Fri 8 Sep 2006
Routine IBM layoffs spark debate
Posted by Greg under General
Multiple layoffs occurred in Burlington VT, Endicott NY and Austin TX today. They appear to have been a long time coming as several of the former employees mentioned spending the better part of 2006 training their replacements to perform the tasks for which they alone were responsible.
Rightsizing is not uncommon and often used by companies to get rid of a few bad apples - or even one - while avoiding discrimination or other charges (By no means am I saying all those laid off were bad apples). It isn’t clear how many folks were let go today, but there hasn’t been any news coverage of it in any of the cities where it occurred. That leads me to believe that this is planned and not substantial. (edit 12 Sept 2006: article in NY newspaper speculates the number of worldwide layoff to be between 500 and 700 people. Some employees are with the IBM-Endicott tech group but it isn’t clear if all are)
I found the discussion at the IBM board at Yahoo! about the layoffs interesting. It is obviously worth noting that disgruntled and emotional former employees are not impartial in their criticisms, but some of the critiques were interesting to me.
The link to the thread is here. The UI is kind of distracting but you can change the appearance to suit you using the view menu. Here are some highlights:
“I once had a PDM, during a moment of rare honesty, once tell me that IBM now did not expect employees to be in a long term status, rather, a short term association.”
You don’t have to tell me how IBM has changed, I’m a 2nd-generation IBMer. I grew up going to the “IBM Christmas parties” where they would hire out a big auditorium and fill it with piles of presents, sorted by age and gender, for kids of employees. That IBM is long, long gone.
Of course I was/am a commodity, treated like garbage - thrown out when the usefulness is gone.
In my case, I have identical skills as my co-workers who remain - C++ Object Oriented programming, with 4 years of Java experience as well. Very current skills. However, the guy in India does same for fraction of my pay, and I’m one of the first in my area to train a guy in India - and yes, alarm bells went off in my head this spring when I was told I had someone to “help” me with the software component I owned.
I had my desk cleaned out 10 days ago, in case it was a “march you to the door” layoff.
Good summary of IBM resource situation. Result:
“This lack of retention of experenced employees, and teh(sic) constant resource shifting churn, IMO is one of the reasons IBM executes poorly globally.”
This result has been proven for years by the break even or worse performance of services (IGS type) despite the best excuses and financial face lift that IBM financial engineering can muster.
All the profits come from divisions with minimal cross tower requirements.
That last line is telling and seems to be true. I don’t think the IBM jams are unifying the company fast enough or thoroughly enough to make consequential change.
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Pingback from IBM Downsizing » IBM Eye
October 11th, 2006 at 5:07 am[…] The routine donwsizing first posted here was picked up by the mainstream press. The new detail is the line of work the employees were in: The affected engineers are developing components for IBM’s line of BladeCenter servers–one of the company’s best-selling hardware products. Sales of BladeCenter systems, which feature a slimmed-down profile for ease of management and expandability, enjoyed a 35% year-over-year increase in IBM’s second quarter. During the same period, IBM’s hardware sales overall increased only 3%, according to the company’s second-quarter financial report. […]
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Pingback from Periodic IBM Layoffs Continue » IBM Eye
May 1st, 2007 at 11:16 pm[…] remarked a while back about IBM’s occasional, under the radar, layoff policy and that’s what seems to be happening now again, this time in Colorado it seems. Per a […]
September 11th, 2006 at 5:36 am
the last line doesn’t tally with the facts, if recent software group figures are anything to go by, does it? SWG has a lot of cross-silos mandating
September 11th, 2006 at 6:39 am
I appreciate your input. I’d enjoy seeing and hearing your impression of recent software group figures. IBM doesn’t break out software (that I can tell) in their quarterly releases… only in their annual reports. A link to the 2005 annual report is here: http://www.edgar-online.com/bin/cobrand/?doc=A-51143-0001047469-06-002608&nav=1&src=Yahoo
The software break bown is about halfway down (starting on page 29 but the numbering is funny).
December 11th, 2006 at 10:59 am
This was different that previous layoffs in several ways
People were hired into the departments at the same time other people were let go. 5 of the 6 people I knew identified for notified redeployment were the older people in the department. Contractors were kept at the same time regulars were let go.
Jobs were targeted for being phased out, but I noticed some jobs were quietly reorganized the weeks before to takeaway important jobs from someone in order to cut them.
The open door process broke down on several levels, one employe asked to speak with an upper level manager and the upper level manager, told his 1st level manager who reprimanded employee and after talking to the employee told the employee to ‘talk to him any time’. Deceitful and unethical? yes.
It was originally portrayed as a person might retrain for another job in IBM, but
no time schedule was given and the paperwork said ‘no one in IBM is authorized to speculate if this will lead to a resource action’ made it appear to the reader that it was unknown. But there was a schedule and it was a short one and designed to break bad news to people in stages.
IBM has allot of ups and downs, in some ways worse in some ways better than decades ago. There has always been some level of discrimination by age, religion and race, including reverse racial discrimination behind the scenes, but I think the system is a little short on ethics and running high on deceit lately. On paper there are mechanisms to restrain these problems which work to some extent and break down to some extent.
May 8th, 2007 at 2:15 pm
I spent about 35 years with IBM and it is really a shame to see what has happened to this companyWhile change, especially in the IT industry is inevitable, it does not have to be like the changes at IBM. What is really troubling to me is that the worst is yet to come. Most Wall Street analysts will welcome layoffs but they are, as usual, very short sighted. IBM is a terrible long term investment. For the last decade or so, IBM has been making it’s expected earnings per share through some very questionable means. They have sold off real estate, Madison ave sky scrapers, dump so-called marginal businesses like the Hard drive business that IBM created in the 1950s, and the PC business that IBM made the ’standard’. They have chisled loyal employees out of promised pensions and other benefits and all of this was to prop up ‘earning per share’ with accounting practices allowed by the SEC. Here’s a simple fact for all of those wiz kids on Wall Street; IBM is running out of assets to sell! And now if there is any truth to the rumors, they are about to dump a huge percentage of their Global Services group, and bailout on the hundreds of under bid IGS contracts. That will undoubtably anger their other very important constituency, their customers. I am so glad that I sold my IBM stock in 1999!