Back in 2007, when I was still writing for PBS, I posted a couple of columns about IBM that caused great consternation for the company. I predicted an acceleration in offshoring and outsourcing that upset IBM employees and customers alike. Thousands of IBM careers were about to be disrupted. The company denied my story and even, I’m told, made a few changes to its plan in response to what I had written. It showed the power of the blogosphere, how one person with a little insight and good sources can affect an industry. And it’s about to happen again.
This coming Wednesday I’ll post another IBM column based on a look I got recently at the company’s plan for 2015. It’s audacious and surprising and I’m pre-announcing it now, frankly, in hopes that doing so will knock loose a few more details that I can include in that column.
If you have anything to share, please contact me at bob@cringely.com or 707-525-9519.
Though IBM completely denied that 2007 column, the more telling response came from an IBM senior manager I bumped into a few months later. “You busted us,” he said.
Until Wednesday…
Yes, Plan 2015.
Please be sure to include *your* project of U.S. employee numbers going forward …
… projection …
Or maybe it’s dejection.
Bob,
It occured to me some time ago the Watson, which currently runs on what, 70 servers, will be running on our desktops or whatever ten or twelve years down the road and IBM will be leading the charge in supplying that sort of interactive software. I put a few bucks into the company on that basis around nine months ago and have done OK. I wondered if Warren Buffet was thinking along the same lines.
Well I’m looking forward to it any which way the story unfolds.
I’m begining to get the feeling that 2012 will be a pivotal year for many companies and for many reasons – not always to the good.
In the “Related posts:” suffix above I see Amazon, Facebook and Wikipedia. Well Amazon have caused an upset here in the UK by apparently avoiding paying any income tax. (Is it true Google are doing the same?) Being a loyal Amazon supporter since they opened here in 1997-ish this tastes bad! Facebook lost out to Microsoft in the AOL patents auction but bought Instagram instead for, coincidentally surely, the same price(!). Is there a “childish” need here? Finally, Wikipedia can do no wrong….. Unless I hear different! 🙂
Yes, an interesting year. Let’s hope these mega-companies learn some decent… well I was going to say “morals” but that’s just naïve I know… 🙁
Don’t worry, Nigel, Amazon hardly pays any taxes here in the US either:
Amazon.com (AMZN)
Pre-tax income: $3,512 million
Taxes paid: $152 million
Tax rate: 4.33%
2005-2009 aggregate data provided by Capital IQ.
Thanks Charlie
*speechless*
🙁
The IRS has some screwy definitions of “income” usually defined in such a way as to increase taxes by disallowing many expenses incurred to create income. However there are certain investments, like the purchase of state issued bonds. Income tax is paid to the state while the federal rate is zero. My point is that taxes are complex and extracted from citizens with no real accountability. Besides, everyone associated with a corporation pays their own individual taxes, so why tax them again as a group simply because they are part of the corporation?
Well Ronc, they are taxed because, like MItt says, corporations ARE people. Now does it seem fair?
have you seen that movie called “corporations”? since corporation is defined as a person by law the movie proceeds to psycho-analyze a corporation as if it was a real person. The results were quite unsettling.
Of course corporations have been legally defined as people in order to facilitate taxing them and controlling them in addition to the taxes and controls on the people involved. It doesn’t change the obvious fact that the individuals involved are unfairly taxed a second time.
Is IBM providing IT services to your company? How well is it working for you? Why?
I know several IBM employees who serve customers. IBM is #1 unethical company. IBM Chairman, Sr Executives, HR People, Appeal Department Directors are lairs and they DO NOT HAVE ANY integrity. IBM Business Conduct Guidelines are total joke. IBM Counselor force l employee to certify BCG; on the other side, if you go Open Door or Report any unethical activities of IBM Management, IBM Chairman and IBM Appeal Department will retaliate against you. IBM Sr. Management and HR Partners have no values or honesty. Please encourage All Students, Customers, and Government to boycott IBM. IBM employs many BCG Violators. You violate BCG and solicit >$30k Entertainment from suppliers, you will promoted. If you report to IBM Chairman, IBM Chairman, Sam will send Appeal Department Director to terminate your employment. So, join the club and violate IBM BCG; you will protected by IBM Sr. Management and IBM HR People.
Couldn’t have been better said.
IBM just lost Amgen in thousand Oaks, CA and Ameriprise, Minneapolis service contracts.
Nicely teased!
IBM’s 2015 plan is built around sponsoring season two of Nerd TV, is what I’ve been hearing.
Did somebody finally leak out the story that Sam and Ginny are selling STG? The rumor I hear is that even Lenovo doesn’t want parts of STG in their deal, although they want to buy the X-Series.
They can’t reach the 2015 Plan numbers for US citizen employees (not I didn’t include foreign based employees living in US) with expensive layoffs. They need to sell entire operating units and the “cloud strategy” with the new “On Demand” initiative called “Smarter Planet” conveniently makes it possible to sell entire divisions now and no one will notice.
The currency changes “Bendover Ben” Bernanke introduced at the Federal Reserve to save the banksters will come to roost at IBM and other essentially foreign multi-nationals shortly. An IBM in 2012-2015 will finally look like Westinghouse and parts of GE (now Toshiba)…..a strong PR backed national brand to keep fooling the stupid Americans but a company really owned and controlled by foreigners with all its assets and employees based overseas……
Whats STG?
I presume he meant “Signature Technology Group” – IT services company:
https://www.signaturetechnology.com/about-stg.aspx
Systems & Technology Group – the hardware business – primarily X-Series (Intel) servers, I-Series (AS/400), P-Series (UNIX) and the mainframe lines of business.
Systems and Technology is probably right in this context. STG can also mean the Storage Group, which is the team that makes the disk and tape storage products.
And who are “Sam and Ginny”?
Palmisano and Rometty, respectively. Current and incoming CEOs. Sam is getting out while the nest is still feathered. I hope he’s proud of himself. I’ve never worked with so many smart people that were all thrown out like deadwood.
The real question is whether what IBM does will impact other sourcing players such as HP/EDS and the India based sourcing companies.
HP/EDS is going the way of Sun/Digital at this point. Floundering from one strategic “direction” to another.
Let me guess… will IBM become iBM? That’s MY take!
nicely played
The employee union group Alliance@IBM has been raising the alarm on this for years. This past February IBM terminated 2500 employees and is moving the work offshore. Roadmap 2015 is being called “Roadkill 2015” by employees.
The IBM US employee population continues to decline, even with a number of acquisitions.
Information pickets are scheduled for April 24 at various IBM sites to call attention to IBM’s abandonment of the US workforce.
Your organization is an ineffective organization that can’t even organize an effective protest, let alone a union. You make the Occupy guys look smart. Hang it up while you still have some semblance of a reputation.
Off shoring is the present and the future – at least until the costs of workers in India (and the other off shore capable countries) equalize with those in the developed countries.
As a software developer, I don’t say this with glee, but rather with fatalistic acceptance.
I find, at times like this, that it’s oddly comforting to remember Marx. Perhaps, once globalization is complete, it will be possible to bring the entire house of cards down simply by removing one of them. Viva la revolución.
From your first 2007 article:
“The point of this has nothing to do with the work itself and everything to do with the price of IBM shares. Remove at least 100,000 heads, eliminate the long-term drag of a defined-benefit pension plan, and the price of IBM shares will soar. This is exactly the kind of story Wall Street loves to hear. Palmisano and his lieutenants will retire rich. And not long after that IBM’s business will crash for reasons I explain below.”
Well, five years later, Sam is retiring (minus one lieutenant who languishes in prison) and IBM shares are soaring (I still have a few shares from the ESPP). The last part of your prediction is the business crash, which I’m a bit surprised hasn’t happened yet…
… give it time.
If GM and Chrysler could go down. IBM is surely on the path to a similar fate. Maybe IBM’s hoping it’ll get bailed out by the Government or Buffet?
IBM is built on a house of cards, and run by a bunch of penny-pinchers, who have artificially inflated the stock, at the expense of the US worker. Sammy, Ginny, and Warren will undoubtedly have inside information and cash out long before the stock crashes. The remaining US workers, if there are any left in 2015 will get to enjoy their 5 whole shares of vested IBM Stock that were issued in 2011. Can’t wait. It’s going to be a helluva pizza party!” -bentoverbyBlew-
Thanks for this information! I’ll be watching. I love your photo! You make a beautiful couple.
Big consolidation :
SAP/Sybase
Oracle/Sun
Software AG/Webmethods/Aris
I am guessing SAP will go after HP hardware biz to stay in the running
I have a friend who’s been working for IBM for years, but she’s still a contractor, not an employee. They’re now offering to move her overseas, but she still won’t be an IBM employee. Seems like a crazy way to run a rodeo.
There are two forces that are making IBM a hellish place to work for the US IBMer. One is offshoring – the continuous, relentless pressure of jobs going overseas. IBM is chipping away at US IBMers in 3% chunks, to stay off the media and government radar. The jobs are going to BRIC countries. US IBMers are laid off. The second force which is gathering steam is something called “Liquid Portal”. Ironically, this will work against all IBMers worldwide in that IBM hopes to reduce the global workforce and increase the contractor workforce by parsing development projects into small, short-term assignments. Freelancers will compete for these projects, very much like the commercial TopCoder.com freelancer competition site. Between these two pressures (offshoring and Liquid Portal) and watching respected colleagues being thrown out like garbage for years of dedicated work, IBM has become a depressing, demoralizing, and caustic work environment.
One of IBM’s keystone habits is the selling of “routines”. Whether your “Cloud” is all your services running on IBM mainframes, or outsourced bits of the enterprise tier spread across multiple off-shore locations development houses, IBM has been and remains a master of the routine of integrating services across many tiers.
IBM does not need enormous numbers of in-house development and business talent to get this part done.
To be sure, there needs to be research and core technical R&D … but the staff necessary to create the routines for others to execute need not be large. And, IBM has so many patents and partnerships with third party OEMs .. why not have those third-party OEMs do all the real heavy lifting on behalf of their clients — with IBM primary contribution being the management workflow service to meld it all together under some IBM certified ready-for-cloud moniker?
In the same way that Boeing shed its unionized workforce by transforming itself from an aircraft manufacturer to a knowledge specialist in the specification and management of aircraft requirements, IBM is going through a similar transition, distilling its workforce to an essential core set of staff focused on the high-level engineering & management knowledge.
“In the same way that Boeing shed its unionized workforce by transforming itself from an aircraft manufacturer to a knowledge specialist ”
bwahahahahaha. Right. Boeing is shedding its unionized workforce by building a second 787 line in the union-hostile state of SC. Boeing abortive attempt to be the master integrator managing a network of partners resulted in a multi-year delay in the 787 launch and continuing quality problems…
By routine, does IBM PureServer fit the ticket? See http://s.nyt.com/u/8SsC
I,BM has good sales agents who make wonderful presentations to CIOs and CEOs.
Their crud doesn’t work — it takes years and years of configuration, integration, and interminable patching.
Anything with the “Tivoli” label is designed to be a money-sink for the customer. Tivoli (anything) is a tar-baby. Run when you hear the name “Tivoli.” You have been warned.
Be seeing you.
I got fired for being at the bottom of ibm’s insidious and deprecating employee ranking system called the PBC(Personal Business Commitments). It’s one of the best things to ever happen to me. Think about that, personal commitment. Really??? To a company eager to throw you to the curb. And they want you to commit. Yup, as soon as I get some reciprocity from the blue pig.
outlet.qweb.es/tiendas-ofertas-outlet-online.html…
[…]I, Cringely » Blog Archive IBM USA jobs Cringely – Cringely on technology[…]…
Since the 2007 prediction IBM had tremendous growth. If IBM is such a horrid place to work why is it that revenues and earnings are always up, up up? Can you really fool customers for so many years?
I have been working with IBM software for 20 years and to be honest I hardly ever understood what IBM has been doing. But they are growing faster than the market, outperform the competition and an end is not in sight.
IBM would change if their figures go down. As long as this does not happen they will probably continue on their path even if there is a critical comment on Cringely.com every 5 years.
Henning,
To bad there is no one by the name Henning Heinz that works at IBM.
You ask how it is possible that IBM is a demoralizing hell-hole for the US employee when earnings and stock price are up? Are you so obtuse that you can’t figure it out? The reason IBM is doing well is because it has learned out to cut costs and employ highly education Indians, Chinese, and Brazilians at 30% of the cost of highly educated Americans. The shedding of the American workforce is integral to IBM’s success. So, yes, unless you are top executive at IBM, it is a hellish place to work where you are in constant fear of losing your job. The rich get richer, the middle class is laid off, and the disparity grows. IBM is a microcosm of what is happening in America today.
I just wanted to mention, the Indian, Chinese hires are not “highly educated” as you mention. They may have graduated from a post-secondary institution, but they likely have no real world experience, and they are not allowed to think as individuals, outside of their very rigid job function.
In celebration of the 100th year IBM anniversary, all employees received a1k ‘gift’ of blue pig stock. Unfortunately, the stock vests in 2015. Most of us will be gone by then. IBM knew full well what it was doing. They never had any intention of giving their employees any sort of gift. It was all smoke and mirrors. Just like all their other tricks and schemes They hand out one thing and behind the scenes they take 3 other things away.
Don’t forget that the bonuses for that year happened to be $1,000 less. So IBM had put out a giant press release that everyone got $1,000, instead of the real fact that they took $1,000 they would normally give, restrict on how we could use it, and then set it up in a way where we probably would never see it.
IBM = Indian Based Majority
RSS (Retail Store Systems) just got sold off to Toshiba, so the plan continues to cast off US assets and personnel, down to the rumored 18K US permanent employee personnel resource headcount .
https://www.reuters.com/article/2012/04/16/nikkei-idUSL3E8FGA1A20120416?feedType=RSS&feedName=industrialsSector&rpc=43
Excerpt
(Reuters) – A unit of Toshiba Corp will buy IBM Corp’s point-of-sale (POS) terminal business, which includes cash registers and related devices, for 70 billion yen ($870.86 million), the Nikkei reported.
IBM holds the top slot in the global POS terminal market with a share of 22 percent and counts Wal-Mart Stores Inc and Toys “R” Us Inc as customers, the Japanese daily said.
Toshiba Tec Corp, which will make the purchase, is ranked fourth worldwide and has a 7 percent share, the newspaper said.
IBM technology will strengthen Toshiba’s cloud computing services that enable stores, shoppers, manufacturers and others to exchange information and offer services, the Japanese daily said.
Toshiba Tec aims to close the deal, financed mostly by cash reserves and bank loans, by the summer, the daily said.
I tried googling “18,000 permanent employees”. Got 25 hits but none mentioned IBM.
Several people in the Yahoo IBM groups have called attention to Bob Cringely’s recent article pre-announcing an article to be released on Wednesday.
Bob says “It’s audacious and surprising and I’m pre-announcing it now, frankly, in hopes that doing so will knock loose a few more details that I can include in that column.”
We can assume that many people are anxiously waiting for Wednesday to arrive to read the audacious and surprising news. So then let’s call it the Wednesday Watch. Maybe Cringely is all wet or taking liberties with the truth. Time will tell, but for now let’s call it the Wet Wednesday Watch.
Regards,
IBM Group Owner
http://groups.yahoo.com/group/IBM/
IBM has laid the long term plan for control of ALL business machines revenue, a long time ago. As an employee for nearly 30 years, in the late 1960’s to the 1990’s, I saw first hand their deliberate manipulation of their customers’ businesses by virtue of their Mainframe leases and sales. No one, outside of IBM executive management and “fellow” engineers and scientists, would really know what unique software precautions that IBM took to protect the “revenue faucet” from being shut off. Spy on their customers?? Yes, maybe to a degree that keeps them connected to IBM’s DB assets and patents. Am I suggesting massive conspiracy? Ask yourself this question: When has IBM NOT conspired to remain relevant, on a global scale? Their mainframes have been significant tools for the Banking industry, Insurance industry, and most of all, governments of all sizes; who were able to ‘afford’ a $22 million 1980’s mainframe, leased or sold to them outright. In the mid 1980’s, IBM’s revenue was reaching $67 billion a year. Much of that was sales and leases of mainframes. Consider how many customers of mainframes IBM would need to gather a revenue of $67 billion..! Now think about why IBM WOULDN’T want to keep those companies tethered to them for as long as possible. Maybe this all sounds crazy and conspiratorial; but remember that IBM has not really faltered since the mid 1990’s. Before that, they hadn’t lost money until then..really. IBM has dominated the world-wide “business machines” business since they realized the impact of punched cards, in 1930’s Germany. IBM wasn’t only “Think”ing….they were learning as well.
There is an old saying… “After you shake the hand of an IBM exec, count your fingers.”
Mr. Cringley, please prophesy!
We’re all waiting….This article has already gone viral inside ibm. We’re waiting for the follow-up.
Similar to others, the BBC has also said it’s the POS systems that have been sold to Toshiba:
https://www.bbc.co.uk/news/business-17751813
However, I suspect that Bob knows a bit more than this!
Is the update supposed to be on THIS page?? It’s Wednesday..or least that’s what my IBM calendar says.. What up Bob?
Bob’s on the west coast….. it’s still early there, or maybe he needs extra time for all the dirt.
Interestingly, when I posted I found that the timestamp was four hours behind EDT. Either his server is still on PST or it’s based in Alaska. 🙂
Server time can be set to anything the Sysop Admin wants it to be. Doesn’t mean squat. Just sayin’…
IBM employees! April 24. Informational picket lines on job cuts and offshoring.
List of locations http://www.allianceibm.org
All welcome!
Make your voice heard on the destruction of IBM US jobs!
You need to show up at next weeks stockholders meeting, and in large numbers. Picketing IBM facilities is a waste of time. No one really works there anymore. They sent everyone home and/or laid them off.
Maybe IBM took out a gagging order on him?
Hey John,
“You need to show up at next weeks stockholders meeting, and in large numbers. Picketing IBM facilities is a waste of time”
Most of the folks picketing IBM facilities used to show up regularly, even with stockholder proposals, to IBM stockholder meetings all at their own cost.
You know why they are choosing to picket instead? Since they knew or found out going to an IBM stockholders meeting was akin to sitting in at a Politburo meeting of a communist state. Picketing will raise more awareness. Showing up to an IBM stockholders meeting is a waste of time. IBM controls the meeting totally. Any awareness made contrary to the good of IBM is basically ignored. No one really cares about the meeting unless they want to hear first hand they get a few more pennies in stock dividends. That is usually the only news. The IBM executives and staff who get to travel, take a day or more off, and spend lavishly on their expense accounts are the only ones who benefit from showing up to it.
Bob will agree that IBM USA headcount by 2015 will sit at no more than 60K. Once IBM starts RAing Indian resources in large numbers now IBM will open shop in Equatorial African countries where all IBM has to do is feed the employees instead of paying them.
Smells like the Akers era. I knew all along that the plan was to bump up stock prices for the CEO and then rape the company. This is the IBM corporate way. Up the river without a paddle.
Companies that innovate will thrive. What was the last product invented by IBM that rivaled the iPhone. The entire economic stratosphere is based on demand for products and services. Show me the innovation and I will invest, but not one dollar here.
Absolutely dead on !
IBM’s downfall has been a long time coming, first it was the effort on salaries to compare how “penetrated” you were, which was basically an excuse to not give rasies and give execs MS Pwerpoint ways to show “savings”
Anyone that has worked in IBM knows, office supplies, gone. Thank you awards, another lie, they cancelled those and said management would replace them with something, they replaced them with resource actions.
PBC, this past year, I have heard from SEVERAL managers that they posted their assessments, the higher execs basically said, take your numbers and subtract one, again, some dumbf##ks made powerpoints, even though adter the past few years, release schedules slip, and that is combined with aggresively driving deliverables, while in the back pairing down what they can actually deliver, Cognos 10, slipped, I am sure a lot of other releases slipped and what they deliver slipped as well.
They do still have the cheerleaders, that is the problem, cheerleader being defined as a successful IBMer who whether they believe or not, will spout whatever is enema’d to them, in all actuality, most if not all IBMers are in this phase, seeing how many more paychecks they can get before they are thrown under the bus.
One thing is clear, and a thing IBM execs do not know or are unaware of, a LOT of IBM’ers basically are front loading their PBC’s trying to say the right things to keep their jobs, Quality? What a joke.
For that new hire that said he is “bleeding blue” good luck with that, come back after a year or two of being on conf calls 6 hours a day, early morning to late at night, then also being expected to do another 8 hours of work a day, then after doing what you think is brilliant work, get told by your manager, eh, you got a 3, so no profit sharing, no raise, ( hell that’s true for a 2 as well) then come back , if you are still there and comment.
IBM is hiring “Project management interns” of course again on pwerpoint that looks good on paper, yeah hire a new grad with no experience, the one plus on this is the people that take this up will get good “drink from the firehose” experience which will serve them well in the next job.
For the rest, well , guess we are going to contract, but with that, OK I will contract, no overtime, then, friday at 5, I am off the clock, need something done by Monday, nope, guess we wil need to keep very detailed records to counter IBM, but, fully willing to give effort, but if your plan fails, it is on you , and being contractor, sure, cancel contract , just means you will have to bring someone new on, and try to recover, IBM seems to be using the Chevrolet or Chrysler model, it will fail,
What I find interesting about your column and all the comments, especially the disparaging ones about IBM and its proposed elimination of the American worker is that Ms. Genny has not come out and refuted one single word. It is not what Cringely says that is important here..it is what IBM is not saying in respond that is truly frightening.
Time to leave IBM. What would be great is if creditors would start to deny credit to people based on their employers layoff practices. Then IBM couldnt get any employees.. might change things.
Interesting series but I think you answered your own questions/comments/thoughts here in this post from a few months ago
https://www.cringely.com/2011/12/why-big-companies-cant-change/
I am a long time IBM employee. I have no love for this company because it has no love for me. I have never called myself an “IBMer”. I am a mercenary. Those Smarter Planet commercials with people saying “I’m an IBMer …” make me cringe. My advice … adapt, improvise, overcome. Keep your focus on customers and make some money for YOU and IBM. That is what this money hungry company worships and will retain in the U.S. … moneymakers.
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calculatoare second…
[…]I, Cringely » Blog Archive Watch out IBM! – Cringely on technology[…]…
I know several IBM employees who serve customers. IBM is #1 unethical company. IBM Chairman, Sr Executives, HR People, Appeal Department Directors are lairs and they DO NOT HAVE ANY integrity. IBM Business Conduct Guidelines are total joke. IBM Counselor force l employee to certify BCG; on the other side, if you go Open Door or Report any unethical activities of IBM Management, IBM Chairman and IBM Appeal Department will retaliate against you. IBM Sr. Management and HR Partners have no values or honesty. Please encourage All Students, Customers, and Government to boycott IBM. IBM employs many BCG Violators. You violate BCG and solicit >$30k Entertainment from suppliers, you will promoted. If you report to IBM Chairman, IBM Chairman, Sam will send Appeal Department Director to terminate your employment. So, join the club and violate IBM BCG; you will be protected by IBM Sr. Management and IBM HR People.
I know several IBM employees who serve customers. IBM is #1 unethical company. IBM Chairman, Sr Executives, HR People, Appeal Department Directors are lairs and they DO NOT HAVE ANY integrity. IBM Business Conduct Guidelines are total joke. IBM Counselor force all employees to certify BCG; on the other side, if you go Open Door or Report any unethical activities of IBM Management, IBM Chairman and IBM Appeal Department will retaliate against you. IBM Sr. Management and HR Partners have no values or honesty. Please encourage All Students, Customers, and Government to boycott IBM. IBM employs many BCG Violators. You violate BCG and solicit >$30k Entertainment from suppliers, you will be promoted. If you report this to IBM Chairman, IBM Chairman, Sam will send Appeal Department Director to terminate your employment. So, join the club and violate IBM BCG; you will protected by IBM Sr. Management and IBM HR People.
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