Analysts Call IBM Layoff Estimates "Hogwash" 131
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."
They're probably right, but... (Score:2, Informative)
...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 :)
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.
That's not what they mean (Score:5, Informative)
IBM NEVER talks about layoffs. (Score:3, Informative)
Re:Never underestimate the lure of the dark side.. (Score:3, Informative)
I *wish*. OMFG are you serious?
Category 1984 2004 Percent change
Disney's Revenues $1.5 billion $30.8 billion +2,000
Disney's Income $294 million $4.49 billion +1,600
Disney's Tax-Free Cash Flow $100 million $2.9 billion +2,900
Stock Price (adjusted for splits) $1.33 $28.40 +2,100
Market Value $1.9 billion $57.4 billion +3,000
Disney's Enterprise Value
(market value plus debt minus cash)
$2.8 billion $69 billion +3,200
Re:They're probably right, but... (Score:3, Informative)
Why is it that people have such a hard time reading simple words and numbers? IBM doesn't have 350,000 people in the US. IBM has about 330,000 people total, IN THE WORLD. IBM has some 130,000 or so people in the US. Total. Less than half of that is IGS. But just for fun, let's say half of IBM is in the US and half of IBM is IGS (that is not the case). We end up with IGS being at most 80,000 people in the US.
IBM is, according to Cringely laying off half of IGS, which according to his drug-induced maths, turns into 150,000 people. Now, using too high numbers, we find that IGS in the US is about 80K. So, what is IBM going to do? Hire 220,000 people, lay off 150,000 people, all in 2007? Well, if they do, that means that IGS would grow from 80,000 to 150,000. Is that a bad thing?
Well, perhaps they won't do that. Perhaps they just want to lay off 150,000 people so that they can cut their current staff down to half of what it is now. That still means that IBM will have to get to 190,000 people before they can start their lay offs. So, how do you propose that IBM hire 110,000 people and then lay off 150,000 people to get down to 40,000 people in IGS? Why would they want to lay off people in such an insane way?
The fact of the matter is that Cringely was at a nasty party the other day. At that party he scored some heavy hallucinogenic drugs, and for some reason he decided to write this nonsense after taking those drugs for about a week.
Senate Bill to Triple H-1B's Next Year (Score:3, Informative)
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.
IBM Employees and Contractors (Score:3, Informative)
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.
Re:Well, if you read Cringeley's comments section (Score:1, Informative)
The number are wrong but it's going to be harsh (Score:3, Informative)
Yeah I think it will happen.
Amusing (Score:1, Informative)