Thread regarding IBM layoffs

Huge misses being forecast by Zacks on both earnings and revenue:

This technology and consulting company is expected to post quarterly earnings of $2.14 per share
in its upcoming report, which represents a year-over-year change of -32.5%.

Revenues are expected to be $17.72 billion, down 7.5% from the year-ago quarter.

https://www.zacks.com/stock/news/1000225/earnings-preview-ibm-ibm-q2-earnings-expected-to-decline

I absolutely believe IBM will come in low on revenue (what else is new eh). BUT the services aspect of IBM (especially GTS) due to their long term contracts will moderate the downturn Also HW is almost a rounding error on IBM’s overall revenue number so even if the entire sales term misses by 10% it’s only a 140 million dollar miss, using 1st q results. IBM does have the Redhat deferred revenue (remember the accounting for Redhat) that will be additive That most likely will make up the HW miss

I work in sales and can confirm Q2 will be a dumpster fire earnings report. Our team missed our numbers by over 10%. Bracing for another massive layoff round in August.

huge miss on everything. IBM is losing so much business.

You will care if IBM nukes you due to a revenue shortfall. Remember the equation is “as goes revenue so goes headcount“. (If revenue drops 4%, head count will drop 4%) Also note the 4% will come out of the high cost countries

Nobody cares

Offshoring is, paradoxically, a short term (medium term at best) plan. The more US companies ship jobs to India, the more salaries and cost of living in India rise until eventually the world becomes "flat" - it doesn't matter where the job gets done, it costs the same and pays the same. Offshoring only works because there is an artificial "dam" between countries where you need $100 a day and you can earn $100 a day; and those where you need $10 a day and you can earn $10 a day. Water is flowing from one to the other and eventually they will level out. (And that's not a bad thing, unless you are OK with Western wealth being at the expense of Third World poverty.)

But eventually, there will be no advantage to shipping jobs to India or China or the Philippines or wherever. Costs of living will equalize. Colonialism only worked as long as Western countries could limit the colonies to producing relative low-value commodities while selling back to them high-value finished products made from those commodities. (By the way, that's a lot of what provoked the American Revolution: happy July 4th, appropriately enough.) With information businesses, that model simply doesn't work.

All of which is to say: offshoring only works as long as everybody else doesn't do it. Good luck with that.

I would say something very close to first q. Revenue miss of 3-4% with earnings make of 1-2 cents. Earnings would have missed, but IBM will take the previous charge taken in 1st q to reduce expense Remember that was approx a billion, and they most likely added another billion on top of that for the recent downsizing’s. AK is serious about getting SG&A costs down by quite a lot. Rumor is IBM headcount outside of India and other low cost countries is heading for 100k total. This is not exclusive to IBM, but every major company I heading this way. Covid has proven that offshoring can be increased to a 5/5/5/85percent Plan. (5% direct sales, 5% deep technical (local) support, 5% overhead (management, AA, HR, etc etc), and 85% off shore perform. Expect that plan to be executed thru out 2020

Big miss but they will blame COVID, international currency fluctuation, locusts, and the dog ate their homework, and they will get away with it again.

Probably miss on revenue, but meet or slightly exceed on earnings... as usual.

No revenue growth means no progress, though I heard the CEO said that he is on a 5 year plan... so don’t expect revenue growth any time soon or ever!