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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?

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
  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.
  - rdtsc 11y ago
    > those employees would sue the board for some of its decisions. How does that even work? I understand if there is discrimination, or they didn't get paid for their work but sue them for betting on services for such a long time? Yeah, I don't see how that works. Moreover, didn't most of those employees make the same bet by getting hired to provide consulting services. Besides, employees are not the owners of the company (unless they are also major share holders). Shareholders can potentially sue, no doubt. But not sure about employees.
    - Spooky23 11y ago
      When you're at will, it doesn't. When you are covered by a collective bargaining agreement and contract, it happens all of the time. In my city, when the administration introduced unsafe conditions and unpopular schedule changes the firefighters union picketed the home of the mayor and fire chief, and successfully sued. A friend worked for a manufacturing company where the Union sued over chronic and egregious mismanagement. Unfortunately, the management wanted the company to fail and dragged things out until bankruptcy.
      - rdtsc 11y ago
        Wonder why more software jobs are not unionized? Hollywood and move industry has some of that. Teacher, pilots, firefighters do it.
        Spooky23 11y ago
        There are downsides too. Some perceived, some real. Unions are all about tenure. When the shit hits the fan, the young people lose. Pay scale is generally based on tenure as well.
        GFK_of_xmaspast 11y ago
        This industry is full of libertarians, full-bore objectivists, "fuck you, got mine"-ists, and scads of people who think they're 10x engineers and don't want to be compared to the plebs.
rdtsc 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. For shareholders. For people who are not laid off and still work there. > 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. Is it surprising that IBM is not a flat organization / meritocracy where regular employees get to vote on corporate strategy. Yes it is not their fault. So what should IBM do? They can provide severance packages, extra benefits maybe. Try to re-train some people perhaps. But can't keep everyone till retirement just to provide jobs (That is what Uncle Sam does). > Why is it that when IBM made a bet that did not play out, that they have cut people's severance benefits signifcantly? But it did play out. Services was bringing a huge amount of money during late 90s early to mid 2000s. It just doesn't anymore > Why are we not holding IBM up to be responsible for the well-being of their workers? We are posting on HN right. This startup land. Every 9 out of 10 startups will die. Are you holding them just as responsible? Or is there some implicit assumption that if you work for IBM then you'll be good till retirement. > I am arguing that we shouldn't talk about layoffs as a "good sign", I still argue it is a good sign. It is good for some parties (I enumerated a few above) and it really sucks for those getting laid off. No denying that. Hopefully they could have extra time, severance packages and so on to help. How about this, what would you do if you ran IBM and you ended up with 50000 employees trained to do something that just doesn't bring profit anymore?
- revelation 11y ago
  A company is it's employees. If IBM still has cheese slicer designers in 2016, it's because they failed to train them. The discussion we're having here is because there seem to be no repercussions to their failure.
  - gozur88 11y ago
    No, actually a company is its shareholders. Literally. Employees are the hired help.
    - 11y ago
makecheck 11y ago
Executive pay doesn’t seem to follow the high-risk-high-reward scenario; they keep the “high reward” but see apparently none of the “high risk”. A much more balanced system would be something like, for each executive: - Your base pay is $51 million. - If you FAIL at your task, YOU OWE THE COMPANY $50 million. - If you succeed, you receive an extra $20 million. If you choose to split $15 million of this reward with employees in terms of stock however, your portion of the stock will be doubled. That would put some skin in the game. And if a failing executive is forking over most of his millions back to the company, they could probably avoid quite a few layoffs. And if the executive doesn’t fail and has a direct incentive to share success with employees, the workers would be even more loyal to the cause.
- ams6110 11y ago
  I do agree with the point that the executives often don't appear to suffer the pain of failure, but if the layoffs are of the scope mentioned, the number of jobs that could be saved with $50,000,000 is somewhere on the order of a rounding error.
  - makecheck 11y ago
    Per executive. Assuming a generous $100k cost per employee, that’s still 500 jobs. And really, I think saving 10 jobs or 5 jobs is still fine, if that were the number. No single person can be so good at a job that it warrants sending hundreds more out the door. Any company that thinks this should try an experiment: fire the executive, ask any employee at all in the company to take over the job for 1/20th the salary and see if the outcome is measurably worse.
- dogma1138 11y ago
  That's not that far from how it works except for the last part. Many executive have a low base pay but a very high bonus component especially CEO's it's usually not 50 to 1 (unless they take a "symbolic" salary when it ends up being usually millions to one) but it's quite high. Now granted it's not if you fail at your task you owe a company money but you don't get it, the owe a company money could happen it's usually common in some countries (UK for example) where the CEO gets a "loan" for X amount which is spread out over some years, it's again not usually to put skin in the game but to lock a CEO to the company, the CEO change at Sage about a year ago had a loan component to it.
woodman 11y ago
>You may be right, but a good sign for whom, exactly? The economy, so everybody. You're asking the wrong question, it isn't "Why is it a good sign that IBM has begun layoffs?" The question is "Why is it a good sign that IBM, a poor performer that is popularly believed to have misallocated resources, has begun layoffs?" It isn't a choice between IBM doing great, or doing layoffs; it is a choice between IBM continuing to do poorly and eventually imploding spectacularly, or doing layoffs. Of course layoffs don't mean a certain turn around for them, but the consequences for inaction are pretty certain. As far as the fate of the individual employees: in the long run the vast majority will be better off. Either IBM didn't efficiently translate those employee's skills to profit, or there is inadequate demand for the skills and the employees have been shielded from that harsh reality. In the case of inefficiency (the most common case): if another company can derive more profit from the same skill - then they can also pay more. In the case of obsolete skills: unless IBM can, with a certainty, provide employment until the employee dies - they are assisting the employee in a game of retirement savings Russian roulette. So that is the economics 101 explanation, but I've found it to be true. I've been through this twice, and in both cases I've come out the other side much better off.
forgetsusername 11y ago
>However, it's not the fault of the people who are being affected by this So, are the worker bees accountable for the success of a company, or are they merely anonymous cogs? HN seems to like it both ways; when some executive or manager gets acclaim, we're quick to point that it's the regular employees doing the "real work" in the company. But when it goes south, we question what part they played in the thing, and point the blame elsewhere. It isn't merely incompetent management that are responsible. And there's also a lot of bad luck involved. A plan was implemented, it didn't work; should the 10's of thousands of remaining workers suffer? >Why is it that we treat this as a necessary evil, instead of something to be disappointed about? It's both.

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
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.
- rdtsc 11y ago
  > those employees would sue the board for some of its decisions. How does that even work? I understand if there is discrimination, or they didn't get paid for their work but sue them for betting on services for such a long time? Yeah, I don't see how that works. Moreover, didn't most of those employees make the same bet by getting hired to provide consulting services. Besides, employees are not the owners of the company (unless they are also major share holders). Shareholders can potentially sue, no doubt. But not sure about employees.
  - Spooky23 11y ago
    When you're at will, it doesn't. When you are covered by a collective bargaining agreement and contract, it happens all of the time. In my city, when the administration introduced unsafe conditions and unpopular schedule changes the firefighters union picketed the home of the mayor and fire chief, and successfully sued. A friend worked for a manufacturing company where the Union sued over chronic and egregious mismanagement. Unfortunately, the management wanted the company to fail and dragged things out until bankruptcy.
    - rdtsc 11y ago
      Wonder why more software jobs are not unionized? Hollywood and move industry has some of that. Teacher, pilots, firefighters do it.
      - Spooky23 11y ago
        There are downsides too. Some perceived, some real. Unions are all about tenure. When the shit hits the fan, the young people lose. Pay scale is generally based on tenure as well.
      - GFK_of_xmaspast 11y ago
        This industry is full of libertarians, full-bore objectivists, "fuck you, got mine"-ists, and scads of people who think they're 10x engineers and don't want to be compared to the plebs.

rdtsc 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. For shareholders. For people who are not laid off and still work there. > 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. Is it surprising that IBM is not a flat organization / meritocracy where regular employees get to vote on corporate strategy. Yes it is not their fault. So what should IBM do? They can provide severance packages, extra benefits maybe. Try to re-train some people perhaps. But can't keep everyone till retirement just to provide jobs (That is what Uncle Sam does). > Why is it that when IBM made a bet that did not play out, that they have cut people's severance benefits signifcantly? But it did play out. Services was bringing a huge amount of money during late 90s early to mid 2000s. It just doesn't anymore > Why are we not holding IBM up to be responsible for the well-being of their workers? We are posting on HN right. This startup land. Every 9 out of 10 startups will die. Are you holding them just as responsible? Or is there some implicit assumption that if you work for IBM then you'll be good till retirement. > I am arguing that we shouldn't talk about layoffs as a "good sign", I still argue it is a good sign. It is good for some parties (I enumerated a few above) and it really sucks for those getting laid off. No denying that. Hopefully they could have extra time, severance packages and so on to help. How about this, what would you do if you ran IBM and you ended up with 50000 employees trained to do something that just doesn't bring profit anymore?

revelation 11y ago
A company is it's employees. If IBM still has cheese slicer designers in 2016, it's because they failed to train them. The discussion we're having here is because there seem to be no repercussions to their failure.
- gozur88 11y ago
  No, actually a company is its shareholders. Literally. Employees are the hired help.
  - 11y ago

makecheck 11y ago

Executive pay doesn’t seem to follow the high-risk-high-reward scenario; they keep the “high reward” but see apparently none of the “high risk”. A much more balanced system would be something like, for each executive: - Your base pay is $51 million. - If you FAIL at your task, YOU OWE THE COMPANY $50 million. - If you succeed, you receive an extra $20 million. If you choose to split $15 million of this reward with employees in terms of stock however, your portion of the stock will be doubled. That would put some skin in the game. And if a failing executive is forking over most of his millions back to the company, they could probably avoid quite a few layoffs. And if the executive doesn’t fail and has a direct incentive to share success with employees, the workers would be even more loyal to the cause.

ams6110 11y ago
I do agree with the point that the executives often don't appear to suffer the pain of failure, but if the layoffs are of the scope mentioned, the number of jobs that could be saved with $50,000,000 is somewhere on the order of a rounding error.
- makecheck 11y ago
  Per executive. Assuming a generous $100k cost per employee, that’s still 500 jobs. And really, I think saving 10 jobs or 5 jobs is still fine, if that were the number. No single person can be so good at a job that it warrants sending hundreds more out the door. Any company that thinks this should try an experiment: fire the executive, ask any employee at all in the company to take over the job for 1/20th the salary and see if the outcome is measurably worse.
dogma1138 11y ago
That's not that far from how it works except for the last part. Many executive have a low base pay but a very high bonus component especially CEO's it's usually not 50 to 1 (unless they take a "symbolic" salary when it ends up being usually millions to one) but it's quite high. Now granted it's not if you fail at your task you owe a company money but you don't get it, the owe a company money could happen it's usually common in some countries (UK for example) where the CEO gets a "loan" for X amount which is spread out over some years, it's again not usually to put skin in the game but to lock a CEO to the company, the CEO change at Sage about a year ago had a loan component to it.

woodman 11y ago

>You may be right, but a good sign for whom, exactly? The economy, so everybody. You're asking the wrong question, it isn't "Why is it a good sign that IBM has begun layoffs?" The question is "Why is it a good sign that IBM, a poor performer that is popularly believed to have misallocated resources, has begun layoffs?" It isn't a choice between IBM doing great, or doing layoffs; it is a choice between IBM continuing to do poorly and eventually imploding spectacularly, or doing layoffs. Of course layoffs don't mean a certain turn around for them, but the consequences for inaction are pretty certain. As far as the fate of the individual employees: in the long run the vast majority will be better off. Either IBM didn't efficiently translate those employee's skills to profit, or there is inadequate demand for the skills and the employees have been shielded from that harsh reality. In the case of inefficiency (the most common case): if another company can derive more profit from the same skill - then they can also pay more. In the case of obsolete skills: unless IBM can, with a certainty, provide employment until the employee dies - they are assisting the employee in a game of retirement savings Russian roulette. So that is the economics 101 explanation, but I've found it to be true. I've been through this twice, and in both cases I've come out the other side much better off.

forgetsusername 11y ago

>However, it's not the fault of the people who are being affected by this So, are the worker bees accountable for the success of a company, or are they merely anonymous cogs? HN seems to like it both ways; when some executive or manager gets acclaim, we're quick to point that it's the regular employees doing the "real work" in the company. But when it goes south, we question what part they played in the thing, and point the blame elsewhere. It isn't merely incompetent management that are responsible. And there's also a lot of bad luck involved. A plan was implemented, it didn't work; should the 10's of thousands of remaining workers suffer? >Why is it that we treat this as a necessary evil, instead of something to be disappointed about? It's both.