back to article IBM: Those 2 redundancy schemes? We need to 'improve margins' and right quick

IBM UK has tried to justify running two redundancy schemes concurrently in the Infrastructure Services Delivery team, telling staff that financial pressures forced its hand and it may take similar action again. Some 30 roles are to be chopped under Project Baccarat, launched in February, and a newer, overlapping programme …

  1. Anonymous Coward
    Anonymous Coward

    To ensure we continue to drive competitiveness and our transformation

    Translated into human speak from the language of the golfogarchy:

    "Blah, blah, bonus for me, hatchet for you. Blah, blah, bonus fro me, hatchet for you. Blah, blah, bonus for me hatchet for you. I am bored, can I go and play golf now while you collect your pink slip".

    1. Ian Michael Gumby
      Boffin

      @AC ...

      You do realize that your manager who you think is getting a bonus, isn't.

      When you've been made redundant, what makes you think that they need said manager anymore?

      And what makes you think he's getting a bonus? (Hint: He's not.)

      1. Anonymous Coward
        Anonymous Coward

        Re: @AC ...

        You do realize that your manager who you think is getting a bonus, isn't.

        He does not. Two levels above him - where this sh*t is really decided - everyone does. An bonus for fulfilling the "improved efficiency" part of their personal objectives.

        1. Anonymous Coward
          Anonymous Coward

          @AC Re: @AC ...

          Clearly you haven't working in IBM or you would have realized that the FLM or even at the BUE level that you won't see it.

          We used to play a game. How many levels between you and Lou. Today that would be Ginny.

          Most peons are 8 to 10 levels away. Depending on how flat your organization was, you could be 5 or 6 levels away. (This is how you could rate someone you are working with who's in a different division.)

          In terms of bonus... this was probably created by some bean counter who's one or two levels away from Ginny, then written in to the PBRs of the senior managers. So its not a bonus but hitting your PBRs ties in to your performance ratings.

          The truth is that IBM is in scorched earth mode. Clearing out a lot of deadwood so they can offshore basic jobs and then hire new candidates that have the skills that they need. Ginny's transformation is so big that its the only way to get it done within IBM.

          Posted Anon for the Obvious reason.

      2. Anonymous Coward
        Anonymous Coward

        Re: @AC ...

        "You do realize that your manager who you think is getting a bonus, isn't."

        No prizes for guessing who doesn't have a real job in this thread.

    2. Howard Hanek

      Golfogarchy

      Graphite clubs, lessons, club dues and those side bets all require vast amounts of money collected from all those 'little people' who resemble the gophers the grounds keepers vigorously exterminate.

      1. Nolveys

        Re: Golfogarchy

        all those 'little people' who resemble the gophers the grounds keepers vigorously exterminate.

        Now that you mention it, events of late at IBM do resemble Bill Murray's contribution to Caddyshack.

        1. BebopWeBop
          Unhappy

          Re: Golfogarchy

          I was thinking more Groundhog Day?

    3. Youngone Silver badge

      Employee Consultation Committee - formed to give staff a voice in the proceedings

      This was the bit I particularly liked. I laughed and laughed.

  2. Anonymous Coward
    Anonymous Coward

    Cut staff levels to zero for maximum profit with no costs!!

    Of course, there will be no-one to do any work, but that's how spreadsheet-monkey-managers think cost and profit are maintained, by cutting the people who do any real work.

    Start by cutting the hundreds of millions of $$ from the Execs salary and bonus first, then people might take this 'efficiency saving' plan as being fair.

    1. Anonymous Coward
      Anonymous Coward

      Re: Cut staff levels to zero for maximum profit with no costs!!

      Agree with your first paragraph.

      Kind of agree with the sentiment in the second paragraph but there might not be that much to gain. There are few who receive the seriously big money (and fewer actually EARN it) so cutting exec's salaries would help but probably not as much as some think.

      1. Anonymous Coward
        Anonymous Coward

        Re: Cut staff levels to zero for maximum profit with no costs!!

        "There are few who receive the seriously big money (and fewer actually EARN it) so cutting exec's salaries would help but probably not as much as some think."

        However, 1990s management think was that reducing the number of levels and pushing decision making authority down vastly improved work done to headcount ratio. By being close to the customer you get productivity benefits which outweigh the cost of the management needed to offshore.

        To make it work, though, you need top level managers who are not all part of the same golf or country club set. This may go some way to explaining why British companies suddenly do better when foreign management takes over that isn't part of the mutual backscratching fraternity.

    2. Anonymous Coward
      Anonymous Coward

      Re: Cut staff levels to zero for maximum profit with no costs!!

      Start by cutting the hundreds of millions of $$ from the Execs salary

      Sadly it isn't that simple. IBM is in the wrong business here. Cutting the fat cat salaries (and fatcatcount) would be entirely just, but they don't make much difference to the fact that outsourcing is about cost, not quality. Unless you're the world's cheapest (and thus crappest) provider, you're going to fight that company and lose.

      Companies claim to outsource for reasons of efficiency as well as cost. That's never true, they outsource things that they simply cannot be arsed to do themselves, and they don't care if the resultant service is poor. IBM thought this market was a goldmine, and as they've found out, market prices are set by people with no standards or principles, using slaves, bots, or trained hamsters. And sadly for IBM shareholders, that means that even when the magic 80% of employees are offshored, they still won't make any money.

      1. Anonymous Coward
        Anonymous Coward

        Re: Cut staff levels to zero for maximum profit with no costs!!

        but why 80% ? why not 85% or 90% ? Or are we only aimimg for 80% customer dissatifaction?

      2. Anonymous Coward
        Anonymous Coward

        Re: Cut staff levels to zero for maximum profit with no costs!!

        Having been there in a previous life the cutting of the senior exec ranks will generate more benefits than just the salary costs. It will improve the effectiveness of operations and make them more innovative. Here are just 2 examples of what I mean.

        1) Big restructure in the risk management side of the business where they essentially removed the function. Of the 600 people doing the function it went down to 60 of which 40 were doing reporting in India and the rest were, you guessed it, the managers. As a result there was no one left to do the risk review but plenty of people to report up (hence the need for so many senior execs - someone has to read all those reports) so delivering services to the client went down and the reporting went up. How is that for efficiency?

        2) All the senior execs were making changes to their businesses to become "Agile" so what did the head of the PM profession do to be also seen to be making his area more agile? He took away the need for Project Managers to re-certify after they had done it once. Simple solution wasn't it and it saved costs as well! The problem is that Project Management had been seen as a profession within IBM but to be a professional you are supposed to keep up with the latest in the industry and keep getting experience. The moment this was brought in the existing Project Managers just stopped doing education (another cost saving!). The situation was made worse by management then pushing certification quotas so people who were not PM's were pushed through the certification process. While it saved costs it has decimated the pool of experienced PM's which has led to a reduction in delivery capability.

        In terms of not making money when the 80% of staff are sent offshore isn't quite correct as the strategy is to automate most functions and this is already happening. In the automated AI future those jobs will no longer be needed. I think IBM's strategy is correct and needed if they are to exist in the next 10 years but the one flaw it has is that they are keeping that middle layer of senior execs who only really read reports and then generate new ones. That is why they need to start culling at the top and not just at the bottom.

      3. Anonymous Coward
        Anonymous Coward

        Re: Cut staff levels to zero for maximum profit with no costs!!

        >That's never true, they outsource things that they simply cannot be arsed to do themselves, and they don't care if the resultant service is poor.

        I won't downvote you but I disagree with this statement. IT departments cost a lot of money, including the people who work in them. None of that money can be directly correlated with the profit that the organisation makes as a whole. Unless the organisation has IT as its core business, IT is just a necessity, just like payroll is. Outsourcing will move the cost to a service purchased by the organisation just in the same way many companies lease their premises.

        Of course, any bean counter with common sense will know that if this still costs the same as it did when it was in-house then it's a waste of time, especially as the act of changing costs money too. Yes, their bonus may depend on reducing cost A and the increase in cost B may not have an effect, but you also have to remember that the outsourcer has a team of salesmen whose job it is to convince people that it's a very good idea. IBM of course have large teams of experts, who can perform tasks quickly and efficiently. I know this because I used to be one; some engagements I was sent on, which were scoped at weeks of work I ended up finishing in a day, having spent a morning writing a few hundred lines of code to do the work for me. They will also have the skills to consolidate and optimise the environment so it runs efficiently.

        Convincing argument, and this is how it should be. The reality is most of the skilled people have left and those that are still there (and there are plenty) are overworked and do their best to move into less-skilled sales roles where their potential isn't used, but they are paid more. The efficiencies never take place, so the menial tasks are just shipped off to someone who costs less but doesn't care if everything breaks.

        The customer does think that things are being improved by doing it this way though.

        1. Justicesays

          Re: Cut staff levels to zero for maximum profit with no costs!!

          " IT departments cost a lot of money, including the people who work in them. None of that money can be directly correlated with the profit that the organisation makes as a whole. Unless the organisation has IT as its core business, IT is just a necessity, just like payroll is"

          In modern society, IT is pretty much core to most businesses, but those same businesses seem happy to risk their existence by trying to cut it as much as possible. Saying it's a necessity , like payroll , is kind of understating it, if your payroll doesn't run on time, you will normally be ok for a few days with complaints from some staff your could sort out on an individual basis. IT is a necessity like air for many companies, if it stops then your entire company could die out in a short time.

          And suing your 3rd party provider is about as effective as suing a company who failed to maintain your life support, doesn't help you (your company) , but your relatives (shareholders) might get a payout.

          Looks like you have to pay top dollar for execs, because who wants their company to be run badly?

          But paying bottom dollar for IT just makes sense...to those highly paid execs.

          1. Ian Michael Gumby

            @Justice ... Re: Cut staff levels to zero for maximum profit with no costs!!

            Here's the logic behind outsourcing.

            You're in business to do something. IT is a function that isn't core to your business and you're not getting what you need from your IT staff. So you outsource it to a company that focuses on IT and Services Delivery, thus freeing you up to focus on your core business.

            That's outsourcing.

            Does your company hire your janitors as employees? No, they contract with a cleaning firm.

            Do they own or lease their buildings?

            Do you build data centers or do you go to the cloud?

            Everyone of those is an example of outsourcing portions of your business.

            You can look at Netflix as an example.

            Or you can look at Amazon where many of its stores are outsourcing their entire infrastructure over to Amazon.

            Then there's offshoring and now near shoring. All to get cheaper labor. But thats a different topic.

        2. Anonymous Coward
          Anonymous Coward

          Re: Cut staff levels to zero for maximum profit with no costs!!

          "Of course, any bean counter with common sense will know that if this still costs the same as it did when it was in-house then it's a waste of time, especially as the act of changing costs money too."

          "Bean counter with common sense" sounds suspiciously like an oxymoron.

  3. Anonymous Coward
    Anonymous Coward

    Overheard in IBM's boardroom:

    "I don't understand...we keep cutting jobs, but revenue doesn't seem to be increasing. Why?!"

    1. Anonymous Coward
      Anonymous Coward

      If you have to ask the question you wont understand the answer

  4. Chunes

    Managementspeak

    “To ensure we continue to drive competitiveness and our transformation we will continue to drive parallel initiatives…."

    All that driving - hasn't she heard about autonomous tech? Oh wait - IBM - maybe not.

    1. Anonymous Coward
      Anonymous Coward

      Re: Managementspeak

      Also "planned vision in Q4" - is this when the LSD enters the C-suite water supply, or when they're hoping the Messiah will arrive, on or around 25th December, to solve all the problems?

  5. Your alien overlord - fear me

    The old saying ... "No one was ever fired for buying IBM"

    The new sayings ... "Everyone can be fired at IBM"

    1. Doctor Syntax Silver badge

      "No one was ever fired for buying IBM"

      I'm sure fund managers can be.

  6. Wensleydale Cheese

    management had a “planned vision in Q4 which drove the need for a level of headcount reduction in 2017.”

    Is Q4 when bonuses are calculated?

  7. John 104

    Desperate. Look for a bankrupt IBM in the next 12-18 months.

    1. Anonymous Coward
      Anonymous Coward

      Morally? Happened years ago, did you miss it? :P

      But to the IBMers, don't worry, the job market seems strong, IBM still looks good on your resume, and where ever you end up it'll be a strange and wonderful sensation to be somewhere that morale isn't buried 6 feet beneath your feet.

      1. CrazyOldCatMan Silver badge
        Coat

        where ever you end up it'll be a strange and wonderful sensation to be somewhere that morale isn't buried 6 feet beneath your feet.

        <FryingPanToFireMode="On">

        I hear Captia are always[1] recruiting..

        </FPTFM="Off">

        [1] Their employee turnover could, if harnessed to the national grid, supply power for the whole of London. And the civilised bits of the UK as well..

  8. Dan 55 Silver badge

    The logical solution: Make IBM a frontend for Amazon Mechanical Turk

    Can I collect my consultancy bonus now?

  9. Anonymous Coward
    Anonymous Coward

    What an awful job she has, I hope she is well-compensated.

    I can just picture it, her phone rings:

    "Debbie, we have looked at the numbers and you need to lose 40 roles"

    "I thought you said 30?"

    "Yes, we're still losing the 30 but we need another 40 gone ASAP"

    Phone call ends, Debbie's hands instinctively rise up and cover her face, elbows on her (hot)desk.

    "For f**k's sake" she mutters, her headache intensifies as she goes back to Lotus Notes to figure out which conference call she has to dial into now.

    1. Korev Silver badge
      Joke

      Sounds like the typical user's reaction to using Lotus Notes to me...

  10. Anonymous Coward
    Anonymous Coward

    After reading this article and IBM's PR splurge, thought to myself, just remove the name IBM and this could be any tech companies PR when looking to improve the balance sheet, reduce the rank and file, while protecting bosses bonuses !

  11. Daz555

    Redundancies in 2018/19 are going to be huge at IBM as they will have all those 'expensive' Lloyds Bank IT staff to get rid of.

    1. Anonymous Coward
      Anonymous Coward

      problem is, all those expensive LBG bods will have protected terms so the huge redundancies will have to be IBMers in order to make room for the expensive LBG oiks.

  12. Anonymous Coward
    Anonymous Coward

    All about EPS

    Everything they do is about earnings per share. They have been cutting the branch they are sitting on for a while and I am frankly surprised it has taken this long for anything major to happen.

    As long as the top execs get their bonuses and as long as they pay their dividends it will continue.

    The scary thing is the amount of Goodwill that they are sitting on. Basically they don't have to disclose it anymore. It will bite them in the ass sooner or later.

  13. Anonymous Coward
    Anonymous Coward

    Draining the swamp

    This is about the 6th or 7th round voluntary/compulsory redundancy programmes that big blue has run over the past 2 or 3 years, which mostly hit the technical delivery teams (occasionally a few managers or sales goons who are approaching retirement age will take advantage of the opportunity to leave with an extra cash bung).

    Its probably safe to assume that by now, all of the dead wood must be gone so the staff that are left must therefore be the cream of the crop. Any further redundancy programmes at this point will be getting rid of good experienced technical staff and must inevitably hurt IBM's delivery capability. (I'm not arguing that big blue could certainly do with thinning the bloated management herd - it has far too many managers that certainly wouldn't be missed!)

    But there is also an economic bombshell to this relentless offshoring to lower wage countries. If you lay off a UK staffer and move his/her job to Bangalore, that UK person no longer has a wage that can be taxed, s/he no longer has money to spend, and s/he could even end up claiming benefits to survive.

    IT companies, Banks, Insurance companies - they're all doing it, relentlessly offshoring IT resources and call centres just to save money on the wage bill. And its not because they have to do this to survive - its to protect the profit margins. These companies already make money - they're just being greedy and wanting to make more at the expense of UK jobs.

    But in doing so, they're cheating the UK economy and pumping money into foreign economies.

    Its about time the UK government wised up to this and legislated against UK companies offshoring jobs. If a company does business or provides services in the UK, it should employ the people who deliver those services in the UK.

    1. Alistair
      Coat

      Re: Draining the swamp

      @AC.

      For the most part this applies in any country where there is a modern stock exchange and where large companies are traded on said exchange. Part and parcel of the mandate of upper management is to be responsible to the Board of Directors for the *value* of the stock. This at one time meant building up Goodwill, asset pools and sustained lines of business, that is good customers, repeating or expanding their business with the company. Having valuable assets, i.e. properties where business was conducted, operational hardware, infrastructure etc. used to be a requisite to be seen as a company with a chance to move forward.

      Now, the rules for 'valuing' a stock and thus the company behind it have been switched to 'make the investors rich' rather than 'build something that will last'. Corporates are being pushed to increase earnings per share *over everything else*, not just this year, or next, but *every* year. If the earnings per share, or profit over revenue does NOT increase year on year, a stock, and thus a company's value drifts down. At that point, money is flowing *out* of the pockets of the board of directors ..... in both their minds and the minds of the rest of the stockholders, whereon people start to sell the stock, which devalues it further. This is the result of something called 'velocity of money theory'. Utter shite if you ask me, but according to at least *one* venerated economist, it has 'increased the wealth pool' by over 4000% in the last 35 years.

  14. Anonymous Coward
    Anonymous Coward

    70 Staff !

    IBM'ers got away lightly, we at CSC & HPe have seen over 2,500 staff go in the last few months !

    There is no social impact analysis done on the offshoring 95% of your staff to very cheap countries. There is talk of two more redundancy rounds at the new merged company. Also talk of 80-100 Million in bonuses for managers to get rid of people who are really needed. People in history have killed for less, having bonuses for making people redundant is pretty disgusting.

    If you charge UK/USA prices, employ UK/USA staff !

    If you charge Indian prices, employ Indians!

    Do not charge UK prices, employ Indians (95% of the time) and take the difference as share holder value at the expense of social impact to the UK/USA (Higher unemployment). There is a cost to every action. Either in money or social, understand what behaviour you are driving when making these choices.

  15. Anonymous Coward
    Anonymous Coward

    AC

    Just a thought. Change the tax rules on dividends and possibly profit. Say x% where x is the proportion of work outsourced outside the UK.

  16. GruntyMcPugh

    Just heard via the old colleague grapevine that IBM announced the start of another 'consultation period' yesterday, and it's set to last 45 days, indicating a further 100 or more layoffs.

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