Slashdot Mirror
Analysts Call IBM Layoff Estimates "Hogwash"
jbrodkin writes "Rumors have been floating around saying IBM will cut 150,000 U.S. jobs, but a Network World story attempts to set the record straight by quoting analysts who say this news, if true, would wipe out the company's entire U.S. operations and would make no sense since IBM is actually doing pretty well."
...they're just analysts. They don't actually know anything. They're making educated guesses at best.
FTFA:
Analyst Frank Dzubeck, president of Communications Network Architects, says the layoff rumor "sounds kind of ludicrous since there's only [about 350,000] people] in the entire company. That means they'd be wiping out every division in the United States including the headquarters, which doesn't seem plausible."
why does it mean that? they probably have several divisions they could drop entirely because they don't really fit with their future plans, they could scrap those first. And then think of the places you've worked. How many people in those places were completely fucking useless and the company would go on without a hitch or even do BETTER with them gone?
Yeah.
Also IBM still has a lot of tech support in the US, if they outsourced most of that, then those people could find themselves without a job.
Does anyone know anything about an actual breakdown of where those 350,000 people who work for IBM in the US are actually placed? And I don't mean geographically, but by business unit (at least - type of job function would be better.) Not that I expect any such data - but then, the analysts don't have it either.
But who knows, maybe the estimate was just over by an order of magnitude - a misinterpreted misprint :)
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Our offices here in Winnipeg (Canada) are going to be decimated down to a skeleton staff of people to maintain our managed servers (for places like MTS, etc.) I've been hunting for another job for 2 weeks now, since a relative of mine high up at IBM told me about my office situation.
I believe what they're saying is there are only 350,000 people in IBM worldwide, and not much more than 150,000 in the US. Hence, wiping out 150,000 jobs in the US would effectively mean offshoring the entire company, including the headquarters division.
The question that comes to my mind is how are they defining "employee" for the 350,000 people in the company figure?
Are they talking just full-time people or contractors? My guess is that they're only counting full-timers.
If they include contractors in the number of people IBM employs, I have no problem believing this "hogwash" figure.
Everything I need to know I learned by killing smart people and eating their brains.
Since when have the decisions of upper management or CEO's ever made sense to begin with?
Maybe there was a time long ago, but recently the only way to make sense out of half of the actions we see out of big company CEO's is if there actions will somehow justify giving themselves another $10 Million or so in salary or other bonuses.
Well, Haliburton is in the process of doing that for other reasons. It's apparently possible.
I don't respond to AC's.
http://www.investorvillage.com/smbd.asp?mb=4326&pt =m
The IBM message board over at InvestorVillage seems to be ignoring this story ever since it broke last week. Usually the message boards are the first to jump on every unfounded rumor. It just seems that this story has zero credibility.
I begin to wonder if it was made up by a guy called Darl.
It's all about short-term stock price manipulation (which I call the "dark side" since it ultimately winds up being a loss but brings instant gratification).
If the CEO is retiring soon, then he has little incentive to do right by the company in the long run, and plenty of incentive to play games to increase the stock price in the short term (so he can sell off his shares after the price goes up). A massive layoff like this would be entirely consistent with that scenario. And it's not like the company's "investors" would give a damn about the long-term outlook of the company anyway. After all, it's all about the growth rate of the stock, and fast growth for a short time is still fast growth that "investors" can take advantage of. They just have to dump the stock before it crashes.
So not only is a massive layoff of this scale plausible, I think it's highly likely. It's just the ultimate manifestation of the short-term thinking that American "businessmen" are so infatuated with.
About the only thing that might prevent it is a huge backlash against IBM by "investors", which is possible but doubtful IMO.
Use 'slashdot stuff' in the subject line in any email you send me if you want to get past the spam filter.
There isn't anything to preclude a CEO from implementing cuts that essentially stop the operation of a company while it restructures. Sometimes they don't come out of restructuring. A few years ago Tellabs cut its operations so far down that it has never returned to being a competitor. This happens because a CEO wants to save his ass, and he stops operations and sells corporate property for short term financial stability. While ending US operations isn't going to happen, cutting it down to 50% would fit right in to what IT companies have done in the past, although usually while under more duress than IBM is now.
Who says that laying off all your employees is impossible?
http://www.satirewire.com/news/att.shtml
At first, I remembered this as being an onion article, but actually it wasn't. Although the onion did have:
http://www.theonion.com/content/node/28984
So there you go!
Hopefully I didn't put any [] around my words.
It's a historical fact. Don't sweat it, it's not gonna be 150,000 people or even 100,000 people...that is absurd.
Blar.
I agree 100%. It makes you wonder what other companies would do once they see IBM "get away" with this.
So what exactly is it about 'including contractors' that suddenly makes a layoff of 100-150,000 employees believable? If you only accept the 150,000 figure as full-time US employees...how many more contractors do you think IBM employees in the USA?
Your hogwash reasoning goes well with Cringely's hogwash numbers.
Blar.
>If the CEO is retiring soon, then he has little incentive to do right by the company in the long
>run
The CEO in a corporation like IBM is never a dictator, never has sole authority on executive decisions, and is held accountable to a Board of Directors, all of whom also have a vested interest in the corporation (and contrary to popular belief, do generally consider performance beyond the next quarterly report.)
A company with as diverse stakeholders and as much volume as IBM has, will have quite strict controls on governance and management.
-fb Everything not expressly forbidden is now mandatory.
You're right about the investors bit, of course, but I just wanted to point this part out.
The sky is falling, the sky is falling! We must go & tell the CmdrTaco!
The CEO in a corporation like IBM is never a dictator, never has sole authority on executive decisions, and is held accountable to a Board of Directors, all of whom also have a vested interest in the corporation (and contrary to popular belief, do generally consider performance beyond the next quarterly report.)
A company with as diverse stakeholders and as much volume as IBM has, will have quite strict controls on governance and management.
You clearly were not an Eisner-era Disney shareholder...
I live ze unknown. I love ze unknown. I am ze unknown.
and we KNOW he has never been wrong before, he's almost as accurate as Dvorak!
Monstar L
350K plus their part-time employees and sub-contractors nets them a workforce of probably 450K or so total worldwide. So a 1/3 reduction while harsh, is likely exactly what they need to survive.
I think there is a growing perception of American workers as being lazy.
Just prior to the DOT COM bust I would see a lot of Visa workers staying
very late, and not particularly getting much done, but looking very industrious.
On the other hand I saw a lot of Americans standing around and "chatting"
about the latest TV shows, Sports, Church, family, etc etc.
The management saw this and took it on face value, so when the layoffs
came a lot of Americans were canned and only a few Visa workers.
I "was" working at Cisco Systems at the time.
Our tax dollars go to fund major colleges here that are more and more training
foreign students to move here to replace us, or send the job to their country.
This has been going on for some time, and will not abate any time soon.
The foreign students pay higher tuition, that is true, but still some federal
funds pay the salaries and Infrastructure costs.
Some Comp Sci classes are over half foreign students.
The colleges have become like a monetary business extension that the tax payer
funds to provide corporate interest with cheaper labor.
Don't get me wrong, there are some good foreign workers, very good indeed.
But with the current prices of real estate, and cost of living in some
areas, this is setting up a collapse of enormous proportions.
Snagging up foreclosed real estate has become big business in the US.
I predict a dire future for all jobs that can be near shored/outsourced/Visa'd.
google "32 trillion offshore needs IRS attention"
>You clearly were not an Eisner-era Disney shareholder...
I *wish*. OMFG are you serious?
Category 1984 2004 Percent change
Disney's Revenues $1.5 billion $30.8 billion +2,000
Disney's Income $294 million $4.49 billion +1,600
Disney's Tax-Free Cash Flow $100 million $2.9 billion +2,900
Stock Price (adjusted for splits) $1.33 $28.40 +2,100
Market Value $1.9 billion $57.4 billion +3,000
Disney's Enterprise Value
(market value plus debt minus cash)
$2.8 billion $69 billion +3,200
-fb Everything not expressly forbidden is now mandatory.
Slightly OT: In Senate bill 1092, Sen. Chuck Hagel wants to triple the number of H-1B's granted next year to 'help' the high-tech industry.
[Insert pithy quote here]
IBM will lay off and hire people here and there always. Some times they will lay off or hire a lot of people. IBM has acquired a lot of companies the past couple of years, layoffs are inevitable. These numbers are insane though. Insane for a simple reason: IGS doesn't have 150,000 people in the US to lay off. IGS doesn't have 150,000 people in the US period. So, will IBM hire all of these people before they fire them?
Cringely needs to lay off his mothers medication before he writes his nonsense.
there are plenty of IBM types weighing in that they can easily see this happening - some have already left or been informed they will be terminated - and they know the company is having serious trouble with its Global Services division.
So I suspect it's all true - although the actual count of employees to be outsourced might be speculative at this point since it appears IBM is keeping that number close to its vest.
Richard Steven Hack - This sig is TOO GODDAMN SHORT TO DO ANYTHING USEFUL WITH! MORONS!
From my view you are totally wrong. When the CEO gets rich, the rest of the board will too. So while the CEO is singled out for discussion, what benefits him, benefits everyone else on the C and board level generally. I'm sure IBM has as many strict controls as Enron and many other shameless corporations, possibly a few more, but I don't believe for a second that they are immune or prevented from insider stock manipulation, even if they are not outright thieves like those who were at Enron. If there is any truth to the rumor then it's hard to explain why they would make this decision given the companies recent results. The company made 8.4, 7.9, and 9.5 BILLION dollars in the last 3 years respectively... But ya, I can totally see why you would want to layoff 100-150k employees and not question the CEO... /sarcasm.
IBM has a program going evidenced at activities underway in its Boulder, Colorado location for its (botched) implementation of LEAN. (similar to LEAN manufacturing, reference wikipedia)
However, IBM is using staff cutting and IBM India augmentation to achieve the efficiencies that are documented in LEAN-M, whereas IBM's implementation of LEAN is really just a pony show that is masquerading as an internal offshoring program.
The number of decimated IGS units in total will probably be something closer to 30K-40K employees.
For the record, IBM has also made a settlement in a class-action in respect to its Cash Balance pension changes which were instituted after Y2K. Many people at Alliance@IBM (the organization which is trying to unionize existing IBM employees) fear that IBM is trying to put the pension fund itself into default so that those obligations can be wiped off the balance sheet, which would also be an instant win on IBM's stock EPS.
IBM is not only ditching employees, it is also ditching customers. IGS was known for signing a lot of non-profitable contracts in anticipation that future work would be coming from those same clients (in addition to ancillary project-related purchases by clients for things such as networking and hardware and all the labor that goes with that).
That apparently didn't come to fruition. IBM will be giving some sad news in the next few years to come of its accounts as it lets those go, and those resources who were working on them.
I'll clarify: post-Wells Eisner-era.
I live ze unknown. I love ze unknown. I am ze unknown.
I know this is an oversimplification, but isn't this just another IT layoff?
From what I understand, the people being laid off don't actually "make" anything, they just support the stuff other people create. Doesn't that make them a potential target for any layoff or outsourcing venture? In that light, this doesn't sound so far fetched, at least not to me.
Here will be an old abusing of God's patience and the king's English.
Damn. Sorry all. I was responding with a flame to a stupid flame bait post and tripped on my own zipper.
The problem with quotes on the internet, is that nobody bothers to check their veracity. -- Abraham Lincoln
Terrorists can't threaten a country's freedom and democracy. Only lawmakers and voters can do that.
- RG>
Hey pal, this isn't a pleasantforest, so don't waste my time with pleasantries!
When it's all said and done, they'll layoff several thousand, and everyone will say "whew, we dodged the bullet there" since it didn't turn out to be 150K.
And IBM will look like the good guys, or at least not-so-bad guys.
The Tao that can be spoken is not the one eternal Tao
I bet if you included salaried employees, all of the new companies that it recently took over/bought out, all of the part-time workers, all of the temp/contract workers, and all of the independent contractors and specialists, you would have well over 500K total worldwide employees. Maybe more if you add in all of the part-timers and outsourced call center employees.
That 350K is apparently for salaried employees only. I doubt if much more than half of their entire workforce worldwide is employed in such a manner.
Hey, it just says 150,000 IBM jobs. There are contractors that are part of that number. This article (http://www.wral.com/business/local_tech_wire/opin ion/blogpost/1374664/) says what I've been thinking. 1,315 IBM employees and an unknown number of contractors. Since contractors get 2 days notice, by the time the article came out in the paper, the contractors were already gone. Note it does say that employees got 30 days notice. Contractors don't get that, at least not in my experience.
I know of 10 contractors that were let go and 2 regulars. I know of another team that lost 15 of their 23 member team but don't know the breakdown.
[John]
Shit better not happen!
Godsdamn Communists!!
May the Maths Be with you!
Disclosure, I do work for IBM
The numbers are plausible, but not at the 150,000 mark being bandied about here today. Last week, the number being quoted was 100,000, and in the USA that would be feasible, especially given the plan would be to actually hire almost 1 for 1 outside of the US where labor is much cheaper for the same skillset.
My department lost ~33% of it's staff last week, with more cuts coming in the next month. While I don't quite expect a full 100,000 Americans will be out of work, a lot of us surely will be.
According to Marketwatch last week, there are a few global US corporations with US operations that are bleeding money. They continue to make their quarterly numbers because operations outside of the US are doing really well. I would not be surprised if we see more than one company pull out from the US entirely. The whole ruckus over importing cheap labor can be bypassed if they just move the company right to where the cheap labor actually lives. When your transportation is Bombardier Learjets and Limos, do you really care where the office is?
130,000 seems like a pretty big number, however I work for Ford we got rid of about 20,000 people over the last few months the projected final figure is going to be around 30,000 for lay-offs, buyouts and firings. My department went from eighteen people down to two; I 'm one of the lucky two to still have a job. IBM made a big push into managed services while it's still big business the market that IBM caters to ie large corporate business is getting smaller the real growth / money for managed services is in the small to medium sized companies, most large companies have figured out they can go to India on their own they don't need to have IBM act as the middleman. Managed services are becoming cheaper and can be bought ala carte. Google hosted managed exchange servers or whitebox VOIP if you want a glimpse of what future managed services are going to look like.
EGOTIST, n. A person of low taste, more interested in himself than in me.
Hmm... you know he's trailing in the *primary* polls for re-election... i.e. he won't get reelected and he's probably lining up some big cushy "consultant" or "lobbyist" position for Microsoft.
This analysis is so patently stupid ... I'm afraid of infringing on that
guy's rights.
They're not cutting 43% of their workforce. They're sending those 43% to
China because that's where those jobs will be needed in the near future
to support all those other jobs that are sent there by the rest of the
F500 "economy".
There are about 60,000 total GS ee's in the US. Total North American (CA/US/MX) staffing is about 3x that. The 12,000 number world wide is probably low by 50% and that total number will represent FT ee's only no yellow badges. EMEA always gets hammered worse than NA. AP is already so damn thin there's nothing left to hack. LA is also thin. So the brunt will be in NA and EMEA. My guess is 24,000 total. We've just had 5.5% in one week. This will probably continue at a pace of about 5%/month this year and 10%/month in 2008. This would put the total reduction of 24,000 to end by June 08. At the same time they can hire 24,000 new heads in India and South America and save themselves 80% of the headcount cost for those 24,000 relative to US costs.
Yeah I think it will happen.
I work with IBM GS on pretty much a daily basis and would not at all be surprised to learn they are in trouble. There is so much red tape and bureaucracy and lack of communication (both internal and external) that nobody can get anything done. It takes them 15 minutes to do something I could do myself in 15 seconds, and that's only after I get through. Sooner or later clients are going to notice things aren't happening the way they should be...
The scary thing is that a bunch of us will find out next week whether or not we get, um, "traded" to IBM GS, who at last word were quite willing to take us if my company (who obviously hasn't clued in yet) decides to expand the scope of their agreement with IBM. I'm desperately hoping for a severance package, especially after learning this news...
Atheists don't hate all religions, they just don't believe in any deity. Agnostics are not sure bout the existence of a god or a supernatural being. It has nothing to do with tolerance.
Facts:
HP has 156,000 employees, and about 90 billion in revenue.
IBM has 366,000 employees, and about 90 billion in revenue.
google has 11,000 employees, and about 12 billion in revenue.
I think that's where the 150K came from, the old $/employee ratio.
IBM is a services company. Human capital is their advantage. Unless they are not making a profit do not expect layoffs en masse. trimming fat, maybe. 150K sounds like bullcrap.
I'm an atheist, and I don't hate any religions any more than I hate children for believing in santa claus and the tooth fairy.
I work for IBM....I'm not doubting a Layoff, but not that big, but the funniest thing about this article is the so called "LEAN" program.. yeah I know all about the IBM LEAN project since I'm a part of that project... it's an efficiency program loosely based off Toyota's methodology. it's to make our manufacturing process quicker and more efficient. Anybody that works in my division would laugh at this article.
Well the problem is by doing such shoddy reporting, he hurts his credibility among those of us who actually think for a second.
We think that not having SLA's saves us gobs of loot but in the end all that happens is that customers are miserable and when it comes to re-up the contract they either fight like like hell to extract insane price cuts, or they just walk.
And on a personal note the three times I have needed a PW reset from India, I'm sorry but I could NOT understand what the person on the phone was speaking to me. It's a string of random numbers and letters. There's no context. Even spelling it out with a military alphabet took 3 tries.
If this is how they think they will save their way to prosperity then the suits up in the Armonk Ship's Prow (HQ) have some awesome weed.
That's why the word hate was between quotes... I thought people know what quotes mean when you add them to a word.
By reading this signature you agree to not disagree with the post you just read.
The comment was meant as atheist = opposing religion while agnostic = not caring either way, but I guess I was a bit too "subtle" in response to a funny (at least that's what I thought) post.
By reading this signature you agree to not disagree with the post you just read.
IBM is now competing with the Likes of Tata (TCS), Wipro and Infosys. While these guys are producing 44% returns every quarter look at the results by IBM - 8 to 9% - even their India operations. No surprise that they want to become Indian Business Machines !! For folks who look at TCS marketcap know that they have only 13% of their equity in the public market - with the largest market cap (I know - can fluctuate). If IBM needs to compete with them in the future, they need to play the game similarly.
I can't tell if this is supposed to be a joke or what. :)