Your thoughts? This is my gut feeling and I may be 100% wrong. I think this time is different and that they will keep RAs on hold due to COVID19. Whoever starts cutting now will get so much bad press it'll be incredible. Even United with 50% of pilots sitting doing nothing is deciding not to cut. So, I think they want to cut but they are afraid that it'd turn into a massive PR fiasco.
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For anyone who thinks RAs aren't coming soon:
https://www.stripes.com/news/us/the-first-us-layoffs-from-the-coronavirus-are-here-1.622069
I just cannot see how can be ethical for IBM cutting jobs during pandemic...
You are 100% wrong
Not for the Netherlands, volutuntary leave program is running, those who accepted (several i know) will leave the company. I
Layoffs in US are a sure thing. April, May, June
You are 100% wrong and pretty weak to post this lame theory.
rumor has it 30 day 'consultation' period begins in uk Monday March 9. Cloud and Cognitive group
1pqz. You really need to look at the numbers Let’s take 4th q earnings and remove everything non-cloud.
Cognitive = 7.2B. (1.6, 3.1, 2.5 B respectively). (Cog Apps, Cloud, TPP)
GBS = 4.2 B (2.1, .2, 1.9). (consulting, GPS, App Man)
GTS = 6.9 B (5.3, 1.7). (infrastructure/cloud, TSS) Cloud = 2.4 of the 5.3
Systems (3.0 B) (HW, OS’s)
Assuming we dump GPS and Infrastructure. That totals .2 + 2.9 = 3.1. Lets further assume TPP and App Management gets trimmed by 50% it nets 1.25 + .95 = 2.3
Total dump = 2.3 + 3.1 = 5.4. Times 4 quarters = 21.6
4thq revenue = 77.1 - all dump 21.6 = 55.5 remaining. This assumes you keep all cognitive, HW, TSS to service the HW, and all cloud. Is there swizzle in those numbers. Of course because we are using 4th q numbers. Any way you slice it an enterprise, consulting, re-writing legacy, and running cloud (what ever flavor) nets you a company worth at least 50-55 billion and it doesn’t have and extra 100 - 125 K worth of heads in it. NOTE the 55 billion company has a monopoly on the “cloud” flavor it is servicing since its Enterprise Z and Enterprise Power (both unique to IBM). The 100-125k shrink is a pile of savings for shrinking down and you have reshaped the company to play in the non-commodity part of the marketplace so you should be able to command some improved margin. NOTE IBM will have to come up with REDHAT, cloud, legacy offerings that are competitive with commodity to stop the shrink and farm the legacy (make it worth engaging IBM vs migrating) but isn’t that the whole point of this exercise
@1cbq RedHat already has dedicated consultants and their annual revenue was around $3B pre acquisition. IBM cloud already has dedicated consultants and their annual revenue is around $4B so your $10B estimate is on the high end but not too far off given Red Hat growing at a good rate. GBS and GTS aren’t needed at all if this is his vision.
@kqw - If Krishna's vision is really an IBM that is just RH + IBM public cloud + cloud consulting services, then get ready for a $10B IBM. Not sure what's going to happen to the other $67B part of the company. And I'm being generous with the $10B number.
The virus is a game-changer - or could be. They need a new playbook for the new world - no point in RAs that belong to the old world. This is not to say that there won't be RAs, just that the new situation mandates a fresh look at the numbers, once this thing has settled. To be honest, when this thing has settled, those numbers might look a damn sight worse.
IBM management has proven the only audience they care about is the shareholders. If a layoff would make shareholders happy they will do it even if the rest of the world thinks it's morally wrong. IBM is failing fast and they have to execute their plan on schedule if they hope to survive.
I think you are way over reading this. IBM has several different levers they could pull and not get one iota of scrutiny PIP, gradual layoffs that don’t activate WARN act, spinoff where they over stuff the spinoff, joint venture where they overload the venture with excessive debt. The most likely reason IBM hasn’t pulled the trigger yet, is they are still digesting the Krishna vision of IBM (enterprise cloud with consulting services complimenting the cloud built around redhat) vs the Ginni vision of IBM (perform services with cloud complimenting those services. Redhat was late to the vision). Once those visions mesh the plan will continue. NOTE Krishna is going to win