The vultures are already circling. . .
https://economictimes.indiatimes.com/tech/information-tech/rivals-eyeing-ibm-spinoff-kyndryls-sub-50-million-clients-experts-say/articleshow/87920533.cms
11 replies (most recent on top)
The 20% of Kyndryl has a value of .75 billion currently, and had a 1.5 billion value day of issue. Either way, you are correct that it wasn’t a factor in IBM’s going forward strategy. IBM has gone all in on a Fortune 500 strategy which means they are way over manned. If the Fortune 500 strategy is going to work, they need to slim Hybrid IBM down considerably (think 40k) or get more business to support the current cost structure. So Who thinks the Redhat / AI / SW modernization strategy will generate a whole lot of new business vs the just farming the branch for business. I think IBM is destined to shrink as cloud is morphing to a commodity business
And your IBM layoffs are coming...Bruh
They are selling their 20%. This is no news and doesn’t matter
Bruh Every IBM’er should care big time, considering IBM owns 20% of Kyndryl
Not sure about "big time". 20% of Kyndryl is not that meaningful and is less meaningful every day.
Bruh Every IBM’er should care big time, considering IBM owns 20% of Kyndryl
Who care bruh. This is an ibm layoff board. Take the noise elsewhere
It’s all about labor rates. IBM via GTS moved a great portion of the labor to lower costs countries including India. Kyndryls problem is the average employee has 10 years of experience. (Kyndryls webpage is the source) And given that, they are still at a competitive disadvantage vs the younger companies. So how do you compete? Automate, innovate, or eliminate (layoffs) NOTE most larger companies will not change horses unless the savings are 15% or greater. The disruption just cost too much. That helps greatly with the partner ecosystem, but when you get to the commodity side of the business (Help desk, and yes Microsoft) it’s all about who will do it cheaper
Lose small accounts, try to keep the big ones. Transitioning to cheaper labor and geos. Competing for large accounts means smaller margins. Transition to cheaper labor again. Rinse and repeat.
Obviously Kyndryl stock is a dog. That's why IBM separated it.
Kendryl is in trouble as a business. Commodity business, too many FTEs, expense ratio too high for a commodity business……you get the idea. Just look at the stock price trajectory. The smart money is dumping the stock. No matter how much internal cheerleading, the company is ugly.
This makes sense if Kyndryl is going to focus on IBM’s partners solutions (eg SAP,Oracle, etc etc) There may be savings in letting the little accounts go as you make it up in personnel and overhead savings. That means Kyndryl may be adopting the exact same business strategy of AK (enterprise baby). If true expect Kyndryl to shrink.