Thread regarding IBM layoffs

The streets view on IBM. YEP they are saying consulting is the problem child

Expect management to shake the consulting tree in May

The Bottom Line

IBM's report averages out to a solid B, yet the market is grading on the AI curve. Software grew 11.3% with Red Hat up 13% and Data up 19%, while IBM Z mainframe revenue surged 51%. The problem is Consulting, growing just 1% in constant currency, which matters because four-fifths of the generative AI book sits there. Jefferies trimmed its price target from $370 to $320 citing valuation, though the Street consensus target of $296.33 still implies meaningful upside from $228. Shares trade at a forward P/E of 21x, hardly stretched for a company raising its dividend for the 31st consecutive year. Q2 will need visible Consulting acceleration to shake the AI disruption overhang.

@d8 yes there is one demographic clearly missing from the announcements

@D7. You said it yourself. IBM has become a bodyshop (eg commodity). What has IBM done with any division that has moved into the commodity business (eg laptops, Intel servers, HDD’s, GTS, etc etc). Yep that’s right. Spun them off or sold them, and then contracted with the buyer to ensure continuity. Trust me the down grading of IBM by every major investment firm over the last month has gotten managements attention. The stock performance of over 300 to 225 in less than a quarter has every executives stock bonus underwater. Consulting is the weak sister and will be restructured. You saw it with laptops, you saw it with Intel servers, you saw it with GTS. Sorry but consulting is in the bullseye, and the commodity portion of Consulting is most likely gone. Their revenue doesn’t justify their costs.

@d1 Major surgery in IBM Consulting ?? you can't do that. Think of how many Indians with no skills or subpar skills will be put out out jobs in India. Not to mention some of Alvind's most fervent DEI adherents. PM Modi will be very unhappy with that situation, even if Trump has nothing to do with it. He would withhold Alvind's medals immediately.

@d7 that’s so odd because on LinkedIn, Reddit and blind you see so many people being hired into consulting

@d1 - IBM Consulting has been relentlessly shrinking for the last 2-3 years. All the people who can sell...gone! All the people who can deliver...gone! Anyone with any real marketable skills or network of client relationships...gone! The last thing we need is to shrink by another 1/2. It has ALREADY been reshaped - from a global SI like Accenture to a pure play Indian bodyshop like TCS. As long as the strategy continues to be "race to the bottom" the terrible results will continue. Shrinking headcount just speeds the process.

My take from yesterday’s results is IBM is repeating the GTS mistakes. Executing on contracts that have zero chance to ever turn around. Can anyone argue that Consulting has had 4-5 years to get its act together and yet delivered a subpar growth rate and a staggeringly small profit. Sorry but it’s time for major surgery in consulting to optimize it for IBM’s go to market enterprise strategy. Consulting has to shrink (most likely by 1/2) as its costs don’t justify its 1% constant currency continued operation return. AK realized GTS’s problem early on (unsustainable contracts) and dealt with it. It’s time for the executive management team to take a hard look at the Consulting division and make some hard choices to reshape Consulting to an Enterprise focused AI/Hybrid cloud organization. 5 years of subpar performance is enough. It’s time for a spinoff or partnership that refocuses IBM on where the enterprise customer set is willing to pay for execution.

The only people who think IBM is a player in AI work at IBM.

@cb
“Lights on, nobody home” doesn’t really square with a company driving AI revenue growth and landing enterprise deals. The results suggest otherwise.

@av the lights are on but nobody is home as evidenced from posts form @ae and @ef

The posts @af and @ae are from the same id--t, his posts are a pest and a nuisance on all the threads on this forum.
Most likely, they are originated by some Indian id--t, living on some dumpster receiving few rupees from the Indian id--t at the top of IBM.

@a2

If Wall Street “wasn’t buying it,” you wouldn’t see sustained enterprise demand for AI driving revenue. The numbers reflect adoption, not hype.

Smoke and mirrors” doesn’t usually show up as higher sales tied directly to AI adoption. At some point, consistent results stop being spin and start being execution.

IBM is in excellent hands with Arvind as CEO

But no layoffs!

Wall Street ain’t takin the bait no more