Thread regarding IBM layoffs

6wzc This is why IBM will always keep Z. Security is built in from the ground up. 60 years of experience confirm that. Hyperscales wish they had this, and one of them will finally buy it from IBM. NOTE GBS read this article and you will see your future (Govt, financial, Healthcare, and Telco) No others need apply. This is where AK is taking IBM Redhat conversion, built on mainframe harvesting/modernizing and enhancing the legacy SW stack, on Fortune 500 customers. Everything else is a rounding error

https://thestack.technology/ibm-cloud-howard-bovill/

IBM will keep on divesting businesses until there is no more IBM company. This is for the executives to keep on cashing in on their oversized salaries, bonuses and stock. The executives don’t care about IBM.... they use IBM as their piggy bank.

The board is complicit because most of the board members are CEOs, former CEOs or other high level executives that do the same thing at their companies, not to mention they get paid huge amount of money from IBM to shut their mouths.

It will never change, IBM will be no more in 5 to 10 years from now.

This is the amount of time you may have left at IBM if you don’t get caught in a layoff.

Wake up folks...

@6wkk Good analysis. In a rational world what you say makes sense, but now look at it from IBM perspective.

They can't cut mainframe because (a) revenue and (b) those are the customers they want to bring to IBM Cloud (haha, no really...) so they can't piss them off. But those mainframe customers constantly demand "you have to bring xyz to the mainframe or I'm dumping it". I can't tell you how many pointless, stupid ports to z I've had inflicted on me because just one z customer demanded it...

Anyway, my point is that if they cling to z, it drags along bunch of storage, software, etc. baggage. And I can't see them making a clean break from z.

There was a “cloud technology” assessment higher up on the chat board by Bob Evans. He claims 4 businesses are responsible for 15 billion in revenue, but they generate zero profit. Cognitive/Watson applications, Power, Storage, and TPP. He claims IBM should keep Cognitive/Watson (6 billion revenue) but re-org it to generate profits, while Power (1.5 billion) , storage (1.5 billion) , and TPP (6.5 billion) should be discarded. That means another 9.5 billion in revenue comes out of IBM and reduces the revenue to the approx 45 billion mark IF you factor in Redhat growth. 45 billion / 350k per head results in 125k heads total for new IBM, OR 25k more than the above estimate after factoring for zero profit parts of IBM. That means IBM from Jan2020 to new IBM must result in approx 134 k heads eliminated. 350 - 90k GTS - 125k New IBM = 134k heads eliminated Again all just speculation, but it kinda makes sense given we are transitioning from Legacy (divorced except for mainframe/enterprise interests) and embracing a Redhat strategy focused on established IBM enterprise accounts. I believe this is the ultimate goal Transform IBM into a Redhat/hybrid cloud/enterprise Fortune 500 engagement process. You keep 1/3, you spin 1/3, and you RA 1/3

109k layoffs... I don't think it is enough... AK need to go bigger

Wow those are shocking numbers...but yes I do your estimates as accurate.

But trying to make sense of NewCo spin-off. This is initial first wave of deep cut before they break off...with a lot more pending that will NOT move to NewCo. Also something's not adding up about Systems...why never mentioned?

Ok?

You can actually run the numbers backwards to see where they come out from an efficiency per employee point of view. IBM in 2020 had 350k employees and did 73 billion in revenue. OR approx 210k per employee. GTS has announced it wants 90k of employees on revenue of 19 billion. OR 211k per employee NET a break even of where IBM is at. My guess is it’s a 50% move up the value chain as a lot of heads were cut. So what does that mean for the remaining IBM? Since you chopped the body shop low/no growth portion of IBM out, I would think your expectations for the remaining IBM would be a higher efficiency rate per employee (300k is the average for Fortune 500, with 375-400k per employee being a higher growth company) Let’s figure IBM wants to improve via cutting GTS out by 60-65% (210 x 1.65 = 346 so let’s round up to 350k per head) Remaining IBM (sans GTS) is 53 billion divided by 350k per head = 151,000 heads in new IBM. So 350k (jan 2020 starting number) - 90k (GTS) - 150K (New IBM) = 109k layoffs