8 ms·

Tell HN: IBM and SAP are cutting thousands of jobs

91 points by ginzunza 4y ago

IBM (IBM) announced the cuts Wednesday, saying they were related to the previously announced spinoff and sale of two business units. Some 3,900 positions, or 1.5% of its global workforce, are expected to go. The move will cost IBM (IBM) about $300 million this quarter, a spokesperson confirmed. SAP (SAP), Europe’s largest software company, will lay off 2.5% of its global workforce of 112,000, or around 2,800 employees, according to an earnings report published Thursday. The restructuring will cost between €250 million ($272 million) and €300 million ($381 million); the company’s shares were down 3.3% in Frankfurt.

glawre 4y ago
I worked at IBM for too many years. This is nothing new. Their MO around 2010-2015 was to do quarterly reductions in order to minimize the press interest. In the UK the redundancy lists were often based on completely inaccurate "employee job codes". These were seemingly set when you joined the company and there was no process to review or update your code. At one stage I was on the redunancy list despite working in a 'Strategic' area. I only managed to dodge it after my Exec/Partner lobbied for someone to see sense.
ergonaught 4y ago
It's funny to write "IBM (IBM)" and "SAP (SAP)".
- ginzunza 4y ago
  haha, totally right
- jasode 4y ago
  >It's funny to write "IBM (IBM)" and "SAP (SAP)". It's because in the original text, the text in (parentheses) was the stock ticker symbol that linked to its chart performance: https://www.cnn.com/2023/01/26/tech/ibm-layoffs-intl-hnk/index.html https://www.cnn.com/2023/01/26/tech/ibm-layoffs-intl-hnk/ind... The copy&paste removed the hyperlinks which makes the extra text look redundant.
squalo 4y ago
almost all of ibm's most experienced and hands on people are now at Kyndryl. IBM continues to pay Kyn people to manage their own systems. Its funny given how much more costly that model is but layoffs impress the hedge funds.
NKosmatos 4y ago
Following the trend :-( Time to get rid of people they don’t want, without them look bad since everybody is doing it, and also they’ll have an excuse if financial results aren’t very good. IMHO it’s the retaliation of big companies to what remote working brought to all of us (freedom, better wages, quality time, escape from bad environments…).
- cdumler 4y ago
  Nah. It's about making your financial results look better. My company touts every quarter how not only is revenue up, profit per revenue is up, ie. we're making more money on the money we make. Yet, when it comes to compensation and dealing with cost of living, the statement is that we haven't met our targets so it's a 3% pool. Not minimum or maximum, but that for someone to get more someone else has to get less. COVID had many enlightening observations about the economy, one of which is that there was a lot of inelasticity in consumer demand versus compensation. Companies have realized that there is a lot more value to extract from employees.
  - lotsofpulp 4y ago
    >profit per revenue is up, ie. we're making more money on the money we make. This makes no sense to me.
    - drjasonharrison 4y ago
      The amount of profit per customer or item sold has increased. Instead of just increasing the number of sales, they have increased their profit margin on each sale.
      - lotsofpulp 4y ago
        Oh, the usual way to phrase that is “increased profit margins”.
  - crmd 4y ago
    At my last medium sized company there were at least a half dozen branches of “the budget”, with employees and sales people being measured against the most aggressive budget, and several levels of management adding their own buffers, and finally the board which was working off the most conservative/pessimistic revenue and profit forecasts. No idea if this is normal or not.
raincom 4y ago
3900 positions ~ 300M, 1 position ~ 80k
- akmittal 4y ago
  That number is for quarter
s_dev 4y ago
I can well imagine there are lots of upset people having lost their jobs. However it never seems to be a priority or even on radar for jobseekers to consider how a a company handles layoffs or handled layoffs in the past as a proxy for their own treatment should that time come again. I wonder if this is partially because jobs seekers have over optimized for salary or total comp relative to other things like job security and working conditions. I must have seen 00s of "Top 10 lists" listing places according to intern pay or grad pay with big companies like Meta and Snapchat always at the helm getting thrown around social media. I have never once seen places advertise that they haven't had to let an employee go. Maybe it's too difficult to measure or just rare enough that it can be largely ignored while things like salary simply can't be ignored. I don't know -- just trying to look at the other side of the coin as it were.
- ge96 4y ago
  Good to have savings or worse credit line to survive intermediary
- nightski 4y ago
  Personally I'd focus more on making a layoff less of a traumatic event than playing ultra safe with a low salary in a low risk company. For most software engineers it's not hard to build up a significant emergency fund. I'd advocate for 6 figures. Feel free to invest 80% of that as well in something liquid. Keep at least 3 months in cash.
  - _rs 4y ago
    Any recommendations on what type of accounts to use or what might be decent investments? I certainly wouldn’t put anything I’d call an “emergency fund” in stocks right now
    - multifasciatus 4y ago
      High Yield Savings Accounts (HYSA) like Marcus by Goldman Sachs can be a good place to keep the 3 month cash reserves.
bastardoperator 4y ago
This is chump change for these companies, thanks Wall Street.
dbg31415 4y ago
So IBM pay is $300,000 / year on average for the impacted roles? Seems very high.
bsg75 4y ago
In IBMs case, this is a regular occurrence, no? https://www.washingtonpost.com/news/on-leadership/wp/2015/01/28/the-biggest-mass-layoffs-of-the-past-two-decades/ https://www.washingtonpost.com/news/on-leadership/wp/2015/01...

91 points by ginzunza 4y ago

glawre 4y ago

I worked at IBM for too many years. This is nothing new. Their MO around 2010-2015 was to do quarterly reductions in order to minimize the press interest. In the UK the redundancy lists were often based on completely inaccurate "employee job codes". These were seemingly set when you joined the company and there was no process to review or update your code. At one stage I was on the redunancy list despite working in a 'Strategic' area. I only managed to dodge it after my Exec/Partner lobbied for someone to see sense.

ergonaught 4y ago

It's funny to write "IBM (IBM)" and "SAP (SAP)".

ginzunza 4y ago
haha, totally right
jasode 4y ago
>It's funny to write "IBM (IBM)" and "SAP (SAP)". It's because in the original text, the text in (parentheses) was the stock ticker symbol that linked to its chart performance: https://www.cnn.com/2023/01/26/tech/ibm-layoffs-intl-hnk/index.html https://www.cnn.com/2023/01/26/tech/ibm-layoffs-intl-hnk/ind... The copy&paste removed the hyperlinks which makes the extra text look redundant.

squalo 4y ago

almost all of ibm's most experienced and hands on people are now at Kyndryl. IBM continues to pay Kyn people to manage their own systems. Its funny given how much more costly that model is but layoffs impress the hedge funds.

NKosmatos 4y ago

Following the trend :-( Time to get rid of people they don’t want, without them look bad since everybody is doing it, and also they’ll have an excuse if financial results aren’t very good. IMHO it’s the retaliation of big companies to what remote working brought to all of us (freedom, better wages, quality time, escape from bad environments…).

cdumler 4y ago
Nah. It's about making your financial results look better. My company touts every quarter how not only is revenue up, profit per revenue is up, ie. we're making more money on the money we make. Yet, when it comes to compensation and dealing with cost of living, the statement is that we haven't met our targets so it's a 3% pool. Not minimum or maximum, but that for someone to get more someone else has to get less. COVID had many enlightening observations about the economy, one of which is that there was a lot of inelasticity in consumer demand versus compensation. Companies have realized that there is a lot more value to extract from employees.
- lotsofpulp 4y ago
  >profit per revenue is up, ie. we're making more money on the money we make. This makes no sense to me.
  - drjasonharrison 4y ago
    The amount of profit per customer or item sold has increased. Instead of just increasing the number of sales, they have increased their profit margin on each sale.
    - lotsofpulp 4y ago
      Oh, the usual way to phrase that is “increased profit margins”.
- crmd 4y ago
  At my last medium sized company there were at least a half dozen branches of “the budget”, with employees and sales people being measured against the most aggressive budget, and several levels of management adding their own buffers, and finally the board which was working off the most conservative/pessimistic revenue and profit forecasts. No idea if this is normal or not.

raincom 4y ago

3900 positions ~ 300M, 1 position ~ 80k

akmittal 4y ago
That number is for quarter

s_dev 4y ago

I can well imagine there are lots of upset people having lost their jobs. However it never seems to be a priority or even on radar for jobseekers to consider how a a company handles layoffs or handled layoffs in the past as a proxy for their own treatment should that time come again. I wonder if this is partially because jobs seekers have over optimized for salary or total comp relative to other things like job security and working conditions. I must have seen 00s of "Top 10 lists" listing places according to intern pay or grad pay with big companies like Meta and Snapchat always at the helm getting thrown around social media. I have never once seen places advertise that they haven't had to let an employee go. Maybe it's too difficult to measure or just rare enough that it can be largely ignored while things like salary simply can't be ignored. I don't know -- just trying to look at the other side of the coin as it were.

ge96 4y ago
Good to have savings or worse credit line to survive intermediary
nightski 4y ago
Personally I'd focus more on making a layoff less of a traumatic event than playing ultra safe with a low salary in a low risk company. For most software engineers it's not hard to build up a significant emergency fund. I'd advocate for 6 figures. Feel free to invest 80% of that as well in something liquid. Keep at least 3 months in cash.
- _rs 4y ago
  Any recommendations on what type of accounts to use or what might be decent investments? I certainly wouldn’t put anything I’d call an “emergency fund” in stocks right now
  - multifasciatus 4y ago
    High Yield Savings Accounts (HYSA) like Marcus by Goldman Sachs can be a good place to keep the 3 month cash reserves.

bastardoperator 4y ago

This is chump change for these companies, thanks Wall Street.

dbg31415 4y ago

So IBM pay is $300,000 / year on average for the impacted roles? Seems very high.

bsg75 4y ago

In IBMs case, this is a regular occurrence, no? https://www.washingtonpost.com/news/on-leadership/wp/2015/01/28/the-biggest-mass-layoffs-of-the-past-two-decades/ https://www.washingtonpost.com/news/on-leadership/wp/2015/01...