At the beginning of February, the Kyndryl company suspended all sales activities in emerging markets such as Eastern and Central Europe, Baltics, and Turkey. These are evident signs of the likely closure of local branches and the dismissal of thousands of employees. Offices in Bulgaria, Romania, Croatia, Slovenia, Lituania, Latvia, Estonia, Turkey, and South Africa are just a few among the 20 countries which will be shut down. IBM has probably set up a new spin-off company making a false promise because this is a scenario of how to slowly lay off almost a hundred thousand people in a very subtle way.
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The other thing is that if bench salaries started to come out of free cash flow vs operational budgets I think you can trick the organization into granting greater executive bonuses, which seems to be part of the agenda as always.
Internal docs indicate the headcount cost is transferred to a 'hq' cost center, but the BUs don't lose headcount...hence false improved per employee earnings/employee or efficiency numbers due to BU headcount charges going down as they are transferred to hq. Pretty, pretty, pretty, sneaky...
It's not a secret that most of management is ruling the IBM way and utilizing HR tactics to remove employees without creating too much news about it. The truth is Kyndryl will show lower than predicted cash loss due to reduction in operating expenses. How do you reduce operating expenses easily? By simply reducing payroll.
Responding to: “one of the big reasons why IBM set up the spin-off company...they couldn't make it work anymore, and somebody else decided to take a chance and see if they could make it work.”. The CEO is formerly the CFO of IBM - it’s still all in the family.
It has nothing to do with IBM at this time! It’s Kyndryl’s executives that fail to their employees. I bet they all get a big bonus.
It's not so much a false promise as much as it is a bet that's failing.
Kyndryl has two major challenges ahead of it. The first challenge is that for a lot of clients, there are better and cheaper ways to manage their infrastructure than to have warm Kyndryl bodies do the work. There are automated cloud services (AWS, Azure, etc.), bringing work back in-house rather than outsourcing it, and other IT firms. The failure of this basic business proposition is one of the big reasons why IBM set up the spin-off company...they couldn't make it work anymore, and somebody else decided to take a chance and see if they could make it work.
The second challenge is the world economy at large...it sucks. Companies everywhere are shedding staff, both internal employees and contractors. It sucks that Kyndryl is going to keep on ditching people, but that's life...not only in the IT services business, but in the world economy in general.