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IBM Businesses The Almighty Buck

Cringely Predicts IBM Will Shed 78% of US Employees By 2015 273

Posted by timothy
from the should-switch-to-fashion-branding-with-cool-logo dept.
Third Position writes "Cringely with more predictions about IBM: 'The direct impetus for this column is IBM's internal plan to grow earnings-per-share (EPS) to $20 by 2015. The primary method for accomplishing this feat, according to the plan, will be by reducing U.S. employee head count by 78 percent in that time frame.' So far, Cringely's pronouncements about IBM have been approximately true, even if he missed the exact numbers and timeframes. Is he right this time?"
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Cringely Predicts IBM Will Shed 78% of US Employees By 2015

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  • Re:Brilliant! (Score:4, Informative)

    by jdgeorge (18767) on Thursday April 19, 2012 @11:23AM (#39735035)

    If Cringley's numbers are approximately correct, I don't think IBM can get to a 78% reduction in 3 years using their current strategy of staying below the reporting requirements for layoffs.

  • Series of Articles (Score:2, Informative)

    by Anonymous Coward on Thursday April 19, 2012 @11:23AM (#39735049)

    This is just one of a series of articles he's releasing this week. Two of them are currently available on his site.

  • Absurd (Score:5, Informative)

    by jbrodkin (1054964) on Thursday April 19, 2012 @11:26AM (#39735071)
    The Cringely prediction cited as being "approximately true" (http://www.pbs.org/cringely/pulpit/2007/pulpit_20070504_002027.html) was nothing of the sort. Cringely predicted IBM would imminently lay off 150,000 employees. That was five years. Didn't happen.
  • by alen (225700) on Thursday April 19, 2012 @11:29AM (#39735119)

    cognos is the worst piece of crap software i've had the pleasure of working with. it's a huge pain in the a$$ to install, you have to make dozens of changes that isn't in the documentation and only available by calling support. even then they tell you to google stuff because the IBM support site is a mess to navigate

    and after you buy the software you find out features are missing because you didn't buy the right version. there are like 20 different versions of Cognos with different features

    SQL Server may not be 100% as good, but at least it's pretty easy to set it up and get going for the 90% of the features you will use

  • by timestride (1660061) on Thursday April 19, 2012 @11:35AM (#39735191)
    Amen-- Cognos is a mess. The thing I hate the most is that their support staff only know certain aspects of the suite. If you have an issue with Cognos Planning, but you are accidently routed to someone in the Cognos Business Intelligence support group, they have to reroute your case and you'll be waiting at least several hours before they call you back. Heaven forbid you have an issue with integration between the two suites.
  • by forkfail (228161) on Thursday April 19, 2012 @11:51AM (#39735359)

    Actually, the US lags behind other Western democracies in the things you enumerate as being overly costly.

    So those that the system has entrusted with overseeing our business and industry sends our jobs to second and third world nations - and they reap huge bonuses for doing so, and thereby, destroying our economy and nation.

  • by UnknowingFool (672806) on Thursday April 19, 2012 @12:08PM (#39735585)

    Other countries don't (yet) have these, so their cost is lower.

    They don't? Obviously you don't work in Europe. In the socialist leaning countries, these rules do not get much press because they are no big deal. In the US, laws to ensure equal protection are treated by some (like yourself) as the cause to end civilization. How dare women demand to be paid the same money as men for doing the same job? Don't they know exploitation is a God-given right in this country?

  • Re:Brilliant! (Score:3, Informative)

    by Anonymous Coward on Thursday April 19, 2012 @12:24PM (#39735741)

    I provide developer support on an SDK... I can tell you one thing - every horror story anyone ever told about complete lack of quality, skill, ability, and in many cases: common sense with regard to outsourced Chinese and Indian development is more likely true than not.

    Outsourced to Russia? well, they may steal your IP and put it in someone else's product (even your competitors if they're hired by them) but at least there's a culture of curiosity and figuring things out. I've worked with some pretty smart Chinese and Indian H1B folks and Naturalized US Citizens (similarly, some smart ones living /working in other first-world countries), but the ones who don't have the ambition/drive to get the hell out of their third world nations and seriously underbid and over promise? yeah... you seriously get what you're paying for there. Good effing luck. Ask Dell how that call center worked out.

  • Re:Absurd (Score:5, Informative)

    by jbrodkin (1054964) on Thursday April 19, 2012 @12:51PM (#39736061)
    Also, I submitted (and wrote) the article that rebutted the 2007 one: http://it.slashdot.org/story/07/05/07/2116251/analysts-call-ibm-layoff-estimates-hogwash?sdsrc=rel [slashdot.org] Cringely was claiming that IBM was about to lay off its ENTIRE US workforce. Come on, at some point you have to exercise a little common sense and not report things that just can't be true.
  • by ipv6_128_lgwb (70428) on Thursday April 19, 2012 @12:54PM (#39736107)

    When I started with IBM in 1999 they had ~220k US employees. At the beginning of 2009 they had ~115K. That year they had two rounds of lay offs that included ~5K per round. IBM stopped publishing the number of US employees after that for some reason.

    - I got hit in that second round

  • Re:Brilliant! (Score:5, Informative)

    by jmauro (32523) on Thursday April 19, 2012 @12:59PM (#39736185)

    It's called a death spiral. It's something that happens to a lot of companies actually where they start jetsoning their "underperforming" business lines but not realizing that the underperforming business lines are covering some of the fixed costs of the "good" business lines. Once those costs are re-allocated to the "good" lines, they are not underperforming and need to be jetsoned off. Eventually there is nothing left in the organization that can cover the fixed costs and it goes under.

    It's one of the things they teach you to watch out for in business school. Why it keeps happening over and over and over again, I have no idea.

  • by Anonymous Coward on Thursday April 19, 2012 @01:02PM (#39736229)

    I started in 99 with IBM as well. I got hit in this last round in the 1st quarter of this year. To be honest, I was glad to go, and feel sorry for the folks still there. When I joined, it was an AWESOME company to work for. Not anymore, it just sucked daily. No responsibility at the management level, and lots of finger pointing. It was hell.

  • by Qzukk (229616) on Thursday April 19, 2012 @01:20PM (#39736509) Journal

    That would attract businesses by the droves I'd think...so, no loopholes, no corporate taxes

    Except they're doing just fine with 0% US taxes by keeping the money all offshore with their employees [yale.edu]. Why should they bring that money back into the country to hire more expensive employees that are going to demand enough pay to buy a house for their family instead of living 20 to a dirt hut or sleeping in a company cot in the barracks?

  • by Anonymous Coward on Thursday April 19, 2012 @01:29PM (#39736643)

    Boomers? No. Financial theorists of the late 1970's/early 1980's? Yes. That's roughly when the concept of "maximizing shareholder value" started to get taught in business school. (I was there, I know. Big name east coast B school - it was on all my professors' lips.)

    It was BS then, it's BS now - it misses the basic fact that a corporation has three constituencies, not one - customers, employees, and yes, shareholders. Take care of the first two, and the third will do just fine, thank you very much. Pay your employees what they are worth, give your customers what they pay for, focus on delivery and not empty marketing, and the value of your business (and hence your shareholders' worth) will grow accordingly.

    It takes thinking past this quarter's results. Under pressure from investors and analysts, that's hard to do - so hard, I think just about the single worst thing a successful company can do is go public. (Looking at you, Facebook...)

  • Re:What decline? (Score:5, Informative)

    by magarity (164372) on Thursday April 19, 2012 @01:40PM (#39736843)

    The article is about slashing 78% of US employees at IBM. That's not a sign of a healthy company.

    They'll be replaced immediately by employees from India and China.

    When I was in China I applied to IBM for data warehouse consulting and got to a third round interview. The hiring manager told me the salary, which was about $1,000USD/month (a pretty good rate in China) but they would send me to the US to work. I pointed out that was below the US minimum wage and she said never mind that because they would send me on a 'Z' visa which is good for up to two years with no salary restrictions. When I then objected I couldn't be sent to the US on any kind of visa as a US citizen, she immediately hung up. I tried to call and email to follow up but couldn't get any response.

    So, don't worry about IBM's profitability after they get rid of those pesky US workers and their outrageous salary demands. The going rate on an IBM data warehouse consulting is measured by $hundreds/hour and it's almost all markup straight to the company.

    Write to your congresscritter and demand something be done about Z visas.

  • Re:What decline? (Score:5, Informative)

    by magarity (164372) on Thursday April 19, 2012 @01:43PM (#39736877)

    Sorry, it was the L visa: inter-company transfer.

  • by TheRaven64 (641858) on Thursday April 19, 2012 @01:59PM (#39737129) Journal
    The other big problem with outsourcing to India is finding the competent Indians. It's much easier to find competent people if you can interview them in person than if they are a few hours away on a fast aeroplane. Unless you have a large corporate presence in India already, you're likely to get the people who couldn't get a job somewhere that does competent screening, even if you are paying above market rates. Add to that, the competent ones are not stupid: they quickly learn that they can consult one or two days a month charging close to western rates and live very comfortably...
  • Re:Brilliant! (Score:4, Informative)

    by moeinvt (851793) on Thursday April 19, 2012 @03:45PM (#39738551)

    "Racism much? I bet your sweeping generalizations of other cultures takes you very far in life."

    It's called inductive reasoning.

    http://en.wikipedia.org/wiki/Inductive_reasoning [wikipedia.org]

    "Hume highlighted the fact that our every day habits of mind depend on drawing uncertain conclusions from our relatively limited experiences..."

    There's nothing wrong with making generalizations based on the data set to which you've been exposed. I think it goes without saying that the comment is based on personal experience as opposed to a comprehensive study.

    The evolutionary nature of this type of thought process is obvious. People that didn't figure out that certain plants and animals will kill you after they'd made a few observations were weeded out of the gene pool.

"The algorithm to do that is extremely nasty. You might want to mug someone with it." -- M. Devine, Computer Science 340

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