Thread regarding IBM layoffs

I'm GTS but my PMR is 1.4 as a recently on-boarded employee. Don't plan on sticking around.

@5r11

GBS at the top of the pay range with PMR at 1.2

Yup totally agree IBM has to overpay market to attract top talent and convince them to risk dragging their career through IBM red tape, sluggishness and toxicity for a premium for a while. Not for the feint hearted.

@5pob You must be new here. Execs pocket huge pay packs, stock, and quarterly bonuses. Agree also that there have been many recent hires into GBS at the top of the pay range with PMR at 1.2 - confirmed from a friend who’s a hiring manager it’s the only way we can attract any talent to IBM because our name is mud and our pay isn’t market competitive. It’s also the reason that many of those new hires last a year or 2 and move on, creating a revolving door, no sales, and no continuity in leadership. Circling the drain.

especially the Execs and higher banded consultants are paid well over the market rates.

lolwut?

Even our execs aren't compensated as strongly as other execs, never mind the worker mensch who more than likely haven't seen anything that resembles a typical IT bonus in years, substandard 401k matching and outrageous family healthcare costs. I'm only hera to clear my retention bonus then I'm out the door.

To the comment about why IBM employees stick around and are so loyal? It’s a well known fact that most IBM a employees, especially the Execs and higher banded consultants are paid well over the market rates. Combine this with the lack of productive output, and you have a scenario where you have literally tens of thousands of employees getting very highly paid to do not a lot of work. That’s why so many people stick around. I took the move to jump early to a FANG, from GBS consulting services. Best thing I ever did!

Bain’s playbook is easy REMOVE COSTS no matter the consequences

Where does one find the "Bain Playbook"?

How will things like FHA's (future health accounts) be treated for people moving from IBM to NewCo? Will older employees be forced to retire rather than take a chance at losing their FHA's? Hopefully
people moving to NewCo will retain their FHA's. If not, just another way to discriminate against older employees.

IBM use GTS as cash-cow for years and mainly existing GTS clients are making IBM Cloud revenue due to migration from legacy to cloud platform , can clients rely on IBM and continue their journey to IBM Cloud ? I personally would not do that as IBM cloud is not as good as Aws, Azure..etc... they have too many service outages, too expensive and lack of skills....IBM will definitely keep shrinking after 2021.

It's going to be interesting watching this play out over the next 12. months. Will staff stay on, hoping to cash in on some lucrative package (my bet is yes, since IBMers seem reluctant to voluntarily look for opportunities outside the company, such is their misguided loyalty, no disrespect intended). I think everyone loses out on this - no winners. Existing customers get leery and bail. Potential customers sit and wait to see how it plays out, or use this as a (valid) reason to shop elsewhere. Employees get shafted one way or another. Wait - execs will do ok!
Elements of the storage portfolio (HW & SW) are closely tied to the mainframe architecture. I don't see them splitting Open and Z storage into two entities, so if someone buys all storage IP, mainframe storage becomes fragile by being dependent on another party.
All very messy!

1gac You have hit the nail on the head IBM realizes an IP deal for Power and Storage is in their interest. Z is the golden goose and will never be sold as it’s the lynch pin for IBM’s turnaround. IBM’s turn around is following Microsoft’s playbook Take your monopoly (windows) and exploit it For IBM just substitute windows for mainframe. Power and storage are in a replacement cycle business model (much like TV’s or refrigerators) and IBM is just trying to figure out how to get their legacy investment dollars out. Selling IP rights for a guarantee that whoever buys the manufacturing rights gets the IBM data center cloud business is a fair swap. IBM will throw all of the Power/storage spend into lab investment to extend the lifecycle of the IP Done deal

As someone in the part of Services that will remain, I pray to god they take some of the worthless execs with them when they spin off, particularly Mark Foster.

What’s hidden in that $2B restructuring charge though?
Elimination of Systems Group via an IP deal?
That’s also been in the Bain playbook all along.

This is a sign of a company under distress. Remember Sun. Remember Digital Equipment Corporation. If DEC was around were at that company.

Arvind's plan for IBM (INDIAN Business Machine) is to split the company into multiple small chunks NewCo, OldCo, FutureCo, thisCo, thatCo, and then sell these Cos to Tata, Wipro, Cogent etc. Another American company will disappear like never existed and Indian companies will rule.

You can do the math 350 - 20k (may cut) = 330k 330-90k (newco)= 240k 240-2.3 billion 4th Q restructuring = 215-225k

An endless parade of weak executives and management teams has led IBM off the cliff. Now everyone is saying IBM was destined to become a smaller company. This is loser-speak. IBM was betrayed by a bunch of spineless, useless, worthless, business cowards in charge of IBM who just showed up for the paycheck (and stock bonuses) and who couldn't take smart business risks because they were scared of their shadow. This is the impending death of an American Business Icon and no one in the media is willing to speak out and tell the truth of this travesty.

“IBM’s future is as a smaller company, more of a niche technology company,” said Michael Cusumano, a professor at the Massachusetts Institute of Technology’s Sloan School of Management. A small, niche company won't need 350k employees. Another small, niche IT company called HPE has $30B revenue and 61k employees.

(Link to Barron's article detailing the headcount being moved and the charge-off, as well as other details).

IBM Is Sharpening Its Focus on the Cloud With Infrastructure Spinoff –
https://www.marketwatch.com/articles/ibm-is-sharpening-its-focus-on-the-cloud-with-spinoff-51602170397?mod=mw_quote_news

Just keep on chopping arms and legs off and see how long you live. It shows how bad things are when Wall Street thinks IBM is worth more dead than alive.

Will new long term contracts be renewed with the soon to be "Newco"? Will customers make large purchasing decisions with the GTS SO accounts? Probably a lot less than if IBM had remained intact. This spin-off has the potential to be a revenue loss train-wreck pre and post spin-off. IBM is in desperate times after 20 years of milking the business for cash flow and earnings and failing to make any meaningful and successful strategic investments aside from their massive overpayment for Red Hat.

We just lost 25% of all revenue...

The good news, this will slow down the mass layoffs at least through early 2021 as the details are worked out.

This restructure is rather big Pay attention to the details 90k heads move, and 19 billion in revenue In addition there will be a 2.1 billion restructuring charge

Read in Barron's: https://apple.news/AOKGL-zW9TBSTZxkdKAKU4Q

As soon as they separate the two companies, they will sell managed services to HCL or TATA or Cognizant. Bet on it.

AMEN. it's about time IBM does this. GTS an anchor. They're abusive to other IBM depts. They're the reason why many clients cancel. Glad to see them leaving. Don't let the door hit you on your way out!

This move to create a Newco Managed Infrastructure business may accelerate IBM Strategic Outsourcing and Managed Services customers migration away from IBM to other cloud players like Amazon and Azure. Given that IBM has single digit market share in the public cloud space (and not really a major public cloud player), it makes no sense to wait and see what happens with this spin-off. Most likely customers will be migrating anyway to other cloud providers, but now the uncertainty of the spin-off of their IBM Managed Infrastructure provider makes it an easier decision to go to another cloud provider sooner rather than later. Another nail in the IBM coffin, it seems. IBM will continue to be the great shrinking machine.

Cue the mass exodus from GTS to avoid being 'jettisoned' as the 'Newco' poor relation.

under GTS side really exciting to get out from under Dumb(Krishna) & Dumber(Ginni Rometty)
Total incompetency looking forward to a new beginning. I don't expect IBM to even be around in 10 years.

How does Newco plan to survive and thrive after the spinoff? They will need to both collaborate and compete with IBM at the same time. IBM will k–l it off if they migrate too much of Newco to the IBM cloud. Will Newco have its' own cloud or perhaps partner with another non IBM cloud provider? It seems like a potential road to an eventual business death for Newco.

So what ever legacy still left with IBM will probably be sold.IBM will then be a pure Cloud and infrastructure , 2 separate companies.

Whatever just noise to me... kids out of college... mortgage paid for.... as Charlie Sheen said WINNING!!! AGREED long overdue... while other companies grew IBM cost cut. They became trillion dollar companies IBM stay stagnant... Hoping all who survive have success!! Good luck to everyone who don't!!

iS TSS included in spinoff ?

This announcement should have been made 5 years ago THANKS GINNI IBM will consolidate into 3 divisions Cognitive, services, and Servers IBM has already announced TSS stays with IBM. Services will be combined with GBS getting measured on bench, and GTS streamlining to Cloud/AI/ and enterprise. If you don’t fit into those 3 pieces, you will go with “old GTS” (think perform) Redhat is under Cognitive Welcome to the streamlined IBM. For the folks in old GTS, you need to think about what is happening IBM is forming a new company with new employee rules You walk out the door on Friday as an IBM’er, and walk back into the door as an XYZ employee. All of your IBM promises stopped on Friday, and all of your XYZ benefits start on Monday. Case closed. NOTE IBM said approx 60 billion in services contracts move to the new company Thats 60/110 = 55% I would expect at least that many employees to move In fact I expect IBM to overstuff the old GTS just like they did with Intel servers to Lenovo Now add in the TSS employees and you can see IBM wants to keep approx 35% of the “hybrid” GTS services. TSS will most likely move to server division, and the rest get moved to XYZ. Good luck to all as this is quite transformative and streamlining.

i think the spinoff is a setup for a sale down the road .Makes it easy and visible one its all separated and dissected.

Does this impact to DB2 Luw support and development team?

Why didn't IBM try to sell off GTS to re-coop some of the Redhat money they spent? Splitting it off doesn't gain IBM anything.

IBM shares surge on plans to spin off infrastructure services unit as a new public company –
https://www.cnbc.com/2020/10/08/ibm-shares-surge-on-plans-to-spin-off-unit-into-separate-publicly-traded-company-.html

does it mean GTS is going? Being spun off entirely or a part of GTS?

Wouldn't it be funny if Amazon ended up buying "NewCo"?