Kyndryl restructuring should reduce overhead functions and reduce the number of managers that lack technical knowledge
Of the various systems they try to manage.
All chiefs and no Indians will cause the company to collapse.
Ai can identify various areas that can be improved as long as there is a team to analyze the data.
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I mean, can we really expect change from a company being run by a criminal?
GTS gained a lot of business from GBS deals involving SAP and ERP. At first just due to the Y2K fear in the late 90s. Many of these were in the chemical and process industry. Then deals came from GBS-led M&As and consolidations and BPR (Business Process Re-engineering) that followed. GTS also benefited from big engagements where the SI went to one of the big-6 (showing my age here), but the customer wanted leverage or to not be tied to a single provider for both SI and MO. And the IBM logo helped there - after all "no one got fired for going with IBM."
The spin-off broke both paths. Hence, one of the reasons for lack of new logo.
A better model can be seen in the Valvoline divestiture. Valvoline was both a lubricant product maker and ran "retail" stores across the US (Valvoline Instant Oil Change). The arm-wrestling came about the name ownership. The blue and red V logo is iconic. Both wanted it. At the end both kept it. Both benefit.
GTS and its spin off could have been the vehicle to load the all but forgotten IBM Cloud (I still want to call it Softlayer). But now but struggle.
Best wishes to all going through this. BTW, RA class of 2019...
Very few restructuring plans ever work out..they are basically cost cutting exercises because senior leadership has failed to execute...failing to execute = you didnlt meet our plan. The answer isn't to cut heads, a mo--n or chatgpt can do that for you. It's to find out what our customer's most pressing problems are and help them navigate the future. Always cutting costs is a sign senior leadership doesn't have a clue and can't execute..S&P 500 has averaged 11% growth in 1Q26...KD was flat in a growing market. Cutting heads isn't the answer, we need better leadership, more accountability and less reliance on legacy business.
@cr There is only one solution at this stage = PE scenario. The Private Equity takeover.
- Strip 4-5 layers of management = layers who suffer from the cognitive dissonance
- Ki-l the narrative machine = immediatelly stops the BS storytelling aka Transformation / Mindset change, etc.
- "Renegotiate" contracts aggressively = new entity will keep the healthy ones, the others will remain with KD, which will be sent to legit bancrupcy
@cc
I was referring to the Kyndryl business model rather than the company itself.
Once IBM spun off IBM GTS, they could no longer use that brand. The 'NewCo' concept emerged because IBM GTS was caught off guard by the move and wasn’t prepared.
To me, the company’s name is irrelevant; what matters is the model.Many other well-known firms operate under this same model, not just Kyndryl. The core strategy is to extract high profits from low-cost labor by positioning a middleman between the IT specialist and the client. In this setup, the specific brand name is inconsequential.
However, it did matter to the clients—IBM carried significant prestige, whereas Kyndryl lacks that same weight. While Kyndryl initially claimed they would start fresh and fix IBM’s flawed methods, the exact opposite has happened.
Not my fault :)
@bq "Back in 2016"...
Kyndryl was officially formed and began trading as an independent company on November 4, 2021. Do you mean IBM GTS ?
"All chiefs and no Indians"
The irony of the latter word :-)
Back in 2016, I warned my manager that Kyndryl’s model was unsustainable. I pointed out the flaws, but no one listened. I predicted that customers wouldn’t stay under such a framework, and indeed, this model is exactly why Kyndryl is crashing.
Senior management is out of touch with IT; they were solely focused on profits and meeting shareholder expectations under pressure from BlackRock, Vanguard, and State Street.By the time these funds realized that 'you can't eat money' and pushed for infrastructure investment, it was too late.
Clients left because they were tired of being pushed unnecessary tools and AI. Now, the only new clients coming in are those with ratings too low to hire their own IT staff.
Because the model is broken and leadership refused to hold themselves accountable, they targeted the most vulnerable: the IT staff. Employees were pressured to generate revenue at any cost. Regardless of your 'band,' you had to do everything as cheaply as possible.
BAU teams were forced into project work and infrastructure deployments outside their job descriptions. People were squeezed to their limits, with many quitting before even reaching the 'bench.' They refused to work under such stress for peanuts, as Kyndryl lost its competitive edge.
Before I left, I told my manager: 'I’ll believe Kyndryl is improving only when I see senior management put on the bench.' Since that hasn't happened, don't expect anything good from this company in the future.