IBM Added 70,000 People To Its Ranks In 2015, And Lost That Many, Too (businessinsider.com)

walterbyrd writes: IBM is very particular in hiring for the hot new skills where IBM is expanding like machine learning, big data, mobile, and security. However, even with adding 70,000 people to their payroll in 2015, IBM actually ended the year with a slightly lower headcount than when it started, according to a SEC filing. IBM is always very careful when talking about its global headcount, which has been going through major shifts for years. It won't say how many people it lays off each year, or how old they are or in what areas they work. It only talks only about "resource actions" or "workforce rebalancing" in terms of the total amount of money it spends on them. It spent $587 million on such things in 2015 (and nearly $1.5 billion in 2014), it said.

Comments

Re:What does IBM do?

[__aaclcg7560]

I am at a loss at knowing/understanding what IBM does.

IBM makes mainframes and provide services. You can never go wrong with IBM.

Why would I buy an IBM computer now as opposed to a Linux box of no pedigree.

The newer mainframes can run 2,000+ instances of Linux.

"resource actions" or "workforce rebalancing"

[zenlessyank]

Or in other words, "we don't pay retirement packages and we don't believe in careers at IBM". Remember folks capitalism has no bounds, no emotions, no respect. The perfection of corporate slavery is complete.

Re:"resource actions" or "workforce rebalancing"

[JoeMerchant]

The classical pension was too easy for management to abuse - fired on the 29th year, etc. 401(k) is the way of today, and only works if you choose to participate.

Re:"resource actions" or "workforce rebalancing"

[turbidostato]

"This is not capitalism."

Yes, it is.

"Capitalists would realize that experienced people are very valuable and worth a high price."

No. Those wouldn't be capitalists; those would be entrepreneurs or businessmen, but not capitalists.

Capitalists are about, who would say, capital. So who will offer me the bests profits *today* is what matters. I'll wait till tomorrow to see who offers me the best profits tomorrow. Think about it and you'll see that's the best strategy to maximize profits, both in the short and the long run, and that's what capitalism is about.

And since we live on a capitalist society you can see how it is evolving to optimize that kind of strategy by globalizing (so I can move my capital all around the world to match it against the most profitting investment without penalites) and by taking away any circumstance that would introduce drag for moving capitals around -like employees' rigths, or any kind of future responsiblity for my investment (so I can move capitals not only anywhere around the world but do it fast and without penalizing).

"What IBM does is short-term greed, which long-term kills the company"

So what? See above: capitalism is not about this or that company succeeding, or even surviving, but about profits. So what if IBM folds tomorrow, as long as I extracted the highest profit for my money today? I will take my money tomorrow to the highest profit payer anyway!

Re:"resource actions" or "workforce rebalancing"

[Anonymous Coward]

Basically what they did was can the old farts and replace them with younger folks and H1-bs.

I was one of the younger folk back in '94. We were told the older folks "didn't have the skills" and "didn't want to learn new skills" so they had to go.

Then over night, I woke up and found out that I "didn't have the skills" and was replaced by folks who did "have the skills" - doing exactly the same work.

Technical skills are age and wage dependent in this profession. At 20, C++ is a great skills. At 50, C++ is out of date.

Re:"resource actions" or "workforce rebalancing"

[Dr. Evil]

"Workforce rebalancing" means sending jobs to India and Brazil.

It's not "outsourcing" because they're going to IBM India and IBM Brazil.

Re:"resource actions" or "workforce rebalancing"

[pauljlucas]

At 20, C++ is a great skills [sic]. At 50, C++ is out of date.

This falls under YMMV. I suppose there's a chance you might be right since I'm only 48 now, but I've been working at a C++ shop and was hired two years ago. It's one of the best jobs I've ever had.

We've also been trying to hire for a while now. I interview so many candidates that can't write a C++ 101-level implementation of an assignment operator that does a deep copy. Many claim "expert" C++ knowledge on their resumes too.

Re:"resource actions" or "workforce rebalancing"

[fluffernutter]

.... and then they complain they can't attract people to technology fields.

Re:"resource actions" or "workforce rebalancing"

[Dr. Evil]

It's not even off-shoring, IBM has offices on all shores involved and can play governments off of one another to get better deals on workers.

Re:A or B

[Zeio]

I know some folks who currently work at and worked at IBM. It is not "B". It is taking people who put a lot of time in and are very good at their job and not even giving them the opportunity to lose some salary to keep their jobs. I heard a story from one friend who was at IBM where they were excited to be working with a new team to support them in India but then suddenly being laid off with the Indian team taking over their jobs. So its a train-and-dump scheme a lot of the time.

What IBM isn't realizing is that a lot of these folks will be relearning the know how without the benefit of those who were knifed in the back and also that in other cultures being an engineer for 10-20+ years is not the goal, they _all_ want to be in management and gain "rank" rather than experience and technical know how.

Invariably you get a bunch of freshers with no real experience being lead by the bureaucrats. Its really unfortunate to see very smart very talented people be summarily fired after training what are supposed to be supporting teams and engineers. I also bothers me they are not given the opportunity to meet new terms to save their jobs.

What is not realized is in other cultures the competitors often build up a presence near to or sometimes next door to a place like IBM and poach engineers and intellectual property. And given IBM is all about decent (not trollish) intellectual property this is not a long term good strategy to be using scabs to replace true blue engineers.

You can also read some stuff here about the former IBM union http://www.endicottalliance.or... - they were not a strong or unreasonable union but you can get a feel for how many good long term employees are facing the firing squad.

In 1985 IBM had 230,000 employees mostly in the USA. Now its 71,000 - and who knows where.

A shell of it's former self....

[Anonymous Coward]

The talent left this company a long time ago.
- The research folks on Watson all left after the Jeopardy publicity stunt. they're all at greener pastures. The CTO for Watson left fairly quickly.
- The people sold off to Lenovo have mostly left - though Lenovo was a bit better than IBM
- The people working on Cloud are basically what was left over after the SoftLayer folks left, and the remnants of old System X & P. Musical chairs. The Softlayer CEO and exec staff also left.
- The Blade Network people and the entire Systems Networking business left to Google, AWS, and other greener pastures
- The DB2 people have mostly left to new startups.
- Just about every key architect for CPUs has moved to ARM competitors

Did I mention that their pay and bonus sucks? One mans loss it another mans gain... Just about every company outside of the HW business has benefited from influx of talent running away from this company.

BTW - That new company called HPE... it's basically the same as above with another name....

Re:A shell of it's former self....

[Anonymous Coward]

I don't know where you are getting your info from, but I've been in DB2 for the last 19 (nearly) years. Most of the top people from 19 years ago ... are still there. There have been some retirements, and some loss at the mid-to-low tiers, but most of the people I knew as the smartest from 19 years ago are there, but far more senior now. And I'm still there, don't know why.

Re:A shell of it's former self....

[gweihir]

Well, I recently had the displeasure to meet with an IBM technical team. I did suggest regular meetings to my contact at the customer, since we were working on similar things for the customer. I have now learned better: The IBM team was exceptionally arrogant, completely incompetent, socially inept and generally unhelpful. My contact and I agreed to not continue these meetings.

The IBM people are now 3 years over schedule and have not even gotten basic things right. This must really be a culture of "nobody was ever fired for buying IBM", or whoever keeps insisting they get yet another chance would have been fired a long time ago.

Re:A shell of it's former self....

[dwywit]

I feel quite sad about IBM. I was a junior admin when we bought a System/36, then the Senior Admin when we upgraded to an AS400.

The gear was expensive, sure, but it was good quality, the sales staff, the CSRs and PSRs knew what they were talking about, they were passionate to find a solution for you, they were friendly and reachable (not arrogant, just *competent* in the best sense of that word), and you generally got a free extended lunch or an invite to the customers' xmas drinks every year. I mean, we even had a tech team once bring an OSCILLOSCOPE to our location to pin down a problem with a machine.

I miss those days. I wonder what's happened to their mid-range teams?

Re:A shell of it's former self....

[KGIII]

Hmm... I actually know, as in know personally, a handful of people who have worked at IBM and, out of that handful of people, I communicate with three of them on a weekly basis. Sometimes we are in touch more often than that.

Full disclosure: I had financial interest in IBM, quite a bit of interest - you could say, until early 2013. I own zero shares in IBM today.

Let me see if I can give you a different perspective?

I'm too lazy to go look right at the moment but the last time I looked, the shares were about half the price that they were when I sold. I sold because I'd noticed a lot of fluctuation in price, in a short amount of time, and I'd already made a decent profit on them. So, I just sold them. I want to say that they sold for about $205 each but I'm not sure. That's close enough if you're interested in the math.

The folks I know who work there are actually concerned. They're not overly concerned with their jobs as individuals, they're expecting a far greater disruption. Of all of the ones that I know, the aforementioned handful, at least half of them have indicated that they're likely to take an early retirement. They're reasonably sure they'll get an option like that. The others seem to think they'll be given the chance (if needed) to relocate and, if I'm understanding correctly, they expect to be able to keep nearly the same amount of pay - except they'll be making US wages in India or China and continuing to be managers.

That's how I understand their views. I'd like to elaborate but I do not have their permission to do so. That's the gist of it.

To go a little further, the reduction in expenses is a requirement. IBM has a huge labor pool and the powers that be see that as a cost center. For better or worse, they need to cut expenses and this is not a matter of "activist investors" or the likes. The last time I read their financial reports, it was not looking good. That was probably about a year and a half ago when I went through them - you can find 'em online if you want. Oh, they make 'em look good because they want you to buy their shares but look at the numbers from the past few years and you'll see a trend. In isolation, they look pretty good. As a trend, it's a bit more obvious.

Anyhow, they have to do something. We can speculate what that something is but they have to do something and do it without upsetting the folks who are investing. They're a skittish bunch and prone to overreaction.

But, as near as I can tell, the folks who have been there a while and are still handy to IBM aren't worried about losing their jobs - even if it means they have to move to management and relocate. Or, they're already in management and are good at their job so they'll just move to a different department. IBM seems keen on keeping a lot of managers around. There are probably more cuts, actual overall cuts, coming in the not-to-distant future. If I had to guess, I'd say Q3 - near the end of it. But that's just a guess that's inferred from conversations.

So, there's a little different perspective.

Corporate DoubleSpeak

[JustAnotherOldGuy]

Let's not be coy...we all know what this Corporate DoubleSpeak means.

"resource actions" = "firing people"

"workforce rebalancing" = "firing people"

"rightsizing" = "firing people"

"personnel adjustment" = "firing people"

Re:Corporate DoubleSpeak

[Anonymous Coward]

Not so much H1B's but more a case of offshoring to lesser skilled individuals. Every time my team lost a local with the job offshored, the offshore team would say they need 3-4 people to do the same work and often got the hiring approved to do so. At it's peak, my team had 24 people, locally we are now down to 3 while the offshore team numbers 82 (and growing.)

Many teams in the U.S and elsewhere spend more time working on escalations resulting from offshore workers than productive, value added work or spend extra hours trying to catch up on the work they are supposed to be performing. I've been called into issues at all hours where the customer has had enough of waiting on an offshore team to resolve a problem - in one case, the offshore team claimed they couldn't determine the server they should be looking at and the customer, after waiting 2 hours, went nuts about it. I get a phone call and am able to tell them the most likely server name within 5 minutes of being briefed and this was for a system that had been managed entirely by the offshore team for the last 3 years.

Re:What's the breakdown

[Greyfox]

Not true. Some of them were also eaten by lions.

Nothing lost (almost), nothing gained

[Anonymous Coward]

- 70,000 US workers
+ 69,500 Foreign workers

This can work across age groups as well.

Re:What does IBM do?

[Dahamma]

The newer mainframes can run 2,000+ instances of Linux.

Citation?

The most I have seen is is on the z13 which has ~140 cores - you can run a bunch of separate instances of Linux but it's nowhere NEAR the same performance as running Linux on fairly cheap dedicated "standard" servers. Not to say there aren't reasons to use a mainframe - just that maximizing virtual Linux instances is rarely one of them.

Bu bye Americans, hello H1-Bs

[Snotnose]

My understanding is IBM is rapidly shrinking it's American workforce and replacing those folks with H1-Bs from India. They are not only losing years of knowledge, they are replacing it with people who barely speak english. What sucks for them is that not only do customers realize they're getting shafted, but the quarterly income, which management uses to base their rediculous end of year bonus, both suck ass.

Re:What does IBM do?

[JoeMerchant]

The applications I have seen are for under-utilized web servers, so, yes, a mainframe can run 2000+ VM instances with LAMP stacks serving web sites that are only visited by 100 or so simultaneous users.

The big lie of the pols

[Okian Warrior]

The politicians tell us is that giving perks to big companies will create jobs.

This is a lie.

Jobs are created when people *start* companies, or when small companies grow. Big companies generally have all the workforce they need, and don't hire more people just because they get more money.

Indeed - it's the big companies who look to cut costs by shaving quality or outsourcing or moving to Ireland. You don't generally see the small, lean, hungry startups looking to outsource from India or move to Ireland.

I cringe when I see the federal government giving [ice cream maker] Ben and Jerry's a grant of $200,000 to increase their competitiveness, because that money spent on sales training could fund 4 small startups, employing 5-7 people each.

Next time you hear a politician, check to see if their speech doesn't end with "and this means more jobs" or similar. It's their way of selling their influence and making it palatable to the voters.

Re:The big lie of the pols

[Sibko]

Jobs are only created when entire new industries open up.

Let's simplify things down a bit to make this easier to grasp:
In order to compete in an established market, you need to produce a better/cheaper product than your competitors.
Every 'cost' in the entire chain of production fundamentally boils down to human labor
Reducing human labor reduces costs
Reducing costs improves efficiency
Improving efficiency allows better competition in the marketplace

There are no new jobs being created; only jobs being lost as we create new practices, techniques, and technology to reduce the amount of human labor needed for production of goods. Walmart replaced all the local grocers because walmart was more efficient than they were. Walmart "created" jobs only insomuch that nobody bothered comparing walmarts' "job creation" to their "job destruction" from undercutting local competition.

Yesterday we needed a team of 1000 to create a widget. Today we need a team of 100. Tomorrow it'll be a team of 10.

Don't get me wrong; I'm not trying to say this is a bad thing. It just is.

So remember, the next time a politician or CEO talks about how many jobs he's creating; what he really means is that he's moving a bunch of jobs into a certain location from another, and almost certainly the end result will be a decline in total jobs in the world, not an increase.

Re:A or B

[JoeMerchant]

1985 was the golden age of the IBM PC - they've shrunk and re-imagined themselves as a mainframe company again since then. Also, the days of micro-printing the letters IBM with single atoms, and similar groundbreaking research, are long behind them.

Re:What does IBM do?

[__aaclcg7560]

The most I have seen is is on the z13 which has ~140 cores - you can run a bunch of separate instances of Linux but it's nowhere NEAR the same performance as running Linux on fairly cheap dedicated "standard" servers.

According to the IBM marketing material, the 2016 Z13 can run up to 8,000 virtual servers on a single system. Slide deck doesn't break the down specs for each of those virtual servers. A Slashdotter who commented on another article said he ran 2,000+ instances of Linux on an IBM mainframe.

http://www.slideshare.net/fgonza93/new-ibm-mainframe-2016-z13

IBM has been dying for years...

[javabandit]

I used to work at IBM (as a senior-level manager) and I can say truthfully that the only way IBM is going to make it is if it completely lets go almost all of its business units and rebuilds from the ground up. Every single LOB they have is archaic. I remember when I was first hired at IBM. They showed every new employee a propaganda video which was like a 10 minute montage of IBM's innovation since it started. That video ended with the final innovation -- landing on the moon. That's right. The last real innovation IBM truly contributed to was LANDING ON THE MOON. Fifty years ago.

In the last 20 years, all IBM has done is try to innovate through acquisitions. Buy a company. Put together a five year business plan to milk the acquiree's customers. "Blue wash" their products. Push new IBM bloatware to those customers. Get rid of 95% of the acquiree's employees through attrition... and replace them with IBM employees from other liquidated business units. Wash, rinse, repeat.

They have a requirement for all business units to ensure that a certain percentage of the workforce was offshore. Also, since their HR review process uses comparison against your peers... people get fired or put on performance plans every quarter. I remember going into ridiculous meetings where my boss would tell me that I didn't have enough of my peopl eranked as low performers... I needed to come up with some names. Didn't matter if my entire team met their personal goals. I had to rate a certain percentage a "3" or my boss would do it for me. Wonderful. IBM used to have a policy of matching 401k contributions with each paycheck. Well, they changed that to a one-time match in December. The kicker there was that if you got laid off/fired before December... then you lost all of your match. Nice, eh? It just so happened that the big layoffs came before the 401k match date. Lots of wonderful cost savings for IBM.

Meanwhile... during periods where several consecutive quarters of revenue misses happened... and tens of thousands of people were fired... Ginni Rometty and her peers received millions of dollars in bonuses. Nice, eh?

I could go on and on. But IBM is simply a crap company. My advice to anybody would be to stay away from there. If your company gets acquired by IBM... stick around for three years. Collect your paycheck, come in late every day, go as slow as possible in your daily work, don't fret while IBM ruins your product by demanding you include 20 year-old technology into your shiny product. Then leave after you are fully vested. Leave immediately and don't look back.

If you are a new college graduate and you get hired by IBM, stick around for no more than two years. You will get a much better job elsewhere. But do not stay.

IBM is a dying company. It has been shitting the bed pan for the last five years and it is only going to get worse. Steer clear.

Re:IBM has been dying for years...

[Britz]

If you turn over your employees every 1-2 years, there is nothing there that knows what they do anyways.

Just last year they completely failed a huge project with DHL. Just Google DHL and IBM. The current official estimated loss for DHL is at 345 million Euro.

Re:IBM has been dying for years...

[Dr. Evil]

I disagree about the innovation. They're making great strides in "global resourcing", learning systems like Watson and still have amazing private physics research. As a physicist, it might be one of the better non-military places to work.

Otherwise, you're spot-on. I worked there longer than I should have. I know almost nobody working there anymore. They were all fired... I mean layed off. Their jobs went to Brazil.

The corporate bloat always made me wonder why anyone would chose to do business with them.... but having worked for similar giant companies, it seems they expect a similar management style in their vendors. Having a second-line manager to complain to when your sales rep's backup failed you and their boss can't help, seems to be some kind of expectatoin. You won't get that in a mom-and-pop shop.

The company varies by division. 2 years and leave is reasonable for most areas, but if you're in physics, or you're in big data and learning systems, or managing global resourcing projects, you might not find a more interesting place to work.

Hiring There, Not Here, or Laying Off Here

[Anonymous Coward]

IBM is hiring lots...in Romania, Malaysia, Costa Rica, and India. Many new there in 2015.
IBM is not hiring in the US or avoiding doing so at all costs. There are slots that are open, but they are going off shore.
Its fun when Romania is ending their day and US is starting. Complete break down as they walk out the door. "What about...? Oh never mind, maybe tomorrow...."
Malaysia skips what they aren't able or don't feel like doing.
Costa Rica, jury's still out though pretty inexperienced.
India's a mixed bag. Some areas they make the US look like bad amateurs. Other areas, not so much. Really difficult issues come back to the US to solve.

Re:Hiring There, Not Here, or Laying Off Here

[turbidostato]

"Until the rest of world catches up to the US in wages, the pressure to off-shore will not change"

You see... it works both ways. Pray it doesn't end up being "until US catches down to the outsourced countries' wages, the pressure to off-shore will not change". There's only one US of A, but there's a lot of third world countries waiting to be the next India or Malaysia once their wages significantly grow over the starvation level.

How many of the newbies were H1B?

[ebusinessmedia1]

Why doesn't IBM clarify this? How many who "left" were over 40 years old - pushed out because of age? IBM is toast!

Age needs to be reported moving forward

[justcauseisjustthat]

I've heard from a number of older friends in Silicon Valley that once they pass 40 yrs old, they don't get callbacks for jobs.
(Now, yes, some have outdated skills, but when someone in there 30s with those same skills is getting jobs, something is broke.)

It appears companies are getting rid of higher paid worker and replacing with cheaper, younger works (sometimes overseas), to bring this into the light, all diversity reports from companies should include age of employees broken down.

Re:What does IBM do?

[Hognoxious]

The needful, then they revert the same because they have one doubt.

The solution is easy

[ruir]

As a consumer, boycott companies such as IBM, Sony and Disney. Period.

Re:The solution is easy

[eWarz]

To be fair, IBM appears to be a minority in the market. I personally have never seen IBM in big (or small) business. Most of the smaller businesses use Dell, and most of the larger ones use Cisco. Maybe there is some industry that I've never worked in that swears by IBM, but in Healthcare, retail (ERP), or startups, I've never seen an IBM system outside of some ancient rogue server. Sure they are making money somehow...

Re:The solution is easy

[rl117]

Both of the two big companies I worked for were all IBM.

The first was a manufacturing site. Every stage of production, process monitoring, lab qc, raw materials ordering and handling, etc. was all run from a single IBM AS/400 system. I wouldn't be at all surprised if that were still the case 17 years later. It worked. This company was also part of a big conglomerate, and the entire set of businesses were all running on big IBM kit. The only change I saw was that they had started to migrate to Compaq and Dell for user-facing systems, which were mainly used for 3720 terminal emulation (replacing the real terminals on token ring) and other tools.

The second was a big pharma company. They were all IBM from servers to desktops and laptops. I liked the ThinkPad. I thought having to make a support call to India (from the UK) for every little (and large) support issue was a bit of a joke though.

Re:lower wages

[Anonymous Coward]

Coming Back on the topic of this entry, IBM created this initiative called Think40 a while ago. You were supossed to seek training and IBM would enable you to take it, in order to complete at least 40 hours of training pero year. In practice, they created a video library with some mild chats about topics as diffuse and shallow as they could (introduction to cloud, introduction to Agile, introduction to cognitive learning, etc) and called the day off. So you spend that 20% of your time watching those useless speeches and then try to find real learning resources on your own. IBM has grown to be nothing more than a hedge fund (and not a very successful one TBH). They buy and sell companies in hope of grabbing something useful.

Re:lower wages

[fluffernutter]

Relocate to where? India???

Re:lower wages

[fluffernutter]

So what skills should I shoot for? The ones that will be valuable third quarter this year? Fourth? Perhaps I should just go for broke and strive to be valuable for the last half of 2017.