Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
Reports of big layoffs to come this week at IBM were correct, at least with regard to timing. Starting Wednesday, the message board at [email protected], a site manned by former IBM employees, was full of posts from people saying (anonymously) that they had been laid off. More accurately, most said they had been “RA’d,” which is IBM parlance for Resource Action, but which means — you got it — laid off.
On Tuesday the site posted this:
The [email protected] is receiving information from employees that a “resource action” or mass job cut will start Wednesday, January 28 in the US and Canada. A resource action is already taking place in Australia. We do not know how many will be cut in the US but it could be thousands.
And sure enough, Wednesday morning saw the start of a series of posts from people claiming to be affected employees. One example:
14 year IBMer resourced today. Last day Feb 27. Age 58. C&N/Legal group. Outstanding performer downgraded to strong performer (i.e.2)for last PBC. Directly closed over $100M in contracts past QTR. Standard package. Lump sum payment equivalent to one week of pay for each fully completed six months of service based on most recent date of hire, with a minimum of two weeks and up to a maximum of 26 weeks. 6 months transition for medical. -Ex-C&N-IBMer.
IBM, like HP and other traditional IT companies have struggled to adapt to a changing world of IT implementation. In this era, as more companies are putting more applications and data on shared cloud infrastructure there is a whole new sales, more incremental sales model. Gone are the days when thousands of big companies upgraded thousands of servers every few years. The reliance on outside SaaS and cloud providers meant smaller hardware and softwares sales into those shops. Adding insult to injury, most of these big cloud server farms don’t run high-end, name-brand hardware of the type that paid the bills for IBM and the others.
HP has been lopping big numbers of jobs for years now –the last I recall came in May when HP said it would nix up to 16,000 jobs, bringing total HP layoffs since Meg Whitman took the reins in September 2011 to 50,000. IBM has been making smaller cuts but also relying on attrition and other tactics to slim down. One insider told me late last year, that if the fourth quarter numbers didn’t add up, big “HP style cuts” would come to IBM.
Looks like that may be happening.
In a follow up to his original post predicting a massive 26 percent headcount cut, Robert Cringely (aka Mark Stephens) noted that he never said IBM would “lay off 110,000” people but would do whatever it took to get rid of that number of employees.
Reached for comment, an IBM spokesman repeated what the company has said in the past: That it is…
aggressively positioning itself for continued leadership in cloud, analytics, mobile, security, social and cognitive computing, and… investing in and staffing these priority areas. This is not new news. IBM announced a $600 million workforce rebalancing charge in 4Q, 2014 … and this means realigning our client teams to provide an optimal mix of skills, so that we can continue to improve service levels, enhance productivity and keep our clients well positioned for the future.
There was one high-profile departure from IBM that was likely not part of this culling: Lance Crosby, former CEO of SoftLayer who became the top IBM cloud guy after Big Blue bought SoftLayer in July 2013, has left the company.