Thread regarding IBM layoffs

IBM is a down spiral that will not stop any time soon... JW talks about getting back to growth, but it is still the same financial engineering as usual.

You would need to change the complete executive team... that means all the SVPs and the new CEO because he was one of the SVPs under Ginni, and he showed NOTHING!!!

@2lhz+15AOKWVi As a seller, I live this every day. 4 separate cadence calls per week. Multiple random emails everyday from people not in my management chain asking for deal status. I spend more time providing deal status internally than I do selling to customers. It's gotten worse since they introduced "tags" in the system, as a way for executives who aren't involved in the opportunity and have never met the client to get credit for sales of an "offering" that has nothing to do with what the customer is actually buying. Madness.

I have seen VPs and executives, fighting with each other for influence rather than benefiting the company. I have seen managers Band 9/10 doing daily claim chasing, hosting useless meetings, etc.
The management team across IBM needs to be refreshed.

I worked there for 19 years and lived through the rise & fall (of the Roman empire). We got complacent selling expensive hardware, software that didn't work properly and a bunch of costly services on top. And just when a customer thought he was all settled, he could start over, as everything was outdated. It couldn't continue for-ever, but we sure thought so. The one guy warning for this collapse years ago, was gifted with a 'party spoiler' T-shirt. Most of my years there were very nice times, but the best moment was when I was kicked out with a huge compensation bonus as a farewell gift, 2 years ago. Best thing that happened to me, at the right time. So long, Big Blue !

They are dressing the old girl up. AK should go faster and be more aggressive as it relates to getting out of low margin businesses. Someone will buy IBM. Why. The free cash flow is real money. Even if it shrinks at 3-5% per year, IBM can service the dividend and still have cash left over for a 10 year horizon. Someone will want that. My guess is the number 3 cloud provider will want to be number 2 some day, and getting IBM moves you into that position. IBM is a non-player in public cloud (that horse has left the barn), but they are a player in private cloud, and that’s where the Number 3 provider will focus. Don’t think of IBM as a provider of technology, but think of it as a target of someone who wants to grow quickly over the next 3 years. Given the marketplace, it’s impossible to grow your sales fast enough to get to number two, so you will have to get out your checkbook. IBM management is counting on that. NOTE to IBM management. Whoever buys you will lay-off 90% of you. Servicing a cash cow is a whole lot easier vs trying to grow a past her prime business. IBM pays close to 1 billion in compensation just for the executive management team. That’s an easy cost take out

New leadership is necessary but not sufficient. IBM needs a new Board of Directors and they need the handful of institutional investors who own a controlling minority of stock to divest. Running a big tech company requires massive CapEx investment which isn't possible when you're expected to dedicate most of your FCF to paying a dividend. It also requires managing on a longer time horizon than the current financial quarter and a focus on top line revenue growth rather than artificial EPS targets. I'm not optimistic that any of this will ever happen.

I'm going to offer an opinion that is somewhat contrary...

IBM does not need better leadership, or fresh leadership, or even just plain ol' leadership. In my opinion it needs _less_ leadership.

All of the BS with SVPs managing other VPs and demanding status in just the right powerpoint template and then making decisions about things they don't properly understand because they are so remote from the front lines: all of that is just symptoms of a greater ill. All of those layers of management are the ship's officers running around the Titanic trying to put too many people into too few lifeboats, and the "inspiring" initiatives and directives that they send us are the orchestra still playing "Abide With Me" as the water laps around their feet. They are, as Engels almost said, the violins inherent in the system.

The fundamental problem is this: a company this large - and that means _any_ company this large, not just IBM - with a "command and control" culture is essentially a "centrally planned economy"; and history has rendered its verdict on such economies. [And to be absolutely clear, I am talking about only the _economic_ failings of the Soviet system: if you wind me up and let me go, I will sing "The Red Flag" for you. Badly out of tune, mind you, but none the less enthusiastically for that. And if you cut me I will bleed Red. Um, like everybody else. Anyway.]

And just like the doomed economies of the former Eastern bloc, we get absurd outcomes because of the way decisions are made - by remote, under-informed people - and the way people are rewarded - for following the party line and making the right friends. And just as the Soviet Union had (proverbially) factories making only left boots (because the factory manager was measured on the number of boots produced, not the number of pairs, and it's a lot easier if you only make the left ones) and not enough tractors, and space programs that started out brightly then died over internal rivalries. And then the farmers get punished for not producing enough crops without tractors and the factory manager gets promoted for exceeding his quota and the space program is declared a huge national success and woe betide anybody who says otherwise, and so it is with IBM. I leave it to the reader to call up their own examples of IBM's left-only boot factories etc.

Fundamentally, it is impossible to effectively run a company this large by "command and control". The only way to run something this large is to truly delegate authority to a constellation of independent business units that can be managed at the VP level (or lower), and then have something like a "board of investors" that funds proposals from those business units and asks questions like "are you conforming to our corporate ethical standards?" and "are you producing a satisfactory return on the capital I've invested in you?", but otherwise not meddling in the operations.

And of course this will never happen.

IBM is operating in a hyper-competitive environment with the Public Cloud. AWS, Azure, Google and Oracle are much better organized and led in this Cloud War. IBM longs for the old days where they could leverage their monopoly on Mainframe and their incumbency to beat the competition. Now these advantages are no longer applicable and IBM's dysfunctional organization and weak leadership are causing poor performance in this new market. There is no saving IBM and the market doesn't see a need for IBM to be saved anyway. No amount of reorganizing or re-focusing will help at this point. The Cloud Market is already been defined and IBM is not part of the equation.
In the IT business, once the winners are determined by the customers, it is very difficult to change the market. IBM has no significant cloud differentiators (Red Hat will not be a measurable differentiator to drive cloud business). IBM is destined to be # 5 in market share in the Public Cloud. To go from # 1 in the Outsourcing business to # 5 in the Public cloud business is a business travesty. There is almost no point to be in this Cloud market with such a weak position. IBM will steadily sunset itself over the next 7-10 years. maybe even faster than that. IBM's opportunity to transform and pivot to cloud was 5-8 years ago but the management team was too un-visionary and too inept to jump into the cloud market and figure out how to win there in the early days. They just wanted to milk the Strategic Outsourcing and Mainframe businesses and deliver dividends to the shareholders.

I drank the kool-aid for sure & got laid off for being blind to the reality. IBM & its leadership have a very high opinion of the company despite a continuing legacy of poor performance. I have not been impressed by Arvind K & while Jim W seems pretty engaged I don't see how there could possibly be any sort of turnaround.

IBM does not need fresh leadership, they need leadership! As was said leaders inspire, willing to dig down and see that the troops are doing/thinking. When Ginny visited sites the local leadership hand pick who they wanted to interact with her. They stacked agile areas with mgrs pretending they were workers. IBM does have some good leaders left, but they are being drowned out by the 100s of VPs who do very little or nothing but make charts. Yes charts are needed, but does a VP need another VP to make them? That is a position a band 8, 9 or may I even say 10. Some of this started with Lou. I remember hearing of a person at my site sending him a email. His response was to the person's manager telling them to control their employee. (now granted I do not know what was in the email and maybe that response was warranted, but still not the way to do it) IBM can be saved if the right leaders are put into the right positions. But I am not holding much hope that will happen anytime soon.

In nearly all cases, the board and shareholders will agree that executive compensation should increase following a sustained improvement in certain metrics, typically based on overall operating performance. That's certainly not the case here.

Other CEOs live in the trenches.

Can't name one ground-breaking idea out of this/previous CEO. Stacking the deck to retire in luxury is what bureaucrats specialize in, and is not novel.

Grab-n-Run was easily outclassed by the competition. The annual reports since 2012 are the poster child for confusion.

Her successor will also survive IBMs performance metrics, and he too will sail into retirement on the lap of luxury. He Already-Knew.

He is again silent.

Agree. The new leadership should motivate the entire company with stability, inspiration and transparency.

IBM needs fresh leadership, not internal relocations, but completely new people from outside. The reason for the collapse of IBM is that many people in senior management have closed their eyes to the problem, or just do not care. The way to survive so far was to eat their competitor, but it no longer works.