Thread regarding IBM layoffs

Sorry forgot to attach the story

https://finance.yahoo.com/news/sap-employees-protest-return-office-204731012.html

It’s funny how SAP and IBM seem to play follow the leader. IBM says layoffs but head count will remain stable. Now SAP does the same. What’s interesting is IBM is targeting approx 4k worth of headcount (400 million charge) on a 288k total worldwide employment base, yet SAP is targeting 8k on a 108k total worldwide employment base. I suspect IBM is targeting 4k for USA headcount.

Weather headcount is much smaller probably 1000.

@2qxk+1qJ82vHl Absolutely correct. IBM Consulting cannot compete with Accenture, Deloitte, Cap Gemini, etc. even for system integration work (SAP, Salesforce, ServiceNow) with only 8% onshore. Not to even mention the higher value "consulting" work. If we just want to compete with WITCH for support contracts and code monkey work then sell off the other half of IBM Consulting now.

Just my opinion (non-consultant), but from what I saw from my time AMS had the most off-shore labor with the lowest margin "code monkey" work. On GTS jobs (that was me) the customers would often assign IBM all the AMS work, but give the "real consulting" (high-paying) gigs to Deloitte and Accenture.

IMO IBM will need more on-shore staff if they want the big bucks in IT consulting.

@2ktx+1qJ82vHl What's left is the old AMS business. The lowest margin part of Consulting, BTW.

@2vlh+1qJ82vHl GTS/Kyndryl is a totally different business than Consulting.

Read it for yourself Kyndryl made it work at 8% on shore. Will IBM get there? AK is certainly trying as the internet allows folks to work from anywhere

https://www.crn.com/slide-shows/managed-services/8-big-new-revelations-about-ibm-s-kyndryl-spin-off

What's left of IBM consulting if BTS and HCS are removed from the picture? Isn't that the whole point of going to IBM in the first place, as opposed to one of the more traditional competitors?

Same thing with on- vs off-shore...is an 8% on-shore target realistic? (I say no.)

IBM’s plan for the USA is to get consulting down to 8% on shore employment

This would require exiting the vast majority of the BTS business and a substantial part of the HCS business as well.

The question isn’t will job cuts happen, BUT where will they happen. IBM’s plan for the USA is to get consulting down to 8% on shore employment. It worked for Kyndryl (IBM’s clone) so it will work for IBM Consulting. SW goal, is to get down to 25% on shore (essentially the LINUX SW modernization group). Infrastructure’s goal is to get down to 50% on shore (plants and TSS ensure a higher percentage, BUT the total number of employees is the lowest of the 3 divisions (approx 25k).

Large right sizing will happen across the board,but due to beserk political correctness if you are a white male over 50 you got a lot greater chance

It’s all about profit margins. Ask yourself what is the profit margin on small power system boxes or small storage devices. I suspect they are in the single digits as they compete against the commodity sector. IBM doesn’t and can’t afford to remain in the small end of the midrange marketplace. IBM’s over head is just too high to remain in this marketplace. The SW associated with those boxes on the other hand command 80% profit margins thus IBM wants to continue to play there. As such Look for a partnership where IBM farms the IP and divorces the rest, just like they did with Intel servers and PC’s. What’s old is new again as the marketplace moves up the value chain

Now that IBM has shrunk as a company and is trying to focus, what does "enterprise" mean as a GTM target? Does that mean that IBM salespeople will have F100 and big government, with partners handling everyone else? Does it mean that IBM keeps "z" and high-end storage and gets rid of "i", "p" and low-to-mid-end storage? Which SW products remain, and which get sold off?

After Weather, what else can be cut?

Last year's layoffs heavily affected CIO. I know several developers who are maintaining whole products by themselves. If further cuts are made to CIO there will be many service outages for both IBM and their clients.

IBM has been very very consistent on their forecasts since AK has taken over. So I would believe them with what they said yesterday. 12 billion free cash flow, and 400 million charge for head count reduction. The unasked question is where are the heads going to come from? I suspect the USA will take the hit as they are over managed. So approx 4000-4500 head count reduction, PIP’s will continue, and 3000 heads will be sold off (Weather). The goal is to target the USA head count as IBM views the USA as high cost, and an easy cost take country. It’s not pretty, but the weak sister from yesterdays announcement was “Infrastructure” TSS being down 9% lead the parade, with the rest of infrastructure (mostly distributed) being viewed as too cyclic and low profit. Look for IBM to try and adjust that via tinkering with “infrastructure” including the cloud offerings. IBM was as clear as they could be yesterday. Enterprise is the focus for IBM go to market, and partners can have the rest.

"non-GAAP" is the same as saying Generally Unacceptable Accounting Principles.

My understanding is that in Software it is also the non-managers that have to go 3 days a week into the office...

Consulting and Software - SVPs have mandated 3 days a week in the US for ALL Manager and Execs. If you are not in consistently by April 1, find a non manager role or a remote allowed role or you will be gone.
Emails I have seen from Grainger, Nirmal/Yusef.
I expect other countries not far behind.

Yes at this point 1% > 0

so how many people were axed last year? should be the same and timing the same. im sure the lists are going to be due by end of feb.

Any idea where these cuts might happen? Maybe people insist on remote-only work?

Anyone predicting if GDP (bonuses for the non exec) will be funded? If yes %.
For those not aware, GDP was funded to the tune of approximately 1% in 2022, for the first time in 3 years.
I'll start and say yes, to the same paltry amount of 1%