Q2 end is around the corner which triggers next year planning which typically also kicks off RA process. This year is a curious one. Will Kyndryl separation be enough to satisfy RA god or will it demand more sacrifice? On one hand, the labor marketing is tight and IBM is not a talent-draw. Share price has performed reasonably well this year, for once. On the other hand, IBM is a finance-driven company that isn't growing with high overhead (IBM Corporate and exec ranks) and plenty of areas outside of hybrid-cloud (Watson Health). See where the 1st half result land.
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If not having email for a few days/a week caused sales to not happen you've got other colossal problems. That's a poor excuse.
Kyndryl spinoff is September 1. Don't expect anything before that but hold on to your britches on September 2 it's going to be real bumpy ride navigating the dead bodies. Guaranteed.
Well the quarter has ended, and with the email outage at the end-of-quarter crunch time, it is highly likely that:
(1) IBM lost sales that would have happened in Q2 that did not. Expect numbers to be lower.
(2) That IBM may find pending sales that were already in the pipeline canceled or postponed by customers, due to the email debacle, and now the former CEO of Red Hat unexpectedly leaving. Meaning Q3 might be worse than it would have otherwise have been.
It is doubtful that IBM will be able to engineer good Q2 results. The turnaround has turned around again and heading down again. This is going to get ugly. I am curious if they will be forced to adjust their guidance downward.
Of course this means layoffs after the ugly Q2 numbers are posted. And Q3.
As a competitor to IBM, I can't wait for the axe to fall. I don't mean that against those that are laid off - I feel for them - been there myself. However, it will cause so much confusion and upset to IBM's install base, that the company is sure to feel the impact from other companies looking to take advantage. Add to that the folks left behind needing to re-organize and keep on going. And the VAR's needing to take over. So much disruption for so many people.
That is why folk need to get out now if the can - i predict a long uphill climb for those that are left. And IBM are going to have to offer some juicy salaries to attract the right people afterwards/
IBM has announced a 3 billion dollar charge for 2021 to execute the current strategy. This doesn’t mean IBM will RA, but may execute alternative measures to restructure the company AKA Global Foundries (they wrote a check to dump heads and a non-performing business). The equation boils down to who may buy your shrinking or non-strategic business, and with what included head count. What IP revenue may that transaction drive for momma IBM, and is the transaction good for both parties over the long run. IBM is transforming itself back to a 1970’s/1980’s business model (farm the IP legacy) with an enhanced acquired Redhat strategy (grow/modernize what legacy you decide to keep that gives you advantage). IBM will exit most of the non-performing/non-strategic legacy as it doesn’t feed Momma IBM. They will farm that legacy instead via IP, and invest where Redhat brings them new market opportunities. That means hybrid IBM must shrink considerably. Currently Wall Street is expecting a 54 billion Hybrid IBM to emerge, but I suspect Hybrid IBM is actually sizing for a far smaller IBM in the 45 billion range due to Covid and the shifting business landscape. (yep that means IBM may sell/spin a larger piece of its slower legacy operation off)