back to article IBM to cut '118k jobs worldwide' – report claims

IBM is reportedly planning to jettison 118,000 workers to counter 11 quarters of declining sales and the impact of shifting industry demand – which, if true, would make it one of the biggest corporate culls on record. El Chan recently broke the huge divisional revamp at Big Blue in a worldwide exclusive, with a series of new …

  1. Buzzword

    Axe the axe!

    Seriously, find another image to decorate your articles. That one has been overused to the point of cliché now.

    1. Anonymous Coward 101

      Re: Axe the axe!

      At least it makes sense, unlike some pictures used. IBM cuts - and so do axes!

      1. Anonymous Coward
        Anonymous Coward

        Re: Axe the axe!

        For a cut this large, a chainsaw would be more appropriate.

        Or a bomb. A large bomb.

    2. Allison Park

      Re: Axe the axe!

      Cringly which is not even his real name is an idiot. Do the math...dont write a chicken little story to promote you lame book on Amazon. Forbes should fire him

    3. Dr Scrum Master

      Re: Axe the axe!

      If anything should be axed it's the cliched illustrations when there's a story related to obesity.

      Please, I want to read the articles on obesity, but I have to avert my gaze at the same time.

    4. Anonymous Coward
      Anonymous Coward

      Re: Axe the axe!

      Honestly 26% of the workforce or 100,000 people - it's not an axe image that's needed - it's just an off-switch - no company can *survive* that sort of mass-restructuring...

      - I wonder how many of the (other) AC's posting on to this thread are current IBM employees? Quick straw poll - Give me an Up Vote if you're a current IBM employee reading this thread. A Down vote for a non-IBMer

  2. Anonymous Coward
    Anonymous Coward

    Its getting sad now

    As an ex-IBMer, having seen it all from inside, this is getting sad now.

    That said, I'm sure that about 50-75% of those could be middle managers going, and the company wouldn't even notice. Of the people I had to deal with about 10-15% were the workers and the rest were management, its was pretty stupid.

    For example to get a new network run into our site, there were 4 managers from networks involved (for those insiders it was a red/yellow network, so you can just imagine!), 2 group managers, 2 from IT, then 3 of us doing the actual work... so that's 8 managers for 3 people!

    Death of 1000 Spreadsheets we called it as all of them had things that had to be done in order (steps 1,2,3,4,5 - heaven help you if you did 1 and 2 then tried to skip ahead to 5 because 3 and 4 didn't matter - still had to show you did 3 and 4 even if they were NULL Ops).

    It took 18 months for 1 line.

    Compare that to where I am now... call up Telco, get quote, sign off, have my network guy turn up on site the day of. I think the last network drop took 33 days mostly because we didn't push AT&T too hard to get it turned up.

    Still it was job security because I was on a 1 year project that took 3 years to get done. And the upper level managers were not surprised because that was always how things overran.

    1. Roger Greenwood

      Re: Its getting sad now

      Q. How does a project get to be 1 year late?

      A. 1 day at a time.

    2. Anonymous Coward
      Anonymous Coward

      Re: Its getting sad now

      But how does the company survive without CIRATS and CWP and CHIP and SA&D? SURELY, that's impossible. SURELY unless you can track and monitor every individual's activity to the tiniest degree, then things must go wrong all the time.

      The only alternative.. I know, it's laughable but hear me out... is that you have skilled staff and you trust them to do their jobs??!! Pfftttt as if that could happen. No, no, IBM's way is the right way. They hope.

    3. Anonymous Coward
      Anonymous Coward

      Re: Its getting sad now

      AC, I thought for a moment you were describing the workings of the NHS in its entirety, not just the IT section.

      In fact what you saw was the beginning of the decline into obscurity that all organisations that become top heavy follow.

      1. Anonymous Coward
        Anonymous Coward

        Re: Its getting sad now

        IBM seem to be in a lot of financial trouble. I've heard that recruiting has been frozen for some time, traveling isn't allowed even when commitments to customers have had to be broken.

        They set themselves up as people who could tell you how to run your business but it seems they can't even run their own.

        One place I worked, where they carved off part of IT and handed it to IBM, is a disaster area. The self proclaimed experts IBM used to replace some of the existing staff have got no real experience. There seems to be a permanent contingent of IBM managers who spend their whole day in meetings with each other without actually achieving anything.

        The managers act as if they've just left university and still believe everything they've been taught, no matter how much evidence there is to the contrary.

  3. Anonymous Coward
    Anonymous Coward

    I wish they'd hurry up. I could do with a redundancy package and some time off, before going to work for someone who gives a shit about their employees.

    1. Anonymous Coward
      Anonymous Coward

      I've already planned how I'll spend mine and decided what sort of job I want and where. Just wish they'd give me a date. I work for an awesome customer, and the IBMers I work with are great people, I'm sick of seeing IBM fuck all of us over repeatedly then wonder why the customer isn't giving us more work.

    2. Anonymous Coward
      Anonymous Coward

      Why give a redundancy package for US employees, when employment in the USA is at will (an employee can be dismissed by an employer for any reason (that is, without having to establish "just cause" for termination), and without warning) http://en.wikipedia.org/wiki/At-will_employment. Obviously an employee in the USA can quit as well any time without warning, "giving notice" is mostly just misplaced loyalty.

      Perhaps it is out of the goodness of IBM's managers' hearts, or because employees of such big corporations have working unions? I also can imagine an orderly lay off is better than a mass dismissal with accompanying bad press. Though shareholders may appreciate the latter approach.

      1. Anonymous Coward
        Anonymous Coward

        "Perhaps it is out of the goodness of IBM's managers' hearts,"

        More likely they are smart enough to have long ago recognised that your biggest security threat is always your own people. Whilst the vast forces of the NSA, FBI and CIA may claim that the Norks hacked Sony Pictures, the damage would appear to be sufficiently thorough that an aggrieved (current or former) insider seems far more likely.

        Getting rid of people is often bad for both sides, but if both sides at least agree that the split was handled as well as it might have been (eg by a bag of cash for employees being shown the door), then they generally don't seek to cause further harm afterwards.

  4. Fenton

    Knock on effect on Rates/Salaries

    I can see with this number of people suddenly hunting for a job, the average rates/salaries could fall even further than they are now.

    Ouch!

  5. Anonymous Coward
    Anonymous Coward

    The magic of financial engineering

    http://davidstockmanscontracorner.com/the-canary-in-big-blues-mainframe-why-ibms-q3-bust-marks-a-turning-point/

    After all this mismanagement not for the shareholders but for IBM product-lines and workers

    are they now re-organisation IBM so the can sell it to a competitor ?

  6. Anonymous Coward
    Paris Hilton

    There's no way that IBM is going to get all this done in a month.

    They're laying off 1/4 of the company. Just the planning meetings to do that and rationalize office space, corporate property left behind by former employees/users, benefits packages, etc. will take a month or more. Much less the business continuity aspects--"What do you mean we layed off the whole team supporting account X and didn't have a succession team in place?"

    It will take several months I am sure.

    Also, let me say that I had a contract about 10 years ago at IBM's Almaden research lab, and you could see the changes coming then. Half the facility had been sold to Hitachi, along with IBM's hard drive business. I understand that investments in R&D can be hard to monetize, but you could see that the knives were out for what was once one of corporate America's and the tech industry's greatest research arms.

    Paris--because why not?

    1. Anonymous Coward
      Anonymous Coward

      Re: There's no way that IBM is going to get all this done in a month.

      You assume there *is* planning and there *is* consideration of the impact to customers. Not from what happened last time. Or recently when we culled contractors. Boom - essential or critical people, out the door, no apparent logic, mid project, mid negotiation, didn't matter. Customer's response - WTF IBM, how are we supposed to do business with you.

      But still, compliance records and audits demand a third of our time, rework due to underskilled global resources requires a third of our time and reporting the same shit to management, their management, some sideways management, regional management, and 'execs' (fuck knows what they actually contribute, nothing at all as far as I can see) takes up most of the rest.

      And we have a 'cost problem'. WELL DUH. Dumbasses.

  7. Anonymous Coward
    Anonymous Coward

    This is just a rehash of Forbes' discredited report. The guy who wrote that is a historically strong critic of IBM. IBM set aside $600m to 'rebalance' the workforce (yes, stupid corporate speak for 'terminate a bunch of people') this year. In 2014 it was a billion bucks and they let go 8,000 odd people. So this year it'll probably be 5,000 globally. That info is widely available, but still, don't let that get in the way of repeating someone else's news, without verification or consideration, because it's sensational.

    1. Anonymous Coward
      Anonymous Coward

      Thanks for adding the update, Register, hope you didn't need me to prompt you to..

  8. Anonymous Coward
    Anonymous Coward

    Cringely is delusional -- again

    This isn't the first time Cringely has predicted apocalypse at IBM -- and he was wrong the last two times too. Back in 2014 he predicted that 78% of the US workforce would be laid off by the end of the year, leaving only sales, senior management and Federal project staff. Did that happen?

    Nope.

    And in 2007 he predicted 150,000 layoffs accompanied by massive outsourcing. Did that happen?

    Nope.

    I really don't understand why anybody would listen to -- let alone buy a book by -- somebody who clearly is completely disconnected from reality at IBM.

    Linkies:

    http://www.cringely.com/2012/04/18/not-your-fathers-ibm/#comment-206300

    http://www.pbs.org/cringely/pulpit/2007/pulpit_20070504_002027.html

  9. Anonymous Coward
    Anonymous Coward

    Cringely - not a good source of IBM rumourology.

    I somehow suspect that at one time the fellow applied at IBM and was declined for some reason. Perhaps his ego.

    In any case, having been outsourced to itsybitsy, and having managed to find my way back to my original employer, I can safely say that it is *quite* unlikely that the number will be that high, but IBM *will* be doing some housecleaning - they are *always* housecleaning.

    I'll agree with all the other (ex)IBM'ers -- IBM cannot find either foot with any of its hands. And that would be on a *good* day. From what I'm hearing, its been a *very* long time since IBM had a *good* day. Sadly this means I'll have to train a whole new flock of "SMEs" in two different countries, 8 time zones away, for about 18 months. And as soon as they're ready, IBM will lay THEM off too. Again. For the same damned reasons.

  10. Anonymous Coward
    Anonymous Coward

    Just a thought ...

    Anyone know if the employees who were sent on mandatory training together with a 10% cut in salary will still be around on 1 April to be restored to full pay?

    http://www.channelregister.co.uk/2014/09/17/ibm_mandatory_training_program/

    If there are any who took that option and are now left out in the cold, what does this say about IBM's view on company loyalty?

    Every time I see IBM in the news I am more and more glad that I escaped.

  11. This post has been deleted by its author

    1. This post has been deleted by its author

  12. The Godfather

    Surprise? noooo..

    Cuts inevitable and on the cards....as for numbers, just wait and see, but they'll be plenty.

  13. asdf

    the key to success

    Stock buybacks are the only thing that matters. Not growth, not profit, just artificially boosting shareholder value in the short to mid term.

    Signed,

    Ten years of clueless IBM executive management.

    1. asdf

      Re: the key to success

      But all these “shareholder friendly” maneuvers have been masking an ugly truth: IBM’s success in recent years has been tied more to financial engineering than actual performance.

      That became readily apparent Monday morning when the company announced its earnings, missing analysts’ expectations by a wide margin. The stock fell more than 7 percent to $169.10 by the end of the day, below the average price Mr. Buffett paid since he started buying the stock in 2011.

      The company’s revenue hasn’t grown in years. Indeed, IBM’s revenue is about the same as it was in 2008.

      But all along, IBM has been buying up its own shares as if they were a hot item. Since 2000, IBM spent some $108 billion on its own shares, according to its most recent annual report. It also paid out $30 billion in dividends. To help finance this share-buying spree, IBM loaded up on debt.

      While the company spent $138 billion on its shares and dividend payments, it spent just $59 billion on its own business through capital expenditures and $32 billion on acquisitions. (To be fair, Ms. Rometty has been following a goal set by her predecessor, Samuel J. Palmisano, to return $20 a share to stockholders by 2015. Ms. Rometty abandoned it only on Monday.)

      All of which is to say that IBM has arguably been spending its money on the wrong things: shareholders, rather than building its own business.

    2. Yes Me Silver badge
      WTF?

      Re: the key to success

      "Ten years of clueless IBM executive management."

      I once heard Palmisano say (internally) "you don't need a PhD to understand our business model - anyone with a liberal arts degree can understand it." Must check what degree Ginny has... anyway, I could never understand a business model with such low revenue per employee. Apparently it's got no better since I left.

    3. Justicesays
      Devil

      Re: the key to success

      "Stock buybacks are the only thing that matters. Not growth, not profit, just artificially boosting the value of our stock grants for immediate cashing in before we abandon ship.

      Signed

      Ten years of thieving IBM executive management."

      FTFY

  14. Anonymous Coward
    Anonymous Coward

    FWIW

    An IBM official claims the story is false and that only a few thousand people are being terminated per their recent 10-Q financial statements.

  15. technodeception

    While at IBM

    I worked at IBM (US) Federal one month short of five years before being dumped, a few years back. One more month would have given me marginally more severance. Those five years, as a Sr System Architect, was among my most rewarding. However, middle management had both no idea what I did nor understood that we were not in the days of the s390. Some middle management got promoted or moved laterally, while others became more direct people managers.That is when things went downhill, especially due to the latter. It was bad enough the functional stack was way too thick, but it was thick with people who knew how to cover their backs at the expense of the company. If the ranks of middle management were functionally thinned across the board, I suspect the bureaucratic drag could have been mitigated. Too bad, between requiring huge profit margins and acting on the whims of people who had little idea what was going on apparently dooms IBM for a huge reduction in force every generation.

  16. Anonymous Coward
    Anonymous Coward

    Rubbish

    I'm currently at IBM and this is the most ridiculous piece of BS ever spouted by Cringely. I can't believe serious news outlets lapped it up. Get with it Reg. Reporting this crap without ANY questioning of the source is a dereliction of duty.

    1. asdf

      Re: Rubbish

      How is updating your resume/CV going?

  17. cashback

    " The company still makes huge profit… $21 billion in operating pre-tax profit last year. "

    Good to see IBM admit to huge profits, shame it doesn't share any of that love with the employees.

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