Thread regarding IBM layoffs

This does not bode well for “technology sales” when your leader jumps ship. Expect an announcement soon regarding the future of technology sales. Power, storage, and channel will most likely get sold off for an IP deal

https://finance.yahoo.com/news/john-teltsch-joins-converge-technology-123000157.html

Given the 1-2 dollars in Infrastructure drives 3-5 of SW and 6-8 of services, you can project the future of IBM’s efforts

Intel infrastructure HW = 0 as IBM has withdrawn. The SW and services are still viable, but you are competing with the body shops of the world so pricing is limited

power infrastructure HW = 1 - 1.5 billion per year and shrinking at double digits. This most likely results in Enterprise power (approx .5 - .75 billion per year) driving the 3-5 SW dollars and 6-8 services dollars, BUT the scaleout footprint is getting replaced by Intel thus driving very limited SW and services dollar and remember the Intel dollars are pricing limited due to 3rd party body shop competition

Mainframe Infrastructure HW 3.5 - 5 billion a year (product cycle dependent) This infrastructure is an IBM monopoly, and will drive 3-5 dollars in SW along with 6-8 dollars of Services. IBM is betting the company on Z (the numbers show it)

Storage HW 1 -1.5 billion a year shrinking at single digits due to competition in the HW space. IBM has unique Mainframe offerings (approx .5 - 75 billion per year) customized to Z and partly to Enterprise Power. This does drive “storage” SW (less than 3-5 dollars of HW) and it also drives some customization of services (again less than 6-8 dollars)

The result of the “infrastructure” look is as goes mainframe/enterprise so goes IBM.

There is a corollary here which is what is driving IBM’s growth besides Z16 and it’s product cycle? Ask the question yet another way. What are customers demanding out of IBM outside of Z? What innovations are customers beating IBM’s door down for? That my friends is where IBM stalls. They have built a debt servicing/dividend model with low to mid single digit growth, but without some innovation that customers can’t live without, You are treading water, as you are at the mercy of Z product cycle. All of the past 20 purchases over the last 2 years do nothing more than supplement the Z product cycle via giving GBS Niche offerings. The street will soon tire of this, and demand IBM return to growing earnings per share. How do you do this in a “services” oriented company? You lower head count (the primary cost of a services company) or you grow revenue via offering innovation (something in short supply within current IBM)

They can add all the salesman that they want, but when you have a limited set of customers (1500 mainframe), and a limited set of products to sell (Redhat and Niche offerings), it makes it a limited marketplace. IBM is operating under the 1-2 dollar of Infrastructure drives 3-5 dollars of SW and 6-8 dollars of services I believe.

IBM is adding Sales folks all over the place on the belief they will sell more stuff to increase revenue... Will all know how it is going to end up... a disaster.

IBM had two business models. Body shop (GTS) (running at approx 195k per employee) and higher margin engagements plus proprietary IBM HW/SW/Services (GBS/SW/Systems) (running at 225k per employee). Due to the Kyndryl spin-off you would expect IBM to move up as far as revenue per employee, but in fact they have moved down. The reason appears to be an extra 20-25k of heads joining IBM. Given IBM’s announcements concerning new employees, it appears to be almost exclusively related to new company purchases which landed in SW and Consulting. So what does this appear to show us? IBM is specializing in industry specific consulting engagements built around Redhat and openshift. That means old legacy IBM (cloud, SW, middleware that competed with Redhat, and low Profit parts of Infrastructure and SW) are most likely in the cross hairs.

Maybe the IBM page on this site should be updated with the new headcount numbers.

Accenture is a $44-billion-in-annual-revenue technology and consulting company incorporated in Dublin. With more than 500,000 [600,000] employees in 200 cities across 50 countries, the company provides a range of services, from strategy and consulting to technology and operations.

Regarding the sustainable revenue per employee, you have to leverage it by the fact that less than 100 k people (out of the 282 k) are sitting in "West" countries. More than 180 k are in developing countries where this ratio can be lower.
No intent of controversy here.

So 191k is approx the burden rate of the average IBM employee. These numbers are unsustainable. IBM has to lower the head count or raise the revenue number substantially. They need to get close to 300k per employee

So 54,000,000,000 / 282,000 = 191,489 You are heading in the wrong direction

That equates to 370k pre-Kyndryl spin-off. That means IBM has been hiring quite aggressively