Some numbers from the UK.
https://www.theregister.co.uk/2019/08/15/ibm/
3 replies (most recent on top)
Aqu. It’s not about salaries, but more about IBM’s burden rate. IBM is notorious for having a 30-35% burden rate. Combine that with GTS contracts that run at 2-5% profit rates (see previous GTS employees confirming this) and you are going out of business quickly. GTS will most likely take the majority of cuts as that’s where the heads are, and that’s where the low margin / non-strategic workloads are. It’s a double whammy, and the markets have moved on GTS. Lots of companies in India and other third world nations will take the low margin business because they can It’s the nature of cheap bandwidth. Go to where the burden rate is lower
Headcount reduction only matters when the salaries are inflated so that's not GTS.
Other divisions will probably get hammered.
Sounds approx correct. Revenue down 7%, so head count drops 7%. Headcount and revenue are linked at the hip. Every single Fortune 500 company uses the same revenue to head count metric. Unless IBM changes strategy yet again, expect more of the same. I would expect the majority of the headcount cuts to come out of services, as IBM has trimmed the HW division to a skeleton crew supporting Fortune 500 customers (think enterprise sized machines). Cognitive division in general has a much higher profit mix, so services have to take the cuts. The CFO has been tasked with saving IBM’s way to prosperity, which means profit margins are taken into account when IBM decides where they wish to play or invest