IBM is a 20-30k employee company that employs 10 times that many, even after selling off most of its lines of business.
IBM's sole sources of consistent, stable income at this point are mainframes and legacy software. Poughkeepsie, San Jose, RTP and a few other major sites are keeping the company in business. You don't need armies of overpaid executives to run all that stuff, yet IBM still has them in droves. It will all come to an end.
@sws+1snaakHH makes a great point.
Kyndryl spilled the beans when they were spun off. When they went public, they published their go to market staffing models for the world. USA staffing was 8% of world wide population on shore. Remember Kyndryl is just a services company with zero manufacturing. Like it or not, that’s where services are heading for USA and Northern Europe. 8% is a services only number. IBM will have to staff at a higher percentage due to manufacturing facilities and labs in addition to the hybrid model, BUT the numbers are going down. I expect the number to stabilize in the 12% range as time moves on.
IBM is quietly moving more work to India. The US redeployment list (aka bench pip) grows as jobs are moved. Not convinced? Watch the IBM job postings. Of the 4,838 open positions on May 15, 2024, 55% or 2,672 are in India. US job postings of 5.1% (248) and the Philippines job postings of 2.5% (119) seem to imply that neither corporate HQ nor significant delivery hub outweigh the strategy of moving to lower cost India.
How long you can show better number by keep sending work to over seas for cheaper resources?
Net debt is also rising (in addition to total debt)
https://finbox.com/NYSE:IBM/explorer/net_debt/
63 billion divided by 225k employees = 280k of revenue per employee That’s close to the 300-320k that has historically been IBM’s sweet spot. Given that IBM has transformed to a consulting company with 160k of worldwide employees, the 280k per employee is very aggressive. IBM acknowledges 160k of consultants in 2024 1st q. IBM acknowledged 30k of infrastructure employees at the end of 2022 (my guess approx 20k in 2024 given all of the downsizings) If 225k worldwide employee number is the aim point, that says the current 90k of SW employees is going down to 45k. If this is even close to true, it says IBM is milking the legacy via skeleton crewing it, and buying innovation which has a 4 year shelf life before it becomes legacy to be milked.
We got a preview of potential downsizing from IBM Deep Throat in August 2021:
"I have said for months that post Kyndrell [sic] IBM would need to be ~225,000 strong.
Given we’re at ~345,000 (after recent RA’s, add in ~14,000 from Red Hat) move 90,000 to SpinCo and we’re still ~40,000 over weight."
https://www.thelayoff.com/t/1csmqHzX#OP
IBM debt just grew to 63 billion https://finbox.com/NYSE:IBM/explorer/total_debt
How can a company with 5,000 products be a '20-30k' employee company? If they can't bury some of their unsuccessful products the downsizing makes no sense.
I believe not that many years. If the downsizing trend continues, so will costs. This could set the stage for the same formula we use for acquisitions. A decent revenue stream, high level customer relationships and some somewhat useful technology. AK and the next POS after him only know the playbook given to them. There are no innovative strategist in our exec ranks. They will unwittingly set us up to be acquired and ki-led by the competition as we have done to so many other companies. If the CEO is not brought in from outside, I predict poet justice.
@yae+1sp6HOxK you are right. Though I am concerned with needing to spend this cash for debt service and all the acquisitions required to grow revenue since we cant do it organically.
Regardless, Company is not going anywhere any time soon. For employees, the prospects don't look good, but IBM is going to be around in some form for many years.
You doom and gloomers clearly can't read a corporate financial statement. I get IBM currently feels like a sh---y place to work for very valid reasons. But the company created ~$13B in free cash flow in the last 12 months. The company is doing better than it has in many years, unless you think it's all an Enron level fraud.
Ibm is running out of money and will need to be sold off or they need to fire atleast 50 percent of workforce to survive in the next few years