Thread regarding IBM layoffs

If IBM sells off services, the question remains “who will be the bad guy to thin the herd”. IBM absolutely stuffed the Intel server sell off to Lenovo several years ago. Lenovo agreed to be the bad guy, and IBM took advantage. Lenovo offered far better terms to retire/leave once they owned the “server” business. I believe Lenovo agreed to this due to the experience needed to migrate the business. The question will be, does the acquiring service company need the experience to migrate the company, or does IBM cut 50% of the “e” ranks and 35% of the management ranks before they pull the trigger. Certainly the acquiring company has a LOT of clean up as far as over lapping infrastructure / BAU tools to consolidate and stream line. NET NET there is at least a 20% savings on the table, and perhaps as much as 33% savings on the table upon closer inspection. This savings cuts on both sides of the equation. It gets generated for the services division, BUT it also gets generated for the “new” IBM that remains. If management doesn’t take the ax to the current excesses, they are not doing their job. When Lou G came on board, he ended up cutting 1/3 across the board. 13 levels of management went to 7. IBM it’s time to break out the ax again, and that means across the executive and management ranks too. The sooner this spin off happens the better as far as share holders, employees, and customers are concerned. Ginni if you want to legitimately say you “earned” your new bonuses, look inwardly within IBM and make the hard choices. The spin off gives you that opportunity, PLUS allows you to position IBM for the future. LOU had to do it, and yes it hurt, BUT IBM prospered for all of the pain. It’s time to transition, so look around the executive table and decide what 40% need to go. You always have to over shoot when it comes to management as they have coddled and feathered their nest vs the normal employees. Get it done. Times a wasting

Sell off services for sure.

We have 4 different tools to record our time right now. That's F'n bloat big time.

Services will operate much smoother once a new company takes over and cleans up.

If the rumors are true that IBM is considering a break up/spinoff, then you should expect an announcement between now and Jan 30th. I use theses dates based on the two previous spinoffs. GF was announced in Oct (3rd q earnings release) and was done I believe July 1 of the following year. Intel servers were announced in Jan and were done I believe by Sept of the same year. (Eg 8-9 months to make it happen). With that said, Ginni is coming up on her 3 year anniversary of restructuring IBM in July of 2019. So working backwards and ASSUMING it’s going to happen say between now and Jan. As far as IBM not investing, that just depends on where you live within IBM. SW that can be ported to “as a service” has seen more investment and SW that doesn’t lend itself to “as a service” (I’m looking at you Watson Health) has seen less or no investment. Watson Health will most likely be moved to India due to the goodwill that has to be written down due to the three acquisitions that IBM made to buy their way into the health care field. AGAIN it all depends on the bean counters and where/if IBM can make the IP pay off vs the investment vs the write downs. IBM seems to be following HPE’s lead, BUT learning from it too. Way over pay for SW then write it down over time vs a OTC (HPE’s perfered method). Look for IBM to back 5-10 “as a service” cloud offerings going forward, with everything else going to A spinoff / IP deal (again I’m looking at you Bain) .

The corridors are full of rumors of coming lay offs, in Q1 2019. IBM starts feeling the pain of lacking new business. Not a surprise since all the underinvestment in IBM services and software. Will be very painful Q4.