IBM is quietly axing jobs, source says

https://www.theregister.com/2024/09/18/ibm_job_cuts/

by Bender • 2 years ago

89 105 2 years ago

theregister.com

rowanG077• 2 years ago

Why would you sign an NDA when beeing fired? So you het some severance pay?

kabdib• 2 years ago

Yup. Cash for silence

onemoresoop• 2 years ago

Can the NDA be invalidated after the cash has been delivered?

darth_avocado• 2 years ago

Unless it’s substantial, never sign an NDA or arbitration agreement for severance. You’re better off keeping your options open if it’s something like one or two month’s salary.

coliveira• 2 years ago

No NDA, no severance payment...

seanmcdirmid• 2 years ago

I thought this was outlawed at least in the states: https://www.cnn.com/2023/02/22/success/severance-agreements-...

zeptian• 2 years ago

why is this news ? they do it twice a year.

they have way too many employees, and it will take them a decade of such cuts to "rightsize"

myth_drannon3• 2 years ago

And they say we don't have ageism in the industry... :

"As with prior layoffs, or "resource actions" to use IBM's euphemism, we're told those affected are substantially in the 50-55 age bracket with 20-24 years of seniority.

"It seems exclusively people in L7 and L8 and L9 bands, at the top of the band in payment structure," the insider said.""

kolbe6• 2 years ago

Disparate outcomes do not imply disparate treatment

BadHumans2• 2 years ago

As with prior layoffs

When all of your outcomes result in same treatment of the same group of individuals, there just might be a little fire to that smoke.

toss13• 2 years ago

Disparate outcomes do not conclusively determine disparate treatment

Disparate outcomes most definitely imply disparate treatment, at least enough to merit further investigation

manuelmoreale7• 2 years ago

If the goal is to save money, isn’t it reasonable to axe the most senior people which are probably also paid more than junior ones? And I’m not saying it’s a smart strategy, it’s probably idiotic. Just saying it’s not really ageist.

whatshisface2• 2 years ago

The cost/productivity balance is supposed to have been considered for hiring and promotion; when a layoff predominately targets a specific division or pay level it means the strategy leading up to that point had been wrong.

groby_b4• 2 years ago

Yeah, it is, unless you can make the case that IBM doesn't need all those leaders any more.

What will happen is that they rehire, and rehire young.

bankcust083852• 2 years ago

That's how Google Cloud did it.

droptablemain• 2 years ago

Perhaps not in principal, but in practical terms it ends up being "ageist."

brailsafe• 2 years ago

resource actions

I've always thought the term "resource" was dehumanizing, but at least on its own it could be interpreted positively, but "resource actions" is just upsetting

acheron• 2 years ago

“Livestock culling”

7qW24A• 2 years ago

RA’ing people at the top of their band means that they’ve topped out skill-wise. These aren’t senior people; it’s people who will never get promoted past 7 or 8 (which are quite junior) but have been accruing comp adjustments for a long time. Most teams will lay off a 7 that is getting paid more than a 9 by virtue of being at the company for 20 years.

osnium123• 2 years ago

Do you think it’s a good idea for employees to voluntarily ask for pay cuts so that they are on the low end of the pay scale for a job grade?

jhallenworld• 2 years ago

Maybe this is true skill-wise, but there is also productivity to consider. I knew a band 9, who was definitely not going to be promoted STSM (band 10), but was extremely productive. I'm sure he was paid well, better than most band 10s.

Band 10 and above include good soft-skills, people who can persuade the industry and organization, give TED talks, etc.

myth_drannon3• 2 years ago

I never saw any significant compensation increase by staying in the company at the same level. A long tenure at level 7 will have a very stagnant compensation and much lower than a newly hired level 7 and lower than 9.

xyst• 2 years ago

With the fed rate cuts, IBM will probably be hiring back those same folks

myth_drannon3• 2 years ago

As per article, they are firing in US and still hiring in India

bankcust083852• 2 years ago

Saving a buck, being a traitor, and sacrificing quality all at the same time. Workers should both unionize and boycott any company that behaves that way.

datavirtue3• 2 years ago

Are these the jobs axed by AI? Would seem to make sense, since the CEO said they were going to replace 5800 jobs with AI.

tbyehl• 2 years ago

Please. Back in April they gutted my team of people working on Ansible automations.

aitchnyu2• 2 years ago

My (tech savvy) mum talked about the "automation" buzzword which allegedly reduced demand for Indian tech workers.

minkles2• 2 years ago

IBM and execs are full of shit and say that because they want other company execs to buy their AI products. They will lay people off because they cost money. No other reason.

lotsofpulp4• 2 years ago

That’s the same thing. AI is cheaper, hence you lay people off because they cost more.

datavirtue3• 2 years ago

I know. Seeing the hype reach and rattle executives is always kind of funny.

aitchnyu2• 2 years ago

Is there an authoritative source about jobs lost to AI? Tired of the FUD.

datavirtue3• 2 years ago

If you bother to download LM Studio,fire up a model and start playing with it and looking into the details you will be smacked in the face with the enormity of the technology and how many man hours it is going to take to actually make good on it in every company.

It will create far more jobs than it eliminates. And yes, the purpose is to remove jobs and make skilled people more effective.

I realized that one day when we have a breakthrough in energy production and battery tech it will usher in an age where we have robots that can move about, find energy sources, and have the knowledge and capability to reproduce themselves. Whatever we all write online and offline will be the sum of that beings' knowledge as it eventually makes its way into the cosmos without us. We are the creator.

farceSpherule• 2 years ago

NDA's don't matter. There are ways to leak the information anonymously.

minkles2• 2 years ago

And the fact that it’s under NDA makes IBM look even more shitty.

5kg• 2 years ago

It's illegal in the US: https://www.nlrb.gov/about-nlrb/rights-we-protect/the-law/em...

javiramos• 2 years ago

I always thought that IBM was a declining giant. I just looked up their share price and it has done strikingly well over the past 2 years. Their revenue has also been growing, albeit slowly. Maybe capitalizing on the AI buzz?

https://finance.yahoo.com/quote/IBM/

KK7NIL• 2 years ago

IBM has largely retreated from consumer facing ventures but it's still a behemoth.

From the start of its Wikipedia page:

IBM is the largest industrial research organization in the world, with 19 research facilities across a dozen countries, having held the record for most annual U.S. patents generated by a business for 29 consecutive years from 1993 to 2021.

I know that in semiconductors they're still doing bleeding edge R&D which they then try to license to foundries. Their mainframe business is still doing quite well too.

And I'm sure they're active in many other niches that I know little about.

marcus0x62• 2 years ago

They have an absolutely massive consulting/services business (~ $20B/year run rate.)

rmbyrro3• 2 years ago

Nobody has (still) ever been fired for hiring IBM.

They have a very strong brand in traditional corporate industries, which have an endless demand for IBM services.

yellowapple• 2 years ago

Nobody has (still) never been fired for hiring IBM.

I'm pretty sure I came pretty damn close the one and only time I opted for IBM Cloud (which was called "Bluemix" back then). In fairness, running a PostgreSQL DB in a container wasn't the brightest idea on my part, and it was also my fault for not having backups in place, but when Bluemix ate our entire prod DB, and the multiple-weeks-long back-and-forth with IBM's support only yielded something along the lines of "whoops, that sucks, good luck building a new DB instance from scratch", we rather quickly jumped ship to AWS and never looked back.

I'm sure IBM Cloud is better these days, though it was a bit telling that during my brief time working for IBM my primary job was to build customers' stuff on AWS instead of IBM Cloud. Go figure.

486sx33• 2 years ago

Whomever hired IBM to build this mess should have been fired

https://en.m.wikipedia.org/wiki/Phoenix_pay_system

throwaway9980• 2 years ago

If someone in my organization buys IBM, I will fire them.

That said, I’m confident that they know better.

fsckboy2• 2 years ago

share price matters to a shareholder in the short term, but doesn't come close to telling the whole story. IBM is not performing well.

In 1990, IBM's market cap was $27B and Microsoft's was $5B.

In 1999, IBM's was just under $100B and Microsoft's was just under $400B.

For the last decade+, IBM has hovered (rather wildly) around $160B, while Microsoft has grown from $250B (post dot com crash) to $2,500B.

so yes, IBM really has been a declining giant relative to their market share in the strong technology sector

IBM selling off more and more businesses might be "the right move" for shareholders and props up the share prices, but it shrinks the overall business and in terms of value creation (where wealth comes from) indicates a shortage at IBM

browningstreet• 2 years ago

Honest Q, why compare MS to IBM?

MS has (mostly) products and licensing, and as far as I understand, IBM has consulting and licenses. Pretty different in this day/age.

nine_zeros• 2 years ago

This kind of relative comparison is the correct analysis.

Companies with 100B+ market cap don't die away. They just fail to continue to innovate and stay relevant - thus robbing their shareholders of even more returns.

This is why companies like sears were considered failures despite lasting for 100 years. Somewhere along the line they lost the plot and forgot how to stay relevant.

bluedevil2k2• 2 years ago

Their share price growth is only a result of share buy backs. They’ve fired tens of thousands of employees and used the cost savings to buy their own stock back, enriching executives, especially their CEO, whose pay increased 23% from 2022 to 2023 to $20.4M. (And IBM didn’t even meet their own internal revenue goal). Are the execs doing what’s best for the company’s long term prospects or what’s best for the shorter term shareholders holder?

* https://ycharts.com/companies/IBM/stock_buyback * https://www.theregister.com/AMP/2024/03/15/ibm_ceo_pay_jumps...

lotsofpulp4• 2 years ago

Share buybacks enrich all shareholders, it just happens that executives get paid in stock and/or are awarded compensation triggered by meeting certain stock prices. This is all for the benefit of shareholders.

stogot• 2 years ago

I asked previous IBM leaders about this oddity. Basicaly boiled up to financial engineering

holografix2• 2 years ago

They’ve been doing it for so long I’m surprised they have any jobs left to axe.

Sam Palmisano skinned IBM then too a knife to its belly and gutted it. All in the name of his “Roadmap 2010” which was a plan to double the share price by 2015.

So basically the pharaoh said “fuck it, we need a new pyramid. Get the whips out and all worker carcasses are to be dump on the left please”.

https://www.forbes.com/sites/stevedenning/2014/05/30/why-ibm...

Edit: roadmap 2010 not 2015

justinclift3• 2 years ago

Followed by Ginni Rometty who continued the trend through to 2020. She was named the runner up worst CEO of 2014 by The Motley Fool:

• https://www.fool.com/investing/general/2014/12/13/the-worst-...

And was responsible for "22 consecutive quarters of revenue decline between 2012 and the summer of 2017":

https://en.wikipedia.org/wiki/Ginni_Rometty#Industry_recepti...

Not a place of growth for anything other than financial engineering. :(

holografix2• 2 years ago

I mean she was terrible but in her defense Palmisano tossed her a hospital pass and walked away with $250M into the mega-rich sunset.

The quality of work coming from the offshored teams was significantly worse and the cost to the end customer certainly didn’t get reduced accordingly.

skipants• 2 years ago

During a tech bull run… that’s pretty impressive

nineteen9992• 2 years ago

Meh. After I finished my stint at Big Blue, they outsourced my entire midrange (UNIX) team which supported a large Australian bank to a foreign provider.

2 years later I had recruitment consultants calling me multiple times a week to get me to "come back" to IBM as the offshoring had been a disaster for the customer. And this was despite of me having a lifetime IBM ban for flipping off my manager's manager on the way out.

No way, no time, no thank you, no how.

gtirloni3• 2 years ago

The rumors of bans were always circulating when I worked at IBM. I never heard that at any other company. It's bizarre.

canucker2016• 2 years ago

Financial shenanigans started with Palmisano's predecessor, Lou Gerstner, the first outside IBM CEO.

Reading about IBM CEOs, before and after Gerstner, the CEO was an IBM-lifer who came up through sales/marketing. Though Gina Rometty started in tech-related area at IBM. The current CEO has the deepest tech background of any IBM CEO. The company has pivoted towards cloud, esp. hybrid cloud.

IBM has exited many hardware/software segments to concentrate on consulting and being the goto for outsourced IT departments since the dot-com crash.

They've tried goosing sales by touting AI a couple times before the current wave - Deep Blue and Watson, which didn't have much long term impact revenue-wise.

They've gone after the cloud, esp. hybrid cloud, with recent acquisitions, esp. RedHat.

alphazard2• 2 years ago

As with prior layoffs, or "resource actions" to use IBM's euphemism, we're told those affected are substantially in the 50-55 age bracket with 20-24 years of seniority.
Despite numerous past and ongoing age discrimination lawsuits, IBM maintains it does not systematically discriminate on the basis of age.

Lawsuits of this sort are a little ridiculous. If you work at a company that pays people more just for being older, then you shouldn't be surprised when the "more experienced" people are the first to get laid off.

malfist3• 2 years ago

I disagree, it is not the victim's fault they were discriminated against

alphazard2• 2 years ago

It's crazy that anyone could believe a corporation cares about anything other than profits.

If IBM actually had the ages of their employees available to the system that did the layoffs, then that would be age based discrimination. But I'd be willing to bet that wasn't a factor.

If you start with a pool of people with large salaries, and look for people not adding at least that much value to the business, you are going to find people who have that salary for reasons other than merit.

The discrimination, if any, was in their favor until the business couldn't afford to discriminate in their favor.

fpp• 2 years ago

IBM today is mostly a service provider - with those in the 50+ age bracket being "kicked out" there will be at least 2 groups:

(1)The ones with skills "to keep the lights on" for these services - those will be hired back as "consultants" - let's hope at twice the daily rate they worked before if they want to continue to work.

(2) The others - for them, the tax payers will pick up some of the balance, but generally, it will be dire for them to find new ways to continue.

Overall, age discrimination is a topic on which most companies and the public are mostly in denial while trying to please everybody else or demonstrate how inclusive they are.

Within many industries you will be excluded "quietly" during the selection for up to mid-level jobs when you are 50+ - quietly, because companies know that such discrimination openly could result in reputational or potential legal challenges.

On exec jobs, it is even more ludicrous - people who are much older than the candidates, block (competent) 50+ candidates based on their age to become their peers.

At the same time, often these companies also do not promote staff above a certain age e.g. when taking on new responsibilities that gets all others promoted (aka substantial pay rise / cost). As a result, while in a few countries here in Europe, 50+ workforce will have more holidays or pension contributions, the salaries of 50+ high achievers might be lower than younger staff in comparable roles. Give the above, some swallow that pill, but those that can afford leave (independent of age the old saying: good people leave, wood stays). Might not apply to most of the 50+ workforce, others might just have better employment contracts (historically), e.g. in the German car factories you have people on payroll with the company, some as contractors through 3rd party, and at the end of the food chain some with a low paid contract for work and labour with a body shop - all doing the same work at very different pay for the workers. In such setups, getting rid of the older workers might result in a higher bonus for top management, achieving KPIs for middle management, and certainly in high consultancy fees for restructuring advice from McKinsey e.a at daily rates per (senior) consultant at about the monthly salary of the worker made redundant - after these "cost" making younger or older workforce redundant becomes a marginal difference.

Overall, from what I've seen, where competence is key and valued, age and other things will not be used to discriminate the best candidates or staff. I've seen 70+ old engineers being hired by top-names for their knowledge, experience and achievements.

With aging societies in many western countries, TMK, in about 5 years the majority of the workforce will be 50+ in most of them.

In the west, during the last 40 years we have shifted from "engineering pride" to prioritising financial markets vs innovations & products. This has certainly created many activities, tasks /jobs particularly in large orgs, that will become "redundant" when the music stops or when some of these orgs fade away due to lack of product, market, leadership or competencies.

We need to look into how our "established" companies stay or become competitive and innovative again with their products and services in a global environment short / mid and long term vs. making most of their money on financial markets. Such companies don't need to care about the age of their staff - they care about skills and competencies.

With the baby boomers leaving the job market, low-birth groups / demographic change of those entering the job market plus technology advances there is now a chance that this puts pressure on companies (and employees) to re-invent themselves.

IBM is quietly axing jobs, source says

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