IBM to lay off nearly 40% of their workforce.

[imported_Shivetya]

The IBM project I am writing about is called LEAN and the first manifestation of LEAN was this week's 1,300 layoffs at Global Services, which generated almost no press. Thirteen hundred layoffs from a company with more than 350,000 workers is nothing, so the yawning press reaction is not unexpected. But this week's "job action," as they refer to it inside IBM management, was as much as anything a rehearsal for what I understand are another 100,000+ layoffs to follow, each dribbled out until some reporter (that would be me) notices the growing trend, then dumped en masse when the jig is up, but no later than the end of this year.

Ouch. both my parents worked for IBM at one time and I worked for them twice as a contractor.

I would assume its another great change in direction for the company, probably because the stock has been stagnant, but more likely because the redundancy and mismanagement at all levels is unbelievalbe. You just have to work for them to understand how much of a mess it can be.

 

[Stunt]

Efficiency drives productivity.
For a mature company like IBM with a large market position, I am happy to see them do more or the same with less.

These people likely have marketable skills which they can apply to many different companies or disciplines.
Skilled employees are in high demand.

 

[Jaxidian]

 

[nergee]

If IBM knew what the real LEAN philosophy is, they would not be laying off anyone...their management sucks and should be fired...I am sick of inept managers making the average Joe pay the price for their stupidity......

 

[Stunt]

Originally posted by: nergee
If IBM knew what the real LEAN philosophy is, they would not be laying off anyone...their management sucks and should be fired...I am sick of inept managers making the average Joe pay the price for their stupidity......

Maybe the "inept managers" have hired too many people over the years and they are finally understanding the actual workload of their employees.
People management is a large field these days (assisted by new software) and most companies should be looking at this.

When I started working in manufacturing as a process engineer, the first thing i did was time studies; you wouldn't believe how much time people waste in a given day at work. Then you improve processes and automate and you can continue to reduce costs.

 

[RichardE]

Originally posted by: Stunt

Originally posted by: nergee
If IBM knew what the real LEAN philosophy is, they would not be laying off anyone...their management sucks and should be fired...I am sick of inept managers making the average Joe pay the price for their stupidity......

Maybe the "inept managers" have hired too many people over the years and they are finally understanding the actual workload of their employees.
People management is a large field these days (assisted by new software) and most companies should be looking at this.

When I started working in manufacturing as a process engineer, the first thing i did was time studies; you wouldn't believe how much time people waste in a given day at work. Then you improve processes and automate and you can continue to reduce costs.

No, it is the management this time. I'll dig up some more info for you later, but this is really an example of "management slowly destroying a company by cutting back in the wrong places".

 

[ultimatebob]

That 100,000 layoff number is totally bogus. IBM only has about 150,000 employees left in the US, and there is no way in hell that they can do a 2/3'rds staff cut in 7 months without throwing the entire company into chaos.

My friends that work at IBM also tell me that their foreign counterparts are lazy and under trained on the products they support. Many of them end up having to clean up the messes they make, increasing their already insane workload. It would be impossible for countries like India and Brazil to pick up the slack from a 50,000 person staff cut, let alone 100,000.

 

[WhipperSnapper]

Originally posted by: Stunt

These people likely have marketable skills which they can apply to many different companies or disciplines. Skilled employees are in high demand.

Why would there be a demand for skilled Americans when foreigners are being imported to fill the demand, at lower wages, on H-1B and L-1 visas and also when those kinds of jobs are being shipped overseas?

According to the April jobs report, the U.S. economy generated only 88,000 new jobs (of who knows what quality), far, far below the amount needed to meet population growth.

 

[MonkeyK]

Originally posted by: Stunt

Originally posted by: nergee
If IBM knew what the real LEAN philosophy is, they would not be laying off anyone...their management sucks and should be fired...I am sick of inept managers making the average Joe pay the price for their stupidity......

Maybe the "inept managers" have hired too many people over the years and they are finally understanding the actual workload of their employees.
People management is a large field these days (assisted by new software) and most companies should be looking at this.

When I started working in manufacturing as a process engineer, the first thing i did was time studies; you wouldn't believe how much time people waste in a given day at work. Then you improve processes and automate and you can continue to reduce costs.

IBM has a reputation for working people into the ground (at least IT people). A number of IT people at my company have come from IBM or accepted an offer from my company over one from IBM.

You are, however, correct, good worker who have to leave their jobs will find work elsewhere. The really good ones (and it always amazes me that when jobs are terminated instead of people the number of good workers who go too) may even start new companies.

 

[Stunt]

IBM compared to their competitors:

IBM: $93B revenue, 366,000 employees = $254,000 earned/person
HP: $94B revenue, 156,000 employees = $602,000 earned/person
Microsoft: $50B revenue, 71,000 employees = $704,000 earned/person
Dell: $58B revenue, 65,000 employees = $892,000 earned/person
Cisco: $32B revenue, 50,000 employees = $640,000 earned/person
Sun: $14B revenue, 38,000 employees = $368,000 earned/person

Looks like IBM is way behind other companies in their sector.
How come P&N isn't lobbying Microsoft to hire 3 times more employees?

I would even go so far as to say they aren't cutting enough.
I mean 150,000 employees for $93B is still $620k/person; about on par with HP.

Hell, my company is low margin manufacturing company and our revenues are $7B with 22,000 employees = $318,000 per employee. For interest sake, Exxon is $3,171,000 in revenue per employee.

 

[ultimatebob]

Don't forget that IBM is a big hardware company, a big software company, and a big consulting/services company. None of the other companies on that list are in such a broad range of businesses. If you really wanted to find companies to compare IBM to, you should really look at other corporate conglomerates like GE or Sony.

 

[Stunt]

Originally posted by: ultimatebob
Don't forget that IBM is a big hardware company, a big software company, and a big consulting/services company. None of the other companies on that list are in such a broad range of businesses. If you really wanted to find companies to compare IBM to, you should really look at other corporate conglomerates like GE or Sony.

GE: 163B, 319,000 employees = $511,000 earned/employee
Sony: 67B, 158,000 employees = $424,000 earned/employee

Any others?

 

[Butterbean]

I think Intel had a big shakeout last year - maybe IBM liked what it saw there.