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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.
i i i...black sabbath intro
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
They're constantly looking to move jobs from areas of relatively high pay (USA, England, Australia, etc.) to areas of relatively low pay (India, Philippines, China, etc.) Which is all well and good if the standard of work were maintained - but it's not. They pay peanuts, and they get monkeys - I've worked with some fantastically competent people from India and China, but the salary they'd command back home is more than IBM is prepared to pay.
I remember an anecdote of a change on a major financial company's test mainframe. It included, amongst other things, an IPL (Initial Program Load - the mainframe equivalent of the three finger salute.) The Chinese staff IPLed the production mainframe. The financial company blew its lid over that, and demanded the work be moved back to their home country, which it duly was ... and two years later, it was back in China again to save money.
I contracted for them for a while. They don't allow an increase in rates (if you want more money, go elsewhere, and you may be able to get back in later on), whilst frequently demanding that you take extra days off so they can balance the books, with next to no notice, and often unilaterally cutting your rate by 10%. Suffice to say that, if I were told about a contract at IBM, my response would be akin to Jack's in Halting State.
There are companies I would happily work at again if given the chance. Then there are companies I would only work at if I were desperate. IBM is in the latter group, despite (or perhaps because of?) their name.
... sell them to Lenovo?
The 90's called. They want their web page back.
I am suprised IBM kept any jobs open in New York state. I would love to see what sweatheart tax break they were given that no other business received.
Obviously, these jobs were cut because there were not enough skilled STEM employees available. This is a clear sign we need more H1Bs.
How about if you assholes retrain the 3000 people for the 3000 open positions?
Assholes.
Ok fine, you don't want to hire local talent? You can't sell your products/services locally! Move your headquarters to one of those hellpit countries.
I think this would be a reasonable way to balance workforce/workload.
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.
No. There isn't.
There is a federal law that requires government be notified 60 days prior to a mass layoff. Nothing in the law requires disclosure of the number of employees affected.
The law says over 49 people at one site.
I did an internship in college at IBM in the summer of 2001 and it was awesome. But by the time I graduated they weren't hiring at that location anymore. And a couple years later they sold that whole facility to Hitachi (when they decided to get out of the hard-drive business). Looks like they've just kept going downhill since then. I'm kinda glad they didn't give me an offer :)
'3000 open positions' .. 'cognitive computing' -- "So do you know how to be replaced by an outsourced position? If so, you're temporarily hired! Welcome to our new 'cognitive computing team'."
A feeling of having made the same mistake before: Deja Foobar
In principle, I agree. But that only holds true as long as management is correctly evaluating what and who is performing efficiently. Judging from IBM's performance and stock price, management is not doing so hot at making that judgement.
That's also a nice thing about markets. They not only punish inefficiency, they also punish stupid management. It may take a while, but eventually the chickens come home to roost.
While government shouldn't protect the inefficient employees, it shouldn't protect incompetent management, either.
Also, economic efficiency isn't everything. Would you be comfortable offshoring industries our national defense is dependent on, even if economic efficiencies could be obtained by doing so?
American Third Position
Finally, a real choice!
My company hired IBM for an "assessment" and for "process improvement" - yeah now we are sending IT work offshore - I see where OUR jobs are headed... The same place all these IBM folks are going - to the unemployment line!
The Truth is a Virus!!!
This isn't what IBM says it's doing...
"IBM layoffs expected. Instead, IBM adds 500 positions."
http://www.csmonitor.com/Busin...
I guess it's time for the yearly Communication Workers of America local 1701 to try to unionize IBM again under the name "Alliance@IBM". Don't they usually wait until March for this same old song and dance? Why's it early this year?
This entire idea that any jobs should be protected is idiotic. If a job doesn't make economic sense it should be eliminated, that's the entire point of progress - eliminating inefficient jobs so that production can become more economical, as in cheaper, thus providing lower prices.
So what would be the proper way to deal with countries that subsidize their workforces? Aren't such countries essentially dumping cheap labor onto the world market? Wouldn't some kind of government action be the only way to effectively address such foul play? Or are you aware of some sort of approach that wouldn't require government intervention?
Maybe they tought Watson to program?
You guys are bitching that the tech firms are hiring the Indians and look at yourselves ... you can't even spell correctly !
You do realize that IBM really is an international company and has a lot of US employees don't you? If they hired only American workers, using your logic, every other country would refuse to let IBM sell products in their country. This, of course, would require IBM (and Apple, and GE, and Facebook, and Google, and Intel, and AMD, and...) to split into two independent companies - the US company and the International company. The former would sell overpriced and lame (due to the lack of volume/revenue from the local market to spend on R&D) products to the US. The latter would develop innovative products and sell them to the rest of the first world and the developing economies - and this would be good how?
One interesting question is, what percentage of revenue and profit come from the US market and what percentage of employe salaries and benefits goes to IBM's US employees. Certainly if that is around "in balance" there's little room for complaint (many years ago, I looked at this when they were publishing numbers of employees and revenue by region and it was clear that the US employees were sucking money out of other countries - but I have no idea how it is now and if it's just correcting for past abuses of feathering US employee's nests at the expense of unemployment in other countries).
Why is there an "insightful" mod and why isn't it "-1"? If I wanted insight, I wouldn't be reading
Maybe they tought Watson to program?
You guys are bitching that the tech firms are hiring the Indians and look at yourselves ... you can't even spell correctly !
That "and" should be "yet". The ellipsis should be a hyphen or a semicolon. There shouldn't be a space before the exclamation mark.
We'll keep your resume on file, AC.
Why is IBM throwing people away instead of re-training them?
My guess it that they are dumping hardware folks, and hiring software folks.
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
Just because corporations lie all the time, it doesn't mean they won't stop lying someday ...
IBM is well known for outsourcing and abusing H1-B and to a lesser extent L1 and L2 visas.
Mind you, Microsoft is worse.
-- Tigger warning: This post may contain tiggers! --
There is a lot of truth to that, however some of those old codgers have knowledge and skill sets you can't find anymore.
There are a few new tech companies that have seeded their start up with poached old codgers from some of these companies. The result is a much greater depth of technical knowledge. And that has resulted in some products that are profoundly more innovative.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
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!
didn't charleton heston say fight subsidy with subsidy?
M isn't for Machine's it's Math. The more you know yada yada
more recent and relevant education on new technology ... one old codger who can't handle change
There must be some fancy Latin phrase for "reasoning by stereotype". In legalese it's "assumes facts not in evidence". In plain English it's called spouting bullshit.
Entirely depends on why the job is being eliminated. The proverbial buggy whip manufacturers during the rise of the automobile? Maybe you guys should look into a second career. The company board threatens workers to accept massive cuts or move their their jobs moved to Bangladesh? Fuck those greedy shitbag motherfuckers.
Well if they fly them in from India then they'll be living in New York, won't they? D'Oh!
While I agree that's how it should work, in the real world it doesn't. Companies lay people off, expecting the remaining staff to essentially produce at the same level. And while one would think that would reduce prices (lower opex should translate into lower priced product) that's rarely the case. Instead it usually goes into company profits, so the company can look better to shareholders and its stock price increases.
Don't be fooled into thinking IBM needs to layoff all these people to remain competitive it had a $6 billion profit in 2013.
If IBM employees cannot provide enough economic value to the market for the market to pay the company enough to offset their cost and provide for profits on top of it, then those jobs have no business existing
If companies stop at that, I think most people would be fine with it.
But with the endless chase for ever MORE PROFIT, it is not enough for an employee to generate enough value to offset their own cost + profit, they have to generate more value than their hypothetical offshore counterpart.
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!
Oliver.
So what would be the proper way to deal with countries that subsidize their workforces?
You mean, like providing education, health care, law enforcement, etc to the people, so the "workforce" don't have to pay for private teachers, medicine, or private guards? Or infrastructures like roads, mass transit trains, electricity, clean water, broadband internet, etc, so the workforce don't have to live near the company, buy electric generators, etc? Or lower tax rate, which is effectively higher pay?
Where do you draw the line?
Oliver.
That's funny (as well as being a good point) but India already got hit with layoffs. Labor laws in India being what they are, the layoff's there were harsher with employees given hours to return their laptops and leave the premises.
===== Murphy's Law is recursive. =====
An outsourcing tax would just result in jinking with the books so that it wasn't "really" outsourcing and any money generated would just go to the government. If they had to cut H1B visas they'd have to hire regular employees.
===== Murphy's Law is recursive. =====
I work at IBM in a low cost country (but none of those you mentioned), and I love it, it is really an empowering company that leverages the skills of those willing to, providing the tools, the mentoring and the environment to develop.
Nevertheless, I think that is not the case in the US and in some other countries that managed to be left behind in the tech skills race, as in the West Europe.
US workers have completely lost pace in hard skills development but the quietus resides in the fact that most of the population in the US/UK dont know any foreign language, and those who do, they are not techies.
Dust off the books and you'll get back in business, US.
So...your answer to "Aren't such countries essentially dumping cheap labor onto the world market?" is "no". Thanks.
Care to answer my other questions? (I'm not trying to be a dick...I really would like to hear how you would address the problem of subsidized labor)
Open your eyes, dude :-) the best talent in the US has left IBM in the last decade, for companies like Google and even MSFT. There are a few skilled lifers left, but IBM, like Battlestar Galactica, has her back broken really bad. She will never jump again.
The 2014 layoffs in Bangalore caught every one by surprise. Open your eyes, your site will be next before you see it coming.
You can't sell your products/services locally!
You can do this right now, it's called a boycott.
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.
You are truly clueless, and I laugh at your naivety. Put down your copy of Atlas Shrugged and open your eyes.
The robber barons appreciate you and every idiot like you consistently going to bat for them despite it going directly against your own interests. (And ours) You're the real problem with the world these days: a sheep thinking he's a wolf, doing nothing but baaaaaing uselessly as the wolves complete their conquest unopposed.
Have never worked for IBM but I have worked with IBMers on various projects mostly at Sterling Forest.
Best wishes to all of them.
Sig for hire.
Since they are essentially a "New York Company" they tended to get a lot of state contracts. Because of this, it would be a big mistake for IBM to lay off too many employees within the state. Right now there are IBM consultants working in many state agencies, babysitting mainframes. Consultants are pretty much free money for IBM; if there were suddenly a huge pool of IBM trained individuals entering the local job market, it'd be easy to replace the expensive consultants with cheaper ex-IBM employees (via cheaper consulting firms, or direct hire) of comparable skill.
he does do the needful, though.
so he has that going for him, which is nice.
--
"It is now safe to switch off your computer."
that reminds me, in my previous company, we regularly flew people in from various remote offices (other countries) and put them up in hotels and had them work out of silicon valley for weeks (sometimes close to 2 months) at a time.
now tell me this: if it was so cheap and effective to have foreign workers on foreign lands, why would you fly them in (10 at a time, sometimes) and park them in expensive hotels and pay their per diem at california prices?
answer: they didn't trust then to work well back home, they needed them here to put even more time/pressure on them and after a long burn-out session that lasted weeks, they'd send them home and bring new ones in.
all the while, not hiring one single local bay area person. and in fact, laying off 1/3 of the local office.
after our big layoff, we did hire one more person. an h1b from india. of course. that must have taken balls the size of gulab jam...
--
"It is now safe to switch off your computer."
While I can only look on with distaste as you blame government for all ills the US is undergoing at the moment, I can enjoy a bit of schadenfreude knowing that your wonderful libertarian paradise sits on the same shelf as communism, gathering dust, both stacked in the warehouse and filed under "doesn't really understand human nature".
He tried to kill me with a forklift!
IBM has decided the only way it can make money is to buy and sell other people's companies. Keep the ones it likes, rebrand them and send most of the workforce overseas. For the ones it doesn't like sell them to foreign companies. Forget making 'things', even forget services. Just buy newer companies, typically software and smaller niche industry companies that combine specialized hardware and a narrow service focus for a specific task. Slap a Websphere or IBM Security or Tivoli name on it, push it out into the market arena and see what happens for 2 years. If it works, great, if not, toss it in the bin or sell it to China if there's a hardware component.
Roadmap 2015 almost guarantees that IBM will have near zero US employment soon, and as far as being a US or NYS company? That's paperwork. Become an India based holding company. May as well sell the services division to them soon - they're eating IBM's lunch because customers only care about cost and price, that's it. There is almost no value add for IBM proficiency in the services business. Customers don't care what works and what doesn't as long as everyone is protected by SLAs and insurance. Crappy is good enough. So when IBM waltzes in with a squadron of people to hawk the micromanagement that IBM does like no one else, customers ask "Well that's great but I'm not paying twice as much for an hour or two more uptime each quarter."
The basic problem is that Ginni Rometty is in over her head. But it's not her fault it's the fault of a culture that only looks inward for executive talent. Only lifers need apply. Moreover the senior executives behave like pirates: they are simply disconnected from the realities around them unless they're stripping assets and selling off pieces of the company. SEVEN straight quarters of declining revenues and the best thing Ginni can come up with is sell the low end server biz, the MCC div and of course fire another 5,000 people. Because when you're an IBM lifer that's the only thing they've ever done, the only thing they know how to do.
We IBMers know it, the press knows it, the analysts know it, Customers are beginning to figure it out... but after 2015, what? 40$EPS by 2020?!?
Novartis, one of the major global accounts IBM has, is leaving the company on December. It represented over 14K servers in 17 datacenters across the whole globe. When asked why, they said they were pretty happy with the service, but they wanted LOWER rates per human resource. So as you see it's not just a matter of IBM not wanting to pay for genuine talent, but also a matter of the big players in the money game not wanting to give a penny for that genuine talent.
OK, I know I might be over-simplifying stuff here, because what IBM wants from outsourcing is paying as low as they can while charging the customers as high as they are willing to pay, but it's worth mentioning everyone in the big money game has been trying to stretch their profits at the expenses of the workforce as much as they can, and this has been exacerbated in the last decade or so.
I work at IBM in a low cost country (but none of those you mentioned), and I love it, it is really an empowering company that leverages the skills of those willing to, providing the tools, the mentoring and the environment to develop.
Nevertheless, I think that is not the case in the US and in some other countries that managed to be left behind in the tech skills race, as in the West Europe.
US workers have completely lost pace in hard skills development but the quietus resides in the fact that most of the population in the US/UK dont know any foreign language, and those who do, they are not techies.
Dust off the books and you'll get back in business, US.
What a load of crap.
For starters, if you work for IBM at one of those low cost countries, you work in one of five places:
Brazil, Russia, India, China, Argentina.
Most of the people from IBM I've worked with in those areas are terrible. Most of them don't have the hard skills that you're lambasting people in the US for. Most of the IT workers there don't know how to do something unless you give them explicit instructions. There's very little critical thinking going on. Even those in those countries I've worked with AFTER IBM have generally been terrible. A monitoring team I trained up was generally less than useless. They could not follow the most basic of instructions and often had serious personality issues.
I hate to break it to you, but if you're going to correct someone on facts, you should at least get your spelling right. His name is "Ozzy" (Osbourne), not "Ozzie". You're thinking of some old TV show called "The Adventures of Ozzie and Harriet".
Another former IBMer here, also with a 5-digit Slashdot ID. But I left years and years ago when I saw where things were headed.
Way back in the day, IBM was a technology company first. TJ Watson drove the company and took massive chances on things like the 360. IBM regularly bet the company on new ideas and regularly took chances with big projects and big ideas.
These days IBM management really has no clue where they're driving the company nor about technology. We used to have a black joke that IBM management wouldn't invest in a new technology until they saw it on the cover of Businessweek, but they've lived up to that recently.
To give you idea of what's gone wrong at IBM I'd direct you to a (paywalled) article at the WSJ from last month and summarized well at http://annexresearch.wordpress.... The key point to see how well management has performed is to look at the amount of stock IBM has outstanding. It's gone from 2.3B shares in 1995 to around 1.1B today. Do the math on how much money that represents and you can see that what IBM management has been "investing in" has been stock repurchases, not new products. That IBM management can't find anything better to do with their money shows just how out of touch with technology they are.
So call me a victim of "the classic lazy crutch of the worker" if you will, but I'm quite able to show you a raft of companies that have created innovations and value with far, far less than IBM has spent on stock repurchases.
Earlier this year, slashdot featured an article about how IBM is dumping "a billion dollars and thousands of researchers" into a new Watson group based out of New York City.
... What?
Now, less than two months later, they're axing half of their New York work force? And their explanation is that they're shuffling their investments into new areas of technology, such as cognitive computing? Isn't that what Watson is?
Chuuch. Preach. Tabernacle.
Obviously, these jobs were cut because there were not enough skilled STEM employees available. This is a clear sign we need more H1Bs.
IBM stands for International Business Machine. International means that it does not call USA home. It means it follows the market and where it can find the lowest of the low salaries.
If you poor down your society (as is happening in the USA and elsewhere) , that society will not have the money to buy your goods and services. I call that aspect, the "Walmarting of America"
Leslie Satenstein Montreal Quebec Canada
An employer needs to have staff to setup,maintain,improve services to others and to itself. It benefits from a motivated workforce, but is obsessed with cutting costs over increasing efficiency. An Employee needs to have a job to allow him to be a consumer at the store, a parent to the next generation and so much more... an element of local society. He/She provides time to the employer who needs to use that resource efficiently as possible for yesterdays, todays and tomorrows challenges. Fast forward to today. The employer is obsessed with cutting costs, and loses sight of efficiency and productivity goals and only presses their employees to pass on their knowledge to lower paid workers, with the illusion of promotions and advances at the workplace. Is it best then for an employee to quicklly and efficiently train someone where the wages are rising, and not require the local employee to be productive? Are we doomed by leadership that does not seek productivity and efficiency over cost and global exposure? Too often we end up withtoo many managers and no one to guide coherent policies, consistent methodologies, and in short a sane working environment. Real work is not appreciated, and, as such its getting done less frequently. Rush a project get a promotion, leave a stinky turd in the wake for others to suffer. Bitter? Yeah.. we still have the same challenges as 20 years ago. It was 1970 that we went to the moon. What have we done lately?
Time for a new Political party in the US (or two!) One is off the rails Other cant pony up a leader.
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.
- 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.
That same Indian person is probably worth at least $50 if ground into a fine slurry to be used as a livestock feed and industrial lubricant. Having them continue to perform a job when they're worth more as raw materials is fantastically wasteful.
You can't spell "oneiromancy" without "roman".