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IBM

http://www.nytimes.com/2009/03/06/business/06layoffs.html?ref=business

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ibm
3/6/2009 4:46:19 PM
comp.databases.informix 16083 articles. 0 followers. Post Follow

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On Mar 6, 10:46=A0am, ibm.su...@ibm.com wrote:
> http://www.nytimes.com/2009/03/06/business/06layoffs.html?ref=3Dbusiness

And this surprises you how?

Look, there are a couple of things at play here...

First, in S&D, there have been a lot of acquisitions and when you
assume a company, you assume their sales force. So you have some
overlap.
You also have a constant churn in the field reps as you remove weaker
workers. Of course the inept management stays put. ;-) I can say more
about S&D, but do you really want a lecture on the economies of
running an IT Software company? ;-) The point is while I know a lot of
people in the S&D ranks who got whacked, I'm not shocked by it. The
other cuts? Now that's a different story...

With respect to the other RIFs, you have a serious issue where IBM is
displacing the work from higher labor cost countries to lower cost
workforces.
How can you say that there isn't 'job shifting' when you get a person
who does job X in the US and is replaced by someone doing job X in
another country like India and Brazil?  A few years ago, IBM moved a
lot of their back office work to Brazil. Very painful in terms of
getting things done. Not really noticed by the customer and the S&D
team just lumped it and worked around the issues. IBM? They saved
money, increasing their profitability at the expense of their ability
to respond to certain customer issues.

In the EU where there are stronger labor laws, the workers have some
more protection. Here IBM has not hired as many workers and there has
been some natural job attrition which slowly lowers the head count. Of
course in this economy, IBM has been laying off workers in the EU, but
not as bad as in the US.

Oh there's a lot one can say about IBM, and not much of it is good.
Rumor has it that Sam P. is retiring soon and when he does, you can
bet that IBM is going to be hurting real bad. When you trim too much
fat, you also cut muscle and nick the bone, meaning you can only go so
far when you have slumping sales and hit your numbers by artificially
increasing your margins. Customers recognize this and will demand
further price reductions or choose other lower cost alternatives. In
short, cheapening the brand means its a slow death spiral. (Only a
major shakeup in management can change this and depending on when the
shakeup occurs, even then it may be too late.)

But hey! What do I know? I'm just a regular guy who watches
things... ;-)

-G
0
Ian
3/6/2009 5:09:19 PM
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