IBM is now fully embarked on a desperate mission to cost cut itself to success. Since it cannot grow revenue due to too many declining legacy businesses, the COVID-19 economic crisis, and difficulties competing in the emerging cloud business, IBM must keep doing everything it can to cut costs to keep the earnings per share at an acceptable level. This is a one-way ticket to an early grave. As they cut higher quality people and replace them with lesser quality, the services IBM delivers will suffer and the customers will have even more reason to leave for another cloud provider once their strategic outsourcing or other service contracts expire. As IBM cut costs, it's reputation will continue to decline.
It is a death spiral that can only be halted by business growth. But where will this growth come from? Red Hat is too small to impact the IBM top line in any meaningful way. Cloud is a losing battle as the top 3 cloud services providers (AWS, Azure and Google Cloud) have been chosen by the marketplace already and Oracle looks like they are destined to be the # 4 player in the cloud. TSS is going to have increasing difficulty growing the business as hardware maintenance declines as hardware morphs into software on a server or moves to the public cloud. So there seem to be no options for IBM to re-ignite growth.
It is a nightmarish situation that IBM finds itself in. And one must wonder if IBM is doomed. They can lock-in and leverage the mainframe business to stay afloat but this is such a legacy move. Maybe becoming Big Brother with AI could be one way for IBM to survive. Hence, IBM must keep cost cutting until there is nothing left to cut and there is nothing left to move to India. Then what do they do.