Any updates? This is inevitable but wondering where the cuts will be.
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The cuts will be where they have always been. Services. IBM’s results around cloud/data (Redhat), AI, and Systems were better than expected. GTS and GBS were worse than expected. Services in GTS consistently bleeds at a 5-7% rate year in and year out. Until IBM offloads them, (HPE anyone) or figures out how to Outsource at a more profitable rate than the competition, this bleeding will continue. IBM has a very nice backlog in GTS which is a nice annuity that has value. I would expect IBM to take advantage of that value. GBS on the other hand was completely unexpected. IBM saw it coming with the covid arrival, but could do nothing to offset it. As covid cases increase/decrease around the World, look for GBS revenue to run in parallel with that. If covid persists GBS will have to revise their go to market strategy. All in all, services continue to be the under performing sectors within IBM, and further cutting or spinoffs in first world nations Or greater efficiency are the only ways out of their “legacy” cost structure. As such expect more change coming down the services pipeline
4pxi. I don’t believe you and I were listening to the same conf call. AK and Kavanaugh both definitely said they would take structural actions as needed to continue IBM’s transformation. NOTE GBS and GTS continued in 2nd Q to bleed revenue. (approx 8% and 5% respectively)
“In Global Technology Services, revenue declined 5%, fairly consistent with the first quarter’s performance. We had signings growth in the quarter and strong growth in cloud revenue, but this was offset by continued declines in client business volumes. As we’ve talked about in the past, about 90 percent of GTS’s quarterly revenue comes from contracts in our backlogs.
While this business has a high mix of recurring revenues, there is some variability in that revenue stream. We provide clients with flexibility in their capacity to deal with volume changes due to their business needs and macroeconomic environment. As the pandemic intensified through the end of March and into the second quarter, we experienced lower client-based business volumes reflecting challenges across industries.“
The operative words are “we provide clients flexibility”. That means as IBM loses revenue they will take appropriate actions
No Q3 layoffs.
Carefully read this news piece: https://www.timesnownews.com/business-economy/economy/article/pm-modi-meets-ibm-ceo-arvind-krishna-ibm-commits-big-investment-plans-for-india/624416. When former CEO Sam Palmisano shook hands with then India PM, over 100,000 jobs went to India. It doesn't take too much imagination to predict what will happen next.
Jango, "Welcome to the new IBM. It’s all about cost take out."? Where you been the last 25 years??
It about year that no new hires on employees who left
It’s all about cost take out, and farming opportunities. Nothing more. IBM is moving to an ultra low cost structure for all opportunities. If they can use a skeleton crew to work an opportunity in the USA or Europe consider it done. Drive costs out of the system is the mantra. One of the posters here said IBM was driving toward a 100k employee population worldwide outside of India. That may be too conservative, with IBM deciding to structure the entire operation to a “gig” engagement policy. That would be the ultimate low cost engagement structure with IBM investing only in relationship skills for the fortune 1000 along with a skeleton crew of Base necessary infrastructure and technical Skills. Now ask yourself isn’t that the ultimate goal of any cloud/AI/services organization? (amazon/google/Microsoft have certainly moved down this path at a much faster speed). Welcome to the new IBM. It’s all about cost take out.
There has been a lot of chatter with no source. The best information will come off the shareholder meeting on 7/20.
Unless a manager claims they had to submit names, don’t listen to anyone else. This year has been nuts and can not be compared to others