Thread regarding IBM layoffs

3rd q earnings report was a tale of 3 divisions, each with its primary focus to take costs out (save ones way to prosperity) One division was pretty much executing its strategy, one division completely missed its strategy, and one division is struggling to figure out where it wants to go.
SW division Like it or not, it’s “buy innovation” even if they have to over pay is working. Overall SW growth of 10% is nothing to sneeze at. Redhat and all of the other recent hybrid enterprise purchases are performing at double digit growth levels, all while IBM 1/2s the SW divisions headcount. Grade B+ to A-
Consulting division Its implementation of using AI for business transformation is a disaster. Yes this includes internal IBM projects too. They have adopted a lowering of labor costs via outsourcing and completely dropped the ball of automation via AI. Their lowering of labor costs has improved their profitability, but made them less efficient. (hiring 1 to 1 in low cost countries). This division needs a complete house cleaning as they are not executing their primary strategy (use ai for business transformation). Ask yourself what value does IBM bring? Lower costs are easily delivered via the body shops of wipro, tata, etc etc. and failure to get more efficient (using ai to automate repetitive tasks) just means you can’t execute. Grade D-
Infrastructure division Their strategy of using innovative design to build out enterprise is working. (note it is subject to the business cycle). Their problem is 60-65% of their costs within the division caters to non-enterprise customers and those customers don’t fit into the IBM Enterprise only strategy. NOTE management is attempting to minimize the scale out portions of infrastructure via outsourcing manufacturing to Foxconn for Storage and Power. They have also deemphasized traditional cloud via minimizing softlayer. Finally they have shrunk the non-enterprise pieces (lab services, scaleout legacy, TSS, and yes traditional cloud) to a skeleton crew. Will these changes justify their costs? Time will tell, BUT scaleout doesn’t compliment / catalyze the IBM strategy of innovative Enterprise design. Profits follow Enterprise, while break even follows scaleout. That’s why AK is emphasizing Enterprise. That’s where the money is at. Grade = C

Generative AI is CAMS all over again. Anyone remember when "strategic imperatives" went from 0% to >50% of IBM revenue, while overall revenue declined by >10% over the same period?

maybe he'll be squeezing blood out of a stone for his next trick at the Big Blue circus !