Estimating 17,500 Layoffs Ahead

IBM confirmed today that 1700 folks were laid off. They didn’t say where in the world they were laid off from. IBM is going to stretch this lay-off out as the Redhat deal is not complete. They need Redhat in the boat before they finalize all of their plans. It’s just dotting the i’s And crossing the T’s. IBM announced a 7% decrease in GTS revenue in April’s 1st Q earnings, approx 5% across all divisions worldwide. You should expect IBM to reduce headcount 7% in GTS and 5% companywide as 2019 moves along. (The head count to revenue matrix has been in use for years). The numbers should equate to approx 17,500 heads over the world over the year. So let’s look at the numbers so far

CFO Confirms 500-700 million 2019 charge for redundancies
CFO confirms IBM will withdraw from GTS contracts that contain OEM
IBM sells to HCL Domino, and commerce
IGF confirms they have withdrawn from OEM
IBM confirms they will withdraw from low margin services engagements

So what should we expect. I would say 17.5 k worth of heads will get laid off. Another 12k heads will be removed due to redundancy (Redhat replacing IBM legacy). Expect low margin services to be spunoff/ merged off/ sold off. (approx 30 - 50k worth of heads. It depends on how aggressive IBM wants to be, and how aggressive the acquiring company wants to be). IBM will exit manufacturing of HW, and adopt an IP strategy for HW. This will involve a GF kind of deal. (approx 5-7k worth of heads) Doing the math says the “new” IBM will be approx 265 -275k worth off heads

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GTS here. My team and our flm got the ax. Flm said it was mainly GTS that he knew of getting cut.

Red Hat has 13+K employees. IBM needs to get rid of at least the same amount of employees. You have to look at the number of employees compared to the revenue. That ratio is still too high at IBM. IBM needs to quickly get down to no more than 250K employees.

@Zr29lG4-txw,

Solution there is, quit doing the work.

I agree with Math of 17500 number. Question is whether it will be immediately in this round or next round by March 2020.

@wla they are not cutting blot on the executive and sr exec level - all the directors floating around. they are cutting the little guy that does the work

Anyone working at IBM knows the internal bloat has to be trimmed. It's become insane.

People outside of IBM even know the management towers have to be cut. It too is insane.

Will this happen? That is the $64,000 question.

Good luck to everyone

I would say this was one of the analyst firms crunching numbers on IBM’s restructuring before Redhat is final. IBM’s CFO always takes questions from approx 10 firms at every earnings report. He also updates the firms 1/2 way thru each quarter. It’s just looking at cash flows/profits and balancing it against manpower

i can bet this was writtien by someone pretty high up

Agree 100%. So, to tally things up:

Doing the math says the “new” IBM will be approx 265 -275k worth off heads

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Estimating 17,500 Layoffs Ahead

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