Thread regarding IBM layoffs

7ndi. That’s exactly what I’m saying. Having worked in Systems group for 30 years, it’s quite ironic that System z and large Power boxes are the only play left. You know the definition of a legacy system don’t you. (One that works) IBM is clearly focused on Enterprise at everything else’s expense. It’s where the monopoly lives. IBM actually showed their cards 5 years ago when they sold off Intel. They thought Power scale out would save them from the Intel data center. It has failed miserably due to Power brand mismanagement (mostly management focusing on moving the metal vs embracing the changing landscape (Eg SAaS / SW issues). Here is where the irony gets even deeper. System Z has understood SAaS and embraced it for years. That’s why is will not die. Power on the other hand still does not get it, and embracing a softlayer (move the metal) type of cloud infrastructure will doom it

-6sfq So you're saying IBM's only remaining play is in "enterprise". The area they doomed as "legacy" when they lost interest 20 years ago. Suddenly it's all they have. From all of us who worked in Systems back in the old days and got cut,..... we told you so.

Have fun !

6fw1. You have hit the nail on the head. YES Cramer’s trust owns Microsoft, Amazon, and Google. WHY? It’s because they are monopoly’s. YES very good monopoly’s. So why is he saying “don’t give up on IBM” It’s because IBM owns the enterprise space of the market, and no one has been able to crack it. Let’s remember IBM owns this because of historical monopoly power, and not because of current “innovation”. (the 1 trillion dollar 50 year legacy ISV sw investment has a lot to do with it ) So what is he really saying. He’s saying IBM has finally figured out how to exploit that monopoly. Redhat is it, and Integrating Z and large Power “legacy” boxes via Redhat for current innovation, lets IBM fully exploit that Monopoly Power. Will IBM fully embrace it? With the Redhat transaction ticking away, the next 60 - 90 days definitely will tell. IBM’s board behind the scenes has been pushing for change, and their allowing Ginni to spend 34 billion for Redhat on that change has cast the die on it. I believe Cramer has gotten wind of how that change will be exploited. Thus his statements. Keep your eye on this space as IBM has made their bets. (all changes have been baked) A LOT and I mean a LOT of change is a coming as IBM has bet 34 billion on it. The questions remaining are how fast, or how slow, and was it for good or for bad. I expect the coming stockholders meeting will give us a few of those answers. Keep your eye on Redhat. As goes the timing of Redhat, so goes the change at IBM

IBM is an old school company with clueless management. With every good company they buyout (Red Hat the latest) they just run it into to ground and ruin it with too much burrecrecy sending more good employees out the door and destroying morale. Ginni should be fired along with the whole board of directors with no golden parachutes for any of them.

@4yuj I trust the bottom line better that says Amazon, Microsoft and Alphabet are in Cramer's charitable trust. IBM is not.

OK so here is the CFO playbook as seen by wall street There was a reason IBM re-orged it’s reporting structure, and Cramer just laid it out for you. The real question now is how small does the “official IBM brand” want to get, and how fast do they want to get there. If you don’t work in the Cloud & Cognitive part of the business (Eg less than 1/3 of current IBM with 82% of the earnings), where does IBM want to place you? I suspect a VERY large re-org is in the works as Cramer wouldn’t be writing about it, unless he was fairly sure it was in play.

Here is the operative paragraph

“This is a roundabout way of stating that the company's main focus will be on its Cloud & Cognitive Software segment. Incidentally, although its Cloud & Cognitive Software accounts for less than a third of IBM's total revenue, given its very high margins, it actually generated 82% of its Q1 2019 operating non-GAAP pre-tax income. IBM reaffirmed its $12 billion of free cash flow guidance for 2019.”

Here is the full article

https://www.thestreet.com/investing/stocks/ibm-dont-give-up-on-the-stock-14935676

IBM can lay you off and send you packing the day they tell you. They can also not give you a payout . This happenes ever day in America , welcome to the real world .

IBM can lay you off and send you packing the day they tell you. They can also not give you a payout . This happenes ever day in America , welcome to the real world .

-2trw they cannot eliminate the severance payout, tiny as it is. It's the only thing they can hold over your head to force you to train your replacement.

IBM needs money and they need it now. Some divisions will be sold off, its par for the course.

My bets are that GBS will go next. It's making money for IBM but not the amount that can save them.

It’s the same offer as last year. 30 days severance PLEASE NOTE there were 2 offers last year. One performance based, and one “business we don’t want to play in anymore”. Performance based PIP’s were 2 weeks notice and 30 days. Business we don’t want to play in was 90 days notice and 30 days. There is yet another wild card in the mix, and that is the spinoff option. If IBM spins you off, you just move to the new company with zero payout. HCL is the big one right now, with the remaining Watson Commerce being the second. The combining of services into one stream lined organization COULD yet be a third. There have been 3 sizing on that, which is standard practice. What IBM decides to do is in the exec teams hands. My speculation given the CFO’s statements to the analysts is that IBM is positioning themselves to be an Enterprise / Fortune 500 provider. They will exit anything smaller than Fortune 500, or commodity related. (some niches will be tolerated) It sure looks like IBM of the late 60’s or early 70’s doesn’t it

Anyone hearing no pay outs this coming round ? IBM needs cash for Redhat and IBM doesn’t have it . 5 to 10 percent cuts end of June .

Trim it, spin it, sell it.

That is the IBM play book. Just look at Intel servers. We trimmed it 4 times via layoffs, then we spun it at least twice via reporting structure, then we finally sold it to Lenovo.

Like it or not IBM services has and is trimming it, they have definitely spun it, so it’s time to sell it

I will only believe this when I see IBM start trimming the mgmt towers.

Staff and team leaders will probably be looked at . Anyone making charts and running data can be outsourced or eliminated. Also , many India vendors locations are doing all the work so watch out for more off loading. Service will be hit again and maybe cut all together. 5 percent cuts so looking at 20,000 people. Good luck.

How do you know and which BU / functional areas?