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Massive Layoff Underway At IBM
Tekla Perry writes: Project Chrome, a massive layoff that IBM is pretending is not a massive layoff, is underway. At more than 100,000 people, it is projected to be the largest mass layoff by any U.S. corporation in at least 20 years. Alliance@IBM, the IBM employees' union, says it has so far collected reports of 5000 jobs eliminated, but those are just numbers of those getting official layoff notices. According to anecdotal reports, IBM appears to be abusing the performance appraisal system to cut additional employees without officially laying them off.
Somehow, I don't think the blog post quoted in the Forbes article is the official stance of IBM corporate PR:
Response from IBM (via its Hong Kong office’s blog):
IBM does not comment on rumors or speculation. However, we’ll make an exception when the speculation is stupid. That’s the case here, where an industry gadfly is trying to make noise about how IBM is about to lay off 26 percent of its workforce. That’s over 100,000 people, which is totally ludicrous.
Despite claiming to be an "official" IBM blog, I don't believe a corporate PR person would say that speculation is stupid or refer to an industry gadfly making noise.
We just can't find enough tech workers here in the USA! Honest!
Love sees no species.
I'm sure many Slashdot readers will be directly affected by this, either being laid off themselves, surviving the layoffs only to go work in turmoil every day, or have their spouse or other loved one laid off. That's hard to deal with. Times will get better, of course, but it sure may not seem like it right now. Our hearts go out to you.
Where is this 100,000 number coming from? The linked article says 5,000 are documented, and then asserts without proof that the full number is/will be 100,000.
Until there's more evidence, I don't believe the 100,000 number.
What ever happened to skepticism (in the original, benign sense of the word) or critical thinking skills?
(This is NOT an assertion that there will be substantially less than 100,000 layoffs. So please, no one claim I'm saying that.)
If you have a 401(k) or any kind of mutual fund investment, you are part of Wall Street. That's how the system works, it's not spinning in a vacuum. That 6% return you got last year did not fall from the sky, it ended up in your pockets because institutional shareholders put pressure on companies like IBM to help the stock price and/or pay more dividends.
lucm, indeed.
“I was included in the resource action in spite of consistently high performance numbers. I am the only woman in the work group and one of only a handful in the whole region. The male partners that were retained have crucial chummy drinking buddy relationships with their customers. The treatment and support of professional women, in spite of the window dressing at the top layers is appalling.”
if the drinking buddy relationship is crucial and you haven't maintained said relationships, then don't you think that's why you're being fired? If you are unwilling to maintain this crucial customer relationship, why should you be retained? Is there some reason why women can't be good drinking buddies too?
Yep, same cat.
He basically says that since IBM is going downhill and losing market share, they should just continue to do what they are doing now, with the same people.
I bought absolutely nothing from IBM in the last 10 years. I plan to buy nothing from them in the next 10 years. I use none of their services. So it makes sense to me for them to become a smaller company.
Is this another case of vitality curve management? GE's Jack Welch was the quintessential example of this policy and is considered one of the most effective company leaders ever.
Unless you worked at GE and were condemned to watch the layoffs year after year until you were finally canned due to being part of the bottom 10% -- or watching the dysfunctional games people played because of the policy
They didn't need to do this to stay profitable.
Companies exist to produce profits, not to provide employment. If an employee is not providing net value, then it is better for the company, and the overall economy, for that employee to go somewhere else. In the long run, it is better for the employee as well.
You do know that layoffs lead to your most experienced productive staff leaving, because it's easy for them to get employment elsewhere right? So while a big corp thinks layoffs are a way of losing the chaff, it's more effective at losing the wheat. Slowly hiring if you want to grow and slowly losing staff through attrition if you want to get smaller is the right way. If your business sucks, get your staff to start new ones internally. If they're competent, they'll have plenty of ideas.
I should use this sig to advertise my book ISBN-13 : 978-1501515132.
The management responsible for these layoffs don't care that much if they're out of a job. Every C-level manager only has to work 1 year after which they could afford never to have to work a day in their life.
People below that... not so much.
When Carly was CEO at HP, she had a 4 million dollar salary and at some point she gave herself a 16 million dollar bonus for saving lots of money (almost all HP employees waived 1 day's worth of salary at Carly's request just a few month's before she gave herself that bonus).
The current HP CEO on the other hand already has a 16 million dollar salary package. If HP goes tits up tomorrow, she's really not going to lose any sleep over it.
The mountains of madness have many little plateaus of sanity - Terry Pratchett.
No. IBM is not asking for volunteers. They are cutting their under-performers. Employees usually know which of their coworkers are deadwood, and if done right, some pruning can lead to a morale boost. The big risk is if you don't cut deep enough and have to come back for another round.
This certainly was false in my area during the last big round of layoffs. (No word yet on whether we'll be seeing layoffs this time round or not.) High performers were cut as well as low performers. You're right that we know who falls into which category -- and it is very obvious that they're not just cutting underperformers.
In addition, whenever there are ill-conceived layoffs in process, there are always some employees that decide that they have had enough of taking on extra work while waiting for the axe to fall on themselves, and jump ship of their own accord. We've seen a couple of those already, and they tend to be high performers themselves -- since they're the ones who are confident of being able to find another job.
How can we continue to believe in a just universe and freedom to eat crackers if we have no ale?
...and yet the CEO just got a big raise after profits and revenue turned down for the 11th consecutive quarter. Go figure.
"They are cutting their under-performers"
They are cutting top performers who are in their 50's and 60's and closing in on the longevity needed for certain insurance and pension benefits.
And being top performers they are relatively well paid.
Has nothing to do with under performance, although IBM instructed their management to give an underperformance review along with the termination date so they could cut the severance in half to 13 weeks or nothing when they put them on "performance improvement needed in 30 days" plan.
Looks to me from the outside like they choose the least costly way based on management's take on need from each "resource" for transition help.
That may be true, but they're being very underhanded in the way that they're conducting these layoffs. Apparently some employees took a deal in the past couple of years that protected them from layoffs, in return for early retirement after a few years of reduced hours. The only exception was if they got the lowest score on their evaluation. Suddenly competent employees are being found incompetent, so that they can be fired.
That's one example. I don't work for IBM, never did, and after they pull this, they'll have trouble convincing anyone who has another option to work for them. They've screwed themselves for years, any agreement they make is clearly not worth the paper it's written on.
I think IBM's management must know the company is in its death throes, they're just slowly shedding people to minimize chaos.
The right to protest the State is more sacred than the State.
They are cutting top performers who are in their 50's and 60's and closing in on the longevity needed for certain insurance and pension benefits.
IBM eliminated their pension plans 20 years ago. Older employees may be more expensive because they've gotten lots of raises throughout their careers, but pensions aren't an issue; IBM's retirement plans are all 401K-based now. IBM actually did what you describe about 10 years ago. The used it to get rid of the people who had been grandfathered into the old pension plan. My former manager got nailed by that as did several other middle managers and execs I knew. I was in the transitional group. They dumped our pensions and instead gave us a one-time payout into a 401K (I got like $80K), plus set up a reasonably-generous 401K matching program, which they later made less generous (though still not bad, honestly).
I suppose older workers may use medical insurance more heavily (like most big companies, IBM is self-insured), but I'd think by their 60's that's actually declining since their kids are no longer on the insurance.
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