Thread regarding IBM layoffs

@fp
The hard truth is that IBM appears better positioned to monetize its past than to finance its future. Mainframe migration threatens its infrastructure base. Cloud-native ELT and zero-ETL services threaten products such as DataStage. Managed Kubernetes and free cloud Linux distributions limit Red Hat’s addressable market. IBM Cloud lacks the investment and scale to compete with the hyperscalers. IBM’s AI strategy relies heavily on infrastructure owned by other companies. Its acquisition history offers little assurance that buying another portfolio will restore enduring leadership.

@fv -- IBM is a Law firm with an I/T department.

A company doesn't become a tech powerhouse by preparing powerpoint slides. IBM should stop claiming to be a tech company and identify itself more like a Private Equity firm - There is no real development, ask anybody who has tried to get the budget for product development, it is one acquisition after the other, and chocking any R&D spend to accelerate the talent into oblivion. Whenever there is a news like IBM is going to invest billions in a new technology, it is a given that money will be spent in acquisition. The decision to buy rather than build always prevails.

Nothing to do with AI or any of the other excuses. Arvind sold Wall St the "we're a Big Tech company like the Mag 7 and should be valued like them" narrative. That narrative demands real growth. Reality is IBM is the same old mainframe and consulting company it's been for the last 25 years. The growth of the last year or so was just from the Z17 cycle, same as it ever was. Z cycle is winding down, growth evaporates, and with it the "value us like Google or Amazon" story.

• The Ghost in the Machine *

The ledger bleeds in massive bytes,
Through failed Q2 tech-panic nights.
A twenty-five percent collapse,
While Arvind redraws funding maps.
"We faltered," sighs the titan’s head,
While sending thousands out to shred.

• The Thirty-Eight Million Dollar Man *

For thirty-eight million in the bag,
He flies a shredded, sinking flag.
A fifty-one percent reward
Approved by an obedient board,
To watch the legacy decay
And blame the market's shifting play.
The core consulting practice stalls,
The mainframes rust inside the walls.
But executive options still vest fine,
Safe from the plummeting design.
The top tier drinks its silver wine,
While common shares fall past the line.

• The Automated Exit *

The pink slips fly to cut the weight,
An artificial, automated fate.
"Resource Action" is the slick term used
For loyal veterans abused.
They purge the senior engineering crews
To pay for bad strategic views.
Then triple junior hiring slots
To manage underperforming bots.
The code is broken, servers slow,
But the golden parachute will grow.
A tech empire turned into dust,
Managed by hollow, greedy trust.

Correct, bonus was paid, and he was higher than usual for most. No pay raises though for most.

They had bonuses this year for most

"IBM’s board faced an uncomfortable decision after learning that the company’s second quarter had fallen well short of expectations."

It is common knowledge that there would be no bonus or increments for IBM employees in 2026. When company does not make money, it is unable to offer any incentives to the employees. So it was already known to the IBM board that they are not making any money. Nothing new that they learned, but it is actually the market that made an uncomfortable decision after learning that the company’s second quarter had fallen well short of expectations.

And how does the market react after learning that operating earnings of $2.93 per share is below the expectation of $3.02 per share. That is a shortfall of about 3% but it resulted in actual decline of 25% of the stock value i.e. almost 8 times. That is astonishing and speaks volumes about how over leveraged this company really is.