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Reports Coming in of Big IBM Layoffs Underway in the U.S.

333 points by zeveb 11y ago

mark_l_watson 11y ago
That is awful. I wonder how much of this is cursed by the bet everything on IBM Watson strategy that I have read about. Are they laying off non-Watson staff?
- adventured 11y ago
  It's the consequence of their bet everything on services approach while the global economy stalls out. Simultaneously they gutted the technology side of their company and vastly under-invested in R&D/innovation, instead choosing to focus on financial engineering to fake earnings per share growth. They should have been at the forefront of cloud services, with a business as large as what AWS is. Instead, they spent their resources on buying back stock and lying to investors about the future. Their financial engineering was so good, they even snookered Warren Buffett, likely ultimately costing his shareholders billions in losses.
  - blisterpeanuts 11y ago
    Maybe I'm not understanding your comment, but according to Forbes[1], IBM is prominent in cloud services and exceeds AWS in revenue. It sounds as though IBM's doing things right, at least in this space. It may be that in other markets, they've fallen behind or failed to innovate, e.g. the vast mobile market. 1. http://www.forbes.com/sites/gregsatell/2015/04/27/move-over-amazn-ibm-now-rules-cloud-services/#655a0e616dad http://www.forbes.com/sites/gregsatell/2015/04/27/move-over-...
    - marcus_holmes 11y ago
      According to the article IBM bought Softlayer and has only just launched BlueMix. I tried Bluemix and found it unoriginal and a cit crap. Not that the world of cloud services moves according to my preferences, but I'm not seeing it used anywhere else either. If IBM is "prominent" in cloud services it's from acquisitions. Whereas AWS pioneered the cloud industry. This is certainly "doing things right" in that it's providing a great exit route for startup founders in the cloud industry. I'm not sure it's "doing things right" for IBM itself. IBM looks like it's being run by accountants. You can tell because they think they'll get the same results from someone on a H1B visa as they will from their veteran employees. Accountants can never get their heads round the fact that technical folk aren't fungible.
      - increment_i 11y ago
        I had a similar experience with Bluemix. One of the biggest turn offs though was the ridiculously convoluted website for IBM's cloud services. Some serious streamlining is in order there. I had no idea where to go or what to do to get the information I needed for simple things like straightforward API pricing, etc.
        gherkin0 11y ago
        > One of the biggest turn offs though was the ridiculously convoluted website for IBM's cloud services. Has IBM ever made a website that wasn't confusing and terrible?
        sk5t 11y ago
        One possible explanation is that IBM actually has no idea what to charge for most BlueMix services.
      - jacques_chester 11y ago
        > but I'm not seeing it used anywhere else either. Bluemix is a re-branded Cloud Foundry. IBM donates engineering to the Cloud Foundry Foundation. CF is used in a lot of places. Disclaimer: I work for Pivotal, the leading donor of engineering to Cloud Foundry. We have our own distribution of Cloud Foundry, PCF, that is a competitor to Bluemix.
        praneshp 11y ago
        Yes, but IBM somehow made CF, which is awesome to use, into a piece of shit offering with Bluemix. I hope their enterprise offering (if any) is better.
        marcus_holmes 11y ago
        cool, new information, thanks :) I'm still not seeing BlueMix itself used anywhere ;)
    - sk5t 11y ago
      One would need a very contorted definition of "prominent in cloud services" to go along with that. BlueMix is still taking its baby steps compared to AWS or Google, and Softlayer is more like an outsourced data center with a bit of a management portal on top.
  - JustSomeNobody 11y ago
    The stock market doesn't reward investing in R&D because you can't benefit from it in three months.
    - gozur88 11y ago
      I see people repeat this but it's not true. The stock market heavily rewards investing in R&D if investors think the research is going somewhere. Biotech companies are a good example.
      - mdorazio 11y ago
        Tesla is another. Their expected future value is based almost exclusively on R&D, and the stock is massively overvalued in comparison to other manufacturers.
      - Zigurd 11y ago
        It might be more accurate to say: Boards reward management for the appearance of producing results in 3 months, and there are a lot of bad C-suite managers who are happy to do so, at the expense of employees and long-term prospects, as long as the compensation is high enough.
    - icebraining 11y ago
      I like how investors are chastised for both having valuations much about current earnings and for only thinking about the next three months.
  - rdtsc 11y ago
    > It's the consequence of their bet everything on services approach while the global economy stalls out. Yeah that was their strategy the last 10 maybe 15 years. That doesn't work anymore. They have to change. It certainly sucks for folks who work in services, but I can't see IBM doing well keeping tens of thousands of people trained in that until retirement just to provide jobs or to be "nice". I understand it has been around for more than a 100 years. At some point large swaths of people had to be laid off, just because of the changing business landscape. I would guess when they switched to mainframes from mechanical tabulators, some people had to be let go. > Their financial engineering was so good, they even snookered Warren Buffett, likely ultimately costing his shareholders billions in losses. Hmm, not sure, I don't think Buffett is easily snookered, he is not an amateur investor.
    - JamesSwift 11y ago
      I think that's what he is implying here. They were so effective at this, that _even_ a savvy Warren Buffet fell for it.
      - rdtsc 11y ago
        I was trying to say that it is not that they tricked him because they are so sly. They might have tricked themselves just as well. So it is not that had some secret great vision to take his money. They made mistake and they didn't see them and neither did Buffett.
- Zigurd 11y ago
  IBM omly appears to be betting on Watson. It is good for annoucements and putting a veneer of technology on a company that's been hollowed out. Once customers realized they could get the same Indian coders cheaper elsewhere, IBM was done.
reddytowns 11y ago
What a dastardly fellow! How dare the elected officer run his company as he sees fit WHY ALL THE DOWNVOTES!!?!?!?!
- jacquesm 11y ago
  She.
  - reddytowns 11y ago
    Damn English and its lack of gender non-specific pronouns! Seriously, though... what is the implication that I am missing? What is the point of bringing up the CEO's pay? Should it be government mandated, is that what you all believe?
    - dandelany 11y ago
      Singular "they" is gender-neutral and grammatically correct, I don't know why more people don't use it.
      - deleted 11y ago
        [deleted]
      - vacri 11y ago
        I don't know why people dismiss it "because it sounds a little funny to me", but are okay with abominations like "he/she" or "zhe"...
        licoricetic 11y ago
        maybe those are different people
        vacri 11y ago
        A venn diagram will provide all possible combinations of opinions, but there are definitely people out there who suggest 'he/she' or 'zhe' instead of 'they' because the latter 'sounds funny'
JohnTHaller 11y ago
There have been a couple folks on Facebook reporting that the H1-B folks they trained are staying while they are let go (ala Disney et al).
- toomuchtodo 11y ago
  I believe that's illegal, and doing so en masse is going to spark Congressional hearings.
  - ebbv 11y ago
    It is 100% illegal, but Disney got away with it so other big firms are following suit.
    - toomuchtodo 11y ago
      I could've sworn they had to walk that back: http://www.latimes.com/business/la-fi-disney-technology-h1b-20150617-story.html http://www.latimes.com/business/la-fi-disney-technology-h1b-...
      - ebbv 11y ago
        They only "walked it back" enough to squash the bad PR they were getting. Once the headlines went away they went forward with their plan after all: http://www.nytimes.com/2016/01/26/us/lawsuit-claims-disney-colluded-to-replace-us-workers-with-immigrants.html?_r=0 http://www.nytimes.com/2016/01/26/us/lawsuit-claims-disney-c...
        jeff_tyrrill 11y ago
        These were two separate instances of layoffs. The grandparent link is not related to yours (except that both stories involve Disney, and both involve layoffs).
    - swingbridge 11y ago
      Disney initially 'got away with it' because they kept the whole thing at an arms length by outsourcing to Cognizant. "Oh that's what you did, hire H1B? Yeah that wasn't us... We just outsourced to Cognizant so you should ask them about what's going on". Super shady, but it was a fleeting attempt at plausible deniability on behalf of Disney execs.
apo 11y ago
IBM layoff rumors have been around for awhile: http://www.cringely.com/2015/01/26/ibm-right-gadfly/ http://www.cringely.com/2015/01/26/ibm-right-gadfly/ I'm not sure what to make of this one.
- colindean 11y ago
  Cringely has always been very critical of IBM. I'm unaware of how often his predictions have been right. Disclosure: IBMer, speaking for myself.
  - amptorn 11y ago
    Seems like a stopped clock situation in his case. That prediction is from a year ago and came to relatively little; he didn't predict this at all.
- ReadEvalPost 11y ago
  I'm unsure on the actual sizing but that wasn't exactly a rumor, that's when I was laid off. This was after a furlough and narrowly avoiding another layoff less than a year into my employment. Needless to say I'm glad I'm gone, even if it wasn't my choice.
  - danso 11y ago
    How easy was it to find something new if you don't mind me asking?
davidw 11y ago
Sort of relevant. Paul Graham tweet on IBM patent trolling: https://twitter.com/paulg/status/705416252563419136 https://twitter.com/paulg/status/705416252563419136
- mtgx 11y ago
  IBM and Microsoft were instrumental in stopping the abolishing of business method patents - and surprise surprise, now they use them to patent troll other companies: https://www.washingtonpost.com/news/the-switch/wp/2013/11/20/software-patent-reform-just-died-in-the-house-thanks-to-ibm-and-microsoft/ https://www.washingtonpost.com/news/the-switch/wp/2013/11/20...
rdtsc 11y ago
That is a good sign. It means the ship is slowly turning around. It sucks for the employees being laid off, no doubt. However they have to do this. There is no other way. They bet big on support and services in early 2000s. So they have lots of those employees. Could they all start to learn new things adapt to the new environment, yeah, some will but not everyone will. Heck, if they didn't lay off people, they'd still have punch-card machine cleaners and even cheese slicer designers (they used to sell those way back in the day).
- mattzito 11y ago
  See, these types of comments are (again) why people have negative opinions towards silicon valley types. You may be right, but a good sign for whom, exactly? For the people who lost their jobs? For shareholders? For fans of IBM the company? Sure, yes, I agree that IBM probably has to shed people in order to stay competitive. However, it's not the fault of the people who are being affected by this, as by and large they were not responsible for IBM's decision to get more and more into support and services. (an aside: it's not clear those are the people being affected, I'm just responding to the parent comment) Instead, I would say a better discussion is: why is it that when IBM made a bet that did not play out, that they have cut people's severance benefits signifcantly? Why is it that we treat this as a necessary evil, instead of something to be disappointed about? Why are we not holding IBM up to be responsible for the well-being of their workers? I'm not arguing that this isn't something that IBM should have done. I am arguing that we shouldn't talk about layoffs as a "good sign", and I think we should try to keep in mind the lives of the people affected.
  - dcwca 11y ago
    > You may be right, but a good sign for whom, exactly? For the people who lost their jobs? For shareholders? For fans of IBM the company? For IBM. It's good when you consider the alternative where a great company is slowly destroyed and everyone loses their jobs.
    - TheOtherHobbes 11y ago
dsmithatx 11y ago
I was at IBM from 1999 until my layoff in 2002. It was the 9th layoff for our group (Websphere). These layoffs suck and the stress nearly killed me. Back then the layoffs occurred after the dot com bubble burst. Lately I've been hearing lots of rumors from investors of wide spread belief of a tech bubble about to pop again. I'm guessing IBM is aware of this speculation and trying to be ahead of the game this go round. They hate to see their stock price drop and I'm very glad I'm not in a situation like that anymore.
- edwinnathaniel 11y ago
  I can't believe they did this kind of thing in 1999 - 2002 for WebSphere. That is the era where Enterprise Java, XML, and SOAP took off and App Server was selling pretty hot. Having said that, the 1999/2000 dotcom bust is different than if it was to happen today. In 1999/2000, open source wasn't as mature/diverse/strong as today so companies will buy commercial technology provided by SUN, Microsoft, IBM, Oracle. These days, majority of the VC backed companies are using FOSS software with minimum Oracle/Microsoft software (probably the ERP/Finance/HR modules).
  - gedy 11y ago
    2002 was really bad for any tech spending..
williesleg 11y ago
Kindof sucks that they have to train their h1b replacements. Just like Disney. I'll never buy anything associated with either company.
pfarnsworth 11y ago
It seems untrue if an IBM spokesperson denied it. It would look really bad if their official spokesperson denied it and then the next day had to say the opposite.
- daodedickinson 11y ago
  Eh, maybe it's a "No layoffs... this week" Melissa Mayer joke.
- lr4444lr 11y ago
  Didn't that happen with Marissa Mayer's accidental leak and cover-up of the Yahoo layoffs a week early not too long ago? http://www.breitbart.com/tech/2016/01/19/marissa-mayer-taunts-her-employees/ http://www.breitbart.com/tech/2016/01/19/marissa-mayer-taunt...
mathattack 11y ago
Here's what I don't get... If you have any options at all, why stay at a company with sub-par technology that abuses their workers? They've been stuck in low 3 Glassdoor [0] range for a while. It's layoff after layoff as they slowly dismantle the company. Why stay? Geographic limitations? Narrow skillsets? [0] https://www.glassdoor.com/Reviews/IBM-Reviews-E354.htm#trends-overallRating https://www.glassdoor.com/Reviews/IBM-Reviews-E354.htm#trend...
- redblacktree 11y ago
  Fear of the unknown? Atrophy of key interviewing skills? Comfort with their position? There are a lot of reasons that people stay, even when a position or company is not optimal.
  - ryandrake 11y ago
    Maybe it's the weak job market? It's not like it's 1999 out there.
  - eggy 11y ago
    Fear guides all of us in some way, and striving to live means taking chances. The myth of the 'stable big company' that you can work at, and get your kid a job at after college, is past history. The U.S. changed directions when they closed a lot of the vocational schools, and the luxury afforded by being the first world economy, drove low to mid-level wages up. Dinosaurs like IBM cannot feed the machine. Manufacturing, though a different industry from IBM, disappeared, although it is making somewhat of a small team, or maker comeback. I've always struck out on my own. Getting laid off sucks, but I think most of them are just unhappy about the compensation, and most people I know who have 'overstayed' their usefulness at big corporations, usually own up and admit they weren't happy there, and they were not producing. I've been on both ends, and it never feels right, but change drives the world and life. The myth of stasis is one most humans embrace illogically. This dialogue will manifest itself in the reincarnation of xenophobia - 'Foreigners taking U.S. jobs!' - wait for Trump to chime in...
    - 11y ago
ImTalking 11y ago
I worked for IBM during the 80s at the height of IBM's power. It was the golden ticket. 400,000 employees and everyone was convinced it was going to hit $100B market cap. When I quit to form my own business, my 2nd line manager said "Why would anyone want to quit IBM?". Long time ago.
- kazinator 11y ago
  That's 2nd line manager thinking for you! If only suspenders could talk ... of course they can't since their jaws are firmly clenched into the upper hems of size 46 slacks.
  - ImTalking 11y ago
    He's the one who said to me "If you walk like a duck, quack like a duck, act like a duck, you are a duck" like he was the Oracle of Delphi.
    - kazinator 11y ago
      OOP visionary, wow. (And if your birth certificate and other papers say you're a duck, but you don't quite walk like one, then you're a subtype of duck. If you're a subtype of duck which has a thumb and a nose, then you use these appendages together to show disdain for Barbara Liskov's Substitution Principle.)
      - Gigablah 11y ago
        That's just anatine-centrism.
- tim333 11y ago
  It did hit a $100B cap. Just took a while.
  - kazinator 11y ago
    Yes; a little uptick in the cap, a little downtick in the value of a dollar and you're there.
moonlighter 11y ago
Meanwhile, IBM's CEO Ginny Rometty not only pocketed a salary of $1.6M in 2015, but also took a bonus of $4.6M. Not bad for 16 straight quarters of shrinking sales, evaporating profits and a falling stock price. http://www.latimes.com/business/hiltzik/la-fi-mh-ibm-s-ceo-writes-a-new-chapter-20160129-column.html http://www.latimes.com/business/hiltzik/la-fi-mh-ibm-s-ceo-w...
- komaromy 11y ago
  That doesn't sound like all that much for the CEO of an IBM-sized company.
  - ryandrake 11y ago
    $6.2M sounds like a lot for any single human being.
    - nickff 11y ago
      $6.2M is not a lot for a big company if the leader can increase sales or profits by even a few percent... which does not appear to be the case here.
      - fdej 11y ago
        Well, there was some recently published research that claimed to find that most of the effect attributed to CEO performance actually can be explained by random fluctuations. Make of that what you will.
        nonanako 11y ago
        Well, there was some recently published research that claimed X actually can be explained by Y. X and Y are arbitrary
        Godel_unicode 11y ago
yeukhon 11y ago
IBM has a fortune of so many old technology they built and acquired over the years. However, these money making recipes are also the dead weight of IBM and stopping IBM from actually making a change. IBM at this point is already too big to fail, so IMO there is no other way but to spin off IBM into multiple companies.
negrit 11y ago
It's interesting considering that IBM and IBM India filled 836[1] and 5420[2] LCAs for H-1B workers this year already. They are probably still hiring but are getting completely away from some aspect of the business. [1] http://data.jobsintech.io/companies/ibm-corporation http://data.jobsintech.io/companies/ibm-corporation [2] http://data.jobsintech.io/companies/ibm-india-private-limited http://data.jobsintech.io/companies/ibm-india-private-limite...
jwiley 11y ago
During the dot-com bust of the early 2000s, I was working at a super-market. One of the guys stocking shelves was a software engineer laid off by a large company after 40 years. The management at Winn Dixie put him stacking boxes in the freezer section...since they knew he needed the money and wouldn't quit. Maybe he deserved to get fired, maybe he didn't. The lesson to me that has been reinforced over my career in the tech sector is: don't ever expect a company to value you more than the next quarters earnings reports.
- SilasX 11y ago
  And learn how to job search. There's surely a better job that guy could have found.
  - ryandrake 11y ago
    I think you're forgetting what the early 2000's were like for software developers.
    - epx 11y ago
      Had a friend that literally had no money for food in this time (2002, actually).
      - deleted 11y ago
        [deleted]
        ebbv 11y ago
        What a disingenuous and snide response. Software engineers outside the valley, especially in the late 90s and early 2000's don't make ludicrous amounts of money. Even if you live frugally and save up, being suddenly laid off will lead you to burning through savings very quickly. It's not like retiring, you don't get the time to prepare. Lastly, lack of empathy is not a virtue.
        jonesb6 11y ago
tschellenbach 11y ago
Well more talent for the rest of us :) Stream is pretty close to the IBM offices and we're hiring in Boulder, CO: angel.co/stream
SilasX 11y ago
Anyone know how this affects their Watson division? They have a new SF office and they've been recruiting pretty heavily in the Bay Area.
- johnward 11y ago
  Watson is a growth play. I would expect it to be the last group affected.
  - SilasX 11y ago
    What do you base that on?
    - johnward 11y ago
      IBM's commitment to growing Cloud, Analytics, Mobile, Social, and Security (CAMMS). Investment into Watson branding and advertising. Maybe the feeling that I want to feel secure since I am in Watson group.
      - SilasX 11y ago
        >Maybe the feeling that I want to feel secure since I am in Watson group. Interesting, didn't realize! Very cool But that might not be a good reason to believe Watson is immune; reality doesn't work like that :-p
manishsharan 11y ago
IBM borrowed a ton of money to buy back its stock to boost share prices. With interest rates set to go up, their interest payments will go up as well and they don't have a runaway hit product to makeup for interest and principal payments.
fencepost 11y ago
I saw some reports that a lot of those affected are ones who've been there for a long time (= older workers), along with comments along the lines of "last year I'd have gotten 25 weeks severance - now I'm going to get 4." Makes you wonder whether any of those folks will now decide that the reduced severance payment isn't worth giving up the opportunity to sue.
michaelZejoop 11y ago
Does this mean it'd be waste of time to write up my "let me tell you about my favorite database" story as part of an application for a job at compose.io ? (serious question)
- strongai 11y ago
  I just submitted mine. The job looks attractive for a techie who likes writing. Mind you, I'm not entirely sure I like the idea of big blue sitting there in the background, metastasizing its woes everywhere.
justsaysmthng 11y ago
As technology gets better, it also gets cheaper. Probably exponentially so. That's why we're going to see this trend accelerate within the industry during the next couple of years - layoffs, bankruptcies, etc. There's just too much really really good technology out there. A lot of the problems that tech people were hired to solve years ago, have now been solved by the improved software/hardware. So it would be a good idea to start working on a really narrow skill set, which is something about human beings, before the AI takes over what'll be left of today's tech jobs.
artur_makly 11y ago
or u can change your environment parameters and simply move to a country where the USD is 4-10x. Then u will have the extra bandwith of time to work / study on the next big idea/framework/rev stream. ive done this 10yrs ago. went from a cog ina a wheel at Aol to a serial entreprenuer. stay flexible.
- easytiger 11y ago
  That assumes a cash surplus for the individual. Where did you move?
anfroid555 11y ago
Sad to see one of the giants slowly dieing that you grew up with.... Hard to change the direction of a major company
AYBABTME 11y ago
What I don't get is why anyone would accept an offer from them.
swalsh 11y ago
No one ever got fired for choosing IBM, but apparently working for them is a different experience. Seriously though, IBM is a dinosaur of a company that is quickly losing its merits. They cater to "old" large enterprises. They charge big licensing fees, and huge consulting rates. Young "enterprises" that embrace open source software are finding it competitive advantage. We don't have to wait for IBM to fit us into their dev schedule (hint, we'll never make it in) because we can modify the product to do what we need.... and we don't have to keep paying for the privileged to use it every year. If you think of IT as a cost center, you probably are an IBM customer, if you think of IT as a competitive advantage you're probably avoiding IBM...

333 points by zeveb 11y ago

That is awful. I wonder how much of this is cursed by the bet everything on IBM Watson strategy that I have read about. Are they laying off non-Watson staff?

adventured 11y ago
It's the consequence of their bet everything on services approach while the global economy stalls out. Simultaneously they gutted the technology side of their company and vastly under-invested in R&D/innovation, instead choosing to focus on financial engineering to fake earnings per share growth. They should have been at the forefront of cloud services, with a business as large as what AWS is. Instead, they spent their resources on buying back stock and lying to investors about the future. Their financial engineering was so good, they even snookered Warren Buffett, likely ultimately costing his shareholders billions in losses.
- blisterpeanuts 11y ago
  Maybe I'm not understanding your comment, but according to Forbes[1], IBM is prominent in cloud services and exceeds AWS in revenue. It sounds as though IBM's doing things right, at least in this space. It may be that in other markets, they've fallen behind or failed to innovate, e.g. the vast mobile market. 1. http://www.forbes.com/sites/gregsatell/2015/04/27/move-over-amazn-ibm-now-rules-cloud-services/#655a0e616dad http://www.forbes.com/sites/gregsatell/2015/04/27/move-over-...
  - marcus_holmes 11y ago
    According to the article IBM bought Softlayer and has only just launched BlueMix. I tried Bluemix and found it unoriginal and a cit crap. Not that the world of cloud services moves according to my preferences, but I'm not seeing it used anywhere else either. If IBM is "prominent" in cloud services it's from acquisitions. Whereas AWS pioneered the cloud industry. This is certainly "doing things right" in that it's providing a great exit route for startup founders in the cloud industry. I'm not sure it's "doing things right" for IBM itself. IBM looks like it's being run by accountants. You can tell because they think they'll get the same results from someone on a H1B visa as they will from their veteran employees. Accountants can never get their heads round the fact that technical folk aren't fungible.
    - increment_i 11y ago
      I had a similar experience with Bluemix. One of the biggest turn offs though was the ridiculously convoluted website for IBM's cloud services. Some serious streamlining is in order there. I had no idea where to go or what to do to get the information I needed for simple things like straightforward API pricing, etc.
      - gherkin0 11y ago
        > One of the biggest turn offs though was the ridiculously convoluted website for IBM's cloud services. Has IBM ever made a website that wasn't confusing and terrible?
      - sk5t 11y ago
        One possible explanation is that IBM actually has no idea what to charge for most BlueMix services.
    - jacques_chester 11y ago
      > but I'm not seeing it used anywhere else either. Bluemix is a re-branded Cloud Foundry. IBM donates engineering to the Cloud Foundry Foundation. CF is used in a lot of places. Disclaimer: I work for Pivotal, the leading donor of engineering to Cloud Foundry. We have our own distribution of Cloud Foundry, PCF, that is a competitor to Bluemix.
      - praneshp 11y ago
        Yes, but IBM somehow made CF, which is awesome to use, into a piece of shit offering with Bluemix. I hope their enterprise offering (if any) is better.
      - marcus_holmes 11y ago
        cool, new information, thanks :) I'm still not seeing BlueMix itself used anywhere ;)
  - sk5t 11y ago
    One would need a very contorted definition of "prominent in cloud services" to go along with that. BlueMix is still taking its baby steps compared to AWS or Google, and Softlayer is more like an outsourced data center with a bit of a management portal on top.
- JustSomeNobody 11y ago
  The stock market doesn't reward investing in R&D because you can't benefit from it in three months.
  - gozur88 11y ago
    I see people repeat this but it's not true. The stock market heavily rewards investing in R&D if investors think the research is going somewhere. Biotech companies are a good example.
    - mdorazio 11y ago
      Tesla is another. Their expected future value is based almost exclusively on R&D, and the stock is massively overvalued in comparison to other manufacturers.
    - Zigurd 11y ago
      It might be more accurate to say: Boards reward management for the appearance of producing results in 3 months, and there are a lot of bad C-suite managers who are happy to do so, at the expense of employees and long-term prospects, as long as the compensation is high enough.
  - icebraining 11y ago
    I like how investors are chastised for both having valuations much about current earnings and for only thinking about the next three months.
- rdtsc 11y ago
  > It's the consequence of their bet everything on services approach while the global economy stalls out. Yeah that was their strategy the last 10 maybe 15 years. That doesn't work anymore. They have to change. It certainly sucks for folks who work in services, but I can't see IBM doing well keeping tens of thousands of people trained in that until retirement just to provide jobs or to be "nice". I understand it has been around for more than a 100 years. At some point large swaths of people had to be laid off, just because of the changing business landscape. I would guess when they switched to mainframes from mechanical tabulators, some people had to be let go. > Their financial engineering was so good, they even snookered Warren Buffett, likely ultimately costing his shareholders billions in losses. Hmm, not sure, I don't think Buffett is easily snookered, he is not an amateur investor.
  - JamesSwift 11y ago
    I think that's what he is implying here. They were so effective at this, that _even_ a savvy Warren Buffet fell for it.
    - rdtsc 11y ago
      I was trying to say that it is not that they tricked him because they are so sly. They might have tricked themselves just as well. So it is not that had some secret great vision to take his money. They made mistake and they didn't see them and neither did Buffett.
Zigurd 11y ago
IBM omly appears to be betting on Watson. It is good for annoucements and putting a veneer of technology on a company that's been hollowed out. Once customers realized they could get the same Indian coders cheaper elsewhere, IBM was done.

reddytowns 11y ago

What a dastardly fellow! How dare the elected officer run his company as he sees fit WHY ALL THE DOWNVOTES!!?!?!?!

jacquesm 11y ago
She.
- reddytowns 11y ago
  Damn English and its lack of gender non-specific pronouns! Seriously, though... what is the implication that I am missing? What is the point of bringing up the CEO's pay? Should it be government mandated, is that what you all believe?
  - dandelany 11y ago
    Singular "they" is gender-neutral and grammatically correct, I don't know why more people don't use it.
    - deleted 11y ago
      [deleted]
    - vacri 11y ago
      I don't know why people dismiss it "because it sounds a little funny to me", but are okay with abominations like "he/she" or "zhe"...
      - licoricetic 11y ago
        maybe those are different people
        vacri 11y ago
        A venn diagram will provide all possible combinations of opinions, but there are definitely people out there who suggest 'he/she' or 'zhe' instead of 'they' because the latter 'sounds funny'

JohnTHaller 11y ago

There have been a couple folks on Facebook reporting that the H1-B folks they trained are staying while they are let go (ala Disney et al).

toomuchtodo 11y ago
I believe that's illegal, and doing so en masse is going to spark Congressional hearings.
- ebbv 11y ago
  It is 100% illegal, but Disney got away with it so other big firms are following suit.
  - toomuchtodo 11y ago
    I could've sworn they had to walk that back: http://www.latimes.com/business/la-fi-disney-technology-h1b-20150617-story.html http://www.latimes.com/business/la-fi-disney-technology-h1b-...
    - ebbv 11y ago
      They only "walked it back" enough to squash the bad PR they were getting. Once the headlines went away they went forward with their plan after all: http://www.nytimes.com/2016/01/26/us/lawsuit-claims-disney-colluded-to-replace-us-workers-with-immigrants.html?_r=0 http://www.nytimes.com/2016/01/26/us/lawsuit-claims-disney-c...
      - jeff_tyrrill 11y ago
        These were two separate instances of layoffs. The grandparent link is not related to yours (except that both stories involve Disney, and both involve layoffs).
  - swingbridge 11y ago
    Disney initially 'got away with it' because they kept the whole thing at an arms length by outsourcing to Cognizant. "Oh that's what you did, hire H1B? Yeah that wasn't us... We just outsourced to Cognizant so you should ask them about what's going on". Super shady, but it was a fleeting attempt at plausible deniability on behalf of Disney execs.

apo 11y ago

IBM layoff rumors have been around for awhile: http://www.cringely.com/2015/01/26/ibm-right-gadfly/ http://www.cringely.com/2015/01/26/ibm-right-gadfly/ I'm not sure what to make of this one.

colindean 11y ago
Cringely has always been very critical of IBM. I'm unaware of how often his predictions have been right. Disclosure: IBMer, speaking for myself.
- amptorn 11y ago
  Seems like a stopped clock situation in his case. That prediction is from a year ago and came to relatively little; he didn't predict this at all.
ReadEvalPost 11y ago
I'm unsure on the actual sizing but that wasn't exactly a rumor, that's when I was laid off. This was after a furlough and narrowly avoiding another layoff less than a year into my employment. Needless to say I'm glad I'm gone, even if it wasn't my choice.
- danso 11y ago
  How easy was it to find something new if you don't mind me asking?

davidw 11y ago

Sort of relevant. Paul Graham tweet on IBM patent trolling: https://twitter.com/paulg/status/705416252563419136 https://twitter.com/paulg/status/705416252563419136

mtgx 11y ago
IBM and Microsoft were instrumental in stopping the abolishing of business method patents - and surprise surprise, now they use them to patent troll other companies: https://www.washingtonpost.com/news/the-switch/wp/2013/11/20/software-patent-reform-just-died-in-the-house-thanks-to-ibm-and-microsoft/ https://www.washingtonpost.com/news/the-switch/wp/2013/11/20...

rdtsc 11y ago

That is a good sign. It means the ship is slowly turning around. It sucks for the employees being laid off, no doubt. However they have to do this. There is no other way. They bet big on support and services in early 2000s. So they have lots of those employees. Could they all start to learn new things adapt to the new environment, yeah, some will but not everyone will. Heck, if they didn't lay off people, they'd still have punch-card machine cleaners and even cheese slicer designers (they used to sell those way back in the day).

mattzito 11y ago
See, these types of comments are (again) why people have negative opinions towards silicon valley types. You may be right, but a good sign for whom, exactly? For the people who lost their jobs? For shareholders? For fans of IBM the company? Sure, yes, I agree that IBM probably has to shed people in order to stay competitive. However, it's not the fault of the people who are being affected by this, as by and large they were not responsible for IBM's decision to get more and more into support and services. (an aside: it's not clear those are the people being affected, I'm just responding to the parent comment) Instead, I would say a better discussion is: why is it that when IBM made a bet that did not play out, that they have cut people's severance benefits signifcantly? Why is it that we treat this as a necessary evil, instead of something to be disappointed about? Why are we not holding IBM up to be responsible for the well-being of their workers? I'm not arguing that this isn't something that IBM should have done. I am arguing that we shouldn't talk about layoffs as a "good sign", and I think we should try to keep in mind the lives of the people affected.
- dcwca 11y ago
  > You may be right, but a good sign for whom, exactly? For the people who lost their jobs? For shareholders? For fans of IBM the company? For IBM. It's good when you consider the alternative where a great company is slowly destroyed and everyone loses their jobs.
  - TheOtherHobbes 11y ago

dsmithatx 11y ago

I was at IBM from 1999 until my layoff in 2002. It was the 9th layoff for our group (Websphere). These layoffs suck and the stress nearly killed me. Back then the layoffs occurred after the dot com bubble burst. Lately I've been hearing lots of rumors from investors of wide spread belief of a tech bubble about to pop again. I'm guessing IBM is aware of this speculation and trying to be ahead of the game this go round. They hate to see their stock price drop and I'm very glad I'm not in a situation like that anymore.

edwinnathaniel 11y ago
I can't believe they did this kind of thing in 1999 - 2002 for WebSphere. That is the era where Enterprise Java, XML, and SOAP took off and App Server was selling pretty hot. Having said that, the 1999/2000 dotcom bust is different than if it was to happen today. In 1999/2000, open source wasn't as mature/diverse/strong as today so companies will buy commercial technology provided by SUN, Microsoft, IBM, Oracle. These days, majority of the VC backed companies are using FOSS software with minimum Oracle/Microsoft software (probably the ERP/Finance/HR modules).
- gedy 11y ago
  2002 was really bad for any tech spending..

williesleg 11y ago

Kindof sucks that they have to train their h1b replacements. Just like Disney. I'll never buy anything associated with either company.

pfarnsworth 11y ago

It seems untrue if an IBM spokesperson denied it. It would look really bad if their official spokesperson denied it and then the next day had to say the opposite.

daodedickinson 11y ago
Eh, maybe it's a "No layoffs... this week" Melissa Mayer joke.
lr4444lr 11y ago
Didn't that happen with Marissa Mayer's accidental leak and cover-up of the Yahoo layoffs a week early not too long ago? http://www.breitbart.com/tech/2016/01/19/marissa-mayer-taunts-her-employees/ http://www.breitbart.com/tech/2016/01/19/marissa-mayer-taunt...

mathattack 11y ago

Here's what I don't get... If you have any options at all, why stay at a company with sub-par technology that abuses their workers? They've been stuck in low 3 Glassdoor [0] range for a while. It's layoff after layoff as they slowly dismantle the company. Why stay? Geographic limitations? Narrow skillsets? [0] https://www.glassdoor.com/Reviews/IBM-Reviews-E354.htm#trends-overallRating https://www.glassdoor.com/Reviews/IBM-Reviews-E354.htm#trend...

redblacktree 11y ago
Fear of the unknown? Atrophy of key interviewing skills? Comfort with their position? There are a lot of reasons that people stay, even when a position or company is not optimal.
- ryandrake 11y ago
  Maybe it's the weak job market? It's not like it's 1999 out there.
- eggy 11y ago
  Fear guides all of us in some way, and striving to live means taking chances. The myth of the 'stable big company' that you can work at, and get your kid a job at after college, is past history. The U.S. changed directions when they closed a lot of the vocational schools, and the luxury afforded by being the first world economy, drove low to mid-level wages up. Dinosaurs like IBM cannot feed the machine. Manufacturing, though a different industry from IBM, disappeared, although it is making somewhat of a small team, or maker comeback. I've always struck out on my own. Getting laid off sucks, but I think most of them are just unhappy about the compensation, and most people I know who have 'overstayed' their usefulness at big corporations, usually own up and admit they weren't happy there, and they were not producing. I've been on both ends, and it never feels right, but change drives the world and life. The myth of stasis is one most humans embrace illogically. This dialogue will manifest itself in the reincarnation of xenophobia - 'Foreigners taking U.S. jobs!' - wait for Trump to chime in...
  - 11y ago

ImTalking 11y ago

I worked for IBM during the 80s at the height of IBM's power. It was the golden ticket. 400,000 employees and everyone was convinced it was going to hit $100B market cap. When I quit to form my own business, my 2nd line manager said "Why would anyone want to quit IBM?". Long time ago.

kazinator 11y ago
That's 2nd line manager thinking for you! If only suspenders could talk ... of course they can't since their jaws are firmly clenched into the upper hems of size 46 slacks.
- ImTalking 11y ago
  He's the one who said to me "If you walk like a duck, quack like a duck, act like a duck, you are a duck" like he was the Oracle of Delphi.
  - kazinator 11y ago
    OOP visionary, wow. (And if your birth certificate and other papers say you're a duck, but you don't quite walk like one, then you're a subtype of duck. If you're a subtype of duck which has a thumb and a nose, then you use these appendages together to show disdain for Barbara Liskov's Substitution Principle.)
    - Gigablah 11y ago
      That's just anatine-centrism.
tim333 11y ago
It did hit a $100B cap. Just took a while.
- kazinator 11y ago
  Yes; a little uptick in the cap, a little downtick in the value of a dollar and you're there.

moonlighter 11y ago

Meanwhile, IBM's CEO Ginny Rometty not only pocketed a salary of $1.6M in 2015, but also took a bonus of $4.6M. Not bad for 16 straight quarters of shrinking sales, evaporating profits and a falling stock price. http://www.latimes.com/business/hiltzik/la-fi-mh-ibm-s-ceo-writes-a-new-chapter-20160129-column.html http://www.latimes.com/business/hiltzik/la-fi-mh-ibm-s-ceo-w...

komaromy 11y ago
That doesn't sound like all that much for the CEO of an IBM-sized company.
- ryandrake 11y ago
  $6.2M sounds like a lot for any single human being.
  - nickff 11y ago
    $6.2M is not a lot for a big company if the leader can increase sales or profits by even a few percent... which does not appear to be the case here.
    - fdej 11y ago
      Well, there was some recently published research that claimed to find that most of the effect attributed to CEO performance actually can be explained by random fluctuations. Make of that what you will.
      - nonanako 11y ago
        Well, there was some recently published research that claimed X actually can be explained by Y. X and Y are arbitrary
        Godel_unicode 11y ago

yeukhon 11y ago

IBM has a fortune of so many old technology they built and acquired over the years. However, these money making recipes are also the dead weight of IBM and stopping IBM from actually making a change. IBM at this point is already too big to fail, so IMO there is no other way but to spin off IBM into multiple companies.

negrit 11y ago

It's interesting considering that IBM and IBM India filled 836[1] and 5420[2] LCAs for H-1B workers this year already. They are probably still hiring but are getting completely away from some aspect of the business. [1] http://data.jobsintech.io/companies/ibm-corporation http://data.jobsintech.io/companies/ibm-corporation [2] http://data.jobsintech.io/companies/ibm-india-private-limited http://data.jobsintech.io/companies/ibm-india-private-limite...

jwiley 11y ago

During the dot-com bust of the early 2000s, I was working at a super-market. One of the guys stocking shelves was a software engineer laid off by a large company after 40 years. The management at Winn Dixie put him stacking boxes in the freezer section...since they knew he needed the money and wouldn't quit. Maybe he deserved to get fired, maybe he didn't. The lesson to me that has been reinforced over my career in the tech sector is: don't ever expect a company to value you more than the next quarters earnings reports.

SilasX 11y ago
And learn how to job search. There's surely a better job that guy could have found.
- ryandrake 11y ago
  I think you're forgetting what the early 2000's were like for software developers.
  - epx 11y ago
    Had a friend that literally had no money for food in this time (2002, actually).
    - deleted 11y ago
      [deleted]
      - ebbv 11y ago
        What a disingenuous and snide response. Software engineers outside the valley, especially in the late 90s and early 2000's don't make ludicrous amounts of money. Even if you live frugally and save up, being suddenly laid off will lead you to burning through savings very quickly. It's not like retiring, you don't get the time to prepare. Lastly, lack of empathy is not a virtue.
      - jonesb6 11y ago

tschellenbach 11y ago

Well more talent for the rest of us :) Stream is pretty close to the IBM offices and we're hiring in Boulder, CO: angel.co/stream

SilasX 11y ago

Anyone know how this affects their Watson division? They have a new SF office and they've been recruiting pretty heavily in the Bay Area.

johnward 11y ago
Watson is a growth play. I would expect it to be the last group affected.
- SilasX 11y ago
  What do you base that on?
  - johnward 11y ago
    IBM's commitment to growing Cloud, Analytics, Mobile, Social, and Security (CAMMS). Investment into Watson branding and advertising. Maybe the feeling that I want to feel secure since I am in Watson group.
    - SilasX 11y ago
      >Maybe the feeling that I want to feel secure since I am in Watson group. Interesting, didn't realize! Very cool But that might not be a good reason to believe Watson is immune; reality doesn't work like that :-p

manishsharan 11y ago

IBM borrowed a ton of money to buy back its stock to boost share prices. With interest rates set to go up, their interest payments will go up as well and they don't have a runaway hit product to makeup for interest and principal payments.

fencepost 11y ago

I saw some reports that a lot of those affected are ones who've been there for a long time (= older workers), along with comments along the lines of "last year I'd have gotten 25 weeks severance - now I'm going to get 4." Makes you wonder whether any of those folks will now decide that the reduced severance payment isn't worth giving up the opportunity to sue.

michaelZejoop 11y ago

Does this mean it'd be waste of time to write up my "let me tell you about my favorite database" story as part of an application for a job at compose.io ? (serious question)

strongai 11y ago
I just submitted mine. The job looks attractive for a techie who likes writing. Mind you, I'm not entirely sure I like the idea of big blue sitting there in the background, metastasizing its woes everywhere.

justsaysmthng 11y ago

As technology gets better, it also gets cheaper. Probably exponentially so. That's why we're going to see this trend accelerate within the industry during the next couple of years - layoffs, bankruptcies, etc. There's just too much really really good technology out there. A lot of the problems that tech people were hired to solve years ago, have now been solved by the improved software/hardware. So it would be a good idea to start working on a really narrow skill set, which is something about human beings, before the AI takes over what'll be left of today's tech jobs.

artur_makly 11y ago

or u can change your environment parameters and simply move to a country where the USD is 4-10x. Then u will have the extra bandwith of time to work / study on the next big idea/framework/rev stream. ive done this 10yrs ago. went from a cog ina a wheel at Aol to a serial entreprenuer. stay flexible.

easytiger 11y ago
That assumes a cash surplus for the individual. Where did you move?

anfroid555 11y ago

Sad to see one of the giants slowly dieing that you grew up with.... Hard to change the direction of a major company

AYBABTME 11y ago

What I don't get is why anyone would accept an offer from them.

swalsh 11y ago

No one ever got fired for choosing IBM, but apparently working for them is a different experience. Seriously though, IBM is a dinosaur of a company that is quickly losing its merits. They cater to "old" large enterprises. They charge big licensing fees, and huge consulting rates. Young "enterprises" that embrace open source software are finding it competitive advantage. We don't have to wait for IBM to fit us into their dev schedule (hint, we'll never make it in) because we can modify the product to do what we need.... and we don't have to keep paying for the privileged to use it every year. If you think of IT as a cost center, you probably are an IBM customer, if you think of IT as a competitive advantage you're probably avoiding IBM...