Layoff Underway at IBM

http://spectrum.ieee.org/view-from-the-valley/at-work/tech-careers/massive-worldwide-layoff-underway-at-ibm

by ajarmst • 11 years ago

274 186 11 years ago

spectrum.ieee.org

bhouston• 11 years ago

Still no real confirmation of figures but I guess there is purposeful obfuscation here.

AlisdairO• 11 years ago

Even so, if IBM loses 100,000 employees in the course of a month it's going to be pretty damn obvious. I'm still betting that the numbers are wildly exaggerated.

johnward9• 11 years ago

It seems to me that to get rid of that many people they would sell an entire business unit (like the size of GBS) instead of laying all those people off and paying severance.

bsder2• 11 years ago

I'm not. If it were just a couple thousand, they wouldn't be doing all the shenanigans with review numbers.

This is a test to see what they can get away with before class action lawsuits start flying. If they dumped all 100,000 at once, they'd get smashed with lawsuits.

So,they're going to try to pull it off with 10,000 and see how many lawyers appear.

smackfu9• 11 years ago

Reminder that Cringeley's original claim from Jan 22nd was:

To fix its business problems and speed up its “transformation,” next week about 26 percent of IBM’s employees will be getting phone calls from their managers. A few hours later a package will appear on their doorsteps with all the paperwork. Project Chrome will hit many of the worldwide services operations. The USA will be hit hard, but so will other locations. IBM’s contractors can expect regular furloughs in 2015. One in four IBMers reading this column will probably start looking for a new job next week. Those employees will all be gone by the end of February.

Now he's trying to spin that he never said "layoffs". Not sure why the IEEE is still trusting him.

seanmcdirmid3• 11 years ago

Wait. I'm confused: was cringeley right or wrong?

smackfu9• 11 years ago

As far as anyone can tell, dead wrong, but then there are still headlines about "massive worldwide layoffs." Not that 5000 is a small number, but IBM is a large company.

x0x02• 11 years ago

Well, here's what we know:

Cringely claims 100k people

IBM claims low thousands (at a cost of $0.6B, which seems quite high) [1]

ieee says Alliance@IBM, an ibm union, claims they know of 5k jobs eliminated; they further say they're seeing a flood of backdoor layoffs, ie sudden bad reviews

My guess is in 6 months, Cringely was more right than wrong. Or at least we see an employment reduction of tens of thousands.

[1] http://mobile.reuters.com/article/idUSKBN0KZ1WF20150126?irpc...

vuldin• 11 years ago

So far he hasn't been way off the mark from what I can see, although that isn't stopping people from aiming their pitchforks at him. I guess they don't want him to be right or something?

rodgerd3• 11 years ago

So maybe not uncritically accepting IBM's press releases would be a good idea?

Jgrubb• 11 years ago

Of course, the appearance of the situation, in the eyes of employees and the public, is not being helped by the fact amid IBM’s actions comes the board’s announcement on Friday of a big raise for CEO Ginni Rometty.

spacemanmatt• 11 years ago

I'm sure that there is a perfectly good explanation for that.

smackfu9• 11 years ago

It's easy to forget that IBM still made $5.5B profit in the most recent quarter.

TeMPOraL11• 11 years ago

There always is. It might just not be what we'd want it to be.

e40• 11 years ago

There's a direct correlation between the two events, I'd wager. She's being rewarded for taking decisive action and also being given an incentive to stay and see it through, where "it" is fixing IBM.

EDIT: yes, I used the wrong pronoun originally. The reaction... wow. No disrespect was intended, and I'd think that leeway would be given here on HN. Oh, well.

encoded• 11 years ago

I think you mean "she".

jes• 11 years ago

With respect, the CEO of IBM is a woman.

vegabook• 11 years ago

Concur. Hold onto her while she does the dirty work, but her days are numbered once Chrome is done. She's the hatchet (wo)man - and nobody will want her around post-cull. They'll want fresh untainted vision, buy-in from the survivors. She might as well give herself a post-dated 2016 3-score.

winslow• 11 years ago

Jesus... That is pretty awful. I understand cutting down your workforce since your business is struggling like hell but don't give your crappy CEO a massive bonus and pay raise.

johnward9• 11 years ago

Reinstating bonuses for execs after several years of poor performance...

jobu2• 11 years ago

The article linked in from that bit is pretty good too: "IBM redefines failure as 'success,' gives underachieving CEO huge raise" - http://www.latimes.com/business/hiltzik/la-fi-mh-ibm-redefin...

"The company has posted lower revenue for 11 quarters in a row."

She gets a raise for successfully shrinking the company?

sgt1012• 11 years ago

In an alien world a million billion miles away a general marshalling forces after defeat after defeat offers it's sword (or other death dealing device) to the star marshals and is told, "no, not now" but inconsolable the resignation is re-tendered, so now the star marshals give it a medal, and a pay rise and a nice pat on the heat, and it agrees to remain in charge.

If I could reduce and organisation to zarg-jelly by resigning I would extract similar geld I guess..

rodgerd3• 11 years ago

Share price is up. Granted, on the back of share buyback plans partially funded by increasing debt, but shareholders are seeing the value of their shares rise.

forgotAgain2• 11 years ago

One reasoning I read was that the board does not want a CEO transition during this time. It would adversely affect the stock price further. And at this point what corporate leader with enough positive recognition to advance the stock price would want the job.

obtino• 11 years ago

Before the IBM apologists start commenting: I was an IBM employee a few years ago and I would never recommend it as a good place to work. You were constantly worried about your job and there were cuts to basic resources all the time. It's not at all surprising to see this happen. IBM only cares about its shareholders and not its employees or customers.

wil421• 11 years ago

I'm pretty sure this is not unique to IBM most mega corporations have the same philosophies. It's not about the employees or even the product at times it's about the numbers and the shareholders.

johnward9• 11 years ago

Worked for other megacorps including IBM. Can confirm.

yuhong2• 11 years ago

Personally, I want to focus on fixing the problems. That is why I mentioned the idea of making capital gain and income tax equal for example.

seanmcdirmid3• 11 years ago

I've done a couple of internships for IBM in the last and work for Microsoft today. IBM felt much more corporate during my brief stints there, even in the research labs.

Keep in mind IBM is an east coast company, not a more laid back west coast company. That might have something to do with it (or I'm just very biased).

artsrc• 11 years ago

Some say other things:

If you want me to do things only for ROI reasons, you should get out of this stock

http://www.theguardian.com/environment/2014/mar/03/tim-cook-...

wyager4• 11 years ago

"IBM only cares about its shareholders and not its employees or customers."

Do you mean "IBM has a finite amount of money and can therefore is subject to the realities of business"?

I mean, what do you expect? Even if IBM was the most altruistic company in the entire world, they would still have to make concessions to the fact that it costs money to employ people.

ihsw• 11 years ago

Realities of business != random and arbitrary cuts

This sounds like middle management is scrambling to meet budget objectives and they're throwing people out based on financial burden rather than actual performance issues.

Yeah I get that people looking to retire and collect benefits are a significant cost centre, but in that case the company should just make it official policy that minimal benefits are offered (or no benefits at all) instead of pretending they're actually offering an attractive place to work.

jweir• 11 years ago

IBM has been spending billions buying back its own stock. This increases the earnings per share of stock as IBM's earnings drop.

http://www.reuters.com/article/2014/10/28/us-ibm-buyback-idU...

beedogs3• 11 years ago

Before the IBM apologists start commenting

And here they are now!

iends3• 11 years ago

Yet IBM CEO was given a raise after last year.

chris_wot• 11 years ago

The CEO missed their target and got a massive bonus.

fletchowns• 11 years ago

To me it seems like if you care about your shareholders, you have to care about your employees and customers.

TeMPOraL11• 11 years ago

You absolutely don't have to. Those two are somewhat correlated, but practice shows the correlation is not that strong.

droopyEyelids• 11 years ago

Your sentence brings up this interesting discrepancy between what something might mean, and what it actually means.

"Increasing shareholder value" could conceivably mean long term growth and doing everything right for a win-win-win situation. It makes sense, in a way.

But really it's much more nihilistic than that. There could be one majority shareholder that smashes the company and fucks over minority stake holders, causes a bad outcome for everyone except him/herself, and finds a legal way to execute the plan. That is a real thing that happens, and can be done as legally and with as much validity as treating everyone well to encourage long term growth.

The shareholders own the company, and it's theirs to do what they want with, even if that means picking up their toys and going home.

AdamFernandez2• 11 years ago

It's so ironic to me that some large corporations only focus on shareholders. Focusing on customer satisfaction, and product quality leads to greater sales more than anything else. A byproduct of this is...wait for it...higher value to shareholders!

TylerE• 11 years ago

They are, in most cases, legally required to place shareholder value over all else.

TeMPOraL11• 11 years ago

Corporations (and generally capitalism by its very nature) run on a greedy[0] algorithm - they pick locally optimal solutions. Which, in some cases, can lead to great results, but in others the algorithm will get stupidly stuck on a suboptimal choice. Focusing on shareholders instead of customers is a local optimum here.

[0] - I mean "greedy" in CS terms, without attaching moral baggage to the word.

bduerst2• 11 years ago

Shareholders vote on the board, the board hires the CEO, and the CEO hires execs who make decisions for the different parts of the company. The shareholders rarely see or care about the day to day operations of a company, but do see the quarterly filings. It's very hard to quantize customer satisfaction on a financial report.

You may say this is a broken system, and for many B2C companies it can be. This is why I think that the benefit corporations are quite possibly one of the single best things to happen to corporate business in almost a century.

It allows a company to focus on a mission statement, and protects it from shareholders who only want to focus on profits.

Nicholas_C• 11 years ago

I think this happens a lot when huge, mature companies are pressured to grow. Management becomes desperate to make the company into something it isn't to stay on top of the earnings treadmill and keep the board/investors happy. At some point it seems it's just about squeezing earnings out of the firm and claiming to be developing a great product and a winning environment while not actually doing that at all. It would be interesting to see how employees view a firm over time during periods of beating earnings expectations and earnings misses.

I don't have any real data on this but I've got a hypothesis that once a firm misses earnings a few times they "get serious", lay people off, and get rid of parts of the culture that made the firm great in an effort to expand margins for shareholders and say, "Look! See? We're getting better!". This really creates a toxic culture that causes a negative feedback loop and makes it even harder to be an innovative firm that grows like shareholders want.

This is probably a huge challenge for firms that do have excess employees, or need to change their employees to pivot strategies, and it would seem to be hard to do this without inducing the aforementioned effects.

psychometry• 11 years ago

It's the "wait for it" part that you're not paying attention to. A company's leadership is primarily tasked with maximizing the immediate value of their share price because that's the expectation in a capitalist system. Long-term growth is secondary to this goal.

oldmanjay2• 11 years ago

I'm not saying you're wrong but you sure didn't provide any evidence to back up your opinion on how to run a fortune 100.

jcslzr• 11 years ago

Ever notice how sociopaths end at the top in big companies, the reason is because they are the most willing to fire anybody, check out the Gervais Principle

mhuffman• 11 years ago

Shareholders want their profits now, like Apple -- not in some imaginary future, like Amazon!

adventured3• 11 years ago

You can condition shareholders, and or build your company such that you target specific types of shareholders.

Too often I see people lump shareholders into one group, as though they're all the same.

You can focus on long-term shareholders, or you can focus on short-term shareholders - IBM chose the latter, and as usual they're paying the price for it in expectations (and those shareholders will be nowhere to be found if the stock erodes later).

Berkshire Hathaway, as an example, chose the former. Buffett carefully cultivated very long term shareholders.

To say that Buffett is concerned with creating shareholder value (he is), means something different than to say that IBM is focused on creating shareholder value (they are) - because they have different types of shareholders, and go about it differently.

Jeff Bezos has talked about this concept a few times in relation to Amazon. He'd rather short-term shareholders just move along to the next stock.

porter• 11 years ago

If they actually cared about their shareholders then they'd also care about their employees and customers.

eplanit• 11 years ago

I don't disagree with you, but instead notice how dramatically it has changed. I began with IBM in the mid 1980s, at a time when they invested heavily in employees' education and development. In my 20s I had the support and encouragement of my management as I pursued graduate school in addition to the job. Plus, we had private offices then. IBM has changed, but so has the relationship between that generation of large companies (i.e. Intel, Motorola, AT&T, ...) everywhere and their employees.

mkozlows• 11 years ago

"IBM said there would be thousands of layoffs. We believe there have been 5,000 layoffs. Clearly IBM was lying."

Um.

xeromal• 11 years ago

Clickbait bullshit.

differentView• 11 years ago

What are you quoting?

gk1• 11 years ago

Not a direct quote, but I believe parent took that figure from this:

Alliance@IBM, the IBM employees’ union, says it has so far collected reports of 5000 jobs eliminated...

vacri• 11 years ago

When Cringely wrote his clickbait 100k, IBM responded saying that the layoffs would be more like 10K.

cjensen• 11 years ago

Those 5K layoffs are just the ones the Union knows about, and they are direct layoffs. It's not the full extent of the direct layoffs, and it does not include the scummy "you're a bad employee so we might have to fire you soon" tactics.

smackfu9• 11 years ago

Given that, it's still a huge gap between 5k and 100k.

Elrac• 11 years ago

A goodly chunk of the company I work at was recently sold to IBM. Not my chunk, but still - color me deeply un-reassured!

TeMPOraL11• 11 years ago

Wait what... does that mean that management at IBM suddenly realized they don't need 1/4 of the company? Since they rather won't be hiring new people in place of all laid off, I wonder what is going on there? Did they recently have an extremely successful merger with a very similar company? Did 1/4 of the company provide zero output? Or did Watson get so good it can actually replace engineers and sales people?

johnward9• 11 years ago

From what I understand; They are getting rid of employees in low performing areas and hiring in growth areas like CAMMS (cloud, analytics, mobile, social, and security) and Watson.

_almosnow• 11 years ago

CAMMSW

trhway• 11 years ago

CAMMS (cloud, analytics, mobile, social, and security) and Watson.

CAMSS&W (1 x 'M', 2 x 'S')

q22• 11 years ago

Better may be SCAMS (Social, cloud, Analytics, Mobile, Security). Easy to remember.

runT1ME• 11 years ago

Why would anyone in the top (let's say, 5%) of tech be interested in working for IBM when it seems this is how it treats its employees?

dingaling• 11 years ago

Why not transfer employees from the unperformant areas to trending ones?

I see this with our US had office too; they let people go when a project ends and then rehire them two weeks later in another department. Whereas in the UK office staff are shifted around to fill needs.

Someone1234• 11 years ago

But nobody will admit that there is a massive ageism problem in technology..? It is nice that some countries have moved to protect against ageism, it is an extremely common problem that few wish to address or take seriously.

bsder2• 11 years ago

But nobody will admit that there is a massive ageism problem in technology..?

It ain't just technology, boss. Welcome to the reason for all those "seniority" rules that everybody on here rails against.

oldmanjay2• 11 years ago

Do you feel like being old would entitle you to a job? And if so, why?

agumonkey4• 11 years ago

Being young entitles someone to a job more than being old ?

Crito• 11 years ago

Being old of course does not entitle you to a job. However people being fired because they are old is something that should bother you. One day, you will be old.

Walk into the office of an accounting firm, engineering firm, bank, architects office, whatever. Count the number of employees that you see with gray hair. Now walk around your (software company's) office and do the same. Chances are (_particularly_ on the west coast in my experience), there is a big discrepancy.

There are several possible explanations. Maybe the old people get fired. Maybe old people get the hell out of the industry on their own terms. Maybe young people are just hired at an absurd rate, which is suppressing the proportions of old people.

Some people suggest that it is because this industry is young, but it isn't that young. Your standard 20-something dev might think he is entering an exciting new industry, but the reality is that the industry is several decades old already; more than enough time to accumulate lots of gray-headed programmers.

OneOneOneOne• 11 years ago

I wonder if there isn't ageism inherent in technology. I mean old tech retains old employees. The old companies and old divisions go down when new tech wins.

sciurus• 11 years ago

Ouch. I lived in Columbia, Missouri for a couple years starting in 2012. The IBM office had just opened in 2010 and was a big deal. The city and state gave them large tax incentives to open it there. If IBM really laid of 150 people in it, that's a huge cut.

http://www.columbiatribune.com/news/local/ibm-layoffs-hit-co...

http://www.columbiatribune.com/news/local/department-of-econ...

eevo• 11 years ago

Native Iowan, same goes for Dubuque Iowa.

e0m• 11 years ago

What a remarkable collapse from the "Big Blue" of the 1960s. Is there really anything sexier then then thought of brand new IBM 360 getting loading into a PanAm jet-powered aircraft.

q22• 11 years ago

Recently, Apple announced highest quarterly income in corporate history and now, IBM is going through biggest layoffs in corporate history. It seems to be the season of superlatives in corporate history.

But what a contrast between Apple and IBM!!!

dredmorbius2• 11 years ago

Tech has a very powerful tendency to winner-takes-all dynamics. IBM's had an unbelievably long run (formed in 1911 though through the merger of two existing firms), and has taken on and disposed of other competitors (most recent Sun, though there were the Seven Dwarfs in the 1960s / 1970s).

Which is to say, the shifts are likely not unrelated, though Apple doesn't directly compete significantly in business.

anonbanker• 11 years ago

Nobody ever got fired for choosing IBM.

Except as an employer.

orionblastar• 11 years ago

IBM didn't take the microcomputer seriously, until it saw how well Apple did and then made an IBM PC to compete with it.

They made a deal with Microsoft for DOS, but didn't make the deal exclusive so Microsoft sold their own version of DOS to the PC Cloners.

IBM made the PS/2 series with Microchannel as Clone Killers. VGA was a better video, and Creative Labs had the Sound Blaster for better audio. IBM's Microchannel flopped because people wanted to still use their ISA cards. IBM had OS/2 and Microsoft had their own version of OS/2 and Windows, and Microsoft took their OS/2 NT 3.0 and made Windows NT 3.1 out of it and stabbed IBM in the back for a second time.

IBM sold their printer line to Lexmark, and their PC X86/X64 line to Lenovo, IBM didn't know how to turn a profit on them.

When IBM couldn't supply the PowerPC chips to Apple for their Macintosh line, because IBM was making PowerPC chips for video game consoles as a priority, Apple switched to Intel chips. Then later video game consoles switched to Intel or AMD chips. IBM open sourced their PowerPC chips eventually.

IBM bought out Lotus and basically ran it into the ground and let Excel replace Lotus 123, and Lotus Smartsuite was never updated to compete with Microsoft Office and for modern Windows systems so it fell away and IBM forked OpenOffice.Org to make Lotus Symphony. That also went nowhere.

IBM still earns money from mainframes and contract support. I think IBM got into Linux and Java contracting as well.

But IBM has changed over the decades and it is not the same company it once was. It fell into a trap of maximizing shareholder values rather than making the customer experience a better one like Apple did. Microsoft also suffers from the same sort of thing that IBM does which explains why Microsoft Surface sales tanked.

IBM needs a big reboot, and to focus on making the customer experience better. Mobile apps is an area they could focus on, make the IBM Cloud and then make IBM Lotus Symphony for iOS and Android and store the documents on the IBM Cloud and offer subscriptions for more storage. They should also make Lotus Domino and Lotus Notes for mobile devices, and make a set of developer tools to make Android and iOS apps easier to program.

aceperry3• 11 years ago

It would be nice to hear from honest IBM managers, who are doing the firing and downgrading of employees, what is really going on. Though I'm pretty sure most people know what the score is.

drawkbox• 11 years ago

IBM seems like it would be a terrifying place to work, Initech level. With the 1,2,3 system there is also probably tons of project protectionism going on, and you probably have to wear a tie.

kjs32• 11 years ago

We don't wear ties.

bronson• 11 years ago

Why is the tone of the comments on this story so different from those of just last week?

https://news.ycombinator.com/item?id=8948778

One hypothesis... some of the IBM managers who were commenting on that story now realize Cringely was at least partly right?

brymaster• 11 years ago

This is a tech board where anyone can post anonymously, so sockpuppeting and astroturfing are quite common, especially as employees of these companies post here. In every thread about Apple/Amazon/Google/Facebook/IBM/Microsoft/etc you'll always have to wonder who's behind that post or who clicked the upvote and downvote arrows.

akurilin• 11 years ago

Does this impact SoftLayer in any way?

kjs32• 11 years ago

Cringly said in his article that a quarter of the IBM workforce would "get their paperwork" to be laid off in the last week of January or so. He was very specific and he's not even close. At some point, the layoffs may total a quarter of the workforce, but that's not what his histrionic diatribe said. If he now gets to backpedal and "restate" what he said and be right in his predictions, then so were the forecasters who said New York was going to be buried in snow and yet only got dusted.

People have been predicting the imminent death of IBM, with detailed litanies of the myriad of ways it's unrecoverable failures, pretty much every day of the 30 years I've been in IT. The thing about predicting the end of the world, is that if you do it long enough and lack the humility to be ashamed of all the times you were wrong, you'll eventually get to be right.

Layoff Underway at IBM

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