Thread regarding IBM layoffs

What is 14-4?

good point 4djj

GBS is being pruned down for a sell off IMO.

Look at 14 in 4. GBS scope reduced drastically!

GTS ain’t going nowhere. If anything we’ll see redundancies accelerate in GBS.

3huq. I believe it will be a mix and match spinoff. The decision criteria will be “strategic” and “gross profit”. GTS and GBS will cull each of their businesses to dump low margin non-strategic businesses. (IBM’s CFO and the annual report have stated that). There is a reason IBM combined them a year ago. They want one services org, but it has to be a profitable services org. Why one org? It’s all about efficiency. Even IBM knows they are over management head count

GTS will go not GBS. A lot of GTS folks have been moved to the Systems division, the rest will be sold out.

Dear 3qwi - you make good points.

I’d venture to say that it’s stilll a long shot to sell off those two. The expertise they have is just not in high demand these days or the foreseeable future.

2wy1. You may be correct. IBM has a LOT of overhead that has to be recaptured. Thus the idea that someone will buy them for a percentage of their real value. Most investment firms that buy distressed assets factor in the value and pay a percentage of that. Certainly that happened at HPE and CSC. Valuing IBM services sans IBM labs or IBM corporate overhead is worth at least 30 cents on the dollar and you have not even trimmed 1 head yet. It is a little ironic that you picked Smith Corona. Didn’t IBM spin off their typewriter division when everyone though it was a diansaur to Clayton dubilier. Just saying IBM imbeds such a pile of overhead in their offerings that most folks can find value in them by just unbundling the offer and restructuring. Again the purchase price is the variable factor

IBM needs to find at least 20 billion to complete the Red Hat purchase. Something will have to give...

Accenture is also a services company and it has attractive multipliers.

Dear 2tid

Tell that to Smith Corona & BlackBerry.

WRONG.

No one will buy GBS or GTS.

Body shops have no multiplier attractiveness.

And, GBS & GTS talent is aged and lazy or just bureaucratic. No one wants that lot.

If you have some money you want to throw away, you can buy them. It’ll be zero upside to the investment. Anyone who knows IBM GTS & GBS, or who has worked with them, knows what I’m saying is 100% accurate.

Sorry. Truth hurts.

You asked “who will buy IBM services”. Really you should ask at what price will someone buy IBM services. There is always a buyer if the sell price is low enough.

The real question: Who the hell would buy IBM "services (GBS or GTS)?

A: no one.

I think everyone in services is hoping they are sold just to get out of the IBM bloat boat.

Services is low margin, but the leadership still believes the old BS that it drags higher margin business. One things for sure, folks anywhere in services shouldn't be surprised if the axe falls.

I made a mistake from above. Mr Cooper came out of GBS not TS&C

GBS is bloated and salaries are well over their GTS counterparts. Consulting is not IBM's forte.

GBS will be spun off way before GTS.

The run rate so far is a deal a month

HCL. 12/6/18 Sell off and IP deal. IBM source TS@C

Mr Cooper. 1/3/19 Sell off. IBM source TS@C

IGF OEM Withdraw. 2/2019. Withdraw from market. IBM source IGF

Centerbridge 4/4/19. IP deal. IBM source TS&C

Seems IBM is keeping their word about TS@C as stated in the annual report (as the company prioritizes the offerings within it’s portfolio, it is moving away from certain low-value offerings, which will impact revenue performance in the near term, but will improve margin growth in the longer term)