I'm finding it hard to understand how the current situation differs from that situation.
Like so many other big corps, IBM did some questionable things because of bad management and got into avoidable trouble.
Now the innocent employees - the ones who didn't get a chance to steer the ship - are being thrown into the ocean.
In a sane world, those employees would sue the board for some of its decisions. Those decisions may have been good for the short term interests of the shareholders, but clearly they weren't good for the long term interests of the company, or of patient shareholders who took the long view.
Bad management is a plague in tech. We've seen a long succession of big corps make the most incredibly surreal, bizarre, dysfunctional decisions, and then show wide-eyed "Who? Us?" surprise when layoffs become necessary because the corps crash into the rocks.
The usual justification that "shareholders win" is bullshit. They don't. No one does, except sometimes - in the short term only - the bad management itself.
It's important to remember that IBM isn't really one entity. They're not just mainframes, or Red Hat, or Watson, or any other one thing. To butcher a TV quote: "IBM is just a convenient name for a group of unrelated corporate interests."
So of course they're doing layoffs: at least SOME of the orgs that operate under the brand name have to be struggling. It gets a lot less impactful when the news just bubbles down to: "someone made a bad bet somewhere."
It was always coming at a company like this. Now is just the time when these things happen.
I have to agree with your last point. IBM is a "well run" company; they take very good care of their shareholders. Some of the things they have to do in order to take care of shareholders is one of the reasons why I no longer work there. But I still hold on to my IBM stock....
To any IBMers commenting - why would you shoot your own company in the foot? Yes people are suffering and trying to get by. Yes there are great and not so great people, in any company. It's a big migration and someone f*ed up. Do you really want to hurt stock prices, and the company by blowing off steam about it? Get back to work!!!!
As opposed to doing what? Keeping these workers on board as an act of charity? IBM operates for the benefit of its shareholders, not its employees; also, water is wet.
Before the IBM apologists start commenting:
I was an IBM employee a few years ago and I would never recommend it as a good place to work. You were constantly worried about your job and there were cuts to basic resources all the time. It's not at all surprising to see this happen. IBM only cares about its shareholders and not its employees or customers.
IBM has been reorg-ing itself to death for 15 years (that I'm aware of, probably more). The IBMers I know used to think they were just trying to downplay the perception of downsizing by doing it in rounds and under other organizational shifts.
It's become clear that the company has no direction. The only thing management knows how to do is rearrange the deckchairs on the titanic, so they'll just continue doing that until they sink.
No where is this more clear than in the withered husks of plants still online because somewhere in shutting them down someone realized "oh yeah, this shit makes us money." And keeping the plant operational is contacted out at exorbitant rates, sometimes to the exact same people laid off from that position at that location over a decade ago.
To add some substance to my comment. I’ve interacted with IBM in different scenarios. I’ve had to manage a team of IBM consultants at work, very frustrating experience. I still shed tears every time I think the hourly rate paid vs the value they provided. When Watson was being hipped the company I was working for was approached to use the tech and come up with some PoCs, the dissonance between the biz dev pitch and the actual “solution” was abismal. Currently I’m at a different company and we have IBM as one of our customers, the image that comes to mind is a headless chicken running around.
That is to say, not a very impressive impression. I’ve to say that I’ve seen some interesting stuff as well. But I’m still very sad about the buyout
I bet IBM’s actions and decisions over the years which due to bean counting, cost cutting or managerial incompetence has resulted in poor life experiences for tons of fired employees.
Do they get to call for the management to get fired? Maybe their competitors get to call them out.
I mean the result of firings is measurably worse than being weirded out by an anti social guy.
It would be nice to hear from honest IBM managers, who are doing the firing and downgrading of employees, what is really going on. Though I'm pretty sure most people know what the score is.
IBM used to have a no-layoff policy. Managers used to have Acrylic desk paperweights. People were loyal as children to IBM back then. in 1995 they hired a non-IBM president (the cookie-monster). Layoffs followed. People stopped being loyal. IBM tanked. Surprised?
The share price did well, the company and its reputation much less so.
It's not exactly news that if you want to goose a share price, a big round of layoffs will "reassure investors." Especially when everyone else is doing the same thing.
It's not just startups. IBM laid off massive numbers of experienced and long-serving staff and made them train their off-shored replacements in order to earn their severance packages. The executive suite and institutional shareholders made out as bandits.
The discussion seems to be diverted to outsourcing; whether it is good or bad. If I were an IBM shareholder, I want to know who is holding the IBM execs accountable? For years they have underperformed, whatever metric you care to use to reach that conclusion; they seem to be unaffected by outsourcing and have golden parachutes.
To hide their technical/execution incompetency they outsource jobs and cook the books. It is moot to discuss outsourcing, the real problems are:
1. The widening wage gap between a regular employee and an executive
2. Complete lack of accountability of executives
3. Despite their pathetic performance are getting richer and richer
Cringely has written some interesting pieces about it. He seems to essentially think that the current management is just trying to suck the last bits of value from the organization. http://www.cringely.com/?s=ibm
IBM isn't sinking. It is quite large, nearly 400,000 employees. If they laid off 10% of their workforce it would be like a bit more than 1 and a half Facebooks ceased to exist but it would be a drop in the bucket at IBM.
What they are is slow moving and hidebound. I think that at some level they understand that, and at other levels they don't. They have an amazing asset in their labs where they can put 1,000 of some of the smartest people you might ever hope to meet on to a problem pretty much instantly.
In my short time with them post acquisition I found a company that was very slowly losing its calcified husk and becoming more agile. It had some blind spots but when you replace enough people that can be fixed. As Gerstner showed in the 90's, as Satella is showing at Microsoft, what Welch showed at GE. Put the right leadership team in place and you can do amazing things with that power.
As someone who worked in IBM, this is business as usual. It's half-company half-cult, complete with mass hysteria and one hell of a reality distortion field.
Like so many other big corps, IBM did some questionable things because of bad management and got into avoidable trouble.
Now the innocent employees - the ones who didn't get a chance to steer the ship - are being thrown into the ocean.
In a sane world, those employees would sue the board for some of its decisions. Those decisions may have been good for the short term interests of the shareholders, but clearly they weren't good for the long term interests of the company, or of patient shareholders who took the long view.
Bad management is a plague in tech. We've seen a long succession of big corps make the most incredibly surreal, bizarre, dysfunctional decisions, and then show wide-eyed "Who? Us?" surprise when layoffs become necessary because the corps crash into the rocks.
The usual justification that "shareholders win" is bullshit. They don't. No one does, except sometimes - in the short term only - the bad management itself.
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