Thread regarding IBM layoffs

@nd I knew it was over when all the talk became what did TSMC do? Or just copy what SEC did. Innovation died

IBM’s fundamental problem is the executive management team refuses to address IBM’s excessive overhead. IBM is and always has been over managed and under resourced. IF And outside CEO was brought in, we would revert back to the first 3 years of Mr Gerstner’s plan. (Go to 7 layers of management vs the current 14, reduce excessive/overlapping headcount by 30%, and exit parts of the business that provide zero profit (yep we are looking at approx 50% of consulting). It’s not a hard equation, BUT McKinsey doesn’t get follow on business for preaching fundamental business practices. Don’t believe me? Let’s look at the past “big” changes to IBM
Spin off GTS
Sell off Intel servers
Paid to get rid of Microelectronics
What did all 3 of these have in common? Excess overhead, as none went out of business, but were restructured under the new owners by getting rid of IBM’s excess overhead

@kn
I have been in R&D for quite some time. I have seen the slide down to mediocrity. When, technical leaders ("Architects") start talking about bringing innovation from the outside (buy small companies, Open source .....) instead of in house development. It became clear, IBM cannot recover.

Bob will rip ibm apart

@j0 John Akers wanted to break up IBM. Lou Gerstner stopped it.

He stopped it on the premise that IBM could monetize services and make big bucks with the synergy. For a time, they did just that.

But now services has been monetized. It has been used up. It has "matured", to use business analyst lingo. So now we go back to the future...current executives no longer see value in synergy, and the whole is now less than the sum of its parts.

The pre-announcement was staged to initiate a chain reaction. It was intentional. The goal, as I suspected, is to have the crowd accept a possible break up of IBM into smaller entities. Some will be acquired by others.
I did read an article in one the finance outlets calling for IBM break-up, or at least, force IBM to sell some business.

@ex It's obviously just a story. IBM's revenue is 100% tied to the mainframe cycle - jumping up when a new Z is released and then falling down after a (shortening) period of time until the next Z series. Meanwhile, AWS/Azure/GCP revenue grows quarter after quarter year after year, there is no cloud "cycle" just growth.

@OP IBM stands for "International Business Machines". It does not stand for "International General-Purpose Machines", "International Consumer Machines", or even "International Gaming Machines". That sounds rather silly, but the bottom line is that IBM makes really big adding machines for companies that require big adding machines.

Take a look at everything in IBM's portfolio. Mainframes are made for high throughput with high degrees of accuracy...running credit card bills, managing bank accounts, keeping track of airline reservations. Just like semi trucks, IBM products have a purpose. But they are of limited purposes, and are limited to select customers.

Just like "most customers" will have little or no need to buy stuff from Mack, Freightliner and Peterbilt, most customers have little or no need to buy stuff from IBM. The business analysts are slowly coming to accept that fact, and are pricing the company accordingly.

@Dk. Wall Street was spooked last week because they don’t know if IBM’s hybrid cloud strategy is for real (justifying a 300 dollar stock price) or just a story IBM can’t stand behind (justifying a much lower price). Wall Street was buying the hybrid cloud story until IBM’s preannounce last week, and now it’s pricing the stock as a legacy mainframe company instead. (Eg the hybrid cloud premium went poof)

Why would it drop 30% in a few days? I could understand a 10% drop at most. 700 Million is a large miss but what else are they hiding that would make the company lose 70 billion in a few days?

If Krabanaugh is cooking the books and Alvind knew too. Both of them need to be held accountable

Bob likes indian hybrid kush.

@OP Arvind and his Senior leaders (Pipmunks) need to be sentenced to a maximum security jail where they will go to the showers and drop the soap.
They are beyond redemption.

Why doesn't Alvind and the Pipmunks give back their bloated bonuses and perks for at least this and next year.

Gin and Tonic had declining quarters of revenue. She was a horrible leader, but Alvind who was supposed to bring IBM back to relevance loses 70 effin billion dollars in a day. That's the GDP of some small countries.

And they have the gall to roll out that new GDP Structure. No raises. Alvind and his pipmunks are greedy pigs. What will be the spin on his next Office Hours?

IBM’s hybrid cloud went “poof” last week when IBM had to disclose that customers were not rushing towards mainframes to solve all of their business problems, but rather away from it. AK spent 5 years convincing wall street that hybrid cloud was the solution, and yet in less than 1 quarter the hybrid cloud strategy evaporated into the “legacy” mainframe business cycle that IBM can’t seem to grow. NOTE there is yet more disturbing news in IBM’s preliminary earnings. IBM reported that “distributed” system sales were up 37% or approximately 200 million give or take. The problem is distributed systems sales have fallen off a cliff over the last 5 years and even a 37% increase in sales (year over year) left IBM 600 million short in the second quarter. (Year to year compare). That says even systems designed for AI (eg power 11) are not solving customers AI desires, and IBM mainframe really shrank by approx 800 million in the quarter when we look at HW sales. Now add it SW growth (redhat, Confluent, and Hashi) yet another 200 million in revenue, and the mainframe loss is approaching 1 billion. That is a very disturbing trend, and the IBM executive team has their work cut out for them, to prove that 2nd q was just a one off and not a disturbing shift in the mainframe marketplace, back to legacy growth based on raising prices.

@bv 100% true in Albany. It almost feels like Albany and its systems are purely setup just to benefit and protect senior managers and leadership

@OP you’re kidding right? Our senior “leaders” only stand for one thing - themselves and their multimillion dollar yearly bonuses while they give absolutely nothing to the people who do that actual work.

pure gibberish