Thread regarding IBM layoffs

I know people who got restricted shares.

If it takes 2 years to vest, does that mean anyone who gets GDP should expect to be RA'd within 2 years?

@emdy Haven’t seen anything posted internally about it

It’s not granted until end of May, early June and is a 2 year vest. The information was just posted internally earlier this week so I’d assume people are still being informed. Someone did say it was a small number of employees (but they always say that... how small is “small”?)

IBM’s CFO has stated for several quarters that IBM will not abandon any IP that is making money. As such we have to assume spinoffs are then the order of the day, IF they do not align with the new IBM moving forward. You can take each division, and pick the weak sisters out of it.

1. Cognitive. The weak sister will be transaction processing modernization outside of Redhat. In addition you could throw in AI into that mix And how do you get the legacy AI into Redhat.. Redhat has won the battle, but it’s implementation will decide the war.
2. GTS. The weak sister here is perform outside of cloud. This could be a very large number. If you throw in TSS outside of enterprise, you have yet another several billion dollar Equation to solve
3. GBS. The weak sister here is application management and it’s role in modernization as it relates to Redhat. NOTE if you are involved in consulting outside of Cloud you are most likely not long for IBM. GPS is most likely not strategic
4. Servers are all things Enterprise (yes that means mainframe). Power scaleout, and Linux boxes are a complete drag on systems revenue as there really is no competitive advantage there. (Intel for 90% of the market is good enough). and storage has moved to SW as their money maker thus the reorg/ rebranding around flash and the abandoning of anything that spins.

You certainly will not dump what I just mentioned, as IBM has far too much invested IP wise, and it still makes money. The question is who wants to acquire it and at what price. IBM knows these pieces have to go, but they must find the correct partner who will work with them, and not against them to exploit the IP. When these pieces go, expect the management layer to drop in half, and an embrace of a younger Cloud centric workforce. Dumping the old pension plan (Use it or lose it) would certainly encourage legacy centric folks Who are in the 60 years old range to leave. This isn’t meant to say the older legacy folks don’t make IBM money, but it is to say, their marketplace is shrinking in revenue at 3-7% a year, and Krishna can’t take the 1000 cuts anymore. He is only going to get one chance to re-org, and he better swing for the fences because if he doesn’t Carl Icahn is waiting in the wings looking at the free cash flow.

Hello @4oou+14HwkSkk

When you state "spinoffs are more the norm"
Do you have any details you can share, or is this just your opinion?
Thanks

With all of the major cloud providers now reporting, And IBM coming in dead last, Krishna is under the gun. His restructuring of IBM is job 1, and it needs to happen sooner rather than later. I would expect a May restructuring to happen. Krishna has already shown his hand as to where his priorities are at. (enterprise customers, Redhat, cloud, AI, and the services to support them). Everyone else need not apply. That plan equates to a 100-150k downsizing or restructuring. Given that IBM seems to be focused on Enterprise customers, I would expect all things enterprise focused (say fortune 1000-1500) to survive within “new” IBM, and all things outside of Enterprise (sub fortune 1500) to be abandoned/spunoff. IBM has Bet the farm on the fortune 1000. That’s where they will farm, as that’s where they believe their advantage vs all of the other cloud providers exists. A lot of hard choices (what businesses does IBM want to be in) have to happen for NEW IBM to emerge. Most folks are thinking layoffs, but I believe spinoffs are more the norm, as IBM wants to extract their IP (20 years of investments) from the Businesses not picked to move into “new” IBM Good luck to all, as May will be remembered are the great restructuring

According to my manager, at least in Systems group nothing has been decided yet. The cynical side of me says it has all been decided long ago and the "high performers" will all turn out to be directors and above.

If I thought there was any chance I'd be at IBM long enough for the shares to vest, I guess I'd be more bothered (old, expensive guy)

I am on the old plan and would LOVE a decent package to retire. Even 1 year medical at current cost instead of 8-10x's I'll have to pay if I retire before 65. I'm actually hoping they announce something before the end of May. Most of the US packages have been awful, 1 month severance and no medical support. Not much incentive to volunterr!

I believe it was only the ghetto innovation centers that got their 401k's cut down to a 3% match.
Other parts of GTS are still receiving the full 6% according to some past comments here.

Better 401k match, higher pay, and more vacation. In addition even though the pension is frozen the longer life expectancy means IBM has to contribute. (It’s the nature of actuarial)

Why are the older IBMers who are on the old pension plan so much of a burden compared to the older ones not on the plan? IBM froze the plan back in 2007 and is no longer putting into it on behave of the employee. Though from what I understand IBMers who are on the plan do get a little more put into their 401k because of it being frozen. Just asking to understand since I am a computer geek and not a business geek. :) thanks

The older workers that IBM would really like to leave are the old pension plan folks. (40 years old in 1999 and 15 years of service). They carry the largest and continuing to grow burden. There are not many of them, but more than you think. With interest rates being at historic lows, And the pension being overly funded, it would be in IBM’s interest to exit the old pension plan (use it or lose it by a certain date), and then sell it off and capture the remaining equity. I know that’s not what folks want to hear, but bean counters will be bean counters and IBM wants older employees out. For the folks in the 50’s demographic, the most viable options would most likely be a bridge on health care to Medicare, and a small severance.

You guys are all overthinking this. It's quite simple. Ginni lied again. Hopefully she will be reincarnated as a snake. At least it would be more fitting to her personality.

HI. @1moc+14HwkSkk

What incentives are the IBM Management Team considering for older workers?

I am over 50 and work with 5 other people over 50. We have not been told about or have heard any incentives being considered for older workers?

Thanks

Everything is being looked at as IBM moves forward. The slowdown in business has the management team quite concerned and considering options that were not on the table prior to 2020. The management team is strongly looking to incent older workers to leave. The numbers are not that big, but the older workers carry a very large burden. Incentives to leave are not viewed problematically like RA’s, thus their consideration.

Within my small team in GBS, we calculated it out what # of people on our team would have received them based on the standard allocation of checkpoint scores and some people being willing to share. None of us got them, and at least 3 of us in this small group should have qualified per the math. So it’s not being distributed as promised and being hoarded by executives, as expected.

I heard it was indeed 2 years you'd have to keep them. But then I also heard it would be paid in April I believe? I've not heard of anyone that has received them yet.

The impression I got from Ginny’s presentation was that it would go to “high performers” (no definition given). I believe it will be going to those they want to incentivize to stay through any reorg. There will probably be some restrictions on them - ie if you leave within two years of granting then you forfeit it. Or maybe it all went to Ginny?