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Cringely Predicts IBM Will Shed 78% of US Employees By 2015
Third Position writes "Cringely with more predictions about IBM: 'The direct impetus for this column is IBM's internal plan to grow earnings-per-share (EPS) to $20 by 2015. The primary method for accomplishing this feat, according to the plan, will be by reducing U.S. employee head count by 78 percent in that time frame.' So far, Cringely's pronouncements about IBM have been approximately true, even if he missed the exact numbers and timeframes. Is he right this time?"
We need to make the company more profitable. Lets put out a quality product everyone will need to have.....ehh fuck it thats too hard, get HR on the line.
The IBM building across the road from the lab I work at here in Winnipeg just had a "For Lease" sign go up yesterday.
Trolling is a art,
The Cringely prediction cited as being "approximately true" (http://www.pbs.org/cringely/pulpit/2007/pulpit_20070504_002027.html) was nothing of the sort. Cringely predicted IBM would imminently lay off 150,000 employees. That was five years. Didn't happen.
cognos is the worst piece of crap software i've had the pleasure of working with. it's a huge pain in the a$$ to install, you have to make dozens of changes that isn't in the documentation and only available by calling support. even then they tell you to google stuff because the IBM support site is a mess to navigate
and after you buy the software you find out features are missing because you didn't buy the right version. there are like 20 different versions of Cognos with different features
SQL Server may not be 100% as good, but at least it's pretty easy to set it up and get going for the 90% of the features you will use
What kind of predictions does he get right? Software will crash and Google will be the new Microsoft and Microsoft will be the new IBM.
http://www.cringely.com/tag/2011-predictions/
That's what this means. When they got out of the PC business they just sold it to china. And now they're apparently doing the same thing with their research division.
Companies don't survive that. The logo might survive. But it will be hollowed out mask.
Oh well. Ironic that this was once the company said to be an unbeatable monopoly.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
Several years ago somebody put out a joke press release that went something like:
Dear Employees,
We have calculated that reducing the workforce by 10% would result in a savings of $100 Million. Taking those calculations further, we have determined that eliminating 100% of the workforce would result in a savings of $1 Billion. Because we are committed to driving maximum shareholder value, we are announcing that we will be eliminating 110% of the workforce. The additional cuts will be achieved by laying off employees of other companies.
When questioned if laying off 100% of the workforce would cause the company to no longer exist, the CEO replied "Nobody has ever tried this before, so let's not be too hasty to jump to conclusions".
Impossible. That would mean they would have to get rid of some *managers* too! Sorry, that ain't gonna happen. People with actual knowledge, sure. R&D, perhaps. But firing MANAGERS?? No way! Someone has to fill all the procedures and spreadsheet targets, ya know..
To Terminate, or not to Terminate, that's the question - SCSIROB
No, this is a boldface lie (well, it was a lie about being a lie)
his was a baldface lie.
"If you have nothing to hide, you have nothing to fear." - Every fascist, ever
This country needs a crash program to train circus lions to eat CEOs and boardmembers.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
When I started with IBM in 1999 they had ~220k US employees. At the beginning of 2009 they had ~115K. That year they had two rounds of lay offs that included ~5K per round. IBM stopped publishing the number of US employees after that for some reason.
- I got hit in that second round
That would attract businesses by the droves I'd think...so, no loopholes, no corporate taxes
Except they're doing just fine with 0% US taxes by keeping the money all offshore with their employees. Why should they bring that money back into the country to hire more expensive employees that are going to demand enough pay to buy a house for their family instead of living 20 to a dirt hut or sleeping in a company cot in the barracks?
If I have been able to see further than others, it is because I bought a pair of binoculars.
But this situation doesn't last for long. Indian workers now live in modern houses in the suburbs with a car and work in modern buildings that from the inside look just like American buildings. So now there are problems in outsourcing to India because the competition for the good people have gone up and now rates there are half of the US instead of 1/10. And when they are half, the overhead to work overseas no longer pays for itself. So, they can try to find cheap workers elsewhere, but they don't speak English like Indians do. Ultimately, it's getting cheaper to just hire Americans again, because there is too much competition in India to make it profitable.
Peter predicted that you would "deliberately forget" creation 2000 years ago...
The article is about slashing 78% of US employees at IBM. That's not a sign of a healthy company.
They'll be replaced immediately by employees from India and China.
When I was in China I applied to IBM for data warehouse consulting and got to a third round interview. The hiring manager told me the salary, which was about $1,000USD/month (a pretty good rate in China) but they would send me to the US to work. I pointed out that was below the US minimum wage and she said never mind that because they would send me on a 'Z' visa which is good for up to two years with no salary restrictions. When I then objected I couldn't be sent to the US on any kind of visa as a US citizen, she immediately hung up. I tried to call and email to follow up but couldn't get any response.
So, don't worry about IBM's profitability after they get rid of those pesky US workers and their outrageous salary demands. The going rate on an IBM data warehouse consulting is measured by $hundreds/hour and it's almost all markup straight to the company.
Write to your congresscritter and demand something be done about Z visas.
"Shareseller value": noun; the real reason people buy shares, which is to sell them at a profit; opposite of "shareholder value", which is the diminishing value of shares held by someone who has been duped into believing that investing in the stock market will make his or her retirement pecunious.
Rich And Stupid is not so bad as Working For Rich And Stupid.
Sorry, it was the L visa: inter-company transfer.
No... Wrong answer from start to finish. You can still have issues with tight specs, paying well, etc.
Prime example: Bindeez/AquaDots. In this instance the toy manufacturer had explicitly specified 1,5-pentanediol as the plasticizer, a relatively safe, non-toxic, chemical. The Shenzen based offshore manufacturer substituted 1,4-butanediol, a much cheaper plasticizer compound that has similar characteristics, but is **NOT** safe or non-toxic. 1,4-butanediol converts to GHB in the gut through the enzymatic processes there. GHB is a dangerous date-rape drug. Why did they subsitute it? Because 1,4-butanediol is VASTLY cheaper than 1,5-pentanediol and they didn't connect the dots (no pun intended) that they were making a bad choice- and they did it to increase their margins, didn't think anyone would notice the change, and quite simply DID NOT CARE.
What you're saying may be the case, but this was one of those "high-end" bunches that DID that. Sorry, not buying your line for a moment because it still happens often and there's little concern by the people over there running the businesses over the sorts of impacts of decisions like this. Not even with companies like Foxconn.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
I don't understand corporate tax to begin with....I mean, it isn't something that a 'company' pays really, it just eventually falls through to the consumer of that company's product....
That's simply an oversimplification. Exactly who ends up paying what percentage of a tax varies a lot depending on the specific circumstances, and is an area of serious economic research. Wikipedia's article on tax incidence provides a pretty good overview, but the short answer is that extra taxes on corporations typically gets split between consumers (in the form of higher prices), employees (in the form of lower wages), suppliers (in the form of cuts), and shareholders (in the form of lower earnings).
This is important to point out, because the false belief that corporations just pass along all taxes benefits the minority of Americans who own significant amounts of stock. In 2007, 1% of Americans owned 43% of all financial assets, the next wealthiest 19% of Americans owned 50%, leaving just 7% for everybody else (source). So if you're a stockholder, you want taxes on corporations low, which means you'd really like to convince most people that taxes on corporations are just taxes on themselves so that they'll oppose taxes on corporations. In other words, it boils down to rich people saying "We want more money".
I am officially gone from
I'll let everyone in on a little secret. IBM is getting rid of most of its software developers because it wants to get out of the software development business. The reason is because they, for a variety of reasons, produce mediocre software, and the executives know it.
IBM's strength is its sales channels. It can command high prices for it's software because it is a trusted brand, and it's very good at strong-arming customers into purchasing expensive complicated solutions once they get their foot in the door.
IBM's new software business model is as follows....
1) Find holes in their "portfolio" for providing end-to-end solutions for customers.
2) Purchase existing companies where that software is already implemented (e.g. Rational, ILOG, Green Hat, Cognos, Buildforge, Telelogic, etc...)
3) Sell said software at much higher prices than the original company could have ever gotten away with.
4) Reduce headcount by eliminating developers from purchased company, replacing them with offshore developers whose only purpose is to "maintain" the newly acquired software. Also, eliminate less-profitable niche products and lay off those developers except for the cream of the crop.
5) Reap huge profits.
6) Repeat.
Check out the list of companies they've acquired...
http://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_IBM#Acquisitions_since_1999
So don't think that the executives at IBM are idiots. They're not. They've found a way to squeeze tons of profits from existing software companies. They have no reason to care about employee morale. They don't need developers. They've got too many as it is from all of these acquired companies. Bad morale means employees will leave on their own, meaning they don't have to pay severance.
Also, IBM typically purchases companies for a handful of their product line. That leaves lots of smaller software products that IBM simply has no use for (not a large enough market, duplication of product lines, etc...). Often, "rebalancing" means chopping these products out of existence. IBM has literally THOUSANDS of these small niche products that it wants to eliminate.
So for developers, it sucks, because the IBM executives have no need for you anymore. There's no reason for IBM to produce its own software anymore. Why risk starting development on a complex product when you can just purchase the finished product? You're nothing more than a "resource" that they have too much of and which needs to be reduced through "resource actions".
But for executives and shareholders, it's a wonderful arrangement. Don't be fooled....IBM can be profitable doing this for a very long time. Please keep in mind that IBM reducing US headcount from 130k to 90k is misleading. That number does not include the huge number of employees that they've absorbed through acquisitions. They've laid off many more than 40k US employees, and they have no reason to stop now.