Does anybody know what step of that reorganization that was (kind of) announced in January we are at? How many of the 10,000 positions that were expected to be eliminated actually got eliminated so far?
I'm just wondering because I'm afraid that if voluntary attrition is not enough, we'll see another major round of layoffs very soon.
Ginni got a 3 year runway after floundering for 4 years? She will make well over 100 million dollars in 7 years as a screwup. IBM BOD should be arrested for murdering IBM.
You ask “where are we at vs the 10k”. I believe that question is too short sighted. The market continues to change at a rapid pace. Actually much faster than IBM has anticipated. As such IBM continues to play catch up. If we look at the status of IBM after the 1st q earnings we can make a few guesses.
IBM continues on their restructuring that started in the July of 2016 time frame. At that time Ginni was given a 3 year runway to “restructure” IBM.
IBM cannot divorce legacy as it’s a cash cow vs strategic initiatives
IBM has combined services for efficiency I would argue they have combined to extract out what is strategic vs what is labor intensive. The labor intensive portions have been or are continuing to be moved off shore to try and compete vs Amazon, Google, etc etc. The off shoring can only go so far, until the numbers just don’t add up anymore. If you look at GBS profit margins from 2017, they were IBM’s ugly step child. (worst performing sector) GTS profit margins were better, but contracts under GTS come under renegotiation approx every 3 years. Renegotiation is where IBM legacy bleeds badly. Thus the move to off shore or die. IBM adopted the off shore model (labor intensive) but they have morphed it to an as a service model (strategic initiative) when it makes sense. As such the GTS contracts face a double whammy. Get off shored to cheaper labor, or get automated into an as a service offering. NET NET the first world GBS and GTS offerings have very little on shore (think first world) labor content. If you find your self in the services business within IBM and are located in the first world, there is an 80% chance you will be restructured out of a job.
The IBM board and share holders are demanding “value” out of Ginni. How does she generate value??? I believe Ginni will be forced to sell off, or spin off the “off shore labor content piece of IBM”. It’s a slowing shrinking portion of IBM, and the sooner she dumps it, the more value she extracts for it
NET NET. IBM will have to shrink if it’s to get out of this death spiral. Services (labor intensive) has run it’s 20 year course, and they are the weak sister. IBM will continue to transition to an as a service company keeping Z due to the annuity stream and VERYlarge SW install base. (remember Z is the only game in town for the fortune 250. Way too many legacy SW application here), Power due to the AI/Cognative stream, TSS due to the annuity stream, Patents/Labs due to the IP stream, Services will be split between labor intensive and as a service. The labor intensive will get sold or spun off. Thea’s a service will be retained, and invested in. Either way the work force (GBS, GTS, SW sales/marketing will shrink dramatically if you are in the first world)
The 3 year Runway Ginni was given in 2016 is 2/3rds complete. Due to the ever accelerating time line of change pushed by Amazon/Google etc etc, Ginni is being forced to move up her 3 year game plan. I expect the services portion of IBM to be resolved by end of 2018. Once that is done, Ginni will get her golden parachute, and a new CEO will be brought in to adopt a new go forward strategy. Much like Gerstner did
I think our department should will be laid off this year. The whole team dismissed.
My organization had a crippling layoff in March. i am sure other organizations will have the same before the year is over.