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Analysts Call IBM Layoff Estimates "Hogwash"
Posted by
ScuttleMonkey
on Mon May 07, 2007 05:08 PM
from the only-time-will-tell dept.
from the only-time-will-tell dept.
jbrodkin writes "Rumors have been floating around saying IBM will cut 150,000 U.S. jobs, but a Network World story attempts to set the record straight by quoting analysts who say this news, if true, would wipe out the company's entire U.S. operations and would make no sense since IBM is actually doing pretty well."
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IBM to Lay Off Half of Global Services Division 553 comments
Rolgar writes "Cringely says that IBM has begun massive layoffs in a quiet manner, starting with 1300 employees, but by the end of the year, the total will rise to at least 100,000 and probably closer to 150,000 employees, nearly 40% of their U.S. workforce. Some people will be temporarily retained as contractors at a fraction of their salary, and eventually, IBM will also dump many of the unprofitable customer contracts worked on by Global Services or outsource the work to Asia. If these people are looking for work, that could seriously drop wages for technical workers in the US since they will have to compete with these people for available jobs."
[+]
IBM Says 'Couldn't Fire 150K US Workers If We Wanted To' 219 comments
theodp writes "In an e-mail worthy of the Dilbert Hall of Fame, IBM execs responded to Robert X. Cringely's Project LEAN layoff rumors, reassuring employees by pointing out that they've already wiped out too many U.S. jobs to be able to lay off another 150,000. Big Blue's employment peaked around 1985, when it had about 405,000 workers who were acclimated to a long tradition of lifetime employment. IBM puts its current global workforce at 355,766, with a 'regular U.S. population' of less than 130,000."
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Analysts Call IBM Layoff Estimates "Hogwash"
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They're probably right, but... (Score:2, Informative)
(http://www.hyperlogos.org/ | Last Journal: Wednesday July 18, @08:19PM)
...they're just analysts. They don't actually know anything. They're making educated guesses at best.
FTFA:
Analyst Frank Dzubeck, president of Communications Network Architects, says the layoff rumor "sounds kind of ludicrous since there's only [about 350,000] people] in the entire company. That means they'd be wiping out every division in the United States including the headquarters, which doesn't seem plausible."
why does it mean that? they probably have several divisions they could drop entirely because they don't really fit with their future plans, they could scrap those first. And then think of the places you've worked. How many people in those places were completely fucking useless and the company would go on without a hitch or even do BETTER with them gone?
Yeah.
Also IBM still has a lot of tech support in the US, if they outsourced most of that, then those people could find themselves without a job.
Does anyone know anything about an actual breakdown of where those 350,000 people who work for IBM in the US are actually placed? And I don't mean geographically, but by business unit (at least - type of job function would be better.) Not that I expect any such data - but then, the analysts don't have it either.
But who knows, maybe the estimate was just over by an order of magnitude - a misinterpreted misprint :)
That's not what they mean (Score:5, Informative)
Not hogwash, not just the US (Score:4, Informative)
Our offices here in Winnipeg (Canada) are going to be decimated down to a skeleton staff of people to maintain our managed servers (for places like MTS, etc.) I've been hunting for another job for 2 weeks now, since a relative of mine high up at IBM told me about my office situation.
Depends on how you define it... (Score:4, Interesting)
(http://www.jameshollingshead.com/ | Last Journal: Thursday June 02 2005, @01:40AM)
Are they talking just full-time people or contractors? My guess is that they're only counting full-timers.
If they include contractors in the number of people IBM employs, I have no problem believing this "hogwash" figure.
When have upper management decisions . . . (Score:2, Insightful)
Maybe there was a time long ago, but recently the only way to make sense out of half of the actions we see out of big company CEO's is if there actions will somehow justify giving themselves another $10 Million or so in salary or other bonuses.
The investors don't seem to have heard (Score:2, Interesting)
The IBM message board over at InvestorVillage seems to be ignoring this story ever since it broke last week. Usually the message boards are the first to jump on every unfounded rumor. It just seems that this story has zero credibility.
I begin to wonder if it was made up by a guy called Darl.
Never underestimate the lure of the dark side... (Score:5, Interesting)
It's all about short-term stock price manipulation (which I call the "dark side" since it ultimately winds up being a loss but brings instant gratification).
If the CEO is retiring soon, then he has little incentive to do right by the company in the long run, and plenty of incentive to play games to increase the stock price in the short term (so he can sell off his shares after the price goes up). A massive layoff like this would be entirely consistent with that scenario. And it's not like the company's "investors" would give a damn about the long-term outlook of the company anyway. After all, it's all about the growth rate of the stock, and fast growth for a short time is still fast growth that "investors" can take advantage of. They just have to dump the stock before it crashes.
So not only is a massive layoff of this scale plausible, I think it's highly likely. It's just the ultimate manifestation of the short-term thinking that American "businessmen" are so infatuated with.
About the only thing that might prevent it is a huge backlash against IBM by "investors", which is possible but doubtful IMO.
Re:Never underestimate the lure of the dark side.. (Score:4, Interesting)
>run
The CEO in a corporation like IBM is never a dictator, never has sole authority on executive decisions, and is held accountable to a Board of Directors, all of whom also have a vested interest in the corporation (and contrary to popular belief, do generally consider performance beyond the next quarterly report.)
A company with as diverse stakeholders and as much volume as IBM has, will have quite strict controls on governance and management.
Re:Lazy Americna perception... (Score:5, Funny)
Re:Never underestimate the lure of the dark side.. (Score:5, Insightful)
IBM will lay off and hire people here and there always. Some times they will lay off or hire a lot of people. IBM has acquired a lot of companies the past couple of years, layoffs are inevitable. These numbers are insane though. Insane for a simple reason: IGS doesn't have 150,000 people in the US to lay off. IGS doesn't have 150,000 people in the US period. So, will IBM hire all of these people before they fire them?
Cringely needs to lay off his mothers medication before he writes his nonsense.
Essentially stopping operations (Score:1)
(Last Journal: Thursday June 07, @02:55PM)
Satirewire article: (Score:3, Funny)
(http://glowingfish.endofinternet.org/~mnharris)
http://www.satirewire.com/news/att.shtml [satirewire.com]
At first, I remembered this as being an onion article, but actually it wasn't. Although the onion did have:
http://www.theonion.com/content/node/28984 [theonion.com]
So there you go!
Cringely Little... (Score:1)
Cringley was the one to break this story (Score:4, Funny)
(http://slashdot.org???? | Last Journal: Saturday August 12 2006, @03:06AM)
Senate Bill to Triple H-1B's Next Year (Score:3, Informative)
Well, if you read Cringeley's comments section (Score:3, Interesting)
So I suspect it's all true - although the actual count of employees to be outsourced might be speculative at this point since it appears IBM is keeping that number close to its vest.
Layoffs are underway, but exact number not public (Score:4, Informative)
However, IBM is using staff cutting and IBM India augmentation to achieve the efficiencies that are documented in LEAN-M, whereas IBM's implementation of LEAN is really just a pony show that is masquerading as an internal offshoring program.
The number of decimated IGS units in total will probably be something closer to 30K-40K employees.
For the record, IBM has also made a settlement in a class-action in respect to its Cash Balance pension changes which were instituted after Y2K. Many people at Alliance@IBM (the organization which is trying to unionize existing IBM employees) fear that IBM is trying to put the pension fund itself into default so that those obligations can be wiped off the balance sheet, which would also be an instant win on IBM's stock EPS.
IBM is not only ditching employees, it is also ditching customers. IGS was known for signing a lot of non-profitable contracts in anticipation that future work would be coming from those same clients (in addition to ancillary project-related purchases by clients for things such as networking and hardware and all the labor that goes with that).
That apparently didn't come to fruition. IBM will be giving some sad news in the next few years to come of its accounts as it lets those go, and those resources who were working on them.
Just another IT layoff (Score:2, Redundant)
(Last Journal: Friday April 06 2007, @12:32PM)
From what I understand, the people being laid off don't actually "make" anything, they just support the stuff other people create. Doesn't that make them a potential target for any layoff or outsourcing venture? In that light, this doesn't sound so far fetched, at least not to me.
Makes no sense. So? (Score:1)
- RG>
Bait and Switch (Score:5, Insightful)
(Last Journal: Thursday February 17 2005, @09:40AM)
And IBM will look like the good guys, or at least not-so-bad guys.
IBM Employees and Contractors (Score:3, Informative)
(http://www.schelin.org/ | Last Journal: Monday May 10 2004, @12:40AM)
I know of 10 contractors that were let go and 2 regulars. I know of another team that lost 15 of their 23 member team but don't know the breakdown.
[John]
Plausible (Score:2, Informative)
The numbers are plausible, but not at the 150,000 mark being bandied about here today. Last week, the number being quoted was 100,000, and in the USA that would be feasible, especially given the plan would be to actually hire almost 1 for 1 outside of the US where labor is much cheaper for the same skillset.
My department lost ~33% of it's staff last week, with more cuts coming in the next month. While I don't quite expect a full 100,000 Americans will be out of work, a lot of us surely will be.
WRAL article (Score:2)
I could see 50,000 of that 130,000 out the door (Score:2, Interesting)
Most of his rethoric is anxiety relief (Score:1)
(http://www.landoverbaptist.org/)
guy's rights.
They're not cutting 43% of their workforce. They're sending those 43% to
China because that's where those jobs will be needed in the near future
to support all those other jobs that are sent there by the rest of the
F500 "economy".
The number are wrong but it's going to be harsh (Score:3, Informative)
(http://slashdot.org/ | Last Journal: Monday October 29, @07:20AM)
Yeah I think it will happen.
Compared to HP, Google (Score:2, Interesting)
HP has 156,000 employees, and about 90 billion in revenue.
IBM has 366,000 employees, and about 90 billion in revenue.
google has 11,000 employees, and about 12 billion in revenue.
I think that's where the 150K came from, the old $/employee ratio.
Layoff's don't make sense (Score:1)
(http://trifster.blogspot.com/ | Last Journal: Monday March 08 2004, @08:28AM)
Amusing (Score:1, Informative)
Competing with the Indian companies (Score:1)
Re:what life would be like in an ATHEIST WORLD: (Score:1, Offtopic)
When can we expect this Utopia to occur? Right after the Rupture - when all the Christians go to hell because Jesus believes that "they all think like bugs down there"?
Re:what life would be like in an ATHEIST WORLD: (Score:1, Flamebait)
This is just weird. Where does it come from? Why is it that insane people like this poster has to spout this kind of nonsense in random places?
Nothing good ever came out of religion. The foundations on which the US was built are entirely secular in nature, even though the people who built those foundations had different views on religion and Christianity. They were all smart enough to understand that only a secular country will survive. Countries lead by religious maniacs will alway fare poorly. Look at the current state of the US. That is what happens when you let the Christian version of the Taliban rule the White House.
Oops-Was meant as a reply. No I am the fool. (Score:2)
(http://www.thenorth.com/apblog | Last Journal: Monday February 13 2006, @07:48AM)
Re:You know (Score:2)
Re:hilarious (Score:1, Flamebait)
(Last Journal: Friday November 10 2006, @06:20AM)
The agnostics, those are the "tolerant" ones.