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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.
There's 5,000 new empty chairs to fling around in Redmond!
"Skill shows through where genius wears thin." -Wittgenstein || Religion: uniting aviation and architecture.
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.
SKID ROW, Redmond, Friday - Microsoft Corporation has enacted swingeing layoffs in mid-January after the failure of its stock buyback program, and has called for a government bailout in the face of the credit crunch.
"Vastly popular operating systems like Vista just aren't selling," said marketing marketer emeritus Bill Gates, "and it's all because people aren't confident to spend their money. In fact, they didn't start buying it in 2007 because they were expecting this even then. A subsidy to buy good, honest American computer operating systems is essential to the health of the economy, or my part of it."
Should the Big One of American virtual office supplies fail, economists predict that it could free up millions of dollars in business spending and provide a devastating boost to an economy reeling from the impact of the credit crunch.
Hiring in most Microsoft divisions has frozen in the last six months and 30GB Zunes are already on suicide watch. "The workload's impossible to keep up with," said blog technical evangelist Gary M. Stewart. "I've even been answering Slashdot comments on Boycott Novell or Groklaw. It's impossible to keep track of! Anyway, you're just another Twitter sockpuppet. Or Mini-Microsoft. Admit it."
Additional bailouts have been hooked on the bill as riders for HD-DVD, eight-track cartridges, 78rpm gramophones and Babbage analytical engine gear manufacturers.
Senators have stated they will only bail the company out with a change in top management. "What the shit," said Linus Torvalds as his draft notice arrived.
http://rocknerd.co.uk
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
Here is a link to the entire memo Steve sent to employees regarding the layoffs.
No, it's not my blog nor am I affiliated in any way with the site.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
Once upon a time, a company had loyalty to it's people, and the worker's were expected to have some loyalty to the company. If the company had a rough quarter or a poor year, people pulled together and worked harder. A company USED to do layoffs to avoid going bankrupt. Workers viewed each other as extended family members - it was common for workers to get together at each other's homes on weekends and holidays. Families got to know each other, work was done in a 'team' enviroment; and if you pulled your weight and did your job - you could expect to retire with the company you worked for. 20 years of service was celebrated, opportunties for promotion were biased such that someone who had shown loyalty to the company had first dibs, over someone coming in from the outside.
Today, despite record profits, companies close plants and terminate people - so the few executives can reap huge bonus's. Getting laid off by a plant closing, business downturn, or poor managment decisions punishes employees who were powerless to avoid the mistake - but end up taking full responsibility in that they have to sell their homes, and re-locate to find work elsewhere. With the cost of housing - this means that the 401K money must be robbed today, so they can continue to make mortgage payments while they try to sell their home, and have money to bring to closing when their home sells for less than what they paid for it.
I've been there, I've had my retirment almost depleted because companies transferred jobs to India, a plant closing, terminating a project I was involved with, a company purchased and moved overseas, and a company that failed due to poor managment. Now after 20 years, I finally have solid career.
When did all this change? Why did this change? It certainly hasn't been for the better - for the USA used to lead the world in production, in technology and development. People used to matter, now each of us is just a cog in the company machine. We are all expendable, and will be dropped on a whim. I wonder why.
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.
I know somebody who works at IBM. They work on a project that supports HR department's requirements when they are doing big layoffs.
In a kafkaesque sort of way, they have job security just so long as things suck and there are additional layoffs coming down the pipeline.
If libertarians are so opposed to effective government, why don't they all move to Somalia?
Jack Welch, when he took over GE started the whole 10% of your under-achiever hog-wash.
Now, if you have poor achievers in your company, who have been there for decades - as GE had - perhaps a 1 time 'cleansing' is necessary. But, if you are doing your interviewing competently, and are teaching and mentoring your new hires - to continuously 'fire' 10% of the workforce is not only stupid, it's counter productive.
Consider, how long does it take a person to learn his job function and all the nuances that take it from being merely fulfilled, but where he can then magnify it? Given the proper motivation, a below average performer can become a top-performer. If a person knows what's expected, is shown how to do this, and is encouraged - he will either refuse to conform (termination case) or he will improve. I've seen this, I've done this and it works.
Other employees see this, and morale improves. People do not want to leave that group/company. Motorola USED to be like this. When Samsung came into town, they had to offer 20%+ salary bumps to attract Motorola employees to leave. Why? Because the people at Motorola knew that they were 'safe', that they had a career and a future with the company. Then Hector Ruiz came along and killed Motorola, before moving on to AMD and killing them.
I do not subscribe to the 10% cull; because you very quickly come to the point that you are cutting good people, and replacing them with good people who you will fire in a year or so. This creates a hostile work environment (why should I welcome you, help you or agree to work with you - if I'm competing against you to keep my job?), slows projects down (people shift departments constantly, at the slightest rumor of a reduction in headcount in a particular division), and you spend a great deal of your time where 90% of your employees are waiting for 10% of the team to come up to speed with their job requirements.
Show me a company that embraces the 10% cull, and I'll show you a company that is on the way down the tubes. Companies that terminate the poor performers, not due to some obscure quota, but do to performance - tend to retain their employees for the long haul. IBM used to be famous for this, and they rose to world domination. Motorola used to embrace this, and they used to have a world-class semiconductor market, communications division, automotive parts, space, micro-controllers and cell phone groups. The people make a company great - not the managment. Management has never made a company great, but poor managment has certainly killed more than a few.
Go to the Microsoft Careers home page and search for job openings - there are six new openings for TODAY alone - 853 openings altogether. Wonder how many of those will eventually be closed?
Previous economic discussions on Slashdot have included several posts with the sentiment: "I'm choosing to ignore this recession. I still have a job so I'm going to continue as before. The only economic problem we have is psychological."
Are you still so certain that your job will remain when another 5% of your customers are about to become unemployed? Are you still so optimistic that you could easily find a new job with a million other educated and experienced workers back on the job hunt too?
Even if this recession were purely psychological, it has set a wave in motion that will splash around for a while causing layoffs and bankruptcies. If there is a rational basis for the economic shrinkage then it could be even worse. I wonder how long it will take to return to growth and optimism.
That's because Hoover sucks
All 3 are hiring out of the states and EU. It is called this is a mass move of jobs out of the states.
I prefer the "u" in honour as it seems to be missing these days.
15% layoff - or in that figure. We've known about it for months, coming, too. Today is the "notification day" for many Sun employees, too ;(
And here I am looking for a job at IBM, Intel, Sun, . . . . Maybe I should take the in-laws up on their offer to let their son-in-law with a CS PhD live in the basement for a few years.
Uhh, if the government pays a salary of $100,000 and then collects $30,000 in taxes, you can't say that not paying the salary is a loss of $30,000 in taxes. It's a gain of $70,000 via not paying the salary to begin with.
You're not creating wealth by taking the $100,000 from other people as taxes and then giving it to the worker. Claiming his spending represents a positive economic activity is kind of silly, since the money was already taken from other people.
Repeat after me: government does not create wealth. Even if it makes some men wealthy.
Government can only create wealth if it gets into the business of making & selling something, which is generally a bad idea for all kinds of reasons, e.g., socialism doesn't work.
I don't think the parent understands the meaning of sarcasm.
512 MB RAM, 20 GB disk, 200 GB transfer, five datacenters. $19.95/month.
One other advantage of the 10% cut pioneered by GE - fear. Fear will keep the local employees in line. Fear of this battle station.
Huh? I thought it was the unregulated American financial sector that caused this world-scale shitstorm. Way to shift blame.
Those who would give up liberty to obtain working drivers, deserve neither liberty nor working drivers.
I know for a fact that several departments within IBM (in the US) have sent down employees to Brazil and India to train those who wouldd eventually take over their jobs.
So in the strictest sense, yes, it is a resource action to fire "duplicate" services or make the company run leaner. However, it is disengenious to say anything other than this was planned to occur as early as Q1 2008. Simply put, IBM artifically inflated their employee base so that they could transition services to a less costly (to the bean counters) and fire the ones in the US.
They will "get away with it" only so long as the company sees no penalty in their actions. They didn't fire anyone until after Christmas and after their quarterly earnings. So to many investors they are doing good things.
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. It doesn't penalize a company (ala tarrifs) but does reward companies that are American in employee base with tax incentives.
Capitalism is by definition ruled by a boom/bust cycle
Capitalism. Noun. An economic system ruled by boom and bust cycles.
Well, not exactly. Not even Wiktionary has that definition. Most people argue that the boom/bust cycle is a result of centralized monetary policy. I'd dig out some articles if I were at home and not on my lunch break.
the bust is bad enough, it can take decades to recover, which is indeed what happened in the great depression.
Depression wasn't just "cyclical downturn crits you for 10." There was another credit crunch during the roaring '20s - people bought everything on credit. Why save up for a radio when you could rent it now for so many dollars a month? Why buy stock outright when you can put 10% down and your broker will give you the rest?
People spent the entirety of their paychecks on what amounts to debt maintenance. A little bump in the great, winding road of economics and suddenly you're wondering if the other 90% will ever appear. Eerily similar to the subprime mortgages today.
DATABASE WOW WOW
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.
So, most of us were "put out of business" by big farms, but now we do other things and (judging by waistlines) eat better than ever.
There's a difference between being put out of business, and choosing a different and better-paying profession.
And American waistlines are bigger than ever because our food is all crap, loaded with high-fructose corn syrup, trans fats, MSG, and other unnatural things. Americans ate a lot better 100 years ago than they do now. Millions of obese people, with obesity caused by drinking sodas and junk food, is not an indicator of "eating well".
Remember the Irish potato famine - over-reliance on local food has risks, too.
The Potato Famine was caused by many things, but somehow during that time, Ireland exported tons of potatoes to England, even though its own people were starving. That says to me that relying on locally-produced food wasn't the problem, it was economics and politics. If they had kept their food at home, they wouldn't have had a famine.
Finally, while the US is lucky enough to have arable land in varied climates, most countries aren't - should Panamanians eat bananas for breakfast, lunch, and dinner?
So you don't think Panamanians have fish in the water surrounding them on both sides? People in tropical regions got along just fine nutritionally before modern times, they just didn't eat the same foods as they do now. Buying imported food (in any country) should be considered a luxury for people that can afford it and want to spend the money on it, not a necessity that all people can demand as a right. Just because I live in the US doesn't mean I have a right to cheap bananas (which don't grow here).