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IBM Begins Layoffs, Questions Arise About Pact With New York
dcblogs writes with news that the rumored IBM layoffs have begun. "IBM is laying off U.S. employees this week as part of a $1B restructuring, and is apparently trying keep the exact number of cuts secret. The Alliance@IBM, the main source of layoff information at IBM, says the company has stopped including in its resource action documents, given to cut employees, the number of employees selected for a job cut. The union calls it a 'disturbing development.' Meanwhile, two days prior to the layoffs, NY Governor Cuomo announced that it reached a new minimum staffing level agreement with IBM to 'maintain 3,100 high-tech jobs in the Hudson Valley and surrounding areas.' The governor's office did not say how many IBM jobs are now there, but others put estimate it at around 7,000. Lee Conrad, a national coordinator for the Alliance, said the governor's announcement raises some questions for workers and the region. 'Yes, you're trying to protect 3,100 jobs but what about the other 3,900 jobs?' The Alliance estimates that anywhere from 4,000 to 6,000 U.S. workers could be impacted by the latest round of layoffs. IBM says it has more than 3,000 open positions in the U.S., and says the cuts are part of a 'rebalancing' as it shifts investments into new areas of technology, such as cognitive computing."
Alliance@IBM has a page collecting reports from people terminated today.
Frankly, I'll never understand why anyone would apply for a job at IBM, unless he's already desperate. Here in Austin, I know plenty of people who have left IBM over the past few years, most of them willingly. I don't know anyone who has joined IBM in the last 10 years.
And the men who hold high places must be the ones who start
To mold a new reality... closer to the heart
If these companies aren't willing to hire local talent and pay living wages, then maybe we should start placing embargoes on their goods and services.
Time for outsourcing tax?
Better to at least keep the jobs hear other then paying for all of the welfare for the people out of work.
Read his latest blog posting on their tailspin:
http://www.cringely.com/2014/01/23/ibm-sells-intel-server-business-company-doomed/?utm_source=rss&utm_medium=rss&utm_campaign=ibm-sells-intel-server-business-company-doomed
I got laid off from IBM almost 7 years ago, and my initial reaction was "Free at last!" Luckily I found a good job where I worked before them, and using the tech I learned at IBM. Typically, they sent my job to one of their cheap facilities in Brazil, and expected me to bring those guys up to speed in my last 30 days ... yeah, right.
My former manager told me a couple years later that the client, a rather large auto company working through a big gummint bailout, got fed up with the scant tech knowledge of the platform, and communications problems (on our "team" phone chats before I left, all the Brazilians used Skype, and there was an annoying constant buzzing sound from that, never mind the thickly accented English I could barely understand, if at all), and demanded the work be done back in the US by the guy I mentored.
I think Cringe is dead on in his analysis: IBM is run by short-sighted, selfish management that is only looking to the next quarter's numbers, and how soon they can bail out with golden parachutes as they eat up the seed corn. They have even been calculating just how much they can break contracts and labor laws weighing the short-term profits against the penalties and fines they have to pay when caught out by customers or the law.
Free at last!
So if you cost $100 and generate $120 value, but the other guy in India cost $20 and generated only $25, well, the company can hire 5 India guy to generate $125 for the same cost of $100, so bye bye to your job.
YOU would think that the guy in India is crap, producing only $25 value, less than a quarter of yours, but you are in fact competing with 5 of them, which combined to give more value to the company than you could!
- I don't see what the problem is, that's exactly what should happen!
Every cent counts, every dollar that can be made by reducing cost of production and increasing efficiency should be made! Where is the problem that you are complaining about?
If your problem is that you are uncompetitive at your taxation levels and your inflation levels with people in India, then your problem is not with the IBM, it is with your government.
Stop paying taxes.
You can't handle the truth.
IBMer here posting as AC, yeah I know but. (I do have 5 digit Slashdot ID.)
So I didn't get RA'd today but would eventually if I stayed, which I will not.
The real issue here is the boneheaded "Road to 2015" where Ginny Rometti and her predecessor Sam Palmisano pulled one of the most Kafkaesque things I've ever seen at IBM. To net it out, they promised Wall Street that they would reach $20 EPS by 2015, through a combination of profits and stock buybacks. They also promised $20B in revenue growth. That drove the share price immediately from ~$120 to >$200, although it's down to $180 now. But needless to say, all the execs with compensation tied to share price were sweetly remunerated for this. In a true irony, the decision to do this in the first place was because they had successfully done it with a prior $10/EPS goal a few years before, mostly via cost reductions, not value delivery.... so essentially they were doubling down on behavior that was arguably stupid the first time.
Now it's 2014 and revenue has actually been flat or DOWN since that Road to 2015 proclamation. What does IBM do? Do they say, "Well, we didn't make the revenue number so we can't achieve the EPS target"? Hell no -- they reaffirm the EPS target as though the revenue doesn't matter. So to get there, the whole organization is now run like a hedge fund, comparing numbers on a spreadsheet to define strategy. Naturally that dictates a decision to raise all your prices and slash your expenses. And that means screwing over the customers AND the employees, including the good ones -- which are still the vast majority. Wages are flat, annual bonuses have gone from 15% to 8% to nothing this year. Expense reimbursements (phone, home office, Internet) have been discontinued, and they even changed 401k matching from per-paycheck to year-end, so they get to play with the money all year, and deny it to anyone not actively employed on December 15. (Of course this makes layoffs all the more attractive.)
The result is the quality of stuff from IBM has gone to complete shit. I am not exaggerating. There simply aren't enough qualified people to deliver on the brand promise that created the "You'll never get fired for buying IBM" mantra. Honestly our technical debt in every important area scares the hell out of me, and customers are catching on. Every decision is based on, "Is there a contract that needs this?" rather than, "Is this the right way to develop product/services?"
Look, I'm no armchair quarterback and I don't expect any organization to be perfect. Criticizing execs is the classic lazy crutch of the worker. But this is simply the complete raping of an historic American company. We stood for something. Yes the international part was central to it, and we embraced it -- I've been to every part of the planet and met people so talented it is humbling. But now it's just geo-arbitrage and, as some have mentioned, not the top quality talent pursuit that used to be our hallmark. Make it cheap, do just enough to barely keep the customers from fleeing, and dammit MAKE THAT $20 EPS NUMBER IN 2015.
IBM has too much clout and too many government contracts to crater completely... but the crisis is coming and it's not going to be pretty. Ginny and her clique are going to oversee the hollowing out of IBM, and that's not good for anyone, even them. They'll get rich and move on like Palmisano did, but their legacy will be the destruction of IBM.
Smoot-Hawley was a bad idea at THAT time because the USA had a trade surplus. Right-wing media consistently omits this important fact.
Further, the main purpose of tariffs is to encourage the other country to stop dicking with their currency, reduce trade barriers, and allow more consumerism in their own country. It's not to cut total trade. And they should be put in place gradually, not suddenly like they did in the 30's.
Table-ized A.I.