IBM says 'several thousand' layoffs on the way

http://www.cbc.ca/news/business/ibm-says-several-thousand-layoffs-on-the-way-1.2931612

by oulipian • 11 years ago

182 103 11 years ago

pesenti• 11 years ago

So does that mean we can finally stop listening to Cringely altogether? I am an IBM employee and I can tell you a lot of my fellow IBMers had a really bad week-end because of his ridiculous claims.

For context see previous discussion on the 110000 employee layoff that won't happen: https://news.ycombinator.com/item?id=8944637

rjruizes• 11 years ago

As another IBM employee, I second that. His rumor caused panic for a lot of people.

DannyBee5• 11 years ago

His rumor is probably a multi-year plan rather than a one-time event.

Innistrad• 11 years ago

I am suspect that IBM would layoff so many at once even if it were their intention to reorganize. The negative press involved with such a huge record breaking layoff would just add insult to injury. It would be much more likely to be 100,000+ over a length of time.

Regardless I am sorry for the terror that this week must be based on this potentially unethical news article.

lmg643• 11 years ago

I wonder if IBM would change their plan based on this leaking. If he really had this totally and completely wrong, then of course that is very irresponsible of him to say.

I don't see how you can stop listening to Cringely altogether though. They did abandon their $20/share EPS plan, which was a pretty epic change. The claims about global services having <50% college grads servicing IBM clients from india is also pretty damning for the company.

I would like to see IBM do well, it makes me angry to see big companies squander their history and abuse their people.

krschultz2• 11 years ago

Something like laying off 25% of the company is as drastic a measure as you can ever take other than closing up shop. If they were thinking about it, they were not thinking about it lightly. They certainly wouldn't change their mind just because the news leaked.

cones688• 11 years ago

I feel lucky like yourself of being in one of the divisions with massive growth.

I don't think people appreciate the size and breadth of IT IBM does, my "tiny" division of security if an independent company would be the 3rd biggest Security vendor in the market.

sharkweek• 11 years ago

Saw the 100k number and thought "surely a typo" - only to learn that IBM has 400k+ employees

I had completely failed to realize just how massive IBM truly is as a company.

smackfu• 11 years ago

My guess is that he turns "possible strategic plan for 110k layoffs over the next five years starting in January 2015" into "110k layoffs in January 2015."

jacquesm7• 11 years ago

I think for an error of this magnitude some kind of apology would be in order. If he can't manage that he's lost a lot of credibility.

timf2• 11 years ago

I don't think he apologized the last two times he incorrectly made massive IBM layoff predictions:

http://www.pbs.org/cringely/pulpit/2007/pulpit_20070504_0020...

http://www.cringely.com/2012/04/18/not-your-fathers-ibm/

hristov• 11 years ago

An error of what magnitude? IBM has not said exactly how many people will be laid off so we do not know what the magnitude of the error will be. Furthermore, they can certainly perform a 110K layoff by splitting it into multiple layoffs of thousands.

egwor• 11 years ago

I don't feel that an apology cuts it anymore. We have so many sources of complete garbage. Imagine if this was what caused the significant drop of the IBM stock price (on the 21st)

Could we create a blacklist of sources that just aren't credible that we can just filter them out? e.g. Sky News. Perhaps negative weighting won't work; perhaps we should add a credibility weighting for respected works (web sites, or authors?)

TheCondor• 11 years ago

An apology would restore credibility?

He's long had some sort of issue with IBM, I'm not sure what the source of it is, but regularly he publishes sensational articles about them with little or no basis in reality.

It this is far enough off base to warrant their response, I'd say the only way he'd gain any credibility is to list his sources and also make his investments clear. Is he buying puts on ibm?

What it looks like to me is that he heard a rumor about some cuts, not unusual and it sounds accurate. He elaborated it into a gigantic story of his creation. I expect better from Forbes.

DannyBee5• 11 years ago

I don't think today's IBM ever planned to layoff 110k at once.

Lay off 10k here, 10k there, call one a workforce restructuring, another "an innovation related rebalancing plan", blah blah blah.

It seems highly unlikely to me that IBM would just up and lay off 110k workers. Ignoring any other issues, the political blowback and PR blowback they'd get from politicians would be huge right now. IBM doesn't want to get in the middle of the current job-related wranglings.

When they laid off 60k in 1993, you can see it didn't really happen all at once then either.

http://www.nytimes.com/1993/02/16/business/first-layoffs-see...

(February)

and then http://query.nytimes.com/gst/fullpage.html?res=980CEEDF163EF...

(July)

bring1• 11 years ago

their stockprice would make a big jump if they could manage to lay off 110k people.

I think it would be a good thing, to streamline their operation.

jimbokun3• 11 years ago

Just read Cringely's article, and think IBM's response takes just the right tone:

"IBM does not comment on rumors or speculation. However, we’ll make an exception when the speculation is stupid."

wglb• 11 years ago

I stopped decades ago.

Note that his wikipedia article says he finally figured out "[A] new fact has now become painfully clear to me: you don't say you have the Ph.D. unless you really have the Ph.D."

Rather cringeworthy, I would say.

yabatopia• 11 years ago

It would be naive to think IBM upper management didn't run simulations of letting go 100,000 employees in order to optimize profits or focus operations . Letting go not in the sense of actually firing people but also by selling divisions or splitting up the company. It doesn't mean they will do it (right away), but it's not as ridiculous as you would like it to be. One thing's for sure: more than 11 consecutive quarters revenue losses will have a drastic effect on the workforce of IBM.

mathattack• 11 years ago

Project Chrome? It's hard to fathom that a tech company would name their layoff program after a competitor's technology. That just strains credulity. If that part is true, it's a sign of bad things in the company.

mynameisvlad• 11 years ago

First off, it's just a name, not really a big deal nor would it really be a sign of anything. Secondly, if your requirement is "not a competitor's technology" then practically every single word would be excluded because it would have been used, at some point or another, by one of the hundreds of thousands of competitors IBM has and has had.

x0rg• 11 years ago

I think IBM should stop selling the ultra crap software that is selling right now like Websphere commerce and all the crappy enterprisey stuff. They really need something good to change and if layoffs are for the better, it's probably worth trying. If the plan is to keep this stuff going, it's gonna be bad.

aragot5• 11 years ago

Yes the most interesting revelation in Cringely's rumor was that IBM made software.

Let's be honest: An big IT product is about 25 programmers and 25 diverse people (incl marketers, designers, accountants) working for 3-10 years. With this you make a GitHub, a Word, an IE. IBM could be owning the planet today. But no, they're in the business of hotels, golf, and conferences.

AlisdairO3• 11 years ago

They do make many billions profit on software every single quarter. Who cares if the market is not very sexy?

If you think there's only 25 people working on Word, I think you're off by an extremely large margin.

CHY872• 11 years ago

I think you have an incredibly short-sighted view of the difficulties associated with software engineering. In particular, your view of how hard it is to write large pieces of software seems to be way, way off.

ibmthrowaway271• 11 years ago

But this kind of thing does exist throughout IBM.

I work on a product that's pulled in >$2bn in revenue over the last 20 years. All with an average of 25 developers working on it. It's still going strong.

panzagl• 11 years ago

Unfortunately I think the crappiness is by design- easy to use doesn't sell support and consulting hours.

parktheredcar• 11 years ago

awful secret of enterprise software. or maybe it's not so much a secret, I don't know.

logn• 11 years ago

That's not really a solution to anything. Websphere is used and essential to lots of companies. They might hate the software but they'd hate hearing it being end-of-life'd even more.

With a company of IBM's size, there's no need to move people from Webpshere to some other project. You can shake out a few dozen engineers from anywhere without their managers even noticing.

Firing a few thousand bureaucrats would go a longer way toward improving product quality than ending product lines.

pkaye• 11 years ago

How many employees does IBM even have in the US anyway? Except for a few research or sales divisions, I'm sure very little is left.

huxley• 11 years ago

IBM doesn't report its headcount in the US any longer, but in 2009 IBM had approximately 105,000 employees in the US, based on congressional testimony (via this article http://www.computerworld.com/article/2520399/it-outsourcing/... ).

IBM has 431,212 employees worldwide (according to their 2013 annual report).

FranOntanaya• 11 years ago

Trying to wrap my mind around the number -- 6 employees per 100,000 people worldwide is equal or higher than the number of physicians per 100,000 in Benin, Ethiopia, Niger, Burkina Faso, Central Africa Republic, Chad, Malawi, Mozambique, Papua New Guinea, Rwanda, Senegal, Sierra Leone, Somalia, Tanzania, Togo and Zimbabwe.

johnward4• 11 years ago

There are still quite a few of US.

TD-Linux• 11 years ago

"IBM does not comment on rumours, even ridiculous or baseless ones," the company said in an email to Reuters.

... isn't that exactly what it is doing?

jimbokun3• 11 years ago

"IBM does not comment on rumors or speculation. However, we’ll make an exception when the speculation is stupid."

https://ibmhkblog.wordpress.com/

trhway• 11 years ago

The correction is coming, and companies are starting to lay off people (like EBay doing "restructuring"). Some companies do global office "optimization" - i.e. completely closing offices in some countries/locations. Given that IBM commented on such a "baseless and ridiculous" claim puts a lot of foundation under it. Obviously not all the 100K at once. After all laying off people in Germany is completely different process than in CA. The fact that they point to open listings just shows that a lot of it will be sold under the sauce of "rebalancing" - lets layoff 10K there and hire the "best" 1K of them here. I've seen that an another legendary SV company (some of its former offices are occupied nowadays by a very "Like"-able company) I think IBM has big plan to close some regional offices, downsize/close some projects and to spin off some pieces with resulting IBM headcount expected being 100K less than today.

jacquesm7• 11 years ago

Spin-offs and spin-outs are not normally accounted as lay-offs.

Gustomaximus• 11 years ago

The correction is coming, and companies are starting to lay off people.

In the last 3 companies I have worked for over 10 years this seems to happen every 6 to 12 months. Restructuring or right-sizing as HR love to call it is a fairly standard thing these days as companies search for optimal profitability. Every company I have worked for preaches employee loyalty in their mantra but I've never really seen it.

xienze• 11 years ago

Cringely definitely tends to... exaggerate but I have to say, getting IBM to even ballpark the number of people they're cutting is quite a feat. Remember this is the company that doesn't break down its head count for "competitive reasons" and prefers to stagger cuts so they don't trigger WARN in various jurisdictions.

jimbokun3• 11 years ago

Not sure of the original source, but a meme I've been seeing around the Internets lately goes something like

"The best way to get an answer to a question on the Internet, is not to ask the question, but to give a wrong answer and wait for people to correct you."

I'm not sure whether this was is what Cringely was up to, but if it was, well played indeed.

dangerboysteve• 11 years ago

Anything with Cringely on it should be suppressed on this site.

ryanmarsh• 11 years ago

He's been wrong about a lot of things for a long time. I'm surprised people still listen to him.

johnward4• 11 years ago

As an IBMer I still cannot understand how the "IBM Alliance" can have a website from '95.

calcsam• 11 years ago

TechCrunch has a source saying 43,000 over the next year -- ie, 11,000 per quarter (scroll to bottom): http://techcrunch.com/2015/01/26/sources-say-ibm-planning-on...

mfringel• 11 years ago

So Cringely guessed incorrectly, but forced IBM's hand in announcing more accurate information.

Well played, I say.

jmspring• 11 years ago

I've known more than a few IBMers over the years associated with IBM Almaden and other places. Many of those on contract/part time/etc, kept their heads down. Many full timers, the same thing.

Cringley may or may not be right on the magnitude of the numbers, but the one thing he is right about is IBM is purely governed by pleasing Wall Street above all else.

The IBM that existed when I was growing up and seeded more than a couple of the early founding staff of the UC Santa Cruz Computer Engineering staff (Patrick Mantey and Glen Langdon -- my advisor to name two), is WAY different than the IBM of today.

IBM is a shadow of itself, there are still interesting groups, but even the research arms are being hit hard by genuflecting to wall street.

IBM says 'several thousand' layoffs on the way

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