Thread regarding IBM layoffs

its a sinking ship without any clear future for existing IBM employees

It’s difficult not to see the sale as a failure of IBM’s big bet on Watson to usher health
care into the AI age.

Abysmal failure to be more precise.

IBM has sold Watson Health. It was a long time coming. --
https://www.protocol.com/bulletins/ibm-watson-health-sale

@3nye+1eUxNxpu I disagree. Francisco has already got a head count and paid for assets and resources of that analysis. There are functional gaps for jobs that crossover like HR etc that will need to be created, but no hiring of FTE’s outside of that or the work streams already identified to divest will occur.
Some contractor houses coming in to do the divesting work but no cramming headcount in from IBM.

Job 1 = lower IBM’s costs to make the announced strategy profitable

To achieve job 1, IBM will stuff as many heads into WH as the new company will take (see lenovo intel sale)

It’s going to be an interesting week as the second shoe of streamlining has to drop, and earnings are usually the best time to get that behind you

We’ll know more at 4 o’clock Good luck to everyone

: @3pqg+1eUxNxpu I hear if they were non WH employees that supported the business are not coming with the acquisition. By the ones you called out, I would guess none. Either new roles created or Francisco supports those roles.
More clarification will be coming shortly

So how many of the "Shared Services" folks, who supported Watson Health, be sent over as part of the deal? For example, contract/sales support (Q2C), HR, legal, CIO, Real Estate, etc.

Since they stated that this will be a new standalone company, they'll need all those roles (unlike a merger where they could just be folded into the existing infrastructure).

@2gou+1eUxNxpu
As a member of the legacy group who has a mix of both for direct reports, I concur.

What I have expressed to my all my reports since the rumor started last year, the buyer will invest in the acquisition and people, whereas IBM does not invest in any of their current or acquired products and people.

Despite a short term “fun” slog, the long term looks brighter with Francisco than staying with IBM in another BU.

Just imagine being able to swindle such amount of money and get paid enormously.

They didn't know about ICD-10. That about sums it up.

I spoke to a few former colleagues of mine at WH to get their opinions. People are divided into two camps:

• Legacy Truven/Thomson/Medstat peeps who are excited to regain some autonomy and get out of IBM--the most restrictive, difficult company they've ever been acquired by in 40+ years
• IBMers who only know WH, feel no allegiance, and aren't close enough to retirement to justify living through all the "fun" an M&A brings

I expect if the contracts were moved to GBS, there is more potential in SW modernization/hybrid cloud/Redhat vs just the ISV sw stream

To @nae+1eUxNxpu: Do you think that those WH people who moved to GBS with a couple of few contracts that are still left in their "healthy pipeline" will bring any value there? IBM should let them go ages ago.

I doubt the analytic software has any real value at this point; IBM made sure of that. When I was there huge chunks of it didn't even know about ICD-10 and I am sure that has only become worse, and have you seen the years of "settlements" over IP violations for what analytics they did have??? (these statements you can find via google from others, no private info here).

I had no idea when I hired in that the division I worked under hadn't had a new sale in 5 years, that they had just been counting renewals as Sales Wins for the quarterly rah-rah calls. I spent enough time to make a difference where I could; still glad to have moved up and on. Good luck to my former colleagues!

"Sold, American!"

https://www.wsj.com/articles/ibm-sells-watson-health-assets-to-investment-firm-11642772712

By: Matt Grossman
Updated Jan. 21, 2022 4:46 pm ET

International Business Machines Corp. agreed to sell the data and analytics assets from its Watson Health business to investment firm Francisco Partners, the companies said Friday.

The deal is the latest step by IBM to refocus its core business around the cloud. The Wall Street Journal reported last year that IBM was exploring a sale of its healthcare-analytics business as a way to streamline the computing giant’s operations and sharpen its focus on computing services provided via the internet. The Watson Health business uses artificial intelligence to analyze diagnostic tests and other health data and to manage care.

IBM had big aspirations for its Watson artificial intelligence to help in medical research and improve patient outcomes, but the technology’s impact has fallen short of early hopes. Partners and clients have moved away from projects that were built around Watson technology in recent years, although IBM had spent billions of dollars making acquisitions to bolster the business.

“IBM took a risk of becoming a disrupter in the complex health care industry but was only able to garner limited success,” UBS analyst David Vogt said in a note Friday. He added that the Francisco transaction probably wouldn’t have a big financial impact for IBM because of the unit’s limited success.

IBM said that the deal wouldn’t weaken its commitments to other artificial-intelligence technology and to healthcare clients that use its IT services. Terms of the sale weren’t disclosed.

Shares of IBM closed Friday at $129.35, down 1.1%. The stock has fallen 3.2% so far this month.

IBM has been reshaping itself around an emphasis on cloud platforms that can serve companies across industries, moving away from sector-specific products like Watson Health. In 2020, the company named Arvind Krishna as its chief executive, choosing a leader who had previously run the company’s cloud and cognitive-software division.

Mr. Krishna’s appointment built on efforts to gain ground on the cloud-computing businesses of rivals such as Microsoft Corp. and Amazon.com Inc. A year earlier, IBM bought open-source software company Red Hat for about $33 billion in another move aimed at growing IBM’s cloud-computing prowess.

In November, IBM completed the spinoff of its Kyndryl Holdings Inc. IT-services business as the segment tried to stem a declining revenue trend.

“In the last couple years, we’ve been on an accelerated transformation of the company,” Chief Financial Officer James Kavanaugh said last month.

IBM’s hybrid-cloud business has been adding customers, but its growth faced a hurdle in slower corporate IT spending last year. The company’s cloud and cognitive-software business missed internal growth targets in last year’s third quarter, Mr. Krishna told analysts in October. IBM is slated to post its fourth-quarter results next week.

Francisco, based in California, has previously invested in healthcare companies such as GoodRx Holdings Inc., Zocdoc Inc. and Capsule Corp.

Good luck with all those unprofitable contracts. Other than the really unprofitable ones that ended up with IBM Consulting.

What a sh*t show of a business this was. Good riddance.

It’s a lock, stock, and barrel transaction That means everything goes. If you are retirement eligible, you can retire from IBM on Friday, and start with the new company on Monday. IBM is happy to reduce the head count and pocket a billion or so. Just one comment Buy high and sell low IBM board and exec’s that is just freeking brilliant Hey let’s give Ginni another bonus for that strategy. I guess you intended to make it up in volume. Brilliant absolutely brilliant

According to Bloomberg, Francisco Partners paid a billion and change. Note the use of the phrase "acquiring the assets" in all announcements. Francisco is not buying the "business", they are buying only the "assets" that in their evaluation still held some tangible value. The rest including the employees will be trashed.

Congratulations to all Watson Health employees!!! You’re free of the sinking ship!

And now the mass exodus begins. Like rats off a sinking ship. I've already seen a number of my Watson Health colleagues polish their LinkedIn profiles just this morning.

If you're IBM Retirement eligible, you better be sure to retire soon, or else you'll be stuck under whatever retirement program Francisco Partners / GoodRx offers.

@teq+1eUxNxpu It's EVERYTHING except some of the existing consulting contracts with the government and a couple of payers that moved over to GBS a few weeks back. All the SW and datasets.

https://www.bloomberg.com/news/articles/2022-01-21/ibm-is-said-to-near-sale-of-watson-health-to-francisco-partners?utm_source=google&utm_medium=bd&cmpId=google

"The value of the assets being sold, which include extensive and wide-ranging data sets and products, and image software offerings, is more than $1 billion, according to people familiar with the plans. "

"focus on our broader IBM business...". lmfao. Rosamilkia is yet another empty suit clown. broader watson business? ai is domain specific... effing id--t.

The great restructuring is fully underway SW anteed up healthcare as their table stakes spin-off piece. NOTE this doesn’t include RA’s (IBM’s pre announced 1 billion) which will address the overlap of Redhat vs legacy IBM cloud. The other two divisions (Infrastructure and consulting) will also have to ante up spin-off candidates as that’s how AK is focusing his executive team. (NOTE it’s a 3 for when you spin off You lose heads, get paid, and streamline the remaining company) Infrastructures table stakes will be Everything non-Z related. GBS will keep everything strategic related (think industry focused for what remains within GBS, (Finance, banking, insurance, etc etc)) The non-strategic parts of GBS will go most likely to someone who can offer up public cloud in a give to get relationship. Good luck to all, as the decisions have already been made, and it’s just a matter of execution

I'm dying to know the price. IBM spent $2.6B to acquire Truven in 2016, and then poured billions more into it. IBM was only asking for $1B for the entire Watson Health portfolio, of which this is maybe a third (and that's being generous). Most likely IBM got less than $300M for this. Yikes!

What we need to know is how many heads are going out the door with the acquisition.

This is the same Private Equity firm which owns GoodRx, and Eventbrite, and LegalZoom (among a bunch of other rinky-di-k names). Not joking. https://www.franciscopartners.com/investments

I'm sure the co--y Truven folks are gonna love this!

@teq - and which heads will roll for this abject failure? Answer : none!

Wait, so is this just PART OF Watson Health?? Sounds like the old Truven piece maybe.

So IBM spent Billions cobbling together Truven, Explorys, Phitel, Merge, Curam, etc etc ... AND NOW they're going to sell it off in those original chunks? Gee, brilliant :-/