IBM set to complete the Watson Health sale to Francisco Partners on June 30. Execs will be axed.
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Ted who?
I see some execs Like : Theodore Tanner and other moving over to the new Merative. He did nothing to help Watson Health.
In speaking to several friends who were impacted by this sale, they have said only 50% (approx 2000) of the impacted folks transitioned to the new company. The other 50% are on the 30 day RA march. Can anyone confirm these numbers?
IBM Execs are cancer... that is normal that they get replaced, otherwise they will go on with their bad habits and decisions.
Not going to be the only thing that goes in the new company, Phytel barely hanging in there.
Don’t be surprised to hear a couple of offerings being sold or sunset and supporting teams RA’d into 2023.
What's being communicated to customers about the transition? What will be the name of the new company?
Approx 2000 leaving IBM WH. That’s a mix of out of scope employees (not calling it an RA) and those going to the new company. No severance for those deemed out of scope.
The real equation is follow the profit and the revenue. IBM is addicted to revenue, but not so much to profit. (just look at the pieces acquired under Ginni that never made a profit, but did bring in revenue. Ginni called them empty calories) IBM management knows it has to deal with those empty calories. Keep in mind Consulting and SW are HW agnostic, thus the weak division is “infrastructure” Given the revenue mix within Infrastructure (Z = 3 billion, Power = 2 billion, and Storage = 3 billion) you could apply TSS’s 6 billion of shrinking revenue (4-7% per year) accordingly and come up with Z plus TSS = 3 + 2.25, Power plus TSS = 2 + 1.5, and storage plus TSS = 3 + 2.25. So if you dumped Power and Storage you are looking at 3.5 + 5.25 = 8.75 of revenue impact (with 35% profit) and a 12.5k of head count impact. (everything being equal) If you factor enterprise vs scaleout at 50/50 revenue mix, and you decide to keep all enterprise products (IBM’s current strategy) you are looking at 4.4 of revenue impact (with almost zero profit), and a 10k headcount impact (this assumes scaleout uses more heads to generate the same amount of revenue vs enterprise). Giving up those empty calories is a no brainer from the CFO/CEO point of view, and the only question is can IBM find a willing partner to absorb scaleout or the whole Power/Storage enchilada and license the IP technology.
What will next divestiture be? Power & Storage are the perennial favorites. But maybe something else?
Does anyone know the approx numbers of folks being impacted (total number)
How many being moved
How many being RA’ed
How many being redeployed within IBM