Thread regarding IBM layoffs

If you work for IBM and sell one of the problem child products, something has to give eventually. IBM either reduces staffing (sales, support, development, marketing), to match the declining demand, eliminates product from the portfolio, or eliminates the entire portfolio. No matter how you cut it, there has to be an impact on staffing at some point.

If someone buys the portfolio, some staff will go with it, some will not. Something is better than nothing, and that would be a good thing for those retained. You could also argue it is a good thing for those not retained, and an opportunity for them to prosper elsewhere.
It also begs the question as to what the problem is: bad selling, bad marketing, bad product, a combination? Yes there is a general decline, but other companies have re-invented themselves and aren't as troubled.

" Hopefully Bain or another venture capitalist will make IBM an offer they can’t refuse "

Why would this be a good thing?

IBM answered a couple of questions yesterday as to its going forward strategy. The 3.2 billion allocated for restructuring has been spent down by 1.2 billion. Thus 2 billion remains for 2021. The GTS/Kyndryl portion of the 3.2 billion was clarified Kyndryl/GTS gets 1/3 of the 3 billion or approx 1 billion in 2021 dollars.

IBM also gave a little clarity to the “problem” children of legacy. Storage shrank 10% which is business as usual. Power shrank 5% which continues its 4 year plummet. NOTE power being a niche product, has most likely reached the bottom in that it’s now a replacement product set (you only buy a new one when the old one breaks) REMEMBER both of these product compares are to Covid 2020 compares so it’s very ugly. TPP improved from -15% to -11% AGAIN vs a Covid compare. IBM management did acknowledge that they expected TPP to stabilize in the high single digit shrink rate). TSS continues its long decline -4%, but it is subject to a NICHE product set. All in all IBM continues to ride the problem children down, and has shown no plan to deal with them. Hopefully Bain or another venture capitalist will make IBM an offer they can’t refuse

IBM has categorized the 3 billion plus 1 billion as “restructuring” funds. The CFO has taken the position that anything that lowers the current run rate of IBM counts towards restructuring. As such he has great flexibility as to what he does with the 4 billion. We should expect the 4 billion to streamline AK’s vision of cloud. Remember not everyone defines cloud the same and in fact all of the hyperscalers define it differently from one another. Given IBM’s mainframe monopoly and their “also ran” softlayer offerings, it’s pretty easy to see why IBM includes a lot of mainframe centric service offerings under cloud.

Once Kyndryl takes over GTS, IBM has 3 legacy pieces that they will have to deal with

1. Power/Storage Approx 2 billion a year, and shrinking at 10% (Niche product set)
2. TPP Approx 6 billion a year and shrinking at 15% (the shrinkage was most likely accelerated via the Covid impact)
3. TSS Approx 5 billion a year and shrinking at 10% (this again is connected to a niche product set)

So how does IBM deal with this given that “New IBM” is suppose to be a 54 billion dollar business. Also remember IBM has 4 billion allocated for restructuring thru 1st q 2022

I suspect IBM will make the mainframe vs everything else call. IBM keeps mainframe and thus Mainframe associated TSS along with TPP. Power/Storage and it’s associated TSS gets spun off much like GF. The 4 billion allocated for restructuring almost exactly matches the one year revenue stream of Power/Storage and its associated TSS. That should give IBM cover for a year to allow the IP revenue stream associated with those products to kick in, and allow TSS to stand up a new spin off business (Bain anyone?)

Was the $3B + $1B for layoffs, of for restructuring?

Example: if IBM pays someone $1B to take Watson Health (as they did with Globalfoundries) is that restructuring? Could it come from that money?

Example: if IBM pays $2B to someone to offload its pension obligations, is that restructuring?

IBM is currently shedding 20% of its workforce in EMEA and this is before the Kyndryl split.

Can confirm. Marketing USA has stated on all hands calls, reorg coming sept 1 with Kyndryl split. It doesn’t take a rocket scientist to figure out what will happen. RIP Marketing.

@wyy+1bQ7sczV What's your source for this? Or is it just pure speculation, at this point?

Post ID: @orl+1bQ7sczV - Thank you for the insight. How do they get away with it. It's sneakiest thing.. smh

USA Marketing notification Aug exit end of Sept

Also keep in mind that IBM has already set aside another Billion for Q1 2022.
So the first quarter is not going to be fun either!

@nmu+1bQ7sczV you don't pay attention i think.

Ibm doesn't do "big" cuts they have been doing 1000s of small cuts to keep it under the radar and hasn't changed with AK at the top.

You people have been saying this since January and now it's September/October lol

If the executives continue to tear down a once great company, the existing talent will leave and new talent will never come!

"... I am not sure if big layoffs are coming. Also half of the year is already over, are they going to cut ~30k heads in just rest of the year?
Sure there'll be restructuring cuts but i doubt there'll be big layoffs."
You are DEFINITELY new here. Yes it's coming. There are no time deadline for laying people off in a year. Many years ago they did big cuts in Nov.
TRUST US. It's coming in Sept/Oct. after the split.

New leadership in different roles always equates to layoffs. The new SVPs will make their changes. But we’ll see in 3-6 months