IBM Eye

PBS’s Cringley, who has covered IBM (see last year’s disaster in the making quote) for some time wrote an article claiming that IBM is stealthfully in the process of laying off 100,000 US employees. Wow! That would explain the rumblings. That’s a third of their global workforce and a sizable percentage of the US population. I sure hope he’s wrong. I’d cash out if it is. I want IBM to dream big… not cut costs and workers to greater profitability.

The IBM project I am writing about is called LEAN and the first manifestation of LEAN was this week’s 1,300 layoffs at Global Services, which generated almost no press. Thirteen hundred layoffs from a company with more than 350,000 workers is nothing, so the yawning press reaction is not unexpected. But this week’s “job action,” as they refer to it inside IBM management, was as much as anything a rehearsal for what I understand are another 100,000+ layoffs to follow, each dribbled out until some reporter (that would be me) notices the growing trend, then dumped en masse when the jig is up, but no later than the end of this year.

Read the rest here.

That would explain the thousands of people digging for rumors this week. What bother me most, if true is the utter deception involved. It would be pretty sickening. Until confirmed I’m going to wait to pass judgement. I completely defended them the time before last. We’ll see what happens here. This will have to be addressed by PR or else it will lead to great internal unrest.

edit 5/14/2007
The Channel Register has what I believe is the definitive reaction to this story. We don’t really know exactly what will happen yet, but Ashlee Vance does a great job exploring the possibilities. Also, IBM did address rumors to their employees.

“Maybe the number WAS too high,” Cringely writes. Instead of 150,000, maybe the true number is only 100,000 or 75,000 or even 50,000. Would 50,000 layoffs from IBM Global Services be significantly less catastrophic for the workforce than 150,000? And while the number of layoffs to come may indeed be less than 150,000, I’d prefer to stick with that larger number, which I feel is not far off. . .”

Cringely’s casual approach to these layoff claims strikes me as appalling. I love a controversial, hard-hitting story as much as the next reporter. You cannot, however, mess around with this type of issue
and just “prefer” to pick and choose layoff numbers. Reporters, even columnists, need concrete information in these instances. After all, Cringely has targeted nothing less than a technology sector meltdown with his pieces - a meltdown that would reverberate well beyond IBM’s boundaries, probably into your home.

IBM Sent a memo to their employees as follows:
We said when we released 1Q results we would be putting in place a series of actions to address cost issues in our U.S. strategic outsourcing business. We have undertaken efforts toward that, and recently implemented a focused resource reduction in the U.S. While any such reduction is difficult for those employees affected, these actions are well within the scope of our ongoing workforce rebalancing efforts. The blog also completely misinterpreted our efforts around Lean. To fully understand Lean, you have to view it in a strategic context - a key part of what we’re doing to reinvent service delivery to provide more value to clients and make IBM more competitive. We are using Lean, which is a commonly used methodology to conduct process design and development, to make informed decisions about how to improve and streamline processes. We are going about that in a disciplined and rigorous way, and the intent, as it has always been, is to improve our speed, quality and responsiveness to clients.

Per Vance, Cringely seems to have confused IBM adjusting its business model to vibrant, competitive threats with some kind of anti-American assault. And, rather than approaching this subject, with the careful touch it deserves, he’s relied on fear-mongering and rampant speculation.