Does IBM need more cut or Apple need to add more ?
10 replies (most recent on top)
Cutting heads is part of IBM strategy . When I worked there , we had departments that actually did customer service work yet another department was looking at cuttings heads .
It was nuts . Like putting a dehumidifier and a humidifier in the same room .
It's not a meaningful comparison in so many ways. In particular, most of Apple's supply chain is contracted (outsourced). It's "effective" # of employees is much higher, they just don't all appear on the books.
These numbers are misleading. For the 350K IBM employees on paper, majority of them are outside of the US. The number of US-based employees is a best-kept secret, but is probably between 50K to 75K. On the other hand, the 130K Apple employees are mostly based in the US. Also the salaries for the employees outside of US may benefit from other tax benefits, for example, taking advantage of the crazy Irish tax laws. Using the average 1 US employee is paid 4 time higher than one outside of US, the numbers are actually comparable. However the revenue/employee ratio of IBM is still miserable.
Too many executives as well... I have always wondered why my internal cost is $240/hr... which is almost 500K a year, when I get only peanuts out of that!! LOL!!
IBM sole purpose is too charge outrageously high amount of money to customers so that executives can get paid outrageously well.
What does that tell you? Well, you better be an exec at IBM!!
IBM still has tons of pork fat . They should be a 100,000 to 75,000 company . Just look up how many lawyers they have . Start cutting and fast !
You are seeing the results of the services play “your mess for less” It was a good play when IBM needed any revenue to survive till tomorrow. Gerstner saw that, and adopted it saying “I’ll take my medicine (down sizing) later” It worked for a while because services revenue used to have margin in them. Then came the Indian outsourcers who truly offer up “your mess for less” because bandwidth is cheap and the disparity of on shore vs offshore labor costs. Services have a natural cap on them because it’s based on hourly revenue instead of innovation. Hourly revenue has a cost plus type of margin built in, while innovation has an unlimited margin built in (what the market will tolerate for your innovation) IBM has run out of runway when it comes to the services model They need to figure out what services are strategic to move the company forward, and spin-off the rest. IBM then needs to focus on innovation because that’s where the money is at. IBM will never approach Apples numbers, but then IBM isn’t selling a billion things per day either. IBM was seduced by the easy money to be made in cost plus (body shop), and failed to innovate, by investing in Softlayer when cloud was dominated by an e-book company, failed to innovate when they dumped Intel for Power then starved it because Intel owned the innovation side of the equation (developers), failed to innovate by ignoring their monopoly (mainframe) so that the install base could harvest value out of it instead of moving to Intel in the cloud. IBM this is your last chance as you are out of investment dollars. The play is Redhat/Ai/Cloud/Enterprise. What is the optimum number of employees to drive innovation? Figure it out and dump the rest That’s what the board, and the shareholders expect. My guess is 225k is in the ball park as you replace legacy SW with Redhat, exploit your monopoly/sales opportunities via Mainframe, and drive value by delivering innovative AI and cloud solutions.
What % of the 350K are rebadged customer employees sitting in GTS?
Quickly invest all of your money in IBM because it is clearly undervalued by a factor of 17x.
B2B vs B2C sums it up. B2B is a dead horse.
- God have mercy .. just numbers .. raw and unpity