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Analysts Call IBM Layoff Estimates "Hogwash"

ScuttleMonkey posted more than 7 years ago | from the only-time-will-tell dept.

IBM 131

jbrodkin writes "Rumors have been floating around saying IBM will cut 150,000 U.S. jobs, but a Network World story attempts to set the record straight by quoting analysts who say this news, if true, would wipe out the company's entire U.S. operations and would make no sense since IBM is actually doing pretty well."

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BULLSHIT!!! (-1, Troll)

Anonymous Coward | more than 7 years ago | (#19028385)

BULLSHIT!!!

They're probably right, but... (1, Informative)

drinkypoo (153816) | more than 7 years ago | (#19028457)

...they're just analysts. They don't actually know anything. They're making educated guesses at best.

FTFA:

Analyst Frank Dzubeck, president of Communications Network Architects, says the layoff rumor "sounds kind of ludicrous since there's only [about 350,000] people] in the entire company. That means they'd be wiping out every division in the United States including the headquarters, which doesn't seem plausible."

why does it mean that? they probably have several divisions they could drop entirely because they don't really fit with their future plans, they could scrap those first. And then think of the places you've worked. How many people in those places were completely fucking useless and the company would go on without a hitch or even do BETTER with them gone?

Yeah.

Also IBM still has a lot of tech support in the US, if they outsourced most of that, then those people could find themselves without a job.

Does anyone know anything about an actual breakdown of where those 350,000 people who work for IBM in the US are actually placed? And I don't mean geographically, but by business unit (at least - type of job function would be better.) Not that I expect any such data - but then, the analysts don't have it either.

But who knows, maybe the estimate was just over by an order of magnitude - a misinterpreted misprint :)

Re:They're probably right, but... (1, Insightful)

Anonymous Coward | more than 7 years ago | (#19028483)

At least they base their conclusion of more than a few anecdotes like Cringley did.

Re:They're probably right, but... (0)

Anonymous Coward | more than 7 years ago | (#19032209)

At least they base their conclusion of more than a few anecdotes like Cringley did.

Cringley may have gotten the literal numbers wrong, but he was right about the 40% of the US workforce. I know that because an IBM manager let that number slip at a meeting a few weeks ago.

That's not what they mean (4, Informative)

konekoniku (793686) | more than 7 years ago | (#19028509)

I believe what they're saying is there are only 350,000 people in IBM worldwide, and not much more than 150,000 in the US. Hence, wiping out 150,000 jobs in the US would effectively mean offshoring the entire company, including the headquarters division.

Well... (2, Interesting)

DogDude (805747) | more than 7 years ago | (#19028559)

Well, Haliburton is in the process of doing that for other reasons. It's apparently possible.

Re:That's not what they mean (1)

644bd346996 (1012333) | more than 7 years ago | (#19028851)

Yep. And that definitely won't happen. I know quite a few mid- to high-level IBM employees in the US who feel that their jobs (and even their divisions) are quite secure.

Re:That's not what they mean (1)

jonatha (204526) | more than 7 years ago | (#19029953)

Yep. And that definitely won't happen. I know quite a few mid- to high-level IBM employees in the US who feel that their jobs (and even their divisions) are quite secure.

Unless they're a 4th line or above, they're kidding themselves.

Re:That's not what they mean (0)

Anonymous Coward | more than 7 years ago | (#19029345)

The 150,000 number was clearly ridiculous, that's because Cringely can't do simple arithmetic. Still, there may be something to the "40 percent of US Global Services" rumor... I don't know either way. If so, the other divisions of IBM will probably be affected as well.

There are plenty of technical jobs for IBM in San Francisco and Boston currently listed on hotjobs.com (dozens in each case). However on monster.com, which in my experience is a better site for tracking, I couldn't find any. Something seems to be afoot.

Re:That's not what they mean (1)

sgt_doom (655561) | more than 7 years ago | (#19029981)

Gee, why wouldn't anyone believe these analysts....why, people have started to say Halliburton may move their corporate headquarters to Dubai sometime soon.....even though they moved it sometime ago.....

Re:That's not what they mean (0)

Anonymous Coward | more than 7 years ago | (#19030291)

Hmm. Makes me wonder if they might be shifting assets in anticipation of Congressional investigations by the Democrats finding something inappropriate and requiring repayment. Of course if Halliburton loses US contracts in 2008 it could hit their bottom line pretty hard, but maybe better that than a $10e11+ fine.

Re:They're probably right, but... (1)

m0rph3us0 (549631) | more than 7 years ago | (#19028545)

Yeah. Didn't GM do the exact same thing in the early 90s? Record profits. Massive layoffs.

Re:They're probably right, but... (2, Insightful)

theNote (319197) | more than 7 years ago | (#19028549)

IBM's silence on the issue is deafening.

IBM NEVER talks about layoffs. (2, Informative)

FatSean (18753) | more than 7 years ago | (#19028761)

It's a historical fact. Don't sweat it, it's not gonna be 150,000 people or even 100,000 people...that is absurd.

Re:IBM NEVER talks about layoffs. (0, Offtopic)

trentblase (717954) | more than 7 years ago | (#19032417)

Fact: Bears eat beets. Bears. Beets. Battlestar Galactica.

Re:They're probably right, but... (0)

Anonymous Coward | more than 7 years ago | (#19028637)

There's 350,000 people in the entire company WORLDWIDE. There are only about 150K employees in IBM in the entire USA. To lay off 150K employees in the USA is to lay off literally the entire company within the USA. And no, this cannot happen, for a number of reasons. For one thing, most state and federal government contracts require that the work be done within the jurisdiction, by citizens of the jurisdiction. Read TFA before you quote it.

Re:They're probably right, but... (1)

drinkypoo (153816) | more than 7 years ago | (#19028753)

Read TFA before you quote it.

What? That's like saying "inhale before you exhale". Obviously I read it, but failed to properly comprehend what I was reading :P

However, the reason I didn't comprehend it is two fold; I was in a hurry, and it was poorly written. There should be no need for the brackets in there, and TFA says nothing about how many employees they have in the USA, only that there are about 350K employees of IBM worldwide. For all I know, 250-300K of them are in the US (despite having worked for IBM briefly, I have no idea of the relative strength of IBM offices in other countries as compared to the US - but I would expect (for no particular reason) around half of their employees to be here.

But nothing in TFA explicitly gives even a ballpark figure for the number of IBM employees in the US, so using your particular conversational tone with me is unfounded. Especially since I obviously read the damned thing (or at least skimmed it) having copied the quote from page two.

Re:They're probably right, but... (3, Informative)

terjeber (856226) | more than 7 years ago | (#19029287)

Does anyone know anything about an actual breakdown of where those 350,000 people who work for IBM in the US are actually placed?

Why is it that people have such a hard time reading simple words and numbers? IBM doesn't have 350,000 people in the US. IBM has about 330,000 people total, IN THE WORLD. IBM has some 130,000 or so people in the US. Total. Less than half of that is IGS. But just for fun, let's say half of IBM is in the US and half of IBM is IGS (that is not the case). We end up with IGS being at most 80,000 people in the US.

IBM is, according to Cringely laying off half of IGS, which according to his drug-induced maths, turns into 150,000 people. Now, using too high numbers, we find that IGS in the US is about 80K. So, what is IBM going to do? Hire 220,000 people, lay off 150,000 people, all in 2007? Well, if they do, that means that IGS would grow from 80,000 to 150,000. Is that a bad thing?

Well, perhaps they won't do that. Perhaps they just want to lay off 150,000 people so that they can cut their current staff down to half of what it is now. That still means that IBM will have to get to 190,000 people before they can start their lay offs. So, how do you propose that IBM hire 110,000 people and then lay off 150,000 people to get down to 40,000 people in IGS? Why would they want to lay off people in such an insane way?

The fact of the matter is that Cringely was at a nasty party the other day. At that party he scored some heavy hallucinogenic drugs, and for some reason he decided to write this nonsense after taking those drugs for about a week.

Not hogwash, not just the US (4, Informative)

Anonymous Coward | more than 7 years ago | (#19028463)


Our offices here in Winnipeg (Canada) are going to be decimated down to a skeleton staff of people to maintain our managed servers (for places like MTS, etc.) I've been hunting for another job for 2 weeks now, since a relative of mine high up at IBM told me about my office situation.

Re:Not hogwash, not just the US (0)

Anonymous Coward | more than 7 years ago | (#19028515)

Oh, so you work at the IBM facility in Canada that employs 150,000 people. Cool. Could you say hello to my girlfriend? - so works there too.

Re:Not hogwash, not just the US (0)

Anonymous Coward | more than 7 years ago | (#19028775)

The figure of 150K employees is NORTH AMERICA, not just the US. That is what I meant.

Re:Not hogwash, not just the US (0)

Anonymous Coward | more than 7 years ago | (#19028767)

Only one in ten? That's not so bad...

Re:Not hogwash, not just the US (3, Funny)

Anonymous Coward | more than 7 years ago | (#19028873)

FYI: Posting as Anonymous Coward doesn't work when you give your employer enough information to identify you indirectly.

Re:Not hogwash, not just the US (0)

Anonymous Coward | more than 7 years ago | (#19028991)

The relative could be a 3rd cousin or whatever. You assume the guy's twin brother is the leak?

Re:Not hogwash, not just the US (1, Funny)

Anonymous Coward | more than 7 years ago | (#19030761)

Our offices here in Winnipeg (Canada) are going to be decimated...

That's ten percent. I'm sympathetic, but it could be worse!

Re:Not hogwash, not just the US (1)

Strych9 (126433) | more than 7 years ago | (#19031541)

How many people are going to be let go?

Re:Not hogwash, not just the US (0)

Anonymous Coward | more than 7 years ago | (#19033053)

Well, he said "decimated", so that means 10% of the total staff will be laid off.

You know (0)

Anonymous Coward | more than 7 years ago | (#19028491)

If IBM shoved them out the airlock, nobody would here them scream.

Re:You know (1)

QuickFox (311231) | more than 7 years ago | (#19029673)

nobody would here them scream.
That "here" there, that's neither here not there.

Depends on how you define it... (3, Interesting)

bladesjester (774793) | more than 7 years ago | (#19028513)

The question that comes to my mind is how are they defining "employee" for the 350,000 people in the company figure?

Are they talking just full-time people or contractors? My guess is that they're only counting full-timers.

If they include contractors in the number of people IBM employs, I have no problem believing this "hogwash" figure.

You're so funny... (1)

FatSean (18753) | more than 7 years ago | (#19028801)

So what exactly is it about 'including contractors' that suddenly makes a layoff of 100-150,000 employees believable? If you only accept the 150,000 figure as full-time US employees...how many more contractors do you think IBM employees in the USA?

Your hogwash reasoning goes well with Cringely's hogwash numbers.

Re:You're so funny... (0)

Anonymous Coward | more than 7 years ago | (#19028857)

Ok, sean. I have seen you talking about IBM, but you have not said where you work and what is your knowledge. So where do you work? Are you privy to the high-up insider info? Offhand, I do not think so.

With that said, I will say that I do not believe that 150K are going to be laid off. But it obvious that it will not be the 5K that you suggested either. This is to be done in multiple rounds through the year. The fact that IBM is not saying how many total (or even giving estimates), should clue you in that it is not the 5K that you have hinted at.

Re:You're so funny... (1)

Bigbutt (65939) | more than 7 years ago | (#19029897)

Don't know about the numbers or how true all this is, but of the teams I know of (having worked there previously and we keep in touch), one team lost _all_ their contractors (5) and 1 regular. Another lost a regular that I know. A third team lost 15 of their 23 member team. The group I'm currently with lost 5 contractors (our team is mostly contractor; heck I think we have two regulars).

I noticed the news article I saw locally said IBM was laying off 1,300 people, giving them 30 days to find new employment within or outside IBM. The problem is, contractors are given 2 days notice, not 30 and were already gone by the time the article came out in the paper. The regulars got 30 days. So I'd have to believe that the 1,300 were full timers and didn't include contractors, just based on what the article said (FWIW).

Feel free to extrapolate from the small sample.

[John]

Re:Depends on how you define it... (2, Funny)

bobcat7677 (561727) | more than 7 years ago | (#19028861)

I wrestled some hogs this past weekend (covered in crisco no less) and can tell you right now: anything designated to wash hogs should be a GOOD THING!

Maybe I am not knowing the meaning of this "hogwash" word you are using...

For those that are wondering, it was a hog wrestling contest at a men's gathering. And yes I did get a Tshirt for doing it! :)

When have upper management decisions . . . (2, Insightful)

alvinrod (889928) | more than 7 years ago | (#19028523)

Since when have the decisions of upper management or CEO's ever made sense to begin with?

Maybe there was a time long ago, but recently the only way to make sense out of half of the actions we see out of big company CEO's is if there actions will somehow justify giving themselves another $10 Million or so in salary or other bonuses.

Re:When have upper management decisions . . . (2, Insightful)

fm6 (162816) | more than 7 years ago | (#19029587)

Well, it's possible IBM's management is just acting retarded. And it's possible that Cringley is just full of shit. I know which theory I like...

Re:When have upper management decisions . . . (2, Funny)

maxume (22995) | more than 7 years ago | (#19029675)

Just think, if IBM took $10 million and spread it among the 100,000 people they are supposedly laying off, they could pay them each $100. It would be like firing them, except they could buy some new pants.

True number of employees?. (1)

Plekto (1018050) | more than 7 years ago | (#19029773)

I bet if you included salaried employees, all of the new companies that it recently took over/bought out, all of the part-time workers, all of the temp/contract workers, and all of the independent contractors and specialists, you would have well over 500K total worldwide employees. Maybe more if you add in all of the part-timers and outsourced call center employees.

That 350K is apparently for salaried employees only. I doubt if much more than half of their entire workforce worldwide is employed in such a manner.

Re:When have upper management decisions . . . (0)

Anonymous Coward | more than 7 years ago | (#19032799)

Firing employees can make a business more streamlined. Obviously there's a limit to that, but a lot of times, especially in a big company with a lot of legacy contracts like IBM, you're going to be able to prune a lot of workers without deeply affecting your core business. This reduces the cost of doing business, which in turn increases profits. It is a thoroughly unremarkable and uncontroversial idea. Layoffs are not necessarily or even usually a sign that a company is in trouble.

The investors don't seem to have heard (2, Interesting)

Anonymous Coward | more than 7 years ago | (#19028595)

http://www.investorvillage.com/smbd.asp?mb=4326&pt =m [investorvillage.com]

The IBM message board over at InvestorVillage seems to be ignoring this story ever since it broke last week. Usually the message boards are the first to jump on every unfounded rumor. It just seems that this story has zero credibility.

I begin to wonder if it was made up by a guy called Darl.

Re:The investors don't seem to have heard (0)

Anonymous Coward | more than 7 years ago | (#19030479)

FUD happens.
Microsoft is the chief source of FUD.
Microsoft's determined to squash Linux.
IBM supports Linux.
So anti-IBM FUD appears.

If I'm right, it wasn't a very lucky guess.

Never underestimate the lure of the dark side... (5, Interesting)

kcbrown (7426) | more than 7 years ago | (#19028603)

"Rumors have been floating around saying IBM will cut 150,000 U.S. jobs, but a Network World story attempts to set the record straight by quoting analysts who say this news, if true, would wipe out the company's entire U.S. operations and would make no sense since IBM is actually doing pretty well."

It's all about short-term stock price manipulation (which I call the "dark side" since it ultimately winds up being a loss but brings instant gratification).

If the CEO is retiring soon, then he has little incentive to do right by the company in the long run, and plenty of incentive to play games to increase the stock price in the short term (so he can sell off his shares after the price goes up). A massive layoff like this would be entirely consistent with that scenario. And it's not like the company's "investors" would give a damn about the long-term outlook of the company anyway. After all, it's all about the growth rate of the stock, and fast growth for a short time is still fast growth that "investors" can take advantage of. They just have to dump the stock before it crashes.

So not only is a massive layoff of this scale plausible, I think it's highly likely. It's just the ultimate manifestation of the short-term thinking that American "businessmen" are so infatuated with.

About the only thing that might prevent it is a huge backlash against IBM by "investors", which is possible but doubtful IMO.

Re:Never underestimate the lure of the dark side.. (1)

polyex (736819) | more than 7 years ago | (#19028797)

I agree 100%. It makes you wonder what other companies would do once they see IBM "get away" with this.

Re:Never underestimate the lure of the dark side.. (4, Interesting)

fishbowl (7759) | more than 7 years ago | (#19028809)

>If the CEO is retiring soon, then he has little incentive to do right by the company in the long
>run

The CEO in a corporation like IBM is never a dictator, never has sole authority on executive decisions, and is held accountable to a Board of Directors, all of whom also have a vested interest in the corporation (and contrary to popular belief, do generally consider performance beyond the next quarterly report.)

A company with as diverse stakeholders and as much volume as IBM has, will have quite strict controls on governance and management.

Re:Never underestimate the lure of the dark side.. (1)

hondo77 (324058) | more than 7 years ago | (#19028973)

The CEO in a corporation like IBM is never a dictator, never has sole authority on executive decisions, and is held accountable to a Board of Directors, all of whom also have a vested interest in the corporation (and contrary to popular belief, do generally consider performance beyond the next quarterly report.)

A company with as diverse stakeholders and as much volume as IBM has, will have quite strict controls on governance and management.

You clearly were not an Eisner-era Disney shareholder...

Re:Never underestimate the lure of the dark side.. (3, Informative)

fishbowl (7759) | more than 7 years ago | (#19029207)

>You clearly were not an Eisner-era Disney shareholder...

I *wish*. OMFG are you serious?

Category 1984 2004 Percent change
Disney's Revenues $1.5 billion $30.8 billion +2,000
Disney's Income $294 million $4.49 billion +1,600
Disney's Tax-Free Cash Flow $100 million $2.9 billion +2,900
Stock Price (adjusted for splits) $1.33 $28.40 +2,100
Market Value $1.9 billion $57.4 billion +3,000

Disney's Enterprise Value
(market value plus debt minus cash)
        $2.8 billion $69 billion +3,200

Re:Never underestimate the lure of the dark side.. (1)

hondo77 (324058) | more than 7 years ago | (#19029473)

I'll clarify: post-Wells Eisner-era.

Re:Never underestimate the lure of the dark side.. (0, Flamebait)

QuickFox (311231) | more than 7 years ago | (#19030025)

Welcome to Slashdot, fishbowl! I understand that you haven't had time
to get acquainted with everything here yet, but as a matter of fact
we can arrange neat tables by selecting "code" in the comment-submit
drop-down menu:

Category                          1984           2004            Percent change
Disney's Revenues                 $1.5 billion   $30.8 billion   +2,000
Disney's Income                   $294 million   $4.49 billion   +1,600
Disney's Tax-Free Cash Flow       $100 million   $2.9 billion    +2,900
Stock Price (adjusted for splits) $1.33          $28.40          +2,100
Market Value                      $1.9 billion   $57.4 billion   +3,000

Disney's Enterprise Value         $2.8 billion   $69 billion     +3,200
(market value plus debt minus cash)

Re:Never underestimate the lure of the dark side.. (1)

tomkost (944194) | more than 7 years ago | (#19029365)

From my view you are totally wrong. When the CEO gets rich, the rest of the board will too. So while the CEO is singled out for discussion, what benefits him, benefits everyone else on the C and board level generally. I'm sure IBM has as many strict controls as Enron and many other shameless corporations, possibly a few more, but I don't believe for a second that they are immune or prevented from insider stock manipulation, even if they are not outright thieves like those who were at Enron. If there is any truth to the rumor then it's hard to explain why they would make this decision given the companies recent results. The company made 8.4, 7.9, and 9.5 BILLION dollars in the last 3 years respectively... But ya, I can totally see why you would want to layoff 100-150k employees and not question the CEO... /sarcasm.

Re:Never underestimate the lure of the dark side.. (1)

ObsessiveMathsFreak (773371) | more than 7 years ago | (#19030267)

(and contrary to popular belief, do generally consider performance beyond the next quarterly report.)

Godsdamn Communists!!

Re:Never underestimate the lure of the dark side.. (1)

metlin (258108) | more than 7 years ago | (#19028825)

If the CEO is retiring soon, then he has little incentive to do right by the company in the long run, and plenty of incentive to play games to increase the stock price in the short term (so he can sell off his shares after the price goes up).
Well, not entirely true. Manipulating it and dumping it right afterwards could lead you to be liable for insider-trading fraud. In fact, lately the SEC has been coming down quite hard on folks practicing securities fraud in any form.

You're right about the investors bit, of course, but I just wanted to point this part out.

Lazy Americna perception... (1)

Ex-MislTech (557759) | more than 7 years ago | (#19029101)

I think there is a growing perception of American workers as being lazy.

Just prior to the DOT COM bust I would see a lot of Visa workers staying
very late, and not particularly getting much done, but looking very industrious.

On the other hand I saw a lot of Americans standing around and "chatting"
about the latest TV shows, Sports, Church, family, etc etc.

The management saw this and took it on face value, so when the layoffs
came a lot of Americans were canned and only a few Visa workers.

I "was" working at Cisco Systems at the time.

Our tax dollars go to fund major colleges here that are more and more training
foreign students to move here to replace us, or send the job to their country.

This has been going on for some time, and will not abate any time soon.

The foreign students pay higher tuition, that is true, but still some federal
funds pay the salaries and Infrastructure costs.

Some Comp Sci classes are over half foreign students.

The colleges have become like a monetary business extension that the tax payer
funds to provide corporate interest with cheaper labor.

Don't get me wrong, there are some good foreign workers, very good indeed.

But with the current prices of real estate, and cost of living in some
areas, this is setting up a collapse of enormous proportions.

Snagging up foreclosed real estate has become big business in the US.

I predict a dire future for all jobs that can be near shored/outsourced/Visa'd.

Re:Lazy Americna perception... (1)

KlomDark (6370) | more than 7 years ago | (#19029213)

So who works harder? Visa workers or Mastercard workers?

Re:Lazy Americna perception... (4, Funny)

terjeber (856226) | more than 7 years ago | (#19029505)

Neither. Shouldn't it be obvious? American Express workers are definitely the hardest workers. They are (clearly) American, and the Express in the name, well, no need to say more...

Re:Lazy Americna perception... (1)

1lus10n (586635) | more than 7 years ago | (#19030197)

And if american workers were not constantly lauded for being the most productive (by a sizable margin) in the world I might believe that this is an issue.

Re:Never underestimate the lure of the dark side.. (4, Insightful)

terjeber (856226) | more than 7 years ago | (#19029333)

So not only is a massive layoff of this scale plausible, I think it's highly likely.

IBM will lay off and hire people here and there always. Some times they will lay off or hire a lot of people. IBM has acquired a lot of companies the past couple of years, layoffs are inevitable. These numbers are insane though. Insane for a simple reason: IGS doesn't have 150,000 people in the US to lay off. IGS doesn't have 150,000 people in the US period. So, will IBM hire all of these people before they fire them?

Cringely needs to lay off his mothers medication before he writes his nonsense.

Re:Never underestimate the lure of the dark side.. (0)

Anonymous Coward | more than 7 years ago | (#19030005)

And it's not like the company's "investors" would give a damn about the long-term outlook of the company anyway.

That's less true of a blue-chip, dividend-paying income stocks like IBM than it is of other companies. IBM's investors are generally less interested in share price growth than they are in dividend payments, and buyers of such stocks are usually looking for long-term incomes from the quarterly dividend payments, plus asset maintenance (the stock price is expected to keep pace with inflation so that your principle doesn't decline).

Those sorts of investors would reap a windfall from a short term, massive spike in profits that would result in a few quarters of very large dividends, but if they weren't paying enough attention to unload, they'd be *very* unhappy with the subsequent loss of asset value and income. And while the CEO may be gone, the board has a lower turnover rate.

Re:Never underestimate the lure of the dark side.. (2, Interesting)

DustyDervish (1043314) | more than 7 years ago | (#19030639)

According to Marketwatch last week, there are a few global US corporations with US operations that are bleeding money. They continue to make their quarterly numbers because operations outside of the US are doing really well. I would not be surprised if we see more than one company pull out from the US entirely. The whole ruckus over importing cheap labor can be bypassed if they just move the company right to where the cheap labor actually lives. When your transportation is Bombardier Learjets and Limos, do you really care where the office is?

Essentially stopping operations (1)

andy314159pi (787550) | more than 7 years ago | (#19028695)

There isn't anything to preclude a CEO from implementing cuts that essentially stop the operation of a company while it restructures. Sometimes they don't come out of restructuring. A few years ago Tellabs cut its operations so far down that it has never returned to being a competitor. This happens because a CEO wants to save his ass, and he stops operations and sells corporate property for short term financial stability. While ending US operations isn't going to happen, cutting it down to 50% would fit right in to what IT companies have done in the past, although usually while under more duress than IBM is now.

Re:Essentially stopping operations (1)

terjeber (856226) | more than 7 years ago | (#19029407)

While ending US operations isn't going to happen, cutting it down to 50% would fit right in to what IT companies have done in the past,

Not really. That deep cuts would seriously hurt IBM not only in the long run but also in the immediate short run. If IBM cut half its US staff the street would interpret that as a sign of severe problems at IBM, problems that IBM obviously have been hiding. This would trigger fears about inappropriate behavior, bad accounting, memories of Enron, and a massive sell-off would happen immediately.

Also, IGS cutting half it's staff in the US would amount to less than 40,000 people, probably far less, nowhere near the 150,000 that Cringely is using.

Satirewire article: (2, Funny)

Glowing Fish (155236) | more than 7 years ago | (#19028755)

Who says that laying off all your employees is impossible?

http://www.satirewire.com/news/att.shtml [satirewire.com]

At first, I remembered this as being an onion article, but actually it wasn't. Although the onion did have:

http://www.theonion.com/content/node/28984 [theonion.com]

So there you go!

IBM's mission (0)

Anonymous Coward | more than 7 years ago | (#19028763)

It's IBM Global Services grand goal to make all non corporate employees either contractors or offshore employees. They have been doing this for years.

what life would be like in an ATHEIST WORLD: (-1, Offtopic)

Anonymous Coward | more than 7 years ago | (#19028815)

Ever wonder what life would be like in a world where atheism was the dominant religion? Wonder no more! Thanks to newly discovered Prayer Technologies we can glimpse into what life would be like in a godless world.
Let's take a look:


ATHIEST KID: Mom, I'm going to go fuck a hooker.
ATHIEST MOM: Okay, son.
ATHIEST KID: Afterwards, I'm going to go smoke pot with my friends, since it's "not addictive."
ATHIEST MOM: Okay, come home soon!

The athiest kid leaves the room. The father comes home from work several minutes later.

ATHIEST DAD: Hey!
ATHIEST MOM: Hi, honey! I'm pregnant again. I guess I'll just get another abortion, since "fetuses don't count as human life."
ATHIEST DAD: Okay, get as many abortions as you want!
ATHIEST MOM: Oh, and don't go in the bedroom.
ATHIEST DAD: Why not?
ATHIEST MOM: There are two gay men fucking eachother in there.
ATHIEST DAD: Why are they here?
ATHIEST MOM: I wanted to watch them do it for awhile. They just aren't finished yet.
ATHIEST DAD: Okay, that's fine with me!

Suddenly, their neighbor runs into the house.

ATHIEST NEIGHBOR: Come quick, there's a Christian outside!
ATHIEST MOM: We'll be right there!

The athiest couple quickly put on a pair of black robes and hoods. They then exit the house, and run into the street, where a Christian is nailed to a large, wooden X. He is being burned alive. A crowd of athiests stand around him, all wearing black robes and hoods.

RANDOM ATHIEST: Damn you, Christian! We hate you! We claim to be tolerant of all religions. But we really hate your's! That's because we athiests are hypocritical like that! Die, Christian!

THE END

Scary, isn't it! Thank god we live in a christian nation, run by god-fearing republicans. Praise be to Jesus!

hilarious (0, Offtopic)

allanw (842185) | more than 7 years ago | (#19029081)

Haha, funniest thing I've read today.

Re:hilarious (0, Flamebait)

tibike77 (611880) | more than 7 years ago | (#19030063)

Actually, atheists "hate" ALL religions.
The agnostics, those are the "tolerant" ones.

Where does this idiocy come from- What oppression? (0, Flamebait)

CFD339 (795926) | more than 7 years ago | (#19029351)


As a Christian in the United States, you are NOT a minority.
You are not oppressed.
Your opinions are not quashed.
Your life, liberty, and livelihood are not at risk.
Your morals are not being impugned.
You are not forced to live a life which is against any of your teachings.
Nobody is asking you to live in any way against your beliefs.
You are not forced to renounce or even hide your beliefs.

GET THE FLOCK OVER IT.

On the other hand, you and your ilk -- by which I do not mean all Christians, but rather the ranting lunatic fringe of which I consider you -- are in fact constantly doing all these things.

You threaten members of minority religions (or non-religions)
You attempt to quash the opinions of others.
You attempt to force others (through 'blue laws' to live by your beliefs.
You harass people who believe differently.
You try to suppress education on subjects where science appears to contradict you.

Once again -- you are the OPPRESSOR not the OPPRESSED!

Re:Where does this idiocy come from- What oppressi (0)

Anonymous Coward | more than 7 years ago | (#19029515)

Oh ya, watch out for those Christians. Every goddamn day they come to my door with LITERATURE! They even say please and thank you when I say I am not interested.

I'll give you blue laws though. Many a Sunday morning at 7am I have had the need for beer or hard liquor. Pisses me off every time that I can't purchase my salve (true stories). I like to drink, a lot, especially before church. Not that I go to church. If I did I would need to drink more, given all that oppression.

They even serve wine at church. That should tell you something.

Oops-Was meant as a reply. No I am the fool. (1)

CFD339 (795926) | more than 7 years ago | (#19029665)

Damn. Sorry all. I was responding with a flame to a stupid flame bait post and tripped on my own zipper.

Re:what life would be like in an ATHEIST WORLD: (0, Offtopic)

Master of Transhuman (597628) | more than 7 years ago | (#19029425)


When can we expect this Utopia to occur? Right after the Rupture - when all the Christians go to hell because Jesus believes that "they all think like bugs down there"?

Re:what life would be like in an ATHEIST WORLD: (0, Flamebait)

terjeber (856226) | more than 7 years ago | (#19029581)

This is just weird. Where does it come from? Why is it that insane people like this poster has to spout this kind of nonsense in random places?

Nothing good ever came out of religion. The foundations on which the US was built are entirely secular in nature, even though the people who built those foundations had different views on religion and Christianity. They were all smart enough to understand that only a secular country will survive. Countries lead by religious maniacs will alway fare poorly. Look at the current state of the US. That is what happens when you let the Christian version of the Taliban rule the White House.

Re:what life would be like in an ATHEIST WORLD: (0)

Anonymous Coward | more than 7 years ago | (#19029943)

The original post has been downmodded to the point where you need a clearance level to read it, but I think it was meant as a joke. It's Offtopic as hell though.

Re:this gets modded 2 ? (0)

Anonymous Coward | more than 7 years ago | (#19031285)

What's up with /. that this gets modded +2? It is not only off topic but is also wrong.

The foundations on which the US was built are entirely secular in nature,
You never heard of a little document written in 1776 written by a dude named Thomas Jefferson have ya?

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.
I don't follow any Religion myself, but somehow I think it's kinda cool that my rights as a citizen are based on the idea that they are "unalienable", not to be given or taken by the whim of man.

Countries lead by religious maniacs will alway fare poorly.
Right, like that stupid Pharaoh worshipping civilization in Egypt that lasted a mere 3000 years.

That is what happens when you let the Christian version of the Taliban rule the White House.
You mean in comparison to all those years we had athiests running the White House????

just because they... (0)

Anonymous Coward | more than 7 years ago | (#19028863)

..might be cutting some huge number of current employees, doesn't necessarily mean they are totally eliminating those positions. They could be shifting them someplace else, they could turn around and look for cheaper temp contractors to do some jobs, etc. And most likely, they will be doing both, completely getting rid of some job titles, and switching to lower cost employees for others. That appears to be their past MO with previous job cuts. As to scale, who knows, but there sure have been plenty of anonymous postings all over the net saying "yep, just got word, 7/8ths of us are going next month" and so on. I've seen a ton of them here and there.

Basically, if you are in the US, working for some big a$$ brand multinational, and make a lot of money now, say upper middle class (43 thou is exact mean now, that is middle/middle class), your job could very well be in peril, the handwriting is on the wall there, they don't want ANY rank and file grunt workers (which is what you are, your white shirt not withstanding, you are a grunt) making close to a hundred grand any more.

Cringely Little... (1)

Steve-o-192.168 (1096403) | more than 7 years ago | (#19028885)

The sky is falling, the sky is falling! We must go & tell the CmdrTaco!

If Cringely says so... (0)

Anonymous Coward | more than 7 years ago | (#19028923)

Well, it's almost guaranteed to be bullshit. Is he every right about *anything*?

It is (0)

Anonymous Coward | more than 7 years ago | (#19028959)

It's most likely happening, my uncle just got 2 weeks. been there for 20+ years.

VMS guru.

Cringley was the one to break this story (3, Funny)

antifoidulus (807088) | more than 7 years ago | (#19029017)

and we KNOW he has never been wrong before, he's almost as accurate as Dvorak!

Seems Entirely Plausable (1)

Plekto (1018050) | more than 7 years ago | (#19029045)

350K plus their part-time employees and sub-contractors nets them a workforce of probably 450K or so total worldwide. So a 1/3 reduction while harsh, is likely exactly what they need to survive.

CompUSA, BestBuy, etc. (0)

Anonymous Coward | more than 7 years ago | (#19029133)

It seems that corporate management is now excising the top level and high pay employees to make their books look nice. We going into a death spiral with our employment with companies now. If you work hard, do well, and get a good salary/wage then you are in can be removed from the company since you are taking too much money. I used to be that you were lazy, stupid, and low paid that you were removed from the company. For us in the working world we are in a no win situation here, you are damn if you work hard and damn if you are lazy.
The financial analyst don't give a damn about the workers, they just want some pretty numbers on their balance sheet. Th financial analyst don't have idea how each of the industry they analyst, they just rape the industry of their money and leave the carcases for the rest of us.

How will this impact the other US service companie (1)

Southphillyman (1064260) | more than 7 years ago | (#19029267)

like Accenture,Uniysis,etc

Senate Bill to Triple H-1B's Next Year (2, Informative)

rlp (11898) | more than 7 years ago | (#19029289)

Slightly OT: In Senate bill 1092 [loc.gov] , Sen. Chuck Hagel wants to triple the number of H-1B's granted next year to 'help' the high-tech industry.

Hagel is the sponsor?? (1)

Black-Man (198831) | more than 7 years ago | (#19031063)

Hmm... you know he's trailing in the *primary* polls for re-election... i.e. he won't get reelected and he's probably lining up some big cushy "consultant" or "lobbyist" position for Microsoft.

Well, if you read Cringeley's comments section (2, Interesting)

Master of Transhuman (597628) | more than 7 years ago | (#19029347)

there are plenty of IBM types weighing in that they can easily see this happening - some have already left or been informed they will be terminated - and they know the company is having serious trouble with its Global Services division.

So I suspect it's all true - although the actual count of employees to be outsourced might be speculative at this point since it appears IBM is keeping that number close to its vest.

Re:Well, if you read Cringeley's comments section (1)

terjeber (856226) | more than 7 years ago | (#19029521)

So I suspect it's all true - although the actual count of employees to be outsourced might be speculative at this point since it appears IBM is keeping that number close to its vest.

Speculative? It's insane! There isn't 150,000 people in IGS to let go. Not even close. Will IBM hire an additional 100,000 people in IGS in the US so that they can let go this number of people?

Re:Well, if you read Cringeley's comments section (1, Informative)

Anonymous Coward | more than 7 years ago | (#19030605)

Posting as AC because I am a Global Services employee who still has a job for the time being. The number close to 100K was stated by 3 managers out East. One of them I know personally found a new post right before he was RIF'd. He wouldn't throw that number out there lightly.

Layoffs are underway, but exact number not public (3, Informative)

christoofar (451967) | more than 7 years ago | (#19029433)

IBM has a program going evidenced at activities underway in its Boulder, Colorado location for its (botched) implementation of LEAN. (similar to LEAN manufacturing, reference wikipedia)

However, IBM is using staff cutting and IBM India augmentation to achieve the efficiencies that are documented in LEAN-M, whereas IBM's implementation of LEAN is really just a pony show that is masquerading as an internal offshoring program.

The number of decimated IGS units in total will probably be something closer to 30K-40K employees.

For the record, IBM has also made a settlement in a class-action in respect to its Cash Balance pension changes which were instituted after Y2K. Many people at Alliance@IBM (the organization which is trying to unionize existing IBM employees) fear that IBM is trying to put the pension fund itself into default so that those obligations can be wiped off the balance sheet, which would also be an instant win on IBM's stock EPS.

IBM is not only ditching employees, it is also ditching customers. IGS was known for signing a lot of non-profitable contracts in anticipation that future work would be coming from those same clients (in addition to ancillary project-related purchases by clients for things such as networking and hardware and all the labor that goes with that).

That apparently didn't come to fruition. IBM will be giving some sad news in the next few years to come of its accounts as it lets those go, and those resources who were working on them.

Re:Layoffs are underway, but exact number not publ (1)

BlindSpot (512363) | more than 7 years ago | (#19032133)

I work with IBM GS on pretty much a daily basis and would not at all be surprised to learn they are in trouble. There is so much red tape and bureaucracy and lack of communication (both internal and external) that nobody can get anything done. It takes them 15 minutes to do something I could do myself in 15 seconds, and that's only after I get through. Sooner or later clients are going to notice things aren't happening the way they should be...

The scary thing is that a bunch of us will find out next week whether or not we get, um, "traded" to IBM GS, who at last word were quite willing to take us if my company (who obviously hasn't clued in yet) decides to expand the scope of their agreement with IBM. I'm desperately hoping for a severance package, especially after learning this news...

Let's come up with a new name... (0)

Anonymous Coward | more than 7 years ago | (#19029453)

Remenber the 80s and 90s? Rather than fire, it was renamed downsizing. Then, rather than downsize, rightsize.

I propose a new buzzword: Rather than outsource, rightsource!

IBM would kill itself if it fired 150k employees. Rumor I heard was 100k, but anyway...

Now, if they "rightsourced" their employee-base, little by little, then they would achieve even greater stock market gains while still having the shell of a global services business. What with all the unemployable people who lost their jobs glutting the market, it will be even harder to find good programmers and IT staff. Therefore, I recommend stepping up the H1-B program, to fill some of the critical slots that could save a little more gravy for the market. Then, once all of the people are gone, IBM won't really need most of those buildings anymore. That's just wasting money on overhead. Perhaps they could rent them out as Section 8 housing for unemployable tech workers! Now, why am I going for that CompSci Ph.D.? Oh, yeah: to work as a post-doc for the next 20 years on grad student salary.

Just another IT layoff (1, Redundant)

boyfaceddog (788041) | more than 7 years ago | (#19029487)

I know this is an oversimplification, but isn't this just another IT layoff?
From what I understand, the people being laid off don't actually "make" anything, they just support the stuff other people create. Doesn't that make them a potential target for any layoff or outsourcing venture? In that light, this doesn't sound so far fetched, at least not to me.

Re:Just another IT layoff (0)

Anonymous Coward | more than 7 years ago | (#19029693)

Tell that to the Beaverton Oregon office! They develop products that customers pay for.

Rumors are rolling in and it is looking like a lot of development centers may go to skeleton crews.

And just because someone doesn't "make" stuff does that mean they are meaningless? A large percentage of IBM's revenue comes from consulting/contract work. Not to mention that those that do "make" stuff need to be supported.

I'm a developer and I love my IT folks! They are the ones that put everything back together when everything goes to hell. Who in their right mind that has actually worked as a development engineer would want to see their IT folks disappear? THAT WOULD BE INSANITY!

Makes no sense. So? (1)

RealGrouchy (943109) | more than 7 years ago | (#19029713)

analysts ... say this ... would make no sense
Since when has that stopped people from doing stupid things?

- RG>

Bait and Switch (4, Insightful)

benj_e (614605) | more than 7 years ago | (#19029733)

When it's all said and done, they'll layoff several thousand, and everyone will say "whew, we dodged the bullet there" since it didn't turn out to be 150K.

And IBM will look like the good guys, or at least not-so-bad guys.

IBM Employees and Contractors (2, Informative)

Bigbutt (65939) | more than 7 years ago | (#19030113)

Hey, it just says 150,000 IBM jobs. There are contractors that are part of that number. This article (http://www.wral.com/business/local_tech_wire/opin ion/blogpost/1374664/) says what I've been thinking. 1,315 IBM employees and an unknown number of contractors. Since contractors get 2 days notice, by the time the article came out in the paper, the contractors were already gone. Note it does say that employees got 30 days notice. Contractors don't get that, at least not in my experience.

I know of 10 contractors that were let go and 2 regulars. I know of another team that lost 15 of their 23 member team but don't know the breakdown.

[John]

Plausible (2, Informative)

Anonymous Coward | more than 7 years ago | (#19030403)

Disclosure, I do work for IBM

The numbers are plausible, but not at the 150,000 mark being bandied about here today. Last week, the number being quoted was 100,000, and in the USA that would be feasible, especially given the plan would be to actually hire almost 1 for 1 outside of the US where labor is much cheaper for the same skillset.

My department lost ~33% of it's staff last week, with more cuts coming in the next month. While I don't quite expect a full 100,000 Americans will be out of work, a lot of us surely will be.

WRAL article (1)

leek (579908) | more than 7 years ago | (#19030493)

For a more balanced article, see http://www.wral.com/business/local_tech_wire/news/ story/1392364/ [wral.com]

Lee Conrad, national coordinator for the Alliance which is based in New York, called Cringely's figure of 100,000 "over the top." However, Conrad stressed that major changes are in store for IBM's workforce. "But having said that," Conrad said in reference to his "over the top" comment, "there will be at least 12,000 layoffs this year."

I could see 50,000 of that 130,000 out the door (2, Interesting)

Blue6 (975702) | more than 7 years ago | (#19030977)

130,000 seems like a pretty big number, however I work for Ford we got rid of about 20,000 people over the last few months the projected final figure is going to be around 30,000 for lay-offs, buyouts and firings. My department went from eighteen people down to two; I 'm one of the lucky two to still have a job. IBM made a big push into managed services while it's still big business the market that IBM caters to ie large corporate business is getting smaller the real growth / money for managed services is in the small to medium sized companies, most large companies have figured out they can go to India on their own they don't need to have IBM act as the middleman. Managed services are becoming cheaper and can be bought ala carte. Google hosted managed exchange servers or whitebox VOIP if you want a glimpse of what future managed services are going to look like.

Most of his rethoric is anxiety relief (1)

gd23ka (324741) | more than 7 years ago | (#19031131)

This analysis is so patently stupid ... I'm afraid of infringing on that
guy's rights.

They're not cutting 43% of their workforce. They're sending those 43% to
China because that's where those jobs will be needed in the near future
to support all those other jobs that are sent there by the rest of the
F500 "economy".

The number are wrong but it's going to be harsh (2, Informative)

gelfling (6534) | more than 7 years ago | (#19031275)

There are about 60,000 total GS ee's in the US. Total North American (CA/US/MX) staffing is about 3x that. The 12,000 number world wide is probably low by 50% and that total number will represent FT ee's only no yellow badges. EMEA always gets hammered worse than NA. AP is already so damn thin there's nothing left to hack. LA is also thin. So the brunt will be in NA and EMEA. My guess is 24,000 total. We've just had 5.5% in one week. This will probably continue at a pace of about 5%/month this year and 10%/month in 2008. This would put the total reduction of 24,000 to end by June 08. At the same time they can hire 24,000 new heads in India and South America and save themselves 80% of the headcount cost for those 24,000 relative to US costs.

Yeah I think it will happen.

memogate (1)

sonchat (819093) | more than 7 years ago | (#19031417)

hey could this ibm fiasco be to Cringely what memogate was to Dan Rather?

Reevaluation (0)

Anonymous Coward | more than 7 years ago | (#19031611)

Upon reevaluation, the committee of analysts have downgraded the claim from "Hogwash" to "Poppycock." However, there is no sign of further downgrade to "Haberdash" level in the near future.
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