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Layoffs at Microsoft, Intel, and IBM
Normally I try to avoid posting straight business news, but I think that these 3 stories combine to something meaningful.
Muleguy noted Microsoft is laying off 5,000,
Mspangler reports that
Intel is cutting 5-6k, while
nonyabidness afraid4myjob submitted that IBM Layoffs have begun with no number, but estimates as high as 16,000.
So yesterday, IBM posted great profits that beat wall street estimates. And today they're doing layoffs? That makes no financial sense to me. Why should any company lay off people just because "Everyone else is doing it"?
-- Political fascism requires a Fuhrer.
Microsoft are cutting up to 5,000 from a total of 90,000 employees - 5.5% of its workforce.
IBM might cut 16,000 from a workforce of 387,000, a cut of 4%.
Intel are cutting up to 6,000 from a workforce of 84,000 - 7% of jobs.
Economists like to pretend that they're dealing with a hard science but they are wrong, so very wrong. Economics is certainly a complex field of study but it is also one of the squishiest sciences there is. Economics is psychology with graphs and math. You can talk about supply and demand, this curve and that, but we're ultimately talking about human psychology. You can't use normal logic to figure this stuff out, you have to work with crowd dynamics, herd instinct, quit talking about how people should behave and pay attention to how they really behave.
If you want to understand how everything is going pear-shaped, just look at the Great White club fire. Huge crowd, small venue, and the band's pyrotechnics set the place on fire. Rationally speaking, there's no reason why anyone had to die. There were sufficient doors and sufficient time for a calm and orderly evacuation. And our economists are the ones who would look at that situation and not quite grasp why there was a panic, a human log-jam at the door, and a whole lot of dead bodies. "That wasn't rational behavior! That was irrational exuberance, or maybe irrational shit-the-bed terror. The problem here is that my observations of this event do not fit my models."
That's what we're seeing in this economy, a fire in a club. Everyone is working to maximize their own survival even though it will harm the chances for the group as a whole. Companies are shedding jobs everywhere, getting work is damned near impossible, and we've got a negative feedback loop that nobody seems to be able to break. And nobody wants to take a look at the wall where the writing stands hundreds of feet high -- "we need to reform the way we're doing business and this will change our entire economy as we've come to know it." The thought is too frightening.
Kwisatz Haderach
Sell the spice to CHOAM
This Mahdi took Shaddam's Throne
To be fair, it was Hoover's fault. Not that he could know; most of the techniques we use today to try and mitigate the effects of a long term downturn weren't even invented during Hoover's administration. It wasn't (at that time) recognized that unregulated capitalism was perfectly capable of committing suicide.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
It changed when your company went public. As soon as the first duty of the company changed from working owners to non-employee shareholders, employees are simply meaningless. As a shareholder of our own privately held firm, our employees are our number one asset. Layoffs, when necessary due to lower service demands, are keenly felt. If our firm was to go public, we would morph into the same heartless money machines as all other publicly traded firms. You want employees to matter? Don't go public.
If only we could fall into a woman's arms without falling into her hands
While it is unpleasant, at least Ballmer acknowledges it's happenning. At IBM (and as an IBMer), no-one has any official information. It seems like employees are being liquidated by a death squad and made into Orwellian 'unpersons' as their names disappear from 'Blupages' - the company directory.
I would rather get an offical word from the management folks ahead of time. I can only suspect IBM management is afraid of sabotage or people getting upset in public - from those that are to be shown the door. I can't think of any other reason for keeping us in the dark.
To quote Grand Moff Tarkin (sp?) - "Fear will keep the local systems in line..."
Really, it was the Federal Reserve's fault. Trying to fight inflation in a recession is stupid. But that was long before Milton Friedman's monetarism.
Of course, Hoover's protectionist policies didn't help. Hopefully Obama listens to his well chosen economic advisers and doesn't follow the same path.
If you had super powers, would you use them for good, or for awesome?
Of course what you left out is the many problems with off-shoring. I'm in Global Services and several accounts have threatened legal action due to quality and SLA drops. I've yet to meet an Indian or Argentina who understands that a 3 day SLA means they have to get the work done in that time. You can tell them but for them it is no big deal that it is a day or a week late. Then quality is amazingly poor.
Remember what that was deemed appropriate must have office equipment for the hip IT company?
Why don't they sell some of that crap?
If Ballmer and Gates chipped in half a billion each, that would pay 1000 employees a hundred grand for a year.
I am very small, utmostly microscopic.
It's also short sighted to bash them for this move.
Let's be honest about the situation here. With one major electronics retailer going down and layoffs in droves from other industries it's pretty clear to see that MS is taking a wise point of view to realize that PC sales are going to be somewhere between stagnant and declining.
Windows sales are largely driven by PC sales. If PC sales are in a slump it's going to directly relate to Microsoft sales. This shouldn't be a hard concept. Otherwise you'd need to provide me with numbers that show that PC sales are either increasing or steady. If you could do that you would be able to show that there is a market swing from Windows based systems of 8% in the last year. Those kinds of numbers simply don't exist anyplace.
Dedicated Cthulhu Cultist since 4523 BC.
International Business Machines Corp. said Thursday it plans to open a technology service delivery center in Dubuque, Iowa, creating 1,300 jobs in the northeast part of the state.
http://www.startribune.com/science/37635999.html?elr=KArks:DCiUo3PD:3D_V_qD3L:c7cQKUiacyKUnciaec8O7EyUr
Cheaper digs and salaries (average salary ~ $45K), and Iowa and locals are giving around $50-80 million in cash and prizes to get them.
http://www.desmoinesregister.com/article/20090115/BUSINESS/90115020/-1/BUSINESS04
No doubt. I submitted this last week as the rumor mill was getting churned up. Sad to say, it looks like a few people saw it coming, and with what's happening at HP, Intel, and Sun, it wasn't totally out of the (big) blue.
My bullshit detector pegged a 11 here! Government does create wealth, the same way that any aspect of the "Service Economy" generates wealth. The primary services that government provides is providing security and enforcing property rights. Without those two services, you can not have wealth creation. Why do people shun investment in unstable 3rd world countries? Why do foreign governments keep their reserves in US treasury bills? Because the US government is uniquely positioned to provide these two basic services. Any institution capable of producing trillions in debt is certainly capable of producing wealth. Just in this case, its not just your tax dollars at work. It is also inflation devaluing your assets kept in dollars. Not providing $100k in services is still a loss of $100k in services. If those services represent repaired roads, infrastructure built, students taught, medical care for grandma, police protection, or national soverignty, the value produced is well worth the tax dollars. Now if that $100k represents a kickback to a corporation's CEO for not providing a service and fucking up the economy you have a point. But as all good Libertarians should know, if you or your government hands over $400 billion, you bought it :)
While that may be true, you must also understand that in a consumer-driven economy you must have *large* numbers of consumers with disposable income to drive the economy. Any long-term concentration of wealth can act like a money sink, preventing the "trickle-down" from taking effect.
In other words there are only so many yachts and mansions Bill Gates can possibly own and at some point more money is just the billionaire equivalent of any other form of pensu waving. If the government takes more of his money and gives it to consumers to spend, they will spend it on consumer goods, thus increasing sales, and stimulating the economy. But like any strategy, the negatives can overtake the positives if you go too far... take too much money and the rich man can't make investments that provide capital for business to function. But even then too much investment in infrastructure and capital projects without enough consumers creating demand for those products and you are back in trouble.
I think the case can certainly be made that we have moved too far into the concentration of wealth category and a little government taking and spending can help rebalance the economy. Then when that goes too far, the next Regan can come in and cut taxes, starting the cycle over again.
Natural != (nontoxic || beneficial)
When I said they hire only 5% of those they fly in, that means they only hire 5% of those that pass all the phone interviews. So they really only hire 1 or 2 in a 100 they interview at all. Personally, I had four phone interviews. I figured at the point they wanted to fly me in I should have been a shoe in as long as I didn't totally screw up the in person interview. I turned out wrong. My word of advice is to say, "no thanks, don't waste my time" if you're contacted by Amazon recruiters.
Nitpick
China did not buy much of mortgage backed securities - they did not need to, since most of banking and social security out there is government controlled. The gulf investors did buy tons of it though
On the other hand China did buy trillions of government debt from US. This allowed them to export tons of stuff into US while keeping a fixed exchange rate. And before you go Caveat Emptoring them, remember that they have not yet played their hands -- they could always dump that debt back on the market at any time.
And about "economies being separated the way they should be " - such strict separation only leads to eternal poverty for poor countries and slow decay for the rich. Japan may be the only country in the world to develop in relative isolation (not after 1945, but their first industrialisation).
http://slashdot.org/submission/1062723/Cheap-mobile-data-plan?art_pos=2
Don't blame entire countries because of the people your out-sourcers end contracting. I'm in one of these countries, and I know how fast and bad executed are the recruiting for american companies. They don't expend more than between a day and a week searching. These HR firms are gold-diggers that know you guys have loads of money, and that you don't expect much, so they pick the first worker they think they can bullshit you in, and ask for a lot more than they pay for him.
Doesn't matter if it works or not. It's a loss of freedom, therefore it's unacceptable.
You can't opt of socialism. You are forced to participate. Just because it might work doesn't mean it's the right thing to do.
The only way to combat offshoring is: a) as a US customer, demand goods and services that originate in the US; b) US gov't remove any tax benefits to a company that has X percentage of the workforce in other countries
Or c) Produce more value than offshore workers. This isn't that hard to do, not because foreign labor is inherently worse, but because of the substantial inefficiencies caused by trying to run offshore teams.
How to solve most of our problems: 1.Lots of nuclear plants. 2.Cure aging.
When did IBM go public? I have pictures and remember stories from my grandfather and mother (who was a customer service engineer - went onsite to fix mainframes - based out of the Salem Oregon IBM Computing center) in the 50's, 60's and 70's where they hosted huge camping trips and vacations at various resorts for all their employees.