Our new CEO addressed layoffs at his office hours meeting today. I like that he is honest and talks straight unlike Ginny, A very nice change, I wish he was in charge years back. For those that DO NOT work at IBM I will not say what he said because I believe its none of your business since it does not effect you. If you lost your job with IBM In the past please move on. This site should be for those still working at IBM and Red-hat. He addressed layoffs in as much details as a CEO can express. if you work at ibm and had not heard the video, take a look. take care
58 replies (most recent on top)
@9iuw,
IBM should be saving millions with mortgage and rent forbearance still active in several states.
Let’s face it, nobody in India is getting the ax. Goodbye to 15,000 coworkers in the US and Europe. Will anyone be left after this or will it just be Armonk and India?
900 million was the 1st q charge. The CFO implied there would be more charges that are self funding as the year goes on. The impacted headcount depends on the base salary of the impacted workforce, and the county that they reside in. Previous charges have usually impacted 15-20k per billion in Europe and the USA. India due to their lower salary structure could impact more
How large is the charge and what does that translate too as far as number of people
6 of one, half a dozen of another. 30/90. Or 90/30 = the same amount Of money net to IBM, and you’ll get the same amount of work person wise out of either offer. NOTE IBM has already taken a 1st q charge
Put down your hash pipe, IBM is not giving anyone 90 day severance pay.
Kinda makes sense (30 day notice and 90 day severance) in that they want you off the books in 2nd q. Good luck to all
Personally, I would prefer the 30 days notice and 90 days severance, rather than the reverse. Sitting at your desk for three months waiting for the nightmare to end would be a bit too much. I would rather take the money and move on already.
- should read “(Bit of a change from previous RAs)”
Previously the plan was 30 days notice - 90 days severance (but if a change from previous RAs) No clue if that is still the plan.
QUESTION: So the current rumor/expectation is that the 1Q RA will be announced in 2 weeks? Is it expected that there will still be the 90 days notice and 30 days severance? Or is it possible - and of course with IBM anything is possible - that the 90 days will be cut to 30 or 60 days due to the delayed announcement?
second confirmation. announcement in 2 weeks. this is the planned one from Q1 that’s finally happening now after being delayed b/c of covid. decisions were made in January February.
@Ym5IM Is this fact or guess? Inquiring minds want to know!
Announcement in 2 weeks
IBM changed their severance (30 days) and incentives (Health care bridge/cobra) in 2016. I have not seen any other incentives ever offered EXCEPT for a limited work schedule for a guaranteed leave date. I don’t expect them to reinstitute an incentive or sweeten the severance at this given time. They could force you to choose the lesser of two evils, (Leave with old pension, or stay with new pension), but again that would be your choice if they decided to impose it. If they sell you, you leave IBM on date A and start with company XXX on date B. (you don't get a choice, but sometimes the new company will honor your time at IBM for vacation). They hold all of the cards, and with the economic virus down turn, they will get cheaper, not more extravagant. All we can do is wait for the announcement. As previous posters have said, the clock is running on our new CEO, so I would expect something much sooner vs later. Potential buyers know this too, and will drive a very hard bargain unless IBM can advantage them in some other way, besides just a flat out purchase
@6xyu+ - I really hope your package is better than the ones from Red Hat. What was given at the close of the acquisition was paltry.
And yes.....they really did happen in spite of what people claim. Management kept it very hushed and instructed our team not to talk about it in any group meetings.
@m5IM Agree! I would love to have the chance to accept a package. Just get on with it!
Would be nice if someone would post facts about exactly when IBM will make layoffs, how many/percentage amount by geo/what the severance package will look like, etc.
Opinions on what IBM will sell off, for how much, etc. are nice to allow you to sound smart;
but no one other than some IBM execs and a few Mckinsey/other hatchet people have any idea what will happen.
GLTA
IBM gets 85% of their revenue from established enterprise Z customers. They do not care about customers who have abandoned Z. They know they will never come back. Their goal is to keep the monopoly they have and exploit that monopoly to advantage IBM. That’s why they bought RedHat, and are restructuring services around Redhat. Everything else in IBM’s portfolio is a rounding error and doesn’t fit into the go forward strategy
"IBM is hoping to take enterprise via Z"
How many "enterprises" that haven't been mainframe customers for the last 30+ years have decided to buy their first one in the last few years?
Remember that Apple abandoned PowerPC back in 2006 because the could not deliver something that was competitive with x86. IBM had already squandered their lead by then - it just took a while for Intel and AMD to catch up at the higher end of the Power family.
If a company were starting from scratch, is there any compelling reason to go with Power vs x86 or even ARM?
Put the lipstick on the pig that is GBS and “Sell, Mortimer! Sell!”
Won’t happen but I wish they would sell GBS. Our compensation is bottom of the industry, we have no incentives, and talent is poor. please put us out of our misery!
Huh?
IBM cloud running on power?
If ibm were successful in doing so, they wouldn't sell power in 1st place. Major FANG companies are doing vertical integration and started their own HW division. IBM already has a hardware division but cant take advantage.
Example: both softlayer and Watson tried to run on power and failed.
Ibms own cloud and other services run on x86.
Power is so far behind.
Maybe the reason ibm hasn't sold it yet is there are no willing buyers
Power and Storage will be Fire saled off. Lenovo bought Intel for approx 33% of sales. Power will have to go for less than that as the industry has moved to scale out and Cloud. (just look at SAP, Power enterprises biggest ISV). Storage has moved to commodity, and IBM will sell it for the IP content. Again IBM can make the fire sale look better via a structured deal where IBM picks up the investment for 10 years, and/or guarantee whoever buys the divisions all of their cloud business. Ask yourself this question. How many Cloud providers has standardized on “enterprise boxes”. Of course it’s none, and IBM is trying to build the business model for one around Z. This leaves Power as odd man out. Intel is taking scale out via cloud, and IBM is hoping to take enterprise via Z. Whoever buys Power will buy it for the legacy replacement business which is fading at warp speed. 25- 35 cents on the sales dollar will be a good deal for whoever buys it. IBM waited far too long to harvest their IPO. Power. AK has pushed all of his chips in on Z.
The power team would love a sell, we have been left hanging with no direction from ibm
500 million for power and storage = 250 million each. That’s approx 25 cents on a years sales. If IBM says they will do the chip design/development for 10 years and guarantee a market for their cloud for 10 years, someone will buy them just for the manufacturing
(Mostly management trimming and spreadsheet jockeys) >agile
Nepotism also is k–ling this company like a cancer.
@3psj+14QYm5IM
All good points but no ones going to pay 500m for power now - should have sold it 2 years ago. They already lost new doe bids for p10 and cant compete even with amd or arm servers let alone intel. It'll be good to get 100 mil for power.
Also storage is heavily dependent on mainframe if I am not wrong. Dont know if anyone would buy power + storage combo is my point.
@4jmj – https://www.reddit.com/r/newIBM/comments/fuhyxz/just_lost_my_new_job/
There is a person who quit their job and had IBM rescind their offer 2 days before their scheduled start date.
Thanks for that info, @2vts . Much appreciated.
@2vts check out the New IBM subreddit. There is a person who quit their job and had IBM rescind their offer 2 days before their scheduled start date. Do not accept!!!
I believe number 4 will be sold as is. The RA that needs to be done in the perform part of the business (Mostly management trimming and spreadsheet jockeys) is known and will be factored into the price. (NOTE the buying companies have run lean mean perform machines, because they had to, to stay competitive. They are buying the backlog that IBM has built up over the years, but has failed to make competitive. IBM has always had this problem when they tread into commodity pricing whether it be HW, SW, or services). IBM has sold divisions “as is” before when they sold Intel servers to Lenovo. IBM over stuffed the Intel sell off, and Lenovo had to deal with the over stuffing. NOTE Lenovo offered far better terms on their RA vs IBM’s, but it was factored into the price so IBM didn’t get the bad RA publicity. Good luck to all, as it’s going to be a wild ride for the remainder of 2020. I would expect AK to show his hand by the end of June, as he was tasked by the board to stop the bleeding via a 1000 cuts, and get it done quickly.
All good options! Do you see #4 being combined with an RA or just selling the divisions as is and the new proud owners sort all that out?
So if you were AK what restructuring would you consider essential to change IBM’s strategy/culture and put it on a track for success? There are a multitude of solutions. Here is one crazy idea
- Sell Power and storage. Arrange terms to advantage AI. (most likely leveraging IBM research via a 10years deal). This dumps HW, channel, TSS, open power, and services around power and storage
- Encourage 60+ to leave. (most likely accomplished via pension (use it or lose it), and Healthcare incentives (bridge to Medicare))
- RA duplicate Redhat/IBM employees
- Selloff perform side of GBS and GTS And combine remaining services into one services org.
What would each cost, and what would each yield. 1. 20k heads gone, with IBM netting 500-750 million due to sale. 2. 20k heads gone, with IBM pension absorbing all costs. 3. 15-20k heads gone, with 1 billion dollar charge. 4. 70k heads gone with IBM netting 5-8 billion for the sale. All total IBM drops 10-12 billion in revenue, but comes out much more cloud/Ai/enterprise aligned. This is the modeling AK is looking at, and will decide before June30.
7 weeks until the end of the second quarter within which time CEO Arvind Krishna said there will be some layoffs.
"7 weeks...... " Until ???
7 weeks......
- and you can find most of those people here in these forums!
My concern is that I take it only to be caught in the middle of a layoff.
There are multitude of reasons to avoid IBM. Layoffs shouldn't be your only concern. IBM has many problems; not least its culture.
IBM is bloated with employees that sit all day doing nothing; it is disgusting. A few of us do the job of the majority. Yet the only thing most of those in the majority do is complain about pay, benefits, and layoffs.