Thread regarding IBM layoffs

Canada already had layoffs a few weeks ago

There was one last week. No waiting to July. Word is Canada coming this week or next. Then at least one more round planned.

cut CICs , baton rouge ,la has LARGE bench!

Real point is RAs seem to be lately 1st week after new Quarter start.

So April 4th (or 6th?) so then July 1st week would be next natural quarterly

Are you like 12 years old? This is ibm. There will always be RA's...

@watsonbot, you're not even trying. Are you really going to upvote your own "reported for spam" spam? You didn't just leave it in the green; you left it sublimely in the green. At the same time as you "crushed" the OP. Can you not develop some sort of sense of balance and reasonableness? Well, if you are a WatsonXXX product, I guess the answer is no.

$34b for RH << and no real ROI

I don’t dispute the 6.8 billion of debt service, but that will be refinanced as time moves on. IBM refinanced a pile of their debt in July of 2022 at very very aggressive rates (eg before the fed started raising rates). ALSO note IBM’s refinancing went out thru 2025 so those aggressive rates will most likely bridge the interest rate spike that started in 4th q of 2022. Yes IBM spends 6 billion a year on dividends, and yes IBM spends 1.5 billion on interest. Given their free cash flow of 9.3 billion at the end of 2022 they actually have a little breathing room for investment. IBM in 1st q of 2023 said FCF will go to 10.5 billion. If true, then they have even more breathing room. NOTE this is still a very thin operating envio given the currency fluctuations and weak demand outlooks. I suspect IBM also recognizes this market situation, and has decided to trim to give themselves some wiggle room. NOTE even IBM realizes they have to make certain strategic purchases and they don’t want to take on more debt to do that. The only solution is to cut costs to be able to free up cash flow for purchases. Yes the numbers still work, but hard choices have to be made as to what does IBM want to be when their restructuring is over. I suspect it will only be focused around “Enterprise” solutions, which encompasses feeding the machine (eg HW sales have to encourage SW sales along with Consulting services). That means Power and storage (at least the scale out) has to go, as they don’t encourage SW sales or consulting engagements. Hello Lenovo care to purchase our scale out products and manufacturing? It’s the old joke, we have lost our scale out lease (vision) and no reasonable offer will be refused.

its business model doesn't allow investing for growth

No secret there. Just look at TTM Cash Flows.
Cash Flow from Operations: $10.4B
Subtract
Debt Service: $6.8B
Dividends paid: $5.9B
Nothing left to allow "investing for growth". Only thing keeping IBM afloat is new debt issuance. Reducing that debt means divestiture of businesses and layoffs.

Based on IBM’s projected revenue for 2023, head count worldwide has to get close to 210k. Right now headcount worldwide is much higher than that. There is another way to avoid RA’s, and that is to boost revenue. IBM to date has not been able to solve that problem. So who is in the cross hairs and why?

1. Consulting (still too much bench time)
2. management (too much overlap and narrow span of control)
3. power and storage (shrinking install base, and HW trending quickly to commodity pricing)
4. TSS (continued 4-7% shrink rate per year)

The language in this discussion has become so perverted over time that it's no wonder that none of it makes sense. Let's get a couple of things out of the way:

1. "Layoff" is a term that USED to refer to a temporary interruption in work, giving the employee the ability to return to employment when business conditions permitted it. The car makers would LAY OFF employees whenever their factories went idle, and they would REHIRE the employees when the factories went back online.

2. In modern usage, "layoff" is more permanent in nature. The employee loses their job, and the job itself and the position is often eliminated. See "downsizing".

3. Way back in the day, IBM adopted permanent terminations as a BAU practice. There were various legal and political issues with doing this, so the name "resource action" (RA) was adopted. This has been standard procedure now for over 30 years.

4. When IBM RA's an employee, the termination is almost always PERMANENT in nature. The employee record is marked so that the employee can never be rehired, either in their old job or in any other IBM job. This is unlike any other company I've seen, either inside or outside the IT industry, where "canned" employees can be rehired by the same company under suitable business conditions. At IBM, canned employees almost always stay canned, no matter what the business conditions are...the company doesn't ever want to see them again under any circumstances. (There are ways of getting around this, but most employees will never be able to do it.)

IBM's business model does not permit, and will never permit, "organic growth" in the way most people understand it. IBM operates by buying companies for whatever IP (intellectual property) seems useful, and after a time they fire (resource action) large portions of the employee base. This makes the accounting numbers look good, and produces a nice dividend, but is self-defeating in the long term. The most that can happen is that the business stays static for a time after acquisition, then declines as market commoditization takes place. IBM cans more employees, then buys some other promising business. Lather, rinse and repeat.

Way back in the day when I was at the company, it was former Tivoli employees who got canned (RA). I imagine in the next few years it will be former Red Hat employees who get the axe.

Reported for Spam - This kid gets off on posting absolute irrelevant nonsense every week and then wonders why the down votes

they should cut at the CICs, they have a large amount of resources on bench

Layoff is a BAU management tool at IBM and is well known, so not much to hide. What I suspect IBM is really hiding is how its business model doesn't allow investing for growth and therefore, can't break out of spiral toward lower margin commodity. Continued layoffs aren't needed if high margin growth is happening.