Hello,
There was a Resource Action back in June in IBM USA. Any news if there was another one in August or coming up in Sep?
Regards
24 replies (most recent on top)
GBS is going to get much smaller if not eliminated. Right now GBS = consulting 1.9 billion shrinking at 3%, GPS .2 billion shrinking at 12%, and application management 1.7 billion shrinking at 12%. I could see Consulting getting folded into GTS, and cater to just cloud consulting within enterprise. Application management being folded into Cognitive, and streamlined using Redhat as the template. I believe the same is already underway for TPP under cognitive. GPS should be sold along with the non-cloud portions of GTS. The exception being the TSS portion of GTS should be moved to Servers so all of your HW/OS support is under one division. You would result in 3 divisions Cognitive/Ai (all things SW or Redhat focused), GTS All things cloud related, and Servers (all things HW, SW (OS’s), and support.). You now have a streamlined IBM.
IBM is spending 1 Billion to train Business Partners on the OpenShift/CloudPak stuff because GBS is incapable of getting their job done. Major firms like Deloitte, EY, KPMG, PWC and many other smaller ones are jumping into this opportunity with the help of IBM.
Where do you think GBS is going to end up?
GTS is certainly the weak sister as far as IBM services go. Exceeding low profit margin due to capital investment. Can IBM completely dump GTS? NO WAY Can IBM trim GTS to their strategic vision (cloud/AI/Enterprise Z) ABSOLUTELY. The same can be said for GBS and the same for Cognitive There are pieces of each organization that do not fit into IBM’s go forward strategy. The sooner IBM deals with the non-strategic pieces the sooner IBM recovers
Seeing a lot of GBS get cut. No surprise, nobody is selling squat.
If true 5/18 = 28% That most likely says IBM wants to trim services by 30% A pretty reasonable assumption given AK’s statements about the future of IBM. GBS is easy to cull as you look at utilization / bench management and pick the low 30%. GTS on the other hand gets harder as strategic direction comes into focus Where is IBM heading when it comes to GTS (cloud, AI seem to be the strategic focus of management, but they comprise 2.4 billion of the 6.3 billion reported for GTS in 2nd q). Let’s assume a 30% shrink rate That equates to 1.9 billion So 6.3 - cloud 2.4 = 3.9 That says GTS outside of cloud/AI will shrink 50% (1.9/3.9 = 49%) So if you are not in Cloud/AI under GTS 1 out of 2 of you is most likely vulnerable. AGAIN this assumes the poster is posting “truth” That assumption may be quite a stretch considering the manager having to do the picking was given zero strategic guidance and just told to pick. There is a strategy to AK’s restructuring (yes GTS the bulls eye is mostly on you), but just telling managers to pick isn’t anywhere strategic
Not even close to being over. My manager friend at IBM was told by her management last week she needs to choose 5 of her 18 staff and let them go. Her manager doesn't care which 5, as long as it is 5. She was told she can choose the 5 (I thought to myself how callous and truly heartless that is of her manager). The manager is in GTS/GBS. She sees the number of people being let go and she's saying it is very, very alarming. To me it seems IBM hires the type of Senior leadership that are just "Yes" people and not so much the "Wild ducks".
If you are going make the segments efficient, why not look at GBS and Cognitive too
GBS = 3.9 billion revenue with Cloud being 1.4 of that revenue
Consulting 1.7
GPS .2
App Management 1.7
Cognitive = 5.7 billion revenue with cloud representing 1.6 billion of that
Cog apps 1.2
Cloud/data 2.8
TPP 1.7
Let’s assume app management is re-writing old apps to new LINUX/AI apps thus stays, but should most likely be rolled under cognitive. Under Cognitive, Cog apps, and cloud/data seem to align with app management so combine them, and streamline for efficiency. TPP seems to be a perform part of Z. As goes Retail, Banking, and Airlines so goes TPP. Lately Airlines and retail are forecasting a recovery in 2024 so maybe TPP should go with the non-cloud piece of GTS This would result in
GBS = 1.9 consulting, .2 GPS, and 2.4 GTS cloud
Cognitive = 1.2 cog apps, 2.8 cloud/data, 1.7 app management
Servers = 1.8 HW and OS’s, 1.5 TSS
GTS = Gets spunoff or sold 1.7 TPP (worst case some of this may be cloud revenue and should be kept), 2.4 non-cloud This revenue is nothing more than perform Running at the mercy of the economy, and IBM should monetize it via IP sales, and leveraging the backlog
This is an interesting article As it relates to the IBM segments NOTE the weakness of GTS pre-tax income (9%) IBM loves the revenue from GTS but they are empty calories. IBM did 6.3 billion in 2nd Q GTS revenue, 4.8 in infrastructure/Cloud, and 1.5 billion in TSS. IBM broke out the cloud revenue as 2.4 billion. Everyone knows IBM has to restructure Its time to take the 2.4 billion in cloud, add on the TSS revenue (even though it continues to shrink) and move on. Spin off the remaining 2.4 billion as they are just perform. TSS via its stream nature is most likely a necessary evil if you are going to keep making HW.
https://www.investopedia.com/how-ibm-makes-money-4798528
What reduction in GTS benefits? Please elaborate.
While I think the 9/10 person is trolling the board, there is one thread that does overlap with that date. The reduction of GTS benefits begins on 9/10 If there is an announcement on 9/10 I would suspect we would see a spinoff and not a lay-off
3sw's 9/10 layoff post is just a slight variation of the one from the day before stating 911 (sic) big layoffs in the US, which I commented on yesterday. At least the poster realized 9/11 is a Friday, and adjusted by a day. Same FUD though.
Whoever is doing this, stop wasting people's time and go troll elsewhere. People like you are part of the problem. We've got enough real problems to worry about right now without dealing with tripe like this.
3swh Fool me once shame on you Fool me twice shame on me
Look for 910 for a major lay-off in the US.The new CEO is calling this "Curry Day". Code name for cutting heads in the USA .
TJ Watson is rolling in his grave !
I dont see any execs who were layed off. They're always recycled, in which org were execs laid off?
There’s always another layoff at IBM! Execs are also not immune— recently quite a few DE’s and business execs were asked to de-band or retire. Really sad!
Latest post (911 layoffs) looks bogus. For one, it is too late from an accounting perspective since the end of the layoff period stretches into 2021. Every past layoff in the US that I can think of is started by end-August. Secondly, 9/11 is a Friday. Layoffs are done on Thursdays. And the comment on Arvind protecting India is just plain silly.
Does anyone moderate this site ? This should be flagged as extremely dubious, at best.
Watch for 911 . Epic layoffs coming . Most in the USA . India is golden since the new CEO is in .
I've heard no news from folks I'm close to in Security, Cloud, and AI.
Given IBM’s services shrink (5-6% per year) I would say IBM will have to continue looking for ways to become more efficient. You maybe correct that IBM took their medicine in May, but the 5-6% shrink rate equates to 10-12k headcount cuts per year just out of services. Everything IBM has done so far has not moved them to more efficiency as their competitors have also adjusted. Combining GTS/GBS to focus on Enterprise engagements, along with trimming the bench due to Covid, means there is more to come. Having Cognitive do well when 3/4 of IBM is shrinking at a fairly good rate does not make for a sustainable business plan moving forward AK will have to restructure IBM’s go to market strategy if he expects to move the needle That means outside the box thinking which should equate to something different than the normal layoff strategy To date IBM has tried to shrink their way to prosperity. How has that worked out over the last 5 years? It’s time to try something different!
Relax, the major RA was on May 21.
I’m hearing it’s coming for GBS as a result of the GBS/GTS merger separate to the bench management layoffs that have been ongoing.
Multiple people in Watson Health impacted this week. Last day is Sept. 30.
Lots of posts on LinkedIn today from people who were just "resource action"-ed.
Several people's last day will be in the end of September and November.