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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
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?
Obviously, these jobs were cut because there were not enough skilled STEM employees available. This is a clear sign we need more H1Bs.
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.
The 80s called. They want to party like its 1999.
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!
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.
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.
a 100% halt on all imported labor. ALL OF IT. stop fucking around, america! if you don't protect your own people, you won't have local people who can AFFORD to buy the shit your company makes.
forget about taxing to stop outsourcing. just get rid of h1b entirely and the other work visas. there are so many people living here, already, who can't find jobs and who need them badly.
why not take care of your own? I got news for you, every other country takes care of their own. why are we so 'open' to the point of killing our own people via slow starvation?
protection of local work force is NOT a sin and it needs to be done now! if we don't, say goodbye to the US being a first world nation. the nation is built on the middle class and if you let the middle class disappear, this will not end well for the US, as a whole.
--
"It is now safe to switch off your computer."