Thread regarding IBM layoffs

Okay. We are 7+ weeks into 2020;
New CEO - Check!
Layoffs - If anyone has facts versus rando guesses/speculation - please comment.
Thanks

US Lab Services, our VP left on his own at the end of December. I think he was p-ss-d off because he had to much work and could not meet his targets. I believe his leadership was pretty p-ss-d off that he left.

If you work at IBM these days, your resume should always be up to date and you should always be looking for another job. Once you find it, you should really leave. This IBM company is no longer worth working for.

I pull the plug Dec 20 after I got my 401K match. So long IBM!!

Has it really started where execs are being asked to leave? I just see some in the mid-ranks leaving with no backfill. These are very different strategies- being asked to leave implies accountability whereas no backfill means exiting a business.

Gss1. It’s already started. IBM execs are being asked to leave as they have not met their performance objectives. I expect Ginni to announce a new CEO in the Jan-apr time frame. Jim from Redhat is most likely the guy as Redhat has become IBM’s customer facing strategy. Think about it. For every 10k worth of IBM Upper band levels that he culls he moves 2.5 billion to the bottom line. I expect 1st quarter to be the ultimate realigning of IBM, and a lot of Upper bands will be shown the door

This feels a lot like it did in the early 90s just before the new CEO and massive layoffs and restructuring. I think it’s going to happen very soon, ibm needs another major rework if it’s going to survive. No idea what would be left , depends on who takes over from the outside. Similar to when Gerstner.

Much of the same is to be expected in 2020. Brace for some layoffs shortly after Q4 2019 results are unveiled on January 21. Then the same non-sense will continue. January 2021 we will be discussing the same stuff, the only difference will be that IBM will be a 70 Billion company vs a 77 Billion company.

IBM services has so much internal waste going on and all they do is add more bloat.

7aad. It’s the death by a 1000 cuts. Services must be restructured to lower costs, and to win business. What unique value does IBM services bring. If it’s viewed as a commodity, someone out there will always underprice IBM. Redhat MAY bring unique value perception in the customers eyes, and that is the hole that has to be filled. If IBM can’t exit their silo’ed view of the world (especially in services) look for a corporate raider to break IBM apart. The cash flow is just too strong to ignore. When Gerstner came into IBM he slashed 100k worth of jobs over two years. (13 management levels to 7). Look for a replay of that corporate move. It’s all about value, As viewed by the customer, and not about the IBM name.

Services, EMEA told we didn’t close on as many large deals as planned for 2020. Global delivery staff being sent home and local attrition not being back filled at B7-10 delivery roles. But, many open hiring tickets for management consulting skills. It is very obvious what the future holds.

Senior management will have employees drink the Kool-Aid while they fatten their own wallets.

Trimming the fat at the top will never happen, but they still can trim the fat internally.
Security and compliance teams need to go. Their tools were sold off so customer stopped using.
Time to say goodbye - Bocelli

5rwb. It’s all about getting the correct new CEO. He/she will staff the board, fill the SVP chairs, set the priorities of managers including how they get paid, and decide what to invest in, and where to take the company. Right now IBM is SO inwardly focused, that its silo’s are k–ling it. If you don’t break the silo’s (how folks get paid) you will get more of the same. (Inward focusing), and we all know how an inward focused company runs. (just look at the Ginni era). Redhat May be that breath of fresh air IBM needs. The Current CEO is ready to step down, the innovation/services era has run its course, and we have a CEO waiting in the corner with 6 months of seeing how IBM plays under his belt. Let’s hope the board can see their way to ushering in the new cloud strategy while discarding the old services strategy One can only hope

What lies ahead in 2020? — Carnage

IBM can certainly be fixed, but it would be a massive undertaking and there are too many vested interests at play for there to be sufficient willpower to do it. Fixing IBM would look something like:

• New BOD
• New CEO
• New SVP team under the new CEO
• Massive culling of management at the GM, VP, and Director/Partner levels
• Selling off of huge amounts of under-performing legacy businesses across Hardware, Software, and Services.
• Use of the proceeds from those sales to invest organically in new cutting edge areas (NOT acquisitions to buy revenue)

The end result would be a much smaller, but leaner and more focused, IBM that can resume an actual growth trajectory. Don't hold your breath waiting, though.

You say Redhat can’t save IBM, and I can’t disagree with that, BUT what if Redhat can act as the agent of change within IBM. IBM Management knows they have to change. You don’t hire Bain unless you are looking at changing. A major re-org was in play before IBM decided to buy Redhat. That re-org was centered on Services. IF and I know it’s a big IF IBM is still embracing change, Redhat May deliver what the shareholders are looking for.

1. A new CEO who embraces change and culling the established herd. (getting to 6 levels of management would be a major accomplishment)
2. A re-org around services that streamlines GTS/GBS. (dump the old/low margin businesses, and grow the rest). This will involve touching 100k worth of heads most of them leaving IBM
3. A re-centering of IBM business goals focused on LINUX/Cloud/AI. You will never catch Amazon or Microsoft, but there are major niches that IBM commands almost exclusive market share. Exploit those niches, and find a major player who Can help
4. Get back to your knitting. Watson had it correct back it the 30’s. Your people are your major assets. Start acting that way. If it means smaller bonuses for management so be it

1. Red Hat can’t save bloated and inept IBM
2. Losers who post here long lengthy useless Whining still going to post in 2020.

Infrastructure under GTS is the really weak and shrinking part of IBM. GTS revenue was 6.7 B, with 2.1 Billion labeled cloud. (5.1 under cloud/infrastructure shrinking as a combined entity at 4% and 1.6 b under TSS shrinking at 3%). If we do some basic math it says 5.1 - 2.1 = 3.0 in infrastructure. If we use IBM’s cloud number growth of 14% and do the combined shrink rate of 4% that says infrastructure shrank at close to10 - 12% YES thats the disaster part. If you want to take all of your bad news at once, you would combine TPP out of Cognitive division (shrinking at 4%) along with GPS out of GTS shrinking at 3% and sell it all off using the revenue to retire debt. Take TSS under GTS and combine it with Systems division to get less boom and bust cycles. All that remains of GTS would be cloud, and you could blend it into GBS or Cognitive. THUS ending up with 3 far more reasonable divisions, and dumping perhaps 100k worth of head count

4th qtr is crashing, it's been push Red Hat from 2nd in command on down...Services is a total c-ap show...movement freezes since Oct 1. I expect Services GBS and some of GTS to be packaged to cover up the lack of quality executives from all alphabet bands.

Nothing really big will happen in 2020, it will be business as usual... meaning just enough layoffs to compensate for the revenue declines so that IBM can make earnings.

Management will continue to claim that business is great and improving... the BOD will be absent as usual and Ginni will still be around running her mouth that she is great!!

LOL!!

something big needs to happen in 2020. Look at the stock price when compared to all the records getting hit at this time by our competitors . Pull off the bandaid, sell things off, shutdown or sell power or invest in it, major reorg and layoffs, get it over with, slow death is no fun, do something big, I fear z will save the 4th quarter and nothing changes ,instead we need a terrible 4th quarter to force big changes or a big sell off that might get some outside investor interested in buying in and forcing changes to occur

GBS leadership changes have happened in several countries over the past few months. We can only hope this will drive some change, but everyone new just opens a bunch of hiring tickets so I don’t have much hope.
Any info about what’s happening in GTS lately? Apart from low morale, I don’t see a lot of leadership changes from where I sit.

Well put

1uc1. I can’t disagree with you. GTS has a 3rd Q pre-tax margin of 7% with GBS coming in at 13.7%. Since IBM isn’t growing their backlogs, we have to assume their costs are too high, they are over manned, or a little of both. No matter how you cut it, it’s time for a good hard look at the management of the business, and “changes”. A new management team and philosophy is most likely in order. If almost every other outsourcer can make better margins with essentially the same work force, it’s time for a change. My guess is a new management structure would double GTS margins, and increase GBS margins by 50%. It’s time to swing the AX and get it done. Using the “we are now primarily a cloud company” would cull excess manpower/management, and focus management into what they say they want to do anyway. HW division has even slimmer margins, but it’s a boom and bust cycle over there, focused around Z. Perhaps they should explore dumping Scale out power and Storage as they are commodity entities.

@1zmb good thoughts, but I have to disagree with 5&6, maybe because it’s the part of the company that I work in. Outsourcing is dying and every competitor knows IBM has huge teams of offshore people who cannot innovate plus a bunch of underperforming, toxic contracts with margins that cannot be recovered. I have heard on good authority that this is why the sale of Services never happened, because they simply could not find a buyer willing to take it on. GBS has seen tumbling revenues due to the fact that IBM would rather sign a large unprofitable deal than a small strategic deal, and the brain drain leaves only the truly desperate behind. So GTS is too risky and GBS is too worthless to be attractive to anyone. I don’t even think at the right price, that anyone would take on either division. So they’ve resorted to transforming GBS and GTS into the new sales arm of Red Hat and all who do not comply, your days are numbered. Already we have seen the departure of Services staff aligned to other cloud technologies with no backfill.

Since we are speculating. Who would be interested in IBM.

1. Someone mentioned Apple. (I guess for the enterprise experience)

2. Google. (I would say for enterprise introduction, AI, cloud growth, and REDHAT)

3. Oracle (I would say for their HW division. If IBM exited Z and Enterprise Power Oracle would take a hit)

4. SAP. (Same story as Oracle but not as much)

5. Any body shop (the 120 billon GTS backlog is worth 30-35 cents on the dollar)

6. Any consulting company (GBS consulting is consistent revenue)

7. Any cloud company looking to grow and claim 3rd place (Google/Alibaba come to mind)

Many stocks were way down around last December so I would not read too much into the lack of a buyer appearing at that time.

I believe last year (2018) in December the stock went down all the way to $105-110 and nothing happened... kinda tell you either the stock should go lower until someone gets interested or IBM is really worth nothing at all!!

If IBM dropped to 80 bucks that would yield 8%. Quite the return considering IBM is a cash generating machine. Another way to look at it would be a 6 - 6.5 year buy out. Again quite the return. Do you really think any corporate raider will wait for 80 bucks. The board will take action at 100 bucks. The break up value alone at 100 bucks will be worth more

@12EZbQtw-aou I agree with you.
@12EZbQtw-voo I agree with you also, I heard the same thing. Not to mention, Expert Labs consultants are way too expensive. At well over $300/hr we are pricing ourselves out of market. Then, we barely have any resources (IBM term for people!) available for multiple reasons:

1. Too many have been laid off
2. Too many are tired of the unrealistic targets and expectations from upper management so they bail out of IBM or join other IBM teams and end up competing with Expert Labs.
3. Some just leave IBM because raises are meager to none and bonuses are just history

For Expert Labs folks, just watch the GM (DK) end of the year videos... the guy is scared like hell and probably already dead meat. My prediction is that he won't be at IBM by year end 2020.

The slow death of IBM... What a sad story, I really wish it could change.

stock to drop to $80 Apple to purchase

Yeah, Sametime is going at the end of December. IBM switching to Slack for IM... isn’t that going to be fun?

Just wait for 4Q results... they are not good. The stock will plunge, but Ginni and her cronies will say everything is fine, the RH integration is still doing well and everything is fine. The BOD will do nothing.

Once the stick goes under $100, IBM gets acquired.

Lab Services or Expert Labs as it is called now is going bye bye... the VP just decided to bail... in his email he said: “The days are long, but the years are short...”. So read it this way: I worked 12-14 hours a day but even in a year I could not achieve what my management wanted me to do and never got compensated for it... so f— it I am retiring (leaving). The GM (his boss) is believed to be p-ss-d.
Then a few month back the SVP on an all hands call made a comment about Expert Labs that they should be more like the Garage people... bye bye Expert Labs!

I believe you can look at IBM as 3 entities.

1. HW
2. SW/Cognitive
3. Services (GBS/GTS)

It makes sense profit wise to break GTS into its components. (TSS, Cloud, and everything else)

I would put TSS back under HW as they go hand in hand, move cloud to GBS and sell off the rest of GTS. You may have to sell some of AIM and BPO under GBS too, but this then aligns IBM into a LINUX/SW/AI, Cloud, and HW company. If you were VERY aggressive you would then sell off HW and just be a Cloud/SW company. Yes it’s a lot of re-orging, BUT IBM has way too much overhead, and very little runway left to fix itself before it gets broken apart by a corporate raider

Any software that is not mainframe, IBM i or included in one of the CloudPaks will be sold along with the workforce.