Things are not as bad as some folks want you to believe. We haven't had a large RA in years. Just saying... I am not trying to minimize trouble that RA'd folks have to go through nowadays - I am merely saying that we are having less RAs if compared to previous periods. Do you agree?
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Marketing is next to get axed. A lot of $ wasted there on campaigns and ads for sub par products. Cut the fat of non-performing products and all their associated marketing budgets
Tim. IBM wants to be out of the body shop business in NA and in Europe. The margins just are not there. They have moved as many folks as they can offshore to compete. As the “hybrid” cloud strategy kicks in, I think you will see IBM exit more of the “legacy” services business. IBM NA generates approx 55% of IBM worldwide reported revenue. If you use the 80/20 rule of off shore vs on shore and an estimate of 150k worth of services employees, (150k x .55 x .2 = approx 16-18 k worth of Services heads. IBM’s NA head count after factoring in plants, labs, corporate, and remaining sales/marketing plus the 16-18k will come out higher than 30k. More like 50-60. Either way you are correct. NA head count will shrink. The equation most CFO’s use is as goes revenue so goes head count. If revenue shrinks 4%, head count will shrink 4%. Until IBM stabilizes expect continuing shrinkage. It’s the death of 1000 cuts
Last layouts in the US hit 1,000 in the June time frame , smaller layoffs are happening just about every week but we never hear about them. With only 30,000 or less employees in the US , another 1,000 hit is a lot. Service will probably be hit again and again until IBM is down to 5,000 employees.
How are the people offloaded to other companies (along with products) counted in layoffs? It seems the majority of people are thrifted in their new companies well before year 3 (or are made uncomfortable enough to leave on their own). Most are replaced with cheaper alternatives.
I ask this as the reduced lay-off count is likely also attributed to letting another company do the lay-off.
June 6th was pretty brutal. Especially in GTS and Managed Applications. And there was a follow-up RA in August.
I concurred with the comment “many frequent smaller cuts that avoids the headlines”. Management tactics to cut/dismiss IBMers continuous to be prevalent by setting up individuals (U.S. based resources) to fail via the Performance Improvement Plan (PIP) process.
That's the first I've heard of layoffs dating back to the 70s. I thought they started in the 90s with Gerstner.
Tell that to the 400 security people who have been cut in the past year. That's the new strategy: many frequent smaller cuts. That avoids the headlines, avoids the WARN act requirements, and spreads out the pain. It's one constant slow rolling ra.
The give 90 days working notice and 30 days severance. If you leave before the 90 you are considered to have left voluntarily, so you don't count against the official stats.
Pay attention to the calendar. IBM bought a new strategy when they acquired Redhat. Most large acquitions take a little while for the management team to realize what they have and how to go forward. It took Gerstner approx 120 days to digest IBM and to make a plan to move forward. (He came in in April, and layoffs happened in late July) Redhat came in in early July. I would expect actions to happen late Oct to early Nov. REMEMBER IBM bought a new strategy. That means any overlap “legacy” IBM folks Who are part of the old strategy are now duplicate. I hope IBM would dump the “legacy” folks via attrition, but the finances say IBM has to move faster and will not wait them out. It took Gerstner 1.5 years to “rightsize” IBM from 375k to 250k. I would expect the same from the IBM/Redhat team. IBM is moving to all LINUX all the time, centered around Enterprise. (Top 1000 customers worldwide) If you fit into that strategy you are good. If not, you may be vulnerable. Don’t believe me? Just go watch the joint Aug 2nd 2019 analyst briefing. They laid out their strategy, timeline, and financial plan. It’s just a matter of executing the plan now
There is a point where you can no longer do large layoffs.... there still have been smaller ones...
That 50 year low metrics is for the USA, not IBM