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Cringely Predicts IBM Will Shed 78% of US Employees By 2015

timothy posted more than 2 years ago | from the should-switch-to-fashion-branding-with-cool-logo dept.

IBM 273

Third Position writes "Cringely with more predictions about IBM: 'The direct impetus for this column is IBM's internal plan to grow earnings-per-share (EPS) to $20 by 2015. The primary method for accomplishing this feat, according to the plan, will be by reducing U.S. employee head count by 78 percent in that time frame.' So far, Cringely's pronouncements about IBM have been approximately true, even if he missed the exact numbers and timeframes. Is he right this time?"

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273 comments

Brilliant! (5, Insightful)

Moheeheeko (1682914) | more than 2 years ago | (#39734983)

We need to make the company more profitable. Lets put out a quality product everyone will need to have.....ehh fuck it thats too hard, get HR on the line.

Re:Brilliant! (-1)

Anonymous Coward | more than 2 years ago | (#39735017)

We need to make the company more profitable. Lets put out a quality product everyone will need to have.....ehh fuck it thats too hard, get HR on the line.

well said.

Re:Brilliant! (3, Informative)

jdgeorge (18767) | more than 2 years ago | (#39735035)

If Cringley's numbers are approximately correct, I don't think IBM can get to a 78% reduction in 3 years using their current strategy of staying below the reporting requirements for layoffs.

Re:Brilliant! (5, Insightful)

Megane (129182) | more than 2 years ago | (#39735163)

Do they have to report it as "layoffs" when they sell off entire business units to other companies? [slashdot.org]

Re:Brilliant! (1)

BigDaveyL (1548821) | more than 2 years ago | (#39735261)

I'd imagine that's one way of doing it. It also makes you look better - i.e. "We're selling off underperforming/unprofitable business"

Re:Brilliant! (5, Insightful)

Anonymous Coward | more than 2 years ago | (#39735353)

Nortel went through that stripping itself off profitable business units that were not making as much money as they want.

I guess they haven't figured that the management division was the prime under-performing department except at the end when the filed for bankruptcy.

Re:Brilliant! (2)

davester666 (731373) | more than 2 years ago | (#39735971)

Well, up until they had no other divisions left, the management division was the most profitable one, because all profits were attributed to that division. Even if every other division had a loss, management was always highly profitable.

Re:Brilliant! (5, Informative)

jmauro (32523) | more than 2 years ago | (#39736185)

It's called a death spiral. It's something that happens to a lot of companies actually where they start jetsoning their "underperforming" business lines but not realizing that the underperforming business lines are covering some of the fixed costs of the "good" business lines. Once those costs are re-allocated to the "good" lines, they are not underperforming and need to be jetsoned off. Eventually there is nothing left in the organization that can cover the fixed costs and it goes under.

It's one of the things they teach you to watch out for in business school. Why it keeps happening over and over and over again, I have no idea.

Re:Brilliant! (1)

PastBlast (2617971) | more than 2 years ago | (#39735603)

No. The employees get "sold" too. This is the way it's happened in the past starting with the sale of IBM Federal to Loral back in the mid-90's. Later... sale of IBM Global Network to AT&T..... sale of IBM PC to Lenovo. You just simply become an employee of the buying company that may lay you off. Hopefully, the buyer's severance package is better but that's rarely the case.

Re:Brilliant! (1)

Anonymous Coward | more than 2 years ago | (#39735185)

This makes me more blue then I already am, hence I have chosen to be cowardly...

You right, but if you do not provide raises, make working condition miserably by giving more work then is humanly possible, give no hope of promotions to most and never back fill, people will start to leave in droves on their own. Well that's at lest that appears to be the plan in the software division.

God help us when they move development over to China or India.

Re:Brilliant! (4, Insightful)

Duhavid (677874) | more than 2 years ago | (#39735517)

"You right, but if you do not provide raises, make working condition miserably by giving more work then is humanly possible, give no hope of promotions to most and never back fill."

Then you can raise a hue and cry about how inefficient and lazy US employees are, that they deserved being let go and replaced with bright, shiny overseas workers who will work cheaper, longer and so much more profitably. Never mind the ramifications. Less money circulating in US economy, less taxes being paid by US employees. Good move, management! All the while, continue to drive for shifting tax burden to those who are losing jobs ( no, not as IBM management, but as individuals supporting current right wing ideology )

Re:Brilliant! (3, Informative)

Anonymous Coward | more than 2 years ago | (#39735741)

I provide developer support on an SDK... I can tell you one thing - every horror story anyone ever told about complete lack of quality, skill, ability, and in many cases: common sense with regard to outsourced Chinese and Indian development is more likely true than not.

Outsourced to Russia? well, they may steal your IP and put it in someone else's product (even your competitors if they're hired by them) but at least there's a culture of curiosity and figuring things out. I've worked with some pretty smart Chinese and Indian H1B folks and Naturalized US Citizens (similarly, some smart ones living /working in other first-world countries), but the ones who don't have the ambition/drive to get the hell out of their third world nations and seriously underbid and over promise? yeah... you seriously get what you're paying for there. Good effing luck. Ask Dell how that call center worked out.

Why corporate tax at all? (2)

cayenne8 (626475) | more than 2 years ago | (#39735881)

I don't understand corporate tax to begin with....I mean, it isn't something that a 'company' pays really, it just eventually falls through to the consumer of that company's product....

If that is the case, why doesn't the US just cut corporate tax to 0%....for companies IN the US doing work with US workers?

That would attract businesses by the droves I'd think...so, no loopholes, no corporate taxes...

Wouldn't that mean more companies wanting to come to the US to do their work? The US would make up the money on more people working...and for sales of more products/services.

Re:Brilliant! (0)

Anonymous Coward | more than 2 years ago | (#39735121)

If you put out 78% of your workforce, at that point haven't you just created a new competitor? One with a better image, and that could play up the home field advantage. Not to mention, who the hell would want to stay on board and wait for the next shareholder-pleasing move? It's not like someone working for IBM would have trouble finding another place to work.

Re:Brilliant! (1)

tofu2go (727555) | more than 2 years ago | (#39735193)

But IBM would hold all the patents and non-compete agreements... so how does a new competitor spring up when it will be slapped by a lawsuit quick?

Re:Brilliant! (1)

krakelohm (830589) | more than 2 years ago | (#39735315)

Hopefully most of their lawyers would be in that 78%.

Re:Brilliant! (2)

Sponge Bath (413667) | more than 2 years ago | (#39735367)

Hopefully most of their lawyers would be in that 78%.

IBM lawyers were /. heroes during the SCO legal shenanigans. What a fickle bunch we are.

Re:Brilliant! (0)

Anonymous Coward | more than 2 years ago | (#39735551)

No, the enemy of the enemy is my friend... until our common enemy is gone.

Re:Brilliant! (3, Interesting)

Archangel Michael (180766) | more than 2 years ago | (#39735625)

If I recall, IBM doesn't wield patents like ..say .. Oracle. They don't run around suing people for the heck of it. What typically happens is IBM gets sued by random small corp for some minor patent that IBM may be infringing on, IBM then offers a cross licensing agreement that is favorable to IBM, but does not overly punish said random company. The random company then has a choice, cross license, drop the suit, or lastly go to court, at which time IBM lawyers drop the patent portfolio on the table and says "we're suing you for infringing upon $X number of our patents, and we are suing for compensation"

And guess how well that goes for the Random Company? Which is why you don't see IBM in courts much. They just want licensing agreements and do business. Granted, not all of IBM lawyers are dealing with patents, which is what the lawyers were doing regarding SCO.

Re:Brilliant! (1)

Anthony Mouse (1927662) | more than 2 years ago | (#39735789)

This is the thing that concerns me about their decline. IBM has been one of the most prolific software patent filers in the world. If they go down, think fall of the Soviet Union, but with no inclination on the part of anyone who can do anything about it to stop them from selling all the nukes to the highest bidder.

Re:Brilliant! (3, Insightful)

Albanach (527650) | more than 2 years ago | (#39735877)

What decline?

http://goo.gl/yRwK5 [goo.gl]

Compared to their competitors, IBM seems to be doing okay if the markets are to be believed.

What decline? (1)

CountBrass (590228) | more than 2 years ago | (#39736123)

Q4 2011 was IBM's most profitable in it's 100 year history.

You're just making stuff up.

Re:Brilliant! (1)

forkfail (228161) | more than 2 years ago | (#39735389)

No, it'll be those who actually build and create that'll get shown the door.

Re:Brilliant! (1)

Duhavid (677874) | more than 2 years ago | (#39735527)

In what court? India, China?

Odd timing... (4, Interesting)

grub (11606) | more than 2 years ago | (#39735025)


The IBM building across the road from the lab I work at here in Winnipeg just had a "For Lease" sign go up yesterday.

Re:Odd timing... (1)

grub (11606) | more than 2 years ago | (#39735117)

(and I know Winnipeg isn't in the US, but we're all of 120ish km away) What happens in the US for downsizing often starts in .ca

Series of Articles (2, Informative)

Anonymous Coward | more than 2 years ago | (#39735049)

This is just one of a series of articles he's releasing this week. Two of them are currently available on his site.

Absurd (5, Informative)

jbrodkin (1054964) | more than 2 years ago | (#39735071)

The Cringely prediction cited as being "approximately true" (http://www.pbs.org/cringely/pulpit/2007/pulpit_20070504_002027.html) was nothing of the sort. Cringely predicted IBM would imminently lay off 150,000 employees. That was five years. Didn't happen.

Re:Absurd (1)

Anonymous Coward | more than 2 years ago | (#39735451)

IBM has moved more and more staff off-shore, so it's partially true.

Re:Absurd - indeed! They cannot fire managers.. (5, Funny)

scsirob (246572) | more than 2 years ago | (#39735593)

Impossible. That would mean they would have to get rid of some *managers* too! Sorry, that ain't gonna happen. People with actual knowledge, sure. R&D, perhaps. But firing MANAGERS?? No way! Someone has to fill all the procedures and spreadsheet targets, ya know..

if you don't get the joke, don't mod. (4, Funny)

Thud457 (234763) | more than 2 years ago | (#39735745)

This country needs a crash program to train circus lions to eat CEOs and boardmembers.

Re:Absurd (3, Interesting)

Rolgar (556636) | more than 2 years ago | (#39735919)

I submitted the original article on Slashdot 5 years ago [slashdot.org] .

You're right, it didn't happen. But maybe by getting the word out, maybe Bob changed IBM's course of action. Maybe instead of laying off most of their domestic workers over the last 7 months of the year, they switched and went with a more gradual move to prevent losing most of their businesses in the U.S. which would have been a very risky undertaking.

If what Bob says is true, then we have a choice. We can let the trend continue, or we can let our state and federal representatives know that we'd rather have work done by small local businesses instead of the megacorps. Of course, we need to let everybody know that we are selecting between two options, a cheap one and a more expensive one. Demand that the more expensive group deliver premium service, and I don't think anybody will complain. Deliver lower quality or have a worse record on up time or missing deadlines than the cheaper alternative, and know that the taxpayers will demand that the next contract will be bid out to the cheapest bidder which will be IBM or another big outsider.

Re:Absurd (4, Insightful)

jbrodkin (1054964) | more than 2 years ago | (#39736013)

No, it didn't happen because it was never a realistic prediction. Those types of layoffs happen at failing companies. IBM is not a failing company, it is a company making massive profits and revenue. I think IBM probably has too many employees, and is making cuts that percentage-wise are small and likely make sense from a business standpoint. But the company had no need in 2007 to shed massive amounts of workers, and no need to do so now. The idea that the Cringely article from 2007 prevented IBM from laying off a third of its work force is ridiculous. That is not how companies make decisions.

Re:Absurd (4, Informative)

jbrodkin (1054964) | more than 2 years ago | (#39736061)

Also, I submitted (and wrote) the article that rebutted the 2007 one: http://it.slashdot.org/story/07/05/07/2116251/analysts-call-ibm-layoff-estimates-hogwash?sdsrc=rel [slashdot.org] Cringely was claiming that IBM was about to lay off its ENTIRE US workforce. Come on, at some point you have to exercise a little common sense and not report things that just can't be true.

Re:Absurd (0)

Anonymous Coward | more than 2 years ago | (#39736283)

Cringley's prediction is unsupported guesswork. And his earlier predictions have had zero impact on IBM's longterm course. IBM has reduced its U.S. workforce by about 30% in the last seven years. See the data below -- it comes from the Alliance at IBM, a CWA affiliate. IBM employs 433,000 worldwide. It is one of largest IT employers in India. It has shifted its workforce overseas for sure, but also gets more revenue overseas than here (I'm not raising this point to be an apologists for IBM), IBM will likely continue to reduce its workforce in the U.S. because it has consistently cut its workforce each year for the last seven. What is IBM's target? Who knows. But it's not 78% reduction in three years, which would be a massive fire sale of its operations. If anything has had an impact on IBM it's not Cringley. It's the IBM Alliance which has provides ongoing insight and information on IBM's labor actions. Whenever IBM has a RIF you can learn all the details about through the Alliance. The other tech firms are doing the same thing, but thanks to the alliance you at least can learn about it. IBM stopped reporting US headcount in 2010 *Alliance Estimate 2012: *95,000 2011: *98,000 2010:*101,000 2009: 105,000 2008: 115,000 2007: 121,000 2006: 127,000 2005: 133,789 That;s the U.S. headcount. IBM employs 433K worldwide, including the U.S.

Firing nearly 80% in 3 years? (0)

Anonymous Coward | more than 2 years ago | (#39735095)

Their past moves have been around 8% a year. Don't get me wrong, investors love them some good layoff sprees, but that kind of fire sale will not drive confidence.

please start with the Cognos people (5, Informative)

alen (225700) | more than 2 years ago | (#39735119)

cognos is the worst piece of crap software i've had the pleasure of working with. it's a huge pain in the a$$ to install, you have to make dozens of changes that isn't in the documentation and only available by calling support. even then they tell you to google stuff because the IBM support site is a mess to navigate

and after you buy the software you find out features are missing because you didn't buy the right version. there are like 20 different versions of Cognos with different features

SQL Server may not be 100% as good, but at least it's pretty easy to set it up and get going for the 90% of the features you will use

Re:please start with the Cognos people (5, Informative)

timestride (1660061) | more than 2 years ago | (#39735191)

Amen-- Cognos is a mess. The thing I hate the most is that their support staff only know certain aspects of the suite. If you have an issue with Cognos Planning, but you are accidently routed to someone in the Cognos Business Intelligence support group, they have to reroute your case and you'll be waiting at least several hours before they call you back. Heaven forbid you have an issue with integration between the two suites.

Re:please start with the Cognos people (0)

Anonymous Coward | more than 2 years ago | (#39735295)

Why stop here, they could also fire the Clearcase and Clearquest teams while they are at it.

Re:please start with the Cognos people (2)

alen (225700) | more than 2 years ago | (#39735341)

i realize they bought these companies but i have SQL databases i manage that began life in SQL 7 or 2000 and seem to work just fine in 2005 and on 2012 test servers. cognos upgrades are a nightmare

i had to install it on a x64 machine and have to use 3 different tools because some work on x64, others are only x86

Re:please start with the Cognos people (2)

billcopc (196330) | more than 2 years ago | (#39735755)

Buddy, I'm from Ottawa. I live just a few minutes from the main Cognos building, where many of my old college buddies used to work. In the opposite direction used to be RIM's big bad campus. Another few km north stood Nortel. And I can't remember the name but there was this giant faceless consulting firm a few years ago, J.P. somethign... J.M.B. I dunno, started with J. Anyway, they're all gone.

If I've learned anything from this city, it's that we can't sustain any big tech company. We have lots of highly educated, skilled and knowledgeable individuals, but there is a very disturbing lack of drive. People get stuck in the routine and innovation goes into cryostasis. Entrepreneurs aim low, people are averse to risk taking. I don't expect nor believe an Ottawa company could ever create a truly innovative product of sufficient quality to be a global contender. Our businesses prefer make-work projects and long-term contract jobs that don't rock the status quo. Cognos is the product of that underachiever culture, as is the Blackberry and its equally retarded step-cousin QNX. I blame the overbearing office drone mentality, where most workers' greatest achievement is passing a government interview and settling into their cushy navel-gazing career.

In that perspective, Cognos fits very well within IBM's bubble. They don't really know why they're here or what they do, but neither do their clients, so everyone is happy by way of ignorance.

Re:please start with the Cognos people (0)

Anonymous Coward | more than 2 years ago | (#39735879)

Unfortunately, most of the Cognos team is based out of Canada. :(

Correct, but the reductions are through attrition (0)

Anonymous Coward | more than 2 years ago | (#39735125)

Retiring boomers are being replaced by engineers overseas who are just as good but one quarter the salary. Customer facing employees of course are still being hired domestically though your shiny new CS degree is not going to see much use in a project coordination role.

Re:Correct, but the reductions are through attriti (0)

Anonymous Coward | more than 2 years ago | (#39735153)

just as good

That is a boldface LIE!

Re:Correct, but the reductions are through attriti (4, Funny)

JazzLad (935151) | more than 2 years ago | (#39735659)

No, this is a boldface lie (well, it was a lie about being a lie)

his was a baldface lie. [worldwidewords.org]

Re:Correct, but the reductions are through attriti (2)

Envy Life (993972) | more than 2 years ago | (#39735759)

What? Most companies doing this outsourcing don't realize it's not an apples-to-apples tradeoff. One of the core issues is that IT education in India is different than in the U.S. In India they spend much of their time on the technical aspects of a broad range of languages and platforms, but that training lacks the depth and the thought training that universities in the U.S. use in their curriculums. That shifts the burden of design and management from the average U.S. CS degreed developer who can do it all, to a tiered project structure where you have to insert a layer of project leads to manage the to-do lists for the outsourced developers.

So we have layers are added by necessity, process time is increased as a result, and in an industry where timing is everything, that short term cost savings is negated by the lost opportunities. Let's not forget that adding one more layer of indirection between the developers and the product owners just gives the developers a lesser feeling of ownership and they have less reason to stick around. In an industry that takes wokers 6 months to come up to speed, and high aquisition costs to find replace them, the costs continue to mount for any outsourcing effort.

Re:Correct, but the reductions are through attriti (0)

doston (2372830) | more than 2 years ago | (#39736027)

Retiring boomers are being replaced by engineers overseas who are just as good but one quarter the salary. Customer facing employees of course are still being hired domestically though your shiny new CS degree is not going to see much use in a project coordination role.

Even mentioning the word "boomer" triggers rage in me. It's boomer *gullibility*, greed and shortsightedness that brought us to the global MESS we find ourselves mired in. We'll be paying for their bad decisions for the next 500 years. We have to find a way to get stupid, greedy, gullible, suggestible, magical thinking people OUT of power.

Probably Wrong (5, Insightful)

elbonia (2452474) | more than 2 years ago | (#39735135)

Considering the fact that most of his big predictions are completely wrong why believe he's right? When did Apple buy out Time Warner Cable? How about Facebook forking and going against LinkedIn. Or Apple’s white iPhone 4 would be the Verizon iPhone 4?

What kind of predictions does he get right? Software will crash and Google will be the new Microsoft and Microsoft will be the new IBM.

http://www.cringely.com/tag/2011-predictions/

Re:Probably Wrong (2, Interesting)

Anonymous Coward | more than 2 years ago | (#39735243)

Also posting anonymously because I've been a grunt on the inside. It doesn't matter if the timing of his numbers is right, the bigger picture is definitely there.

IBM employees in the Americas need to unionize. Yesterday.

http://endicottalliance.org/

Re:Probably Wrong (3, Interesting)

ciggieposeur (715798) | more than 2 years ago | (#39735627)

They needed to back in 1999-ish when Gerstner began fucking with the pension.

Alliance@IBM was really useful though circa 2003. Gave us plenty of warning that a Resource Action was coming to Software Group in RTP.

Re:Probably Wrong (1)

ColdWetDog (752185) | more than 2 years ago | (#39735805)

Also posting anonymously because I've been a grunt on the inside. It doesn't matter if the timing of his numbers is right, the bigger picture is definitely there.

IBM employees in the Americas need to unionize. Yesterday.

http://endicottalliance.org/

Meet the new boss, same as the old boss.

Re:Probably Wrong (0, Troll)

Anonymous Coward | more than 2 years ago | (#39736309)

I grew up in eastern PA. Boy, did they love their unions. Unions will save us all from the big, bad, evil companies. And there were some very large union shops - Bethlehem Steel (gone), Mack Truck (tiny little shell of what it was), Western Electric (gone), and many more, mostly all gone. Yes indeed, those unions did a mighty fine job. They didn't save a single job, they just ensured that in the future there would be no jobs at all. Take your unions and shove them as far up your ass as you possibly can.

Now more than ever... (2)

IGnatius T Foobar (4328) | more than 2 years ago | (#39735161)

IBM stands for "I've Been Moved" (Except now it's your *job* that's been moved, and you will probably not move with it...)

This one paragraph NAILS it (2)

MikeRT (947531) | more than 2 years ago | (#39735203)

While it looks good on paper it is not practical and is not working. The language barrier for IBM’s Indian staff is huge, for example. Troubleshooting, which was once performed on conference calls, is now done with instant messaging because the teams speak so poorly. Problems that an experienced person could fix in a few minutes are taking an army of folks an hour to fix. This is infuriating and alarming to IBM’s customers.

Phone support with trained professionals who can get the job done fast to impersonal IM with barely bilingual, questionable quality support techs on the other side of the planet. Rates are more or less the same (I'm being generous). What could POSSIBLY go wrong with that? That's like putting a Ford Mustang body on a low end Tata car and wondering why customers flee from it.

Re:This one paragraph NAILS it (2)

El Torico (732160) | more than 2 years ago | (#39735507)

I've been having lots of fun with Juniper support lately. One of our WAN accelerators died (third one of that model in two years I was told), so I opened a ticket; the support staff in India issues an RMA. After a week, they said the unit was delivered and signed for by "Mary". There's no Mary at my location. I told them that we didn't get it. A week later, the unit finally shows up. However, they sent the RMA using a company that can't get onto my facility (on a military base). So, I went and got it (no biggie). I unboxed it, installed it, and pressed the power button - nothing happened. They sent a DOA.
I contacted Juniper to RMA the RMA, it took them two months this time. I'd send an e-mail asking, "Where is it?" They'd respond with, "Did you get it yet?" It finally came, shipped by the same company that couldn't get onto the base. At least the second one works.
Of course, now I can't download the software to upgrade it; the support staff (in the Philippines this time), keep sending me e-mails saying, "The download page works for us when we use your account".
I have nothing against Indians and Filipinos, but I have problems with incompetence.

Re:This one paragraph NAILS it (1)

Smertrios (550184) | more than 2 years ago | (#39735575)

They are already doing this internally. 99% of the time when I contact one of their support techs I get someone who I can barely understand over in India or Brazil.

So IBM is selling the rest of the company to China (4, Insightful)

Karmashock (2415832) | more than 2 years ago | (#39735217)

That's what this means. When they got out of the PC business they just sold it to china. And now they're apparently doing the same thing with their research division.

Companies don't survive that. The logo might survive. But it will be hollowed out mask.

Oh well. Ironic that this was once the company said to be an unbeatable monopoly.

Re:So IBM is selling the rest of the company to Ch (0)

Anonymous Coward | more than 2 years ago | (#39735535)

Maybe it's just their way of saying there is no more future left in their industry, they don't believe the can compete and are slowly shutting down? So what? businesses do this all of the time. This is just a way of soaking up as much money on the way out as opposed to eventual bankruptcy.

Re:So IBM is selling the rest of the company to Ch (1)

ColdWetDog (752185) | more than 2 years ago | (#39735819)

Maybe it's just their way of saying there is no more future left in their industry, they don't believe the can compete and are slowly shutting down? So what? businesses do this all of the time. This is just a way of soaking up as much money on the way out as opposed to eventual bankruptcy.

Or maybe it's there way of saying there is little future left in the US. Maybe Brazil / India / China / etc. are the growth centers they're banking on. Maybe then it makes lots of sense to 'outsource' those functions.

To the people who will be paying for them.

There are companies that look beyond the next quarter. IBM tends to be one of them.

Re:So IBM is selling the rest of the company to Ch (1)

Smertrios (550184) | more than 2 years ago | (#39735605)

They are selling their point of sales machines to Toshiba. They want to become software and service only.

Re:So IBM is selling the rest of the company to Ch (2)

Karmashock (2415832) | more than 2 years ago | (#39735645)

their point of sales machines constitute 78 percent of US staff? Really?

This joke has been done before (5, Funny)

rudy_wayne (414635) | more than 2 years ago | (#39735297)

Several years ago somebody put out a joke press release that went something like:

Dear Employees,

We have calculated that reducing the workforce by 10% would result in a savings of $100 Million. Taking those calculations further, we have determined that eliminating 100% of the workforce would result in a savings of $1 Billion. Because we are committed to driving maximum shareholder value, we are announcing that we will be eliminating 110% of the workforce. The additional cuts will be achieved by laying off employees of other companies.

When questioned if laying off 100% of the workforce would cause the company to no longer exist, the CEO replied "Nobody has ever tried this before, so let's not be too hasty to jump to conclusions".

Re:This joke has been done before (0)

Anonymous Coward | more than 2 years ago | (#39735989)

Source [satirewire.com]

Responsibility is expensive (2, Interesting)

concealment (2447304) | more than 2 years ago | (#39735317)

In the USA, many of the obligations to employers come from government-enforced responsible behavior. We want equal treatment of women, minorities and LGBT people; employee rights and regulation; health and safety standards; environmental pollution limitation; a complete tax system; counseling for employees who need it and so on.

Other countries don't (yet) have these, so their costs are most lower.

If the consumers start being willing to pay extra money for products designed and built according to our standards here in the USA, maybe we will see IBM and others stop this outflow of labor. However, if the consumers compete mostly on price, that won't be the case.

Re:Responsibility is expensive (2, Informative)

forkfail (228161) | more than 2 years ago | (#39735359)

Actually, the US lags behind other Western democracies in the things you enumerate as being overly costly.

So those that the system has entrusted with overseeing our business and industry sends our jobs to second and third world nations - and they reap huge bonuses for doing so, and thereby, destroying our economy and nation.

Re:Responsibility is expensive (1)

oh_my_080980980 (773867) | more than 2 years ago | (#39735447)

You don't understand how corporations work. Apple is not saving a boat load of money making iPhones in China. At most they are saving 20% but they are still making 70% profit margins. Consumers are paying a premium for Apple products like the iPhone and that still does not motivate Apple to bring production back to the States.

Corporation only care about profits and will do ANYTHING to the workforce to control labor costs.

Blaming the government won't solve the problem. Holding corporations accountable will.

Re:Responsibility is expensive (0)

alen (225700) | more than 2 years ago | (#39735757)

how much does apple send to foxconn every year? costs like $10 to assemble an idevice? $2 billion tops if you include the investment into the plant and equipment?

how much does apple pay their US workforce? a lot more i bet

Re:Responsibility is expensive (1)

Bigby (659157) | more than 2 years ago | (#39735809)

Hold them accountable by buying hundreds of millions of their product? Or do you just want to impose morals on companies through law? Because that works.

Re:Responsibility is expensive (1, Informative)

UnknowingFool (672806) | more than 2 years ago | (#39735585)

Other countries don't (yet) have these, so their cost is lower.

They don't? Obviously you don't work in Europe. In the socialist leaning countries, these rules do not get much press because they are no big deal. In the US, laws to ensure equal protection are treated by some (like yourself) as the cause to end civilization. How dare women demand to be paid the same money as men for doing the same job? Don't they know exploitation is a God-given right in this country?

Re:Responsibility is expensive (0)

Anonymous Coward | more than 2 years ago | (#39735709)

Apple doesn't make iPhones in Europe either...

Re: (2)

Xandrax (2451618) | more than 2 years ago | (#39735871)

"How dare women demand to be paid the same money as men for doing the same job"

Women do get paid as much as men; once actual hours worked, time off for family, medical time off, vacation, and types of jobs (men work more dangerous, higher paying jobs) are factored in. In large blue cities (like New York) women are now making more then men.
   

Re:Responsibility is expensive (0)

Anonymous Coward | more than 2 years ago | (#39735943)

It's not that "exploitation" is a god-given right. It's that it's self-correcting.

Yeah but... (0)

Anonymous Coward | more than 2 years ago | (#39735661)

Sure, it costs the companies a lot, but think of the government jobs it create to write and enforce those regulations.

Re:Responsibility is expensive (0)

Anonymous Coward | more than 2 years ago | (#39735677)

If you're anything like Australia, the govt will set one benchmark for local companies (aka standards compliance) and not for foreign imports. Even if you wanted to, local goods struggle to be cost competitive. Ever opened an Italian "designer brand" stove? Other than razor sharp edges and exposed wires, they are s*** ... Just one of many examples

AC

Re:Responsibility is expensive (1)

biodata (1981610) | more than 2 years ago | (#39735957)

Nobody wants employees any more, that's why the western governments sold everything they could in the 80s to corporations, and now the corporations are offloading to thrid-world subsidiaries. It used to be that doing a job well would earn you a salary, some healthcare when you were sick, school for your kids, and a pension when you are too old to work anymore. Our ancestors had to fight the rich tooth and nail for this minimum human dignity, mostly by forming strong unions with each other. The rich realised that if they could make the unions look unpopular enough, they would be able to destroy them, so that's what they did, with the help of their friends who owned the newspapers. This will only get worse until it is resisted in the strongest terms, in the only language that the rich understand.

Curious (0)

Anonymous Coward | more than 2 years ago | (#39735329)

I have no idea who this person is or if his predictions will come true, but I find it curious that /. seems to only believe that quality products/services can originate from America and nowhere else. America certainly doesn't have a monopoly on talent or education. Relative to the world, they increasingly have less of both as other countries develop. It's only natural that global American companies would increasingly need/want to go elsewhere, then. Aren't the standard complaints about this sort of thing along the lines of "we're American and you're Vietnamese/Brazilian/Romanian/etc, so we deserve large houses with backyards and you deserve poverty, even if we can both do the same job"?

Re:Curious (1)

oh_my_080980980 (773867) | more than 2 years ago | (#39735501)

True that America does not hold a monopoly on quality products - see Germany - but China has a long way to go. China can build things cheaply but unless they have strict Quality Controls and Oversight, their products are invariable crap. You see it time and time again companies that have poor Quality Control end up having crap products.

Re:Curious (1)

HungWeiLo (250320) | more than 2 years ago | (#39736159)

You get crap from them because the parent companies pay crap. They will build to any spec you want as long as you pay for it. It's just most companies choose to build to a lower spec - because they can.

In the fashion industry, for example, Chinese manufacturers are now considered "high-end". Go to boutique stores, and you will now only find Chinese-made clothing for the $100+ market. Anything below has been out-outsourced to Vietnam, Cambodia, and Indonesia.

Considering how awesome IBM has been for us... (0)

Petersko (564140) | more than 2 years ago | (#39735365)

...I can only hope it means a decreased presence in North America. Good riddance.

Re:Considering how awesome IBM has been for us... (1)

forkfail (228161) | more than 2 years ago | (#39735793)

When all that remains in the US of our technical industry is management, it will be only a matter of months before we lose that as well.

Article is dated in 2007 (0, Interesting)

Anonymous Coward | more than 2 years ago | (#39735459)

This article was from 2007. We should of seen the massive layoffs by now...

Re:Article is dated in 2007^W 2012 (1)

fnj (64210) | more than 2 years ago | (#39735777)

What article is dated 2007? The article in the first link provided in the aummary is from this month. It references a previous writing from 2007.

Federal Role? (1)

sycodon (149926) | more than 2 years ago | (#39735483)

I'm fairly Right Wing and just uttering those words makes me feel queasy.

But I have to say that when it comes to U.S. chartered companies outsourcing the majority of their employees and work over seas, I have a problem.

Despite Globalization, I believe there is still something to be said for "dancing with the one who brung ya". At the very least, these companies have benefited from the U.S Legal and industrial infrastructure. I'm not saying that the Feds made IBM possible, but it was a symbiotic relationship that grew over time. The U.S. (Feds, state and private) is a BIG customer and As such, I think a reasonable person can say that IBM and other large U.S. companies "owe" something to the U.S. and its workers.

The problem is how to you persuade them to honor that debt without completely stomping all over the existing Business environment?

Re:Federal Role? (0)

Anonymous Coward | more than 2 years ago | (#39735689)

import duties, maybe once we treat software products like other products manufactured abroad, slapping import duties on software and services (i.e. call centers) from abroad might persuade multinationals its cheaper to hire in the US.

Re:Federal Role? (2)

forkfail (228161) | more than 2 years ago | (#39735833)

Well, that rather goes to the core of the problem. And I'd note it's far more than the government contracts: it is the flood of WWII and Vietnam vets who took degrees from the GI bill; it's the education system that this nation built up; it's the industry and work ethic of the people that built the economy that made IBM possible.

But these days, our system is set up to reward those who maximize profit. Outsourcing, layoffs and liquidations are rewarded with bonuses to those who do those thing. Destroying industry, infrastructure and innovation are seen as worthy goals, not as things to be avoided. It's all about short term gain, not about long term sustainability. Throw in the fact that we're destroying our education system, and things look pretty grim.

Unless you change these things, the guy who took the date to the dance is going to find her in the proverbial back alley working tricks every time.

Re:Federal Role? (1)

tqk (413719) | more than 2 years ago | (#39735909)

At the very least, these companies have benefited from the U.S Legal and industrial infrastructure. ... The U.S. (Feds, state and private) is a BIG customer and As such, I think a reasonable person can say that IBM and other large U.S. companies "owe" something to the U.S. and its workers.

I think it would be better to just add them to your list of companies to boycott until they come around. Getting the Feds involved isn't going to fix anything, and will likely just make it hurt more.
 
... assuming there's any truth to the story in the first place. Someone mentioned this story is from 2007.

Re:Federal Role? (0, Funny)

Anonymous Coward | more than 2 years ago | (#39736011)

As a left winger from another country that is benefiting from your poor economy and shoddy educational system, all I can say is "Suck it up Princess"

Re:Federal Role? (2)

ciggieposeur (715798) | more than 2 years ago | (#39736213)

The problem is how to you persuade them to honor that debt without completely stomping all over the existing Business environment?

You don't. You can't. Because the existing Business environment is a million MBAs saying "I got mine, screw you!", and fighting tooth and nail the slightest hint that maybe the success of the companies that hired them had something to do with ginormous government outlays in public education, highways, civil courts, property rights enforcement, publicly-funded research, contracts, grants, etc. etc.

I do not question the great Cringely. (2)

multicoregeneral (2618207) | more than 2 years ago | (#39735489)

Mainly because his predictions provide insight into a strategy, a situation, or a problem that does exist. Even when he's wrong, you learn something. There are very few people in the industry that are as well connected as he is.

Re:I do not question the great Cringely. (1)

Anonymous Coward | more than 2 years ago | (#39736025)

Well connected doesn't make you right or even insightful. Everyone dotes on him because of his documentary and journalism work, but so far all his predictions have either missed the mark completely, or have been completely obvious or so vague that any likely outcome could be interpreted as success. For someone so well connected, he doesn't seem to have a clue of what's going on *now*. Or maybe some ulterior motive makes him deliberately issue false "predictions".
Whatever the case may be, based on Cringely's past record, all we can say is that IBM might lay off some unknown number of employees some time in the future. Well, that's probably true, but... not very informative.

I've seen this in action (0)

Anonymous Coward | more than 2 years ago | (#39735525)

I worked in one of IBM's. 24/7/365 operations at the big RTP, NC campus (the one that was long one of the pillars of the Research Triangle) - the company didn't pay a whole lot of attention to our area while I was there (probably good for headcount) but they also didn't bother to fill necessary slots when someone left, and the whole operation is likely hanging by a thread. they were making incredible margins, too - but customers are sure to leave as the services required constant attention for SLA reasons. That office has been dropping FTEs for contractors from the lowest bidder in every area, moving offshore when possible, and it shows. They still make money and get good project contracts, based mostly on name alone. It's really quite sad, but there are plenty of other companies doing the same thing (take the brain drain at HP under Carly and Hurd, for example - layoffs that often had nothing to do with profitability or merit - why have a team full of experienced salespeople if you can halve it and replace half of those left with people who don't know the company, product or customer?)

Well, well... (1)

MattW (97290) | more than 2 years ago | (#39735565)

This certainly puts the recruitment message from an IBM recruiter I got on LinkedIn last week in a new light.

Re:Well, well... (0)

Anonymous Coward | more than 2 years ago | (#39735767)

Start running now. I wouldn't take a job with them unless it was 2 or 3 times my current salary. One of my contracts got sold to them for a few years.

Time for a IT union (1)

Anonymous Coward | more than 2 years ago | (#39735635)

Time for a IT union so they can't pull carp like this!

Question (0)

Anonymous Coward | more than 2 years ago | (#39735839)

Who/what is Cringely? Is it a person (if so, who does he work for and what are his credentials) or is it an organization (if so, what does it do?)

As someone who works there (1)

Anonymous Coward | more than 2 years ago | (#39735895)

No not exactly shed jobs, but the focus will be on hiring in the developing countries as IBM see's more demand from those areas and that the U.S is a well saturated matured market. this is the 2015 plan they do have and have had for almost 7 years.

From an IBMer (0)

Anonymous Coward | more than 2 years ago | (#39736075)

I believe it! It's been going that way for a while now though 78% in 3 years is probably too high. The IBM US employes are somewhere around or just below 90k. Just a few years ago (5-6) it was at 130k.

Just part of an existing IBM trend (4, Informative)

ipv6_128_lgwb (70428) | more than 2 years ago | (#39736107)

When I started with IBM in 1999 they had ~220k US employees. At the beginning of 2009 they had ~115K. That year they had two rounds of lay offs that included ~5K per round. IBM stopped publishing the number of US employees after that for some reason.

- I got hit in that second round

Re:Just part of an existing IBM trend (2, Informative)

Anonymous Coward | more than 2 years ago | (#39736229)

I started in 99 with IBM as well. I got hit in this last round in the 1st quarter of this year. To be honest, I was glad to go, and feel sorry for the folks still there. When I joined, it was an AWESOME company to work for. Not anymore, it just sucked daily. No responsibility at the management level, and lots of finger pointing. It was hell.

Additional Benefits from Trade Act? NOT! (0)

Anonymous Coward | more than 2 years ago | (#39736217)

IANAL, but another kick in the pants is the Trade Adjustment Assistance program, which provides benefits when you lose your job to a foreign worker, does not apply since your replacement is another employee (albeit in another country). Having been a former IBMer, you are expected to train your replacement, and are then shown the door.

Department of Labor Trade Act Program [doleta.gov]

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