back to article IBM jobs axe: 'The cuts have STARTED and are spreading' sigh staff

Word has it that IBM's latest big staff purge is now underway, with former Big Blue workers reporting that they have been handed pink slips along with kits describing their severance packages. Rumors that IBM was planning major job cuts were flying fast and furious this week, following a Forbes editorial that claimed the firm …

  1. Anonymous Coward
    Anonymous Coward

    They've certainly started in Australia this week. Goodbye to good friends.

  2. Destroy All Monsters Silver badge
    Meh

    IBM spokespeople have further observed that the company currently has around 15,000 job openings available.

    Reskill, reapply. Welcome to the real.

    Stability can be had as much today as in 1932 Weimar Germany.

    1. Notas Badoff

      Stability...

      "The capacity of workers, after being displaced, to find a new job that will eventually provide nearly comparable pay most often depends on the general knowledge of the worker and the ability of that individual to learn new skills," Greenspan said.

      'eventually'...

      'nearly comparable'...

      This is an academic economist talking about the real world, and the best he can offer for your life is: two steps forward, one backward, one forward, one backward, one forward, one backward ... until we decide you are unhireable.

      The 20-hour work-week is nigh! Work for 25 years, out of work for 25 years, take the average ...

      1. DubyaG

        Re: Stability...

        Actually to finish Mr. Greenspan's statement, it should read, "... new skills and is inversely proportional to your age."

    2. Ian Michael Gumby

      Doesn't work that way...

      If you opt to take a package... you're no longer allowed back in.

      Speaking of which... anyone who's escaped the borg... why would they want to go back unless they are mentally ill or challenged.

      1. Anonymous Coward
        Anonymous Coward

        Re: Doesn't work that way...

        "anyone who's escaped the borg"

        What does Google have to do with it?

      2. Sporkinum

        Re: Doesn't work that way...

        I was laid off at the end of May. I had a job with a 10 percent raise in 5 weeks. At about the 10 week point my old job called me and offered me my old job back... without a raise. I got 1 week severance for each year I was there, 12 weeks pay, plus I had a bunch of vacation they had to pay me for. It actually worked out well for me. The two times I was laid off ended up being positive things, though they certainly didn't seem so at the time.

        1. Ian Michael Gumby

          Re: Doesn't work that way...

          Depend on the package, role and division.

          I was in S&D where if you quit, you could come back. If you took a package, you were gone and couldn't come back. But if you took a package, and went to work for a company IBM bought, you were allowed back in.

          Learned a lot from my time within the Borg. Some good, some bad...

          But life truly is better outside the Borg.

      3. Anonymous Coward
        Anonymous Coward

        Re: Doesn't work that way...

        > anyone who's escaped the borg... why would they want to go back unless they are mentally ill or challenged

        Usually because the local and state governments have screwed the economy so bad that they're about the only employer left in the area. It's why Poughkeepsie NY has become the "new Detroit" (except without the exotic-looking ruins).

    3. Anonymous Coward
      Anonymous Coward

      "the company currently has around 15,000 job openings available."

      Likely it take that many people to configure IBM computer systems to print redundancy notices...

      What do those hundreds of thousands of people actually do now that IBM doesn't even sell x86 server systems and has pissed billions away on Linux in an ill fated attempt to ignore Microsoft?

  3. Tom Betz

    "that Forbes made up?"

    Bob Cringley has really good inside contacts at Big Blue. If he said 100,000 (which he didn't, IBM's PR staff made that number up in their response to his first Forbes column on the subject), I'd believe him. Check out his follow-up to the Forbes story on his own blog

    So far, he's on the mark:

    "So what’s the truth about these job cuts? Well we’ll know this week because I hear the notices are already in transit to be delivered on Wednesday. (I originally wrote in the mail but then realized IBM would condemn me if they are coming by FedEx, instead.)"

    My emphasis above.

    1. Anonymous Coward
      Anonymous Coward

      Cringely has what now??? Re: "that Forbes made up?"

      "Cringley has really good inside contacts at Big Blue. If he said 100,000, I'd guess he's got a sound basis for that number"

      Seriously? Last year Cringely predicted that IBM was going to fire almost everybody in the US apart from sales and those working Federal deals by the end of the year. Nothing happened. And back in 2007, he predicted 100,000 layoffs; again, didn't happen. He didn't have a sound basis for those numbers then, and he doesn't now. If there's one thing that's abundantly clear to anybody paying attention, Cringely has no clue what is going on inside IBM.

      And here's what his follow-up says: "They denied it, of course — not the workforce reduction but its size, saying there won’t be even close to 110,000 workers laid off". Look, if you predict "110,000 layoffs" and the actual number is the several thousand THAT IBM ALREADY ANNOUNCED you're not "right, but a little off on the number" -- which, incidentally is also what Cringely said in 2007 -- you're just plain WRONG. And hearing that envelopes in the mail is not exactly Oracle of Delphi levels of prediction!

      Cringely isn't a gadfly; he's an idiot.

      And yes, I know I'll get downvoted by the people for whom IBM is Evil Incarnate, regardless of how idiotic Cringely's third failed Doomsday prediction is.

      1. fishman

        Re: Cringely has what now??? "that Forbes made up?"

        Someone posting as an AC running damage control. Not surprised.

        1. Anonymous Coward
          Anonymous Coward

          Re: Cringely has what now??? "that Forbes made up?"

          So whether or not they provided their name is more important to you than Cringely (a) having all his facts wrong and (b) having a documented track record of having all his facts wrong?

          OOH, powerful argument!

    2. diodesign (Written by Reg staff) Silver badge

      Re: "that Forbes made up?"

      "If he said 100,000 (which he didn't,"

      Got to stop you there. He said 26% of employees would be getting severance packages. Given the biz has 431,212 employees, according to its filed paperwork, the rest is basic math.

      C.

      1. SharkNose

        Re: "that Forbes made up?"

        "Got to stop you there. He said 26% of employees would be getting severance packages. Given the biz has 431,212 employees, according to its filed paperwork, the rest is basic math."

        Did he specifically say 26% of employees globally? No-one knows exactly how many employees IBM has in the US for example (last public statement a couple of years ago was around the 100K mark but probably less than that now). 26% of that is maybe 20 to 25K employees, maybe even less.

        Some interpolation was done on the basis of the $580M charge that IBM said it would take for this restructuring. It seemed that the media got to a figure of 10K employees based on that figure, but reading the various posts on the IBM alliance forum it seems that many employees are only getting half of the settlement that would usually be offered, which I assume means IBM can afford to layoff more staff for that $580M. There is also an ongoing theme of staff being given poor ratings and put on performance improvement plans, which many assume is a way of getting staff out of the door on the cheap. So maybe 26% of the *US* workforce is a possibility.

        1. diodesign (Written by Reg staff) Silver badge

          Re: Re: "that Forbes made up?"

          "Did he specifically say 26% of employees globally?"

          He said:

          "To fix its business problems and speed up its 'transformation,' next week about 26 percent of IBM’s employees will be getting phone calls from their managers. A few hours later a package will appear on their doorsteps with all the paperwork."

          and

          "One in four IBMers reading this column will probably start looking for a new job next week. Those employees will all be gone by the end of February."

          Other than saying the US workforce would be "hit hard," there's nothing country specific in the claims. He thought 110,000 people would be laid off in the space of five weeks.

          Still, it got Forbes 420,000 page views. Kerching!

          C.

  4. Mark 85 Silver badge

    "The cuts have started in the US and are quickly spreading," griped one commenter. "I received my call this morning. I received a 3 rating for the first time in my entire career. It was completely unfounded with no documentation to substantiate. 18 years with the company and they totally betray and demoralize before they let you go."

    Nothing abnormal about that. Underhanded/unethical, yes. I believe they pull this so that if you try to sue, they can say you were a lousy employee. I've seen it happen more than once lately like it's a new trend in HR or management.

    1. Anonymous Coward
      Unhappy

      @Mark 85

      Nope, not new. I've seen this done for at least the last 20 years, so by now it counts as "tried and true".

      Well, good luck to former IBMers. The job market in Silicon Valley seems fairly robust, though I can't speak for people in tech in the locations that IBM has a lot of headcount in, nor can I speak for the market for 40+ and 50+ year-old workers.

      1. Mark 85 Silver badge

        I don't doubt that. I'm a backwater area and though I'd heard about, I never was around it until recently. I guess it takes a bit to filter down to some places.

      2. Anonymous Coward
        Anonymous Coward

        It's an old trick - and done right you can fire^H^H^H^H get rid of a lot of people. I worked for a company that did this on a regular basis every year before the employees pension plan became "vested" - and if you hadn't been with the company long enough to be vested in the plan all the company contributions returned to the pension pot. You'd be a star performer for 4 years and then at year 4, all your evaluations went through the floor and you became a problem employee - after that most people quit and move to other companies - well, except for the management, their performance evaluations were always shiny.

        I hear the management team retired very happily.

      3. Anonymous Coward
        Anonymous Coward

        Tried and true

        a large company I worked for did this, 15 years ago. As one of the staff selected for redundancy I challenged the selection process and took them to tribunal (UK), They settled in the end which was ok as I found another job at better pay anyway. They would have to send director level to the tribunal to refute my case and of course they needed a lawyer while I just filed myself which is pretty straightforward.

  5. asdf
    Mushroom

    well duh

    When your business model is buying up your own stock so your executives can cash out before the whole shit house goes up in flames you sure don't need over 400k employees. You especially need to start laying off when you start smelling smoke like now so the last of the good ole boys can make it to the exits.

  6. ps2os2

    IBM Layoffs

    I have some good friends at IBM and will miss some of them (except one) if the numbers are correct.

    Gerstner started the down fall and this just adds to my perception that IBM is doomed to failure in the long run due to management failure.

    1. knarf

      Re: IBM Layoffs

      You can be friends with them (except one) I expect

  7. Version 1.0 Silver badge

    Once upon a time

    Used to be, the job of management was to run the company profitably with the shareholders (owners) of the company receiving the benefits and a share of the profits.

    These days the job of management seem to be to make as much money as possible (obscene salaries, pension and golden handshakes) and bail out before the company goes under.

    The stock market seems to think that this is modus operandi for many large publicly traded corporations and the trick is to sail along with them while they pump the stock price up and then get out at the first sign of trouble.

    1. fajensen Silver badge

      Re: Once upon a time

      the trick is to sail along with them while they pump the stock price up and then get out at the first sign of trouble.

      An even better trick is to buy derivatives, for example Credit Default Swaps on the company's debt in the "unregulated financial market", then let the moronic and crooked management run it into default at which point the CDS's trigger and meaningless numbers accumulate in a Swiss number account.

      Ex. Tax. Of Course. What part of "Unregulated" did we not understand?

      The "Smash & Grab" of the old days has evolved into a viable business model. Isn't de-regulation working just Great?

  8. Robert E A Harvey

    The ultimate end

    We are seeing now the end of the process that started in the 50s, with lower paid people being replaced by automation and all the money going to the management.

    Of course, the chief beneficiary of this in the early days was companies like IBM.

    1. fajensen Silver badge

      Re: The ultimate end

      No, it is not even that: "They" are now skipping the entire part where "services and products demanded by the customer" is being produced and replacing it with the production of money via "financialisation" of the business.

      Everybody does it. You pretend to sell an iPhone 6 at 300 credits per monts, plus say another 299 credits for "the plan" which is fixed for two years. That is 599 credits per month for two years coming into the shop. The cost of the iPhone is 7395 retail, now, the purchase price would be 1/3 of that, 2465 credits.

      That means that we have 599 per month coming in for two years from an investment of 2500 + some service fee for running the network which we don't know - probably less than the cheapest mobile plan - 199 credits.

      Traditionally, we would say that the cost of the iPhone is paid after 1 year and the next year is profit;

      However ... in the financialised model we do something different:

      We set up a holding company who services the subscriber contract. This company gets 599 per months for two years duration. This company also finance the iPhones for "the mothership", to do this financing it issues bonds. The iPhones are paid after 1 year, there is money coming in for 2 years and interest rates are really, really low.

      So we offer a good deal on the bonds like 10% for two years. We now have 14000 coming in in total and we issue bonds for that amount (we pay the 10% interest from the 599). The 10% interest rate means that those bonds are probably going to sell in the market for at least twice the price of, say, government bonds yielding 2%.

      That means that we have 28000 right there per mobile deal, in our little mitts NOW, and the incoming cash flow takes care of the interest, the costs of financing the terminals and the pay-back of the bonds after 2 years.

      Of course this is not all: We can charge "the mothership" fees and interests for the financing deal and we can locate our holding company in a beneficial location for tax purposes and maybe set the fees so that the poor "mothership" hardly makes any profit and therefore does not have to pay taxes.

      Basically, what we do is that we use a product to create debt, leverage it as hard as "the market" allows, sell it off for an instant profit, then use our insider knowledge keen business acumen to avoid taxation also.

  9. Anonymous Coward
    Anonymous Coward

    At a time when they are trying to force restructure project Aquarius (desktop support) staff by reviewing some support structures and having staff TUPE over to a new supplier (again)

    Seems big blue is in the big poo

  10. Enigman

    Clueless

    Had one of my colleagues RA'd today. After 18 months in the job, my manager still has no clue what most of us do. Colleague was putting in 10 hour days and worked many a weekend without recompense just to keep his work cycle under control. We have several major activities that are dependent on this guy and the workload can't be moved to the rest of us. His job is moving to India and their management have already indicated they will only do the specifically defined work in his job role and not all the other work that he does... The rest of us are 'restlessly reinventing ourselves' to find a job elsewhere.

  11. Anonymous Coward
    Anonymous Coward

    Here's the truth...

    ""The cuts have started in the US and are quickly spreading," griped one commenter. "I received my call this morning. I received a 3 rating for the first time in my entire career. It was completely unfounded with no documentation to substantiate. 18 years with the company and they totally betray and demoralize before they let you go.""

    IBM Exec "Joe, I see you have 10 direct reports. Have you given them their annual review?"

    Joe FLM: "No, I haven't. I need to figure out how to rate them."

    IBM Exec: "That's OK, I needed to tell you that you can only give out one "1" and only three "2" ratings.

    Joe FLM: " So that means I have to give six people a '3' ? But my people are good peformers"

    IBM Exec: "I know, I'm just following orders from the top."

    So now you know how you got your 3.

    Your PBCs? They are a joke. You can hit your PBCs and still get a low rating.

    As someone who escaped the borg, I can tell you that if you have the right skill sets, you will survive. You your career was to build a silo and to hide within the organization, or have skills deemed non relevant like a Lotus notes guru... Sorry.

  12. Anonymous Coward
    Anonymous Coward

    stuck in the dark ages

    Have you seen the endicottalliance website? It's like unearthing a fossil, left to its own devices and undisturbed for millennia, and perhaps unfortunately, representing the personality of the average IBM employee?

  13. earl grey
    Trollface

    I miss the big axe picture

    Seriously, no big picture? That's ok, nobody like them anyway.

  14. Uncle Ron

    Calculation

    The article states: "Analysts have calculated that this likely means "several thousand" pink slips." Not if the severance packages are 1/2 or 1/3--or less--of what they used to be. Then the numbers are higher. Maybe much higher.

  15. Joe Drunk

    Unfortunate but it is a sign of the times. Those who have as many grey hairs as me will remember a time when stability/longevity was a reward that could be expected from a career you've invested significant time and effort in to exceed employer expectations.

    We were referred to as 'Personnel'.

    Somewhere around the 90's there was a change - We were converted to 'Human Resources' - someone to be used up till you were no longer deemed essential. Outsourcing was what all trendy companies wanted so I became a consultant. The demand and rates were high and a 6 month + contract almost always went to 24 months + so I had more job security than regular employees. I replaced many such sods during my consulting years. Now rates have gone down along with demand due to inexhaustible supply of job seekers. The only things that have gone up are expectations of your commitment in both hours and work required along with time off in between contracts.

    Enter the era of "Human Capital" - The word 'Human' is thrown in there as a PR stunt as you are treated no better than a piece of office furniture.

    What kind of career awaits PFYs entering today's work force?

    They will all be similar to Supernovae. Burn brightly through a short time until they are exhausted and burn out, sometimes in violent explosions (run amok with a shotgun after being made redundant).

  16. Anonymous Coward
    Anonymous Coward

    Total Stupidity

    I'm one that has been laid off in Australia, but I've received high ratings for the last 7 years so no performance issues. I'm in a position where I'm charged out until at least June and they have offered me close to a years salary as a payment. I mean how on earth can a business be so stupid to actually shed revenue earning staff? I'll take the package and start working for the customer now as soon as my 4 week notice period is up.

    1. Dogman34

      Re: Total Stupidity

      Just curious. Are the layoff rules different in Austrailia or did you have a contract that resulted in a package for a full years salary? Just got the std pkg here in US for 26 weeks.

      1. Diogenes

        Re: Total Stupidity

        The basic entitlement is quite bizarre - you get either 1 or 2 weeks per year (depending on years of service, but if you have worked for over 10 years you get less than if you had worked 7 or 8, or 9 , + notice periods vary dependingn years of service (basically 1 week for every year up to 4 years) + an extra week if you are 45 or older.

        I can't remember the details but IIRC ex Telstra staff going to IBMGSA had different rules, we were given 4 weeks for every year under 5 years +2 weeks after 5 years to a max of 20 years ((including service with Telstra) that was when GSA gave me the bullet in '03 - even though I had some rather unusual skills they were looking for to do a little jobbie in Thailand, not allowed to apply for as I was on "the list").

  17. Enigman

    Duplicity

    Dialled into a conference call earlier than I was supposed to and my manager, his manager and the Indian manager were discussing resourcing - despite my announcing my arrival they didn't notice and continued their conversation. Appeared to be a discussion of how they were hiring additional resources in India (I'd assumed it was replacements of staff how had left). Indian manager was asked how the hiring was going and what KT (Knowledge Transfer) he required from the Australian team. Then discovered they were hiring people in preparation for next Resource Action in May and that we were to be told we'd be training these new team members as backups for the team in India. They are scared we'll leave before they get a change to get rid of us on their own terms. Needless to say my team are now actively looking elsewhere.

  18. Anonymous Coward
    Anonymous Coward

    Why can't they just ask for volunteers. There's plenty of us who'd take a package gladly to escape. All that's keeping us here is the fact it's likely we'll get laid of sooner or later and the package is much better if they let you go than if you decide to leave. But no, they just choose people seemingly at random.

  19. xuser

    It's normal a guy that work 10 years for the companhia and ONLY get a raise of 70 € ?

    It's normal that the awards are BLUE points that you Can change for objects,etc. on the intranet of the company ?

    I think NOT !

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