be rated “3’s” for playing the stock buy back game with an EPS goal, instead of making something of value and selling it for a profit. Don’t you think?
Good luck
after more than 20 years at IBM it saddens me terribly to hear of this layoff. like most, every time your manager calls to speak to you one thinks ‘this is it’. i used to lose sleep over it but now i would almost welcome it because the environment is that bad. i do not know one person who is happy. ibm is very top heavy in executive management, with a handful of us left to do the actual work. it is a toxic working environment and gets worse by the day. i hope for my colleagues and i this is not true but it probably is. but this go round is the first that i really do not care. after 11 bad quarters you would think the board of directors would wake up.
It is 60% reduction in European IBM marketing team now. The time, when company trys to use digital channels to sell cloud and saas… marketing is laid off…
There’s a lot of 20-20 hindsight in all the commentary, but what it really boils down to is that IBM executive management has decided to exit most of the IT business that is relevant to the world. This happened for a lot of reasons, many of which were never fully explored.
Take “cloud computing”, for example. I was with IBM Global Services in the 1990s and 2000s, and the company made a big investment at the time in what they called “e-business on demand”, also known as “utility computing”. If successful, this would have been cloud computing, implemented 10-15 years before its time.
It was a disaster. Rather than putting up a fully automated environment like what you see with Amazon Web Services, Google, etc., IBM management focused on putting up a web services front end and a traditional IBM outsourcing back end. In other words, all the work of provisioning servers, storage, etc. would be performed MANUALLY (by people), along with all the processes associated with billing, service contracts, etc. (which as any IBM customer knows can be horrendous).
Technologically speaking, it was such a disaster that many meetings were called with very highly-credentialed people (IBM Research, the SEI at CMU) to figure out what to do. In the meantime, from a business perspective customers didn’t want it, for obvious reasons. They were too busy speaking to Amazon, Google, Microsoft, VMware, EMC…companies who understood various aspects of IT automation and knew how to proceed.
IBM executives, for their part, did what they do best when something isn’t making fast money…they CUT and RAN. Budgets were eliminated, people were slashed, and the aforementioned provisioning and support work (formerly performed by US and West European labor) was moved over to whatever countries could offer cheap labor. Sometimes the labor was good, sometimes not…no matter though, as long as the price was right.
And that’s what we have today.
Bla bla bla. Bla bla. Bla.
The number doesn’t make sense to me. Assuming an average package of $100K (it could be more), 110K people will cost $11B. Considering their FCF in 2014, do you think they can afford it?
No matter what the severance package costs, it’s cheaper to fire people than to keep them. If they don’t have enough cash in the bank, they can borrow it, or change the terms of the package by agreeing to pay for a longer period of time, essentially borrowing from the fired employees, who prefer that option.
So, the Americans get laid off and the H1bs remain?
[…] 【IBM 或将迎来史上最大规模裁员，但裁员 11 万人传闻不靠谱】硅谷记者 Robert Cringely 昨天在他个人网站上发布文章爆料，IBM 正在进行一项代号为“Project Chrome”的人员裁减计划，大约 26% 的员工将被裁掉，也就是近 11 万人要失去工作。到目前为止，IBM 没有对裁员传闻进行公开置评。不过，可以猜测的是，IBM 确实将会继续裁员，但裁员 11 万人的消息太夸张，并没有十分可靠的证据。2014 年 2 月 26 日，IBM 宣布启动“阿波罗计划”，裁员人数约为 1.3 万人，而其希望借此节省约 10 亿美元的开支。根据 IBM 公司的财报，该公司进行此项计划，过去四个季度大约支付了 15 亿美元的人员遣散费用。如果 IBM 在今年裁员 11 万人，按照去年同样的费用计算，IBM 要拿出 120 亿美元的遣散费用。实际上，IBM 2014 年的净利润也仅为 120 亿美元，更何况这家公司手头的现金也只有 85 亿美元。因此，只要稍微计算一下，IBM 这样下血本的裁员传闻，是站不住脚的。 […]
The plan is the re-organization of IBM divisions around Systems, Security, Cloud, Analytics and GTS, GBS. This reorganization unfortunately will create a lot of redundancies and henceforth the layoffs. Cloud is essential to attract Startups around Bluemix in addition to Hybrid and completely Cloud environments, Security is fast growing and it needs a services arm which will partly be moved from GBS, Analytics will have all the software assets that pertain to Data, and Systems will no more lead with Hardware as Websphere brand is integrated with it and is targeting Organizations that will keep thier Data Centers because Websphere is still Infrastructure, SOA and Business Agility & Flexibility.
Makes Sense?
[…] 【IBM 或将迎来史上最大规模裁员，但裁员 11 万人传闻不靠谱】硅谷记者 RobertCringely 昨天在他个人网站上发布文章爆料，IBM 正在进行一项代号为“Project Chrome”的人员裁减计划，大约 26% 的员工将被裁掉，也就是近 11 万人要失去工作。到目前为止，IBM 没有对裁员传闻进行公开置评。不过，可以猜测的是，IBM 确实将会继续裁员，但裁员 11 万人的消息太夸张，并没有十分可靠的证据。2014 年 2 月 26 日，IBM 宣布启动“阿波罗计划”，裁员人数约为 1.3 万人，而其希望借此节省约 10 亿美元的开支。根据 IBM 公司的财报，该公司进行此项计划，过去四个季度大约支付了 15 亿美元的人员遣散费用。如果 IBM 在今年裁员 11 万人，按照去年同样的费用计算，IBM 要拿出 120 亿美元的遣散费用。实际上，IBM 2014 年的净利润也仅为 120 亿美元，更何况这家公司手头的现金也只有 85 亿美元。因此，只要稍微计算一下，IBM 这样下血本的裁员传闻，是站不住脚的。 […]
[…] on another website, is that IBM customers are fed up with sub-standard off-shored services. See I, Cringely IBM's reorg-from-Hell launches next week – I, Cringely Reply With Quote […]
Leaders,
There are noises from foreign media about IBM “layoff”, and the speculations are picked up by local media, spreading fast through social during weekend. Please use below statement firmly when you are inquired. For any media inquiries, as usual please direct them to Xiao Yi Shen/China/IBM, leader of External Relations GCG.
Holding Statement:
IBM does not comment on rumors or speculation. However, we’ll make an exception when the speculation is stupid. That’s the case here, where an industry gadfly is trying to make noise about how IBM is about to lay off 26 percent of its workforce. That’s over 100,000 people, which is totaly ludicrous.
The fact is that IBM already announced, after its disappointing 3Q earnings report, that the company would take a $600 million charge for restructuring. That’s several thousand people. Not 10,000, or 100,000. Moreover, IBM currently has job postings for more than 10,000 professionals worldwide, with more than half of them in growth areas such as cloud, analytics, security and mobile technologies. IBM’s new cloud leader, Senior Vice President Robert LeBlanc, told Fortune this week that IBM has plans to hire 1,000 cloud professionals.
A little perspective on IBM’s earnings is in order. The company still makes huge profit… $21 billion in operating pre-tax profit last year. And IBM’s “strategic imperatives” represent 27% ( and growing ) of the company’s total revenue… $25 billion in revenues, up 16 percent. We have high growth in a substantial portion of the portfolio, and those areas (CAMSS) have better-than-normal margins in areas that matter most to clients today — that’s the heart of the IBM transformation.
通常，IBM不对谣言和猜测进行评论。不过，如果这个猜测和谣言太过荒谬的话，我们也会作出回应。近期的传言就属于这样的一个情形，有人试图“爆料”说IBM将如何裁员26%，也就是说裁员总人数超过10万，这完全是无稽之谈。
事实是,IBM在发布令人失望的3季度财报之后就已经宣布，IBM会花费6亿美元进行结构调整。这个调整涉及到数千位员工,不是1万，更不是10万。此外，IBM目前正在全球范围内开放超过1万个职位的招聘，这些职位中超过半数都在IBM的高增长领域，包括云计算、大数据分析、信息安全以及移动技术。IBM的新任云计算负责人、高级副总裁 Robert LeBlanc，在本周告诉《财富》杂志，IBM正计划招募1000多名云计算专家。
IBM的财报清楚显示,IBM公司仍然保有良好的盈利水平……去年IBM的运营税前利润为210亿美元。IBM的”战略重点“业务贡献了公司总收入的27%,并保持持续增长，营收达到250亿美元，同比上升16%。我们主要的产品组合拥有高增长率,并在CAMSS（云计算、大数据分析、移动、信息安全和社交商务）领域有着卓越的盈利能力，而这些领域恰恰是客户在今天所最为关注的。所有这些，正是IBM转型的核心。
IBM is the company I am proudest to declare I am FROM. There is no rationale left to join Big Blue and every incentive to leave as quickly as possible. There can’t be many folks remaining whose benefits packages (to the extent they even exist at IBM any longer) include a pension, so what’s the motivation to stay? It seems as if the management of the company is determined to test the “too big to fail” meme.
You are a fucking retard. They don’t even have 100,000 US employees.
If your concept of computers is gaming, Internet and social media….you know little to nothing about real computers. Mainframes run every global business because they are pretty much 100% reliable, have a team of people that know their business inside-out and can be relied upon to keep everything running. These customers may have PC’s in the enterprise, but they don’t do the “real” work. You can’t rely on personal computers to manage an international banking system or keep an airline flying…
Sorry but the days of the m/f being the only game in town for high throughput transactions are over. Look at Amazon for starters. Yes, banks and older companies still use the mainframe but I am not aware of any new company choosing it
UK Chrome was 17% layoffs and we are winning more business than many.
The US cannot close deals so I expect Cringley is not far off on his US numbers. They are ‘at will’ so maybe packages will be minimal. BRIC countries are all over the floor and they will get very little severance so $600M will go a long way – if you believe that number.
One point – very, very few Executives are going in UK. Just a shuffle. Very top-heavy and high opinions of themselves.
Glad to have left….Management is just inept and mediocre. Techies are sidelined. Get out now..
So wait, is this 26% of the US workforce or the whole workforce? UK Chrome wasn’t even the whole of UK IBM as far as I know. Still traumatic for the US but if it is only the US that is a lot fewer people.
[…] blogger Robert Cringely wrote last week that IBM would lay off 26% of its staff, or nearly 112,000 employees, in a massive restructuring. […]
[…] cut a whopping 26 percent of its workforce — or about 118,000 employees — as part of a “Reorg from Hell” story that was later picked up by the […]
IBM’s quoted investment in R&D is very misleading. As perhaps the last great, privately held R&D organization, it has also become a sacred cow. Unfortunately IBM R&D provides almost no value to its services organizations, and limited value to the software business. So quote whatever investment you want, it is money poorly spent on projects that for the most part have no business impact. Watson is clearly the potential exception, but expectations grossly outstrip likely reality.
Any layoff hurts the services organizations which run at a utilization rate matched only by southeast Asian garment sweatshops. There’s no one on the bench, and anyone laid off is someone getting pulled from a revenue generating client projects.
[…] IBM’s reorg-from-Hell launches next week […]
[…] The layoff report came from Robert Cringely, a blogger that follows IBM closely. […]
[…] blogger Robert Cringely wrote last week that IBM would lay off 26% of its staff, or nearly 112,000 employees, in a massive restructuring. […]
First off Project Chrome is a real project and was kept to the top IBM brass up to the point Cringley broke the story. The internal IBM rumor mill, going back to early 4Q were talking Project Chrome US layoffs right in the 20-25% range. That’s a net effect of traditional RAs and record setting number of PBC 3s given and those people being managed out of the business with no severance. Right were Cringley reported. Due to his story there has been an incredible amount of awareness and bad press. If IBM doesn’t go through with it we have Mr Cringley to thank.
Do not think we owe Cringley a thank you or anything else. He is a gossip that creates tremendous anxiety and uncertainty. Any business that would lay off one-quarter of their business would be fodder in the news and social media. Whether Cringley says one thing or another has no bearing on what IBM does.
Agree with Joe Thomas.
The date of notification is Wednesday, Jan 28.
I’ve yet to see a second source for this story and as plenty have already stated, the numbers just don’t add up, especially given the guidance during the earnings call.
Keep in mind that if 26% of the company is not gone by February 28, Cringely is wrong and should be held accountable for being wrong.
Frankly, I think someone high up deliberately fed him a line of baloney to discredit him and he fell for it.
[…] have this feeling that this week will signal my end at IBM. Its been an interesting 1.5 years there. I’ve liked it overall and felt I made a difference […]
This report is far too negative. I believe G. Rometty is going to turn things around completely. She’s departed from the ‘Road to $20 EPS’ as she needed to. And Apple’s CEO’s sexual attraction to Ginny and ensuing IBM/Apple relationship will take it to brand new heights. Just watch all you doubters!
CNN is basically reporting it’s Cringe /vs/ the IBM statement that Chien posted above. it frankly doesn’t make a lot of difference. IBM is not going to cashier the newest-hired, cheapest-fed, most-interesting-language set of workers. they’re going to slice into the bone of the institutional memory of the place, the systems, the glue that makes Big Blue work. what IBM needs to chop 26% of is the power-tie squad. they need to change the hold music to Dean Martin’s “Too Many Chiefs (and Not Enough Indians.”
[…] Less than a year after ridding itself of its x86-based server business, IBM may be cutting as much as a quarter of its staff this Wednesday, according to tech blogger Robert Cringely. […]
[…] the weekend, pseudonymous tech blogger Robert X. Cringely claimed that Big Blue was planning to lay off as many as 112,000 employees this week — 26% of its […]
[…] the weekend, pseudonymous tech blogger Robert X. Cringely claimed that Big Blue was planning to lay off as many as 112,000 employees this week — 26% of its […]
[…] the weekend, pseudonymous tech blogger Robert X. Cringely claimed that Big Blue was planning to lay off as many as 112,000 employees this week — 26% of its […]
[…] the weekend, pseudonymous tech blogger Robert X. Cringely claimed that Big Blue was planning to lay off as many as 112,000 employees this week — 26% of its […]
[…] the weekend, pseudonymous tech blogger Robert X. Cringely claimed that Big Blue was planning to lay off as many as 112,000 employees this week — 26% of its […]
[…] the weekend, pseudonymous tech blogger Robert X. Cringely claimed that Big Blue was planning to lay off as many as 112,000 employees this week — 26% of its […]
Bob,
I absolutely loved your documentaries ‘The Triumph of the Nerds” etc. The best historical capture of the rise of the computer era – EVER. But..
..your negative views on IBM and many of the ill-informed posters on this blog.. are really ignorant and devoid of any factual reality. The statement that IBM is doing ‘nothing’ to transform the business.. and that IBM is a ‘Sales’ focused business is waaay off the mark. How do you get sales? By producing products that are far superior; which means focus on great design and user needs. IBM has been transforming itself over the last several years.. and the results (like Watson Analytics) are shaking the industry. I wouldn’t be so quick to write off a company with such a depth of talent!
I agree with Bob.
In reading this IBM article, the thing that first strikes me is that this Cringley(Mark Stephens) is one very unhappy person. Definitely some low self-esteem or inferiority issues going on. I’ll guarantee you that I’m not far off the mark.
Any of us could have “self-esteem or inferiority issues”. It doesn’t make us wrong.
IBM have set aside $600m for rebalancing which equals around 5,000 heads
Suspect Mr Cringely is incorrect about the numbers, kinda makes him look dumb?
Cringely needs to be held accountable for the rubbish being posted
Not!
The other question is – who at Forbes was responsible for OKing the article? Renders their future credibility to garbage. I thought they were reputable up to this point.
You’re on Bob’s blog, not his Forbes posts. While Forbes may or may not okay articles appearing on their site, they have no control over Bob’s personal site.
Besides, Bob has a good track record over these sorts of things. A career that spans decades in IT allows Bob to have contacts all over the IT world, including IBM.
“A career that spans decades in IT” by his own admission he’s been focused in the personal computing space. “Thirty years in and around the PC business”. If he wants to talk about Gateway, Compaq, Packard Bell, NEC, etc then I will take what he says with more than a grain of salt.
Given all the bloodletting going on at the IBM Alliance website, it seems Bob was right. We don’t know about all the numbers, but it doesn’t look good to be an IBMer today.
Shades of KODAK.
[…] The layoff report came from Robert Cringely, a blogger that follows IBM closely. […]
[…] The layoff report came from Robert Cringely, a blogger that follows IBM closely. […]
Maybe it’s all bogus but 100,000 being laid off sound so much better (and sells more of whatever it is they these days) than 10,000. God forbid it’s not 100k but even at 5 or 10k it’s still a lot of people, especially if you are on of those being kicked out through that back door called a 3 rating on the PBC.
IBM dismisses Forbes report of massive layoffs: http://mobile.reuters.com/article/idUSKBN0KZ1WF20150126?irpc=932 “A report last Thursday on Forbes’ website by pseudonymous Silicon Valley technology gossip columnist Robert Cringely said IBM planned to break with that gradual approach and suddenly lay off 26 percent of its global workforce. IBM did not issue a categorical denial of the report, but strongly suggested it was inaccurate.” Apparently Reuters assumes it’s 26% of the global workforce, not the US. I don’t know where the 100.000 figure came from, since it’s not in Bob’s article, but only in the comments. That of course, doesn’t mean it’s wrong.
[…] there were projections that 13,000 to 15,000 employees would be released within the year. The estimate for 2015 of 26% further reductions calculates to leave about 300,000 IBMers worldwide. This leads to three questions about the […]
Note, it’s easy to have “respect for the individual”, rich pension plans, top notch health plans, etc, when you have a monopoly. Once that mainframe monopoly was undermined by the PC revolution, the company had to make some cold hard decisions if they wanted to stay in business. I turned in 30 years at Blue and I for one am happy that they tightened the belt, and found a way to stay in business. It wasn’t the same company, and granted, I liked the frills while they lasted… but hard workers find a way to stay employed (whether for the same company, or at another). The IT industry is littered with the bones of companies that didn’t make it (CDC, Burroughs, DEC, Wang, DG, and on and on). If Blue has to execute a reduction in force to stay in business, it beats the alternative.
These actions are primarily driven by Wall Street… have you seen Michael Dell recently, since he took the company back to being private? He’s almost giddy about his ability to take a long term view of the business, and make decisions that deliver optimally for the long term health/growth of the company. He’s regained the 20% of his time that had been sucked into dealing with Wall Street (reporting, etc). A few more stock buy-backs, and maybe IBM will be able to follow suit! 🙂
The criticism on IBM isn’t the fact they’ve had to make work force reductions, but in the manner they’ve done so, and the lack of value they’ve had in how they’ve managed their human resources. Spanning a decade of mistreatment now (or more!) and lack of integrity.
I was a manager for my last 12 years at IBM, when they perform a resource action, they ensure that it is totally above board, in terms of hitting low performance (as rated in the most recent performance evaluations), eliminating a function completely, or what have you. These are not done frivolously, and are specific to results, whether it be the individual, or the organization/function being eliminated. It’s not subjective, and I would contend meets the definition of integrity. It doesn’t make it any less difficult if you’re the one getting hit, it takes a toll on all individuals involved, but it’s business. If you can’t make business decisions about human resources, you won’t be in business long.
My brother is a small business owner (veterinarian), a college colleague of his told him the first time he had to let someone go, it took him 45 minutes, and he said he realized it didn’t make it any easier on either one of them. He said now, if he can’t let someone go in 5 minutes, he figures he’s not doing his job. Either way, the personal toll isn’t any less, but the outcome is the same. IBM’s “full employment practice” of the pre-1990’s era isn’t a normal business practice, and I contend can only be sustained by a company that enjoys a market monopoly, like IBM did while they employed that practice.
You sir are an IT drama queen and need to stop making things up, I am not sure if YOU lost $ as a result or ?? but to put out false info shows your hatred for a company that set much of the standards that are used in this industry, Please do the IT industry and everyone that works in that field a favor and put your pen down. Forbes has lost much respect in this industry due to your “negligent reporting”
Now we know Cringley was right about Project Chrome. Laura and those people commenting on forbes.com from the IBM PR machine calling his prediction basis and without fact ought to be personally ashamed. Thankful for the internet. To those hard working IBMers still around… Speak out Not up.
I worked for Filenet a great company..With fabulous people, we worked hard and got results. We beat IBM 75% of the time on bids because our sales teams under the late great Ron Ercanbrack were stellar. Our products were amazing and our prof services delivered. Support was world class under Bill kreidler….and then IBM did a cognos. ALL the stellar performers left…They now work for similar companies with the same ethos as Filenet…what IBM get is the product and then it all goes to pot. Great companies exist because the people believe in their product, they love their environment, they get results AND they get their rewards for the long hours. Ask anyone left if they believe in IBM…This will not be the last set of cuts….The ship is too slow to react to a fast changing market place….but it has oodles of money…so does it matter? To those getting the call it most certainly will.
[…] Tech blogger Robert Cringely wrote last week that IBM would lay off 26% of its staff, or nearly 112,000 employees, in a massive … […]
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Mr. Cringely I’ll repeat myself –
1. IBM in December ’12 or ’13 did mobile internet analysis and found that 80% or more was via the iOS Apple system.
2. There’s nothing left for profit in a business except Business IT maintenance and software.
3. It then went into negotiations with Apple for management of Business apps with maintenance contracts. You yourself have said this is IBM’s future!
4. CPU design has been a minor profit maker for IBM.
5. Hard drives have been sold off Why? SSDs!
6. IBM PCs sold off Why? Low profitability.
7. Midi and large mainframes computers are now easily made by hot wiring cheap PCs together, rather than the old dedicated IBM 360 way.
8. Likewise for servers.
Now a synthesis of your analysis.
Cloud computing ( IBM’s new computer) not sold but leased via Business IT maintenance to businesses. Which means server farms like Apple’s. Also with the terrible insecurities in Microsoft’s Windows and Google’s Android a need for a secure OS and philosophy of security everywhere – thus the Apple relationship as Apple thinks security is paramount. IBM’s dedicated business apps must pass muster Apple’s apps requirements.
Apple and iOS will discipline IBM into a better company. IBM take the bane out of high employment business relationship maintenance needs that Apple all its life dislikes and finds unprofitable. IBM becomes custodian in Apple app Store of all business apps.
Finally Apple becomes a Business friendly company via IBM’s long history with business.
IBM is happy Apple is happy!
Oh and Apple gets some IBM computer geniuses for advanced OS & CPU design hmmmm!
AND don’t forget patents cross use.
WIN WIN WIN WIN WIN for ever.
Bazz, I’m curious so my question is this. How does that KoolAid taste? Been too long since I’ve had a swig do don’t remember.
[…] came up because IBM finally reactedtoday to my last column predicting a massive force reduction this week. They denied it, of course — not the workforce […]
It’s really sad to see what’s happened to IBM and I feel very sorry for my former colleagues. IBM was not only a great company – it’s was a symbol of technology and offered so much opportunities to many of us.
These days are gone – but not only for IBM’ers, the whole IT industry has changed.
When IBM left the road to be a technology leader and started to became a “financial product” for investors, the decline was foreseeable. Gone were the days where innovative products and services helped companies to stay ahead of the competition. IBMs strategy of rather “buying” innovation instead of building it based on its own DNA did not pay off.
It’s a shame, that in a time where technology plays a major role in the world – IBM is suffering. How could this happened – how could it be, that IBM can not participate in the new wave of technology ?
Maybe because IBM cloud never deliver on the SMARTxxx bullsh** story. Nothing of the Smart stuff works smart. Its all about marketing bubbles for investors or politicians. IBM lost the core of its technology DNA, which is desperately needed nowadays. There is so much crap on the market from many vendors and startups, you would not believe.
IBM needs to find the way back being a technology company with relevant, state-of the art technology with flexible licensing and top customer support. It has to do less marketing but more innovation.
I wish all my former colleagues all the best and hope you’ll find new opportunities in or outside IBM – take care !!!
Don’t blame me. My predecessor took IBM down a different path. I only sucked the soul out if it, made hundreds of million$ in doing it, and told Ginny to do the same. Too bad the juice ran out under her reign. She should have known we had squeezed most of the juice out of it when I handed her the wheel. I thought she was smarter…
But don’t blame me…..I made many an investor happy, as well as my personal financial advisors.
Btw, vision is overrated.
SP
Master Palmisano, your jet is waiting on the tarmac. Before you leave sir, should I burn the stacks of $50s or $100s in the fireplace?
Please, just the $100s. I like to keep the $50s to hand out as crumbs to some of the ex-IBMers I meet in the street who I forced into early retirement.
Now, excuse me, I’ve got to go to go to a luncheon with the Golden Parachute Club I chair. I think I’ll relate my ‘From Baltimore to Upper New York riches’ life story today. We have a few new members who haven’t yet heard it.
Sammy P.
P.S. I haven’t quite figured out Ginny’s sexual attraction to Tim Cook. I do need to ask her next time she calls for advice.
[…] to a woes, a Forbes columnist this week reported that IBM was gearing adult to cut a whopping 26 percent of a workforce, or about 112,000 people, yet IBM has vehemently denied a […]
[…] to its woes, a Forbes columnist this week reported that IBM was gearing up to cut a whopping 26 percent of its workforce, or about 112,000 people, though IBM has vehemently denied the […]
I guess it will take few weeks to find out whether you or IBM is telling the truth. One thing I think you need to go after is that big companies just don’t work anymore in IT and Software. There are too many layers of management, too many chiefs while they cut Indians and don’t train the ones they have. The successful companies are smaller and more innovative. Look to business partners of the big 4-5 software companies to get around the bureaucracy if you have to use big company software. It’s true at HP, IBM, Microsoft, Oracle, SAP, all of them. There companies would easily be worth more in the market broken up as each business unit focuses on it’s business. IBM has 93 brands on acquisitions and each is worth more apart than as a part of IBM. IBM is schizophrenic. Services and software should never be in the same company. I’m in software. The goals are conflicting. Software is about providing the most functional value to a customer at a fair price with great documentation, support, and intuitive interfaces that forgo training to perform specific tasks. Then add training if the software is more complicated and for weaker customers. For services, the game is “we are your expert, we know what to do”. You hire services because you either can’t or don’t want to integrate the systems. As services, you convince the customer you are the “subject matter expert”. HP, IBM GBS/GTS, InfoSys, CSC, WiPro, TaTa mainly exist because “big companies want to do business with big companies”. When services and software are in the same company, then management lets the software team slack off on documentation and training, so they can double charge the customer for services to train the customer and provide professional services. If the software is great, you don’t need professional services. For a software company, professional services are a “crutch” keeping your software from being great. Good for Oracle, bad for customers. Big software companies hate small companies and punish them with software audits and other punitive processes that make customers hate them. They tell reps and salespeople that “we love SMB” then just absolute hate them in accounting, sales, and support. This has to stop. If you have to measure the usage then “build it into” the software and then when they exceed their license send the salesman to go have a friendly conversation about expanding their usage. Don’t send the software audit mafia to “shake them down”, Microsoft! By the way, if you don’t have 6-7 layers between a line person and the CEO you can sure help the customer by making your brands into smaller business and making the software cheaper for the customer. Every management layer has a price and impacts profit, what value do they add? Think in terms of how Warren Buffet runs his “other” businesses. He puts in good management and they run businesses with no more than 4 layers of management. Perhaps he can make IBM more valuable by breaking it into at least 5 smaller companies, or maybe 93 brands.
Were we lazy, complacent, “entitled” generation and took for granted we were sort of the untouchables globally calling emerging countries “Third World”, Did they really emerge and did we submerge ourselves. Are you all collectively saying management is solely responsible for this doom, and you dont share any of that burden. Ask yourself. Yes YOU ! Lets hear some confessions.
Anonymous,
You hit the nail on the head. It was YOU! That’s why it was ok to cull resources the way we have. Liability to our business.
It’s all about EPS. You entitled generation, if nothing else, learn that lesson!
Sam
With all due respect Sam ….. regarding us ‘entitled generation’ …. give it a little introspection and you may realise that many in the CEO community and your lieutenants on the board of directors are the ultimate personification of the ‘entitled generation’.
Sure … you may work hard …. but only to promote your own self interest at the expense of the company interest. Your compensation packages are many orders of magnitude higher than the value you provide to the company, which are not linked to performance, and a received even if you trash the company. I don’t know about you Sam, but many of your peers also use their privileged position to transfer company wealth into their own private businesses as preferred suppliers.
You are paid to represent the shareholders, however we are seeing the biggest transfer of shareholder wealth in global history to company employees at the top of the pyramid.
How many of you can truly call yourselves General Paton’s leading your corporate armies to glorious victories ? Or true visionaries like Steve Jobs and Edison taking your companies from startup to global leader ? … however you still get paid the same whether you perform or not.
Alas … us ‘Entitled Generation’ can only dream of aspiring to the levels of entitlement enjoyed by yourselves ….
… Para Dox
[…] employees might want to start fixing up their resumes and LinkedIn profiles. It was reported by tech blogger Robert Cringely that 26 percent, or a whopping 112,000 positions, might be cut from the company. IBM readily […]
[…] is based. “Industry gadfly” Robert X Cringely predicted that 26 percent would go (IBM’s reorg-from-Hell launches next week), which would be more than 100,000 […]
[…] is based. “Industry gadfly” Robert X Cringely predicted that 26 percent would go (IBM’s reorg-from-Hell launches next week), which would be more than 100,000 […]
I’ve been an IBM employee for nearly 18 years and a sub-contractor for them 9 years before that. I’ve wanted to work for IBM since I was child, I will be laid off on March 31. I don’t have any official notification yet but my direct report manager said when my current assignment ends I will not be allowed to look for another job within IBM and I get a week of pay for each year I worked. I fought my way back to work from long term disability in January 2014. It has not been easy. I was not surprised at a big layoff, IBM has done them every year I’ve been an employee. I am surprised at the at they are going about it. Ms. Rommety already stated the $20/ share in 2015 that Lou Gerstner, former CEO, promised was not going to happen. As others have commented IBM is changing its focus from hardware and software to cloud and mobility. Being among the last of the big tech companies to focus on cloud and mobility they need money to catch up. What’s the fastest way to create money? Fire employees. In this case ~25% of the current population. No salary cost, no current benefit cost and no future benefit cost – the defined benefit plan, pension & medical) was axed in the late 90’s. Multiply that number by 100,000 and that’s a great deal of money immediately available. Ms. Rommety can say that the 25% number is high because at the same time time IBM IS hiring younger employees right out of college who have the cloud and mobility skills for the direction Ms. Rommety is taking IBM. Current IBM customers who are not cloud and/or mobility based will suffer as those of us who support those customers will be fired. I think Ms. Rommety should return her bonuses and take a salary cut as other well known large company CEO’s have done until she rates a performance rating worthy of working, not to say running, a company like IBM.
One more soon to be “laid off” employee of IBM.
Methinks Tracy’s post should be removed!
You where not around for the real IBM that I enjoyed Working for. For the first 20 years of my career.(Starting in 1978 ) (Back then we still heard of respect and Values and finding ways to working through the hard periods, getting back on track, making adjustements.) Then came the period you speak about (the last 18 years or so)… This is when the Money hungry , no responsible Management teams came along, that only think of their profits, no longer thinking of the long term for the company, and each time their so called vision or strategy would fail, it was not their fault but the people that was following the path laid out by thethe leaders. These same Leaders, Never would they take full responsibility for IBM failure and would only say, We need to reorganize…. They all need to go back to school study what real leaders had to do back when management meant something, When management was responsible not only to vision for the future but also wanted the personnel below them , the workers, the real backbone of the companies, to prosper with them. Not always bending to the shareholders, as it is today. This is why IBM is not successful … Management is looking short term profit only. And not benefits long term. No longer any vision involved, only their contract terms and how fast they can get rich and get out…. Let the problems be the blame of someone else. Genie, .. is no exception and to tell the truth the worse leader IBM has ever had. Leader she is not… Who is really pulling the strings… Which shareholder … Right Genie…. NO NO…You need to quit smiling and stop lying to what you have left of what once was the best company anyone could have worked for. You and others have lost the pride that was built by Watson, and Watson JR. AS well as many others… When the era of Cookie Monster (Gersner and others followed,) the common employee realized it was only a matter of time, before the likes with no vision or backbone would destroy such an amazing company. Congrads you have succeeded in something.
Well, I ‘left’ IBM March last year. 20 years up so a hefty payout. Haven’t touched those $$ however, I walked into IT contracting at even higher rates and have never looked back.
To top it off, I contract for a client who is also one of IBM’s top named accounts. So out of IBM’s pocket into mine. Who”s laughing now? not IBM ….
You really should discover the true IBM in books like Richard Delamarter’s Big Blue: IBM’s Use and Abuse of Power
https://www.amazon.com/Big-Blue-IBMs-Abuse-Power/dp/0396085156
and
http://en.wikipedia.org/wiki/IBM_and_the_Holocaust
IBM’s view of computers was that they control people (that’s the ‘business’ in IBM) and they could not adapt to the computers are just creative tools used by people paradigm. There are still a lot of IT people that support IBM’s view and what became of it in Microsoft, but they are a dying breed.
So, here it is, March. Can Cringely please show us proof that 25% of the entire IBM workforce that was employed February 1 was dismissed (not just the US, this article **never** stipulates that the layoffs/firings were to be US only)? If not, then this article is garbage. IBM had layoffs. Big deal. They have them every year. Any idiot could have predicted that much and any idiot could have predicted IBM using any means they could get away with to do it. But Cringely’s article got the links because of his number (25%) and the speed with which it was to be executed (1 month). So, Mr. Cringely, please own up to it and either prove that your number was right or own up to the fact that you lied.
Cringely never said what geographical area the 25% figure referred to, but IBM, in its denial, assumed it was of the whole company, as did many other news reports mentioning the 100K number. Since IBM won’t tell anyone how many employees lost their job against their will, I don’t see how anyone can come up with a believable number. If IBM had nothing to hide, they would simply “open source” the detailed break down.
>> Cringely never said what geographical area the 25% figure referred to
…which is pretty amateurish reporting if you ask me. If he didn’t know what geography he was referring to, he should have said that. Regardless, even if you say it is just the US, there is still no indication anywhere that 24-26% of the US workforce that had IBM jobs February 1 were not working as of March 1.
>> I don’t see how anyone can come up with a believable number..
Yet here is Cringely…asking us to believe him.
he got the dates wrong. if you’re on the inside you know he was right. I do. It’s just being covered in lift and shift and other crap and spread out over a few more months. the coming wave of cuts is massive.
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[…] part of them. While IBM is best positioned to sell services with its cloud, it is simultaneously gutting its services division. This is an excellent example of how IBM’s short term and long term goals are in horrible […]