Report: Major IBM job cuts to start tomorrow


Citing sources within the company, IBM (IBM +0.1%) workers group Alliance@IBM  says the IT giant will begin notifying employees affected by a major round of job cuts tomorrow.

Big Blue has already said it expects to record a $1B workforce rebalancing charge in Q1, as it tries to improve its cost structure in the face of ongoing revenue declines.

Bernstein's Toni Sacconaghi thinks it costs IBM ~$70K, on average, to let an employee go. He previously forecast at least 13K of the company's 434K employees could be laid off.

IBM, still maintaining a 2015 EPS goal of $20, has promised to keep 3,100 jobs in its home state of New York through 2016. That's up from a prior pledge of 2,350.

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Comments (4)
  • misty__girl
    , contributor
    Comments (56) | Send Message
     
    Let me guess. The rank and file workers will get axed but the clueless bloated exec population will be untouched.
    25 Feb 2014, 02:01 PM Reply Like
  • User 53147
    , contributor
    Comments (520) | Send Message
     
    Vacated. You're correct. The US rank and file took a huge hit yesterday and today, while management didn't. This has been and continues to be the IBM multi-year employment pattern, which has destroyed morale and enthusiasm within IBM.

     

    Are the execs clueless ? I would say yes and no. They appear to be clueless in terms of how to grow and lead the company. But maybe they are turnaround geniuses, which I strongly doubt. Internally, the execs are viewed as self-serving opportunists rather than visionary leaders.

     

    They are certainly not clueless when it comes to following a simple script given to them by Palmisano, which ensures that they will enrich themselves. That script is:
    1) Cut costs by any means.
    2) Have the company buy back shares to placate investors (the EPS Roadmap) and to provide themselves with a big pool of shares they can give themselves at no cost.
    3) Cash out shares as soon as possible; reward themselves with new zero cost shares.
    4) Repeat the above until it finally blows up.
    They are executing this script perfectly.

     

    IBM has tremendous potential which will never be realized with this current crop of execs. IBM desperately needs a completely new leadership with a new, strong focus on invigorating the company. For the sake of the remaining employees and investors, I hope this happens sooner rather than later.
    28 Feb 2014, 04:41 PM Reply Like
  • FleetUSA3226
    , contributor
    Comments (872) | Send Message
     
    I understand it is the overhead (e.g. bloated exec) which cause them to lose consultancy bids because their per diems are too high.
    26 Feb 2014, 03:12 PM Reply Like
  • slam stocks
    , contributor
    Comments (1452) | Send Message
     
    More cuts better stock price and EPS. Company is still quite bloated and appreciate the effort to change the culture. As for management, they'll be gone soon, they will need to produce and cannot hide forever, especially when the IT workforce is young and hungry.
    26 Feb 2014, 10:25 PM Reply Like
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