It seems to me like IBM is in perpetual layoff mode. It's not that the ship is turning around - it's that it's grinding down into irrelevance. In a sense IBM is doing it the right way - returning the capital (via dividends and buybacks) and people (unfortunately via layoffs) back to the market to work on productive things in configurations that add value. Better to do this than to waste everyone's time and money. (But yes - it's painful!)
Do large tech companies need to be perpetually laying people off because various bets don't work? Or that they necessarily increase productivity so much faster than revenue? (What's unique about tech here?)
I agree, IBM's revenues are down down down every year, and they "make up for it" by replacing long-term their first-world workforce with a cheaper offshore workforce (showing more profit on less revenue).
This is all financial engineering and next year---I predict---their revenue will be down again, but they will show still more profit.
IBM's strategy for some years now can be more or less summarized as "offshoring". That's one reason the layoffs are only going a little at a time in waves, because you can't offshore the whole company in one fell swoop. Instead they're trying to do a ship-of-Theseus type thing where they piece-by-piece replace all the American staff with cheaper offshore staff, hoping they can pull it off while the ownership and business stays (mostly) in place.
They are putting themselves right into complete irrelevancy while they are at it. IBM sales and services is a scourge - never have I seen such incompetence on such a wide scale.
If you are an independent software vendor who gets roped into part of an IBM deal, the first thing you should do is get them out of the loop and make contact with the real technical staff at the customer. Beats the hell out of playing telephone.
The same anecdotal story can be said for any services company. IBM, though, usually delivers above and beyond which is why they're the go to firm for services and are usually called in to mop up messes made by competitors.
I respectfully disagree. I've been observing IBM expand in a couple of thriving sectors (e.g. infosec, cloud computing, healthcare, analytics) and grow by making smart purchases. At the same time, Warren Buffett has reportedly increased his IBM stake. If these are any indicators, they are actually becoming very relevant.
IBM is playing catch-up to all of these services mentioned as they continue to buy companies giving the impression of growth and sector leaders. They should ask there Watson computer how to be a competitive business.
Buffet buying IBM goes completely against his philosophy buying tech so he'll sugar coat it not to look completely stupid.
Except that's not exactly what they're doing. They're laying off US workers and replacing them with cheap employee's from BRIC countries. This isn't about turning around the ship, it's about replacing the ship's crew with a foreign crew that will gladly accept a 1/3 of the wage.
reply