IBM is about to get hit with a massive reorg and layoffs

[Karu]

Beginning of the end of good times???

 

IBM is expected to go through a massive reorg next month that will reportedly see 26% of its 430,000-strong work force let go, or 111,800 people. If that figure holds true, that would make it far and away the largest corporate layoff event in history, breaking the record previously held by IBM, when it cut 60,000 in 1993.

The problem is a complex mess of bad management – like laying off important people in the middle of a project – to getting sidetracked with pie-in-the-sky ideas like commercializing Watson and failing to adjust to the new era. The "M" in IBM may mean machines, but hardware is less than 10% of its business. Two-thirds is in services, and the services pipeline has dried up.

Why? Well, according to an ex-IBMer I spoke to some time ago, who confirmed what Cringely wrote in his book, IBM is still wedded to services contracts in an age where companies are shutting down their internal data center entirely and moving everything to the cloud. If you don't have a data center, you don't need an IBM service contract to manage it.

That's why IBM grabbed Softlayer, the cloud services provider. It needed to get into the cloud fast because it was behind Microsoft, Google and Amazon. Since the purchase 18 months ago, IBM has put a huge amount of money into SoftLayer and there has been a number of announcements around SoftLayer services.

Cringely said the mainframe and storage areas will see deep cuts, which is pretty stupid considering IBM announced the new Z13 mainframe and hopes it will stimulate sales. That won't be easy when you cut the people who are supposed to sell it. Cutting storage is also foolish, as we are in the era of Big Data and Data Lakes and storage is vital to these concepts.

And you have to wonder what a layoff of 110,000 people will do to the firm. That has to be jarring. I remember an old advertisement from the print days that said "What's worse, getting laid off on a Friday or being told to pick up the slack on the following Monday?" This will be undeniably upsetting to the survivors, who will likely spend time updating their LinkedIn profiles.

The question I have to ask is why isn't Rometty one of the 110k. IBM has seen 11 straight quarters of declining revenue and it's hemorrhaging customers, according to both my source and Cringely. It's becoming apparent she is not up for the job and can't pull the company out of its nose dive.

Cringely said the layoffs will begin next week and by the end of February, all of the employees will be gone. If nothing else, IBM's first quarter numbers will take a monstrous hit from the severance packages for 111,000 employees. To say nothing of what this will do to its customer confidence.

[LoverofCar]

All this started when Global Foundries brought over their technology and IP. It is already in the writing.

[Kb27]

A lot of layoffs FT is going to flood the market and come looking for a job.

 

If you're holding onto one, better hang on tight.

[Hydrocarbon]

  On 1/26/2015 at 3:37 AM, Kb27 said:

A lot of layoffs FT is going to flood the market and come looking for a job.

 

If you're holding onto one, better hang on tight.

 

Even if got secure + stable job, such a tsunami of jobless people will have a huge effect on the economy.

 

It's gonna be a blast!

 

[Tiger1]

their building in Changi Business Park is huge. Lots of FTs there.

[Jman888]

  On 1/26/2015 at 4:16 AM, Tiger1 said:

their building in Changi Business Park is huge. Lots of FTs there.

 

 

 

err..... every building in Changi Business Park is huge

[Kezg1]

  On 1/26/2015 at 4:16 AM, Tiger1 said:

their building in Changi Business Park is huge. Lots of FTs there.

 

 

...some friend 's said is already rename but not officially...Chenai Bussiness Park..LOL

[Karu]

Wonder how will this affect it's S'pore site???

[Jamesc]

No worries they have a huge anount of experienced in retrenchment.

 

IBM = I've Been Moved.

 

It all becuase of the stupid cloud

 

Where there is cloud there is rain

 

and its raining heavily now.

 

[Little_prince]

shit man. this is damm bad.

 

haiz.

 

hope no bros here affected?

 

stay strong

[Vidz]

  On 1/26/2015 at 4:41 AM, Kezg1 said:

 

 

...some friend 's said is already rename but not officially...Chenai Bussiness Park..LOL

 

ET FT go home... ?

Edited January 26, 2015 by Vidz

[Karu]

  On 1/26/2015 at 5:20 AM, Jamesc said:

No worries they have a huge anount of experienced in retrenchment.

 

IBM = I've Been Moved.

 

It all becuase of the stupid cloud

 

Where there is cloud there is rain

 

and its raining heavily now.

 

 

So when we talk about cloud, they are actually 'renting' the data from their servers right?

 

If that's the case, sales of server will be hit & 'rental' of these data storage cannot cover cost?

 

Pardon me for these questions... I'm not an IT expert.

[Goldbug]

will the retrenched flipped and torched buildings?

[Karu]

Maybe that's why they have to quickly come out with laws to disallow public drinking after 10:30pm... They knew that there'll be many jobless drinkers...

[Ben5266]

  On 1/26/2015 at 5:45 AM, Karu said:

 

So when we talk about cloud, they are actually 'renting' the data from their servers right?

 

If that's the case, sales of server will be hit & 'rental' of these data storage cannot cover cost?

 

Pardon me for these questions... I'm not an IT expert.

Key point for cloud is sharing of resources.

Meaning 1000 company is sharing a cluster of servers cpu and the service to managed it.

If old method, 1000 company will need to buy 1000 servers and employ 1 engineer each to manage the server.

With cloud, companies could share the resources.

[Volvobrick]

  On 1/26/2015 at 5:45 AM, Karu said:

 

So when we talk about cloud, they are actually 'renting' the data from their servers right?

 

If that's the case, sales of server will be hit & 'rental' of these data storage cannot cover cost?

 

Pardon me for these questions... I'm not an IT expert.

 

I think "Cloud" means something you can see but cannot touch....

 

Can see/use the data, cannot touch the servers, as someone else owns and runs it.

 

IT bros - correct?

[Celicar]

  On 1/26/2015 at 6:04 AM, Volvobrick said:

 

I think "Cloud" means something you can see but cannot touch....

 

Can see/use the data, cannot touch the servers, as someone else owns and runs it.

 

IT bros - correct?

Not IT person too, but somebody has got to own it, so it can be anybody right, including the data owner. Cloud just mean you don't have to bring a storage hardware around, is that right?

[Jamesc]

  On 1/26/2015 at 6:04 AM, Ben5266 said:

Key point for cloud is sharing of resources.

Meaning 1000 company is sharing a cluster of servers cpu and the service to managed it.

If old method, 1000 company will need to buy 1000 servers and employ 1 engineer each to manage the server.

With cloud, companies could share the resources.

 

Thats exactly right.

 

IBM's model is to tell the 1000 companies,

 

no need to hire the engineer, just outsource to me

 

and I will hire the engineer and manage them for you.

 

With cloud you don't need to buy your own server

 

and house it and manage it, someone else can do it all for you.

 

IBM should have moved into the cloud business earlier

 

and it would have been a great opportunity as a cloud is

 

just a network of servers in many different locations.

 

And IBM makes servers - a lot of them and very bigs one too.