Anyone got RA today?
Or have been put on a PIP?
16 replies (most recent on top)
Red Hat AMQ competes with IBM MQ
Red Hat Fuse competes with IBM App Connect, and probably API Connect
Red Hat Integration competes with the products above
Red Hat Linux competes with IBM AIX
Red Hat Process Automation competes with various IBM products
Red Hat Directory Server competes with IBM Directory Server
Red Hat JBoss Server competes with IBM Webpshere Application Server (WAS)
Red Hat Decision Manager competes with IBM Operation Decision Manager (ODM)
... I am probably missing a few for sure...
So... isn't that a great strategy? That must confuse the heck out of clients...
What about the IBM Sales force... always trying to figure out which offering they should lead with... Great job IBM!
IBM Legacy SW competes directly with Redhat hybrid offerings including AI.
What IBM Legacy SW product competes directly with a RH product? Websphere Application Server competing with JBoss is the only one I can think of, and WAS isn't going anywhere.
What RH offering is "AI"?
There is a second unspoken issue among the consulting division and that is they lack clarity in front of their customers when it comes to recommending the new IBM strategy (Hybrid Redhat cloud solutions including SW modernization and AI).
@3xsd, this issue is not limited to IBM Consulting. It also applies to IBM Technology Sales.
The mafia? The mafia takes care of their own people...
So, some facts:
- - most customers already use RHEL
- - most customers DON'T want OpenShift
- - the rest of Red Hat products are not very good
where is the growth from Red Hat going to come to get an ROI on the 34B IBM spent acquiring Red Hat?
IBM upper management knows where the problems are. They are very easy to ID and IBM has paid two other consulting companies to tell them what they already know. Consulting has a problem with margins. They are 1/3 lower than the competition. There is a second unspoken issue among the consulting division and that is they lack clarity in front of their customers when it comes to recommending the new IBM strategy (Hybrid Redhat cloud solutions including SW modernization and AI). The folks who have the required skill set are far fewer than IBM needs to cover the fortune 2000. It’s hard to recommend a new strategy to customers when your recommenders are not up to speed with the solutions IBM wants them to adopt.
SW division’s headcount is built around legacy solutions expertise which is experiencing shrinking revenues even though Z16 has been refreshed. The new Redhat strategy solutions are growing, but at a very slow pace due to a lack of skilled employees. The skill sets needed just don’t exist externally and therefore must be cultivated internally which is a very slow process. As IBM transitions from legacy toward Redhat solutions, the legacy headcount needs to be transitioned to “sustain mode” which means a large headcount reduction.
Infrastructure outside of enterprise offerings is a sink ho-e for money. Just look at 2nd q hybrid cloud revenue. It shrank 5% year over year even with Kyndryl and currency goosing infrastructures revenue. The marketplace has spoken and they are only interested in “enterprise” offerings from IBM’s infrastructure division. That means management has to make some very tough choices with the remaining 60% of infrastructure headcount
Because they are the mafia that rules.
Why is IBM not cutting the most expensive overhead called executives?
The CEO plays the hand they inherit. Ginni left AK with a 350k legacy company that generates FCF, but has zero and I mean zero innovation as Ginni had zero vision. AK knew he had to bring in a new strategy to goose innovation, as the old strategy had failed. The new strategy is working, but when you are starting from almost zero, even a doubling of the new strategy’s growth doesn’t move the needle a lot. Luckily AK is at the beginning of a legacy product cycle, so cash flow should remain rather strong for 4-5 quarters which buys him time for the new strategy to take root. The issue will be how many folks do you need to harvest that legacy cash flow? The established models say approx 2/3 or 130 k to mine the legacy with another 1/3 or 65k to bolster innovation. That says 195k headcount max. IBM has shed 88k with Kyndryl which was a good first step to stop the bleeding, but then they lost their way by not executing the second step (trimming another 50-60k to ensure growth). AK cannot afford to trim FCF again if he wishes to remain CEO, so look for the second step to be executed within the next 60 days.
Based on the results for Q2, there will be some type of separation for many people, whether PIPs or layoffs. The CFO only goes by the numbers, and the numbers are saying that cost must come down significantly or IBM will not make its promise of 10B of FCF for this year. The CFO doesn't give a sh-t whether people that are actually needed to run the business are essential... it is only about costs and to make it through the next few quarters. So, heads are going to roll and we know it won't be from the management rank.
I am with you. The development team I am in is also going dark. Most of everyone is fed up with management's bu-----t. And most are already looking for a job to get out of IBM ASAP.
Based on that "gEt A lIfE" post it looks like someone someone pi---d off a corporate shill today.
There are currently about 400 software engineers who have been told they must received 3rd party certifications "or else" in my division. Even though the majority of us have only been with the company for 1 year (there was already a mass exodus of experienced software devs) the majority of us are basically going dark and ceasing all slack communication. It has management petrified and the executives just seem entirely checked out when they aren't screaming into the wind.
Of course there are some a-s-kissers, especially in the Gen X age group, but basically the vast majority of us feel like we've been lied to and bullied from the start and we're unimpressed. Let the layoffs come, we'll all have new jobs within 2 months. Good software devs aren't scared of rubes.
Doing some back of the envelope assignment of already announced headwind costs (currency, interest, employee pay, russia, Watson health sale, Z acceleration, and Kyndryl one time wrap) it’s going to take an approx 20% reduction in employee costs to satisfy if they are all addressed at once. Can you imagine the tough decisions that will need to be included in the fall plan?
If I had to speculate on how to get to the 50k without a large, impairment charge it’s going to be something like
20-25k PIP
10-15K RA
10-15K partnership off
to post Post ID: @rlk+1hWLMV6l:
Do you realize IBM does not want to RA people anymore so they do NOT have to give them severance package?
What IBM is doing now is putting people who are over 45 years old on PIP, with impossible goals to reach. Great employees had been put on PiP.
Given the 2nd quarter analyst question and answer session, AK has already given you the answer to this question.
- Consulting has 10’s of thousands of folks turnover per year (AK’s actual words) This makes the consulting division self regulating as all managers have to do is reduce hiring, and prioritize higher margin and higher strategic engagements. PIP’s will be used if necessary to goose the profit margins as they are easily measurable.
- SW is a bimodal business environment right now. IBM Legacy SW competes directly with Redhat hybrid offerings including AI. IBM has said they are optimizing the Redhat offerings at the expense of the legacy offerings. That means IBM will be exiting certain legacy product lines as Redhat lines become mature. When IBM exits businesses they usually go with RA’s
- Infrastructure is again a bimodal business (enterprise offerings vs everything else) where both businesses feed IBM (they are a necessary evil as the SW has to run on something, and that SW can be modernized or implemented on an LPAR within an Enterprise box). IBM has already combined the “enterprise” manufacturing into one location (see April announcement) and continues to sing the praises of “enterprise” product offerings (see Z16 and large power announcements). That leaves the other part of IBM (everything else) (scale out, TSS, lab services, non-enterprise hosting etc etc) IBM makes almost zero profit on any of these offerings due to IBM’s high overhead(TSS being the exception but it continues to shrink at 4-7% per year). So what is IBM to do? They would like to form a partnership (GF like) with a commodity manufacturer where IBM guarantees a certain amount of sales to the partner. Whether IBM can find a willing partner is all about “terms” NOTE this would be a trade of personnel so no RA’s or PIP’s
You do realize RAs and PIPs are very different things, right?
RAs are MASS actions where lots of people are let go to balance/reduce costs.
PIPs are INDIVIDUAL performance improvement plans that legally can only get put in place if you’re not doing the job you’re getting paid for. Every successful company out there uses these.