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IBM layoffs strike first in India; workers describe as 'slaughter' and 'massive'

• sspiff 13y ago
  low social oversight and regulations result in easily attracting jobs and fewer protection when jobs need to be cut. On a downhill slope, it's much simpler and cheaper to cut jobs in developing economies, precisely for the same reasons it's cheaper to create jobs there when things go uphill.
• pyalot2 13y ago
  Outsourcing jobs. Outsourcing layoffs. Checks out, what did India expect?
  • deleted 13y ago
    [deleted]
  • CmonDev 13y ago
    Yes, not really a lay-off. More like winding down the scale of outsourcing. I hope jobs will re-emerge onshore later on.
    • dagw 13y ago
      I hope jobs will re-emerge onshore later on. If by "onshore" you mean China, then you'll probably get your wish. Otherwise, probably not.
      • nailer 13y ago
        I've worked with 10 Indian employees that could easily be replaced with a single competent westerner (of any descent whatsoever) for 1/3 the price. I suspect I'm not alone.
        • mkartic 13y ago
          Er, are you saying they were incompetent because they were Indians?
          • nailer 13y ago
            >> a single competent westerner (of any descent whatsoever) > are you saying they were incompetent because they were Indians? Quite obviously not.
            • electrichead 13y ago
              Not that obvious, actually. What was the point that you were trying to make?
              • nailer 13y ago
                Many western engineers, including many people of Indian origin in the US or UK, would also be 10x more productive than an individual in an outsourcing company hired based on the low cost of labor.
        • KumarAseem 13y ago
          And I have worked with 10 westerners who also can be easily replaced by 1 Indian who will do the work in a much better manner. Just because you might have had exposure to some idiots does not mean you label the whole bunch as incompetent.
          • nailer 13y ago
            It's certainly not a rule, just an observable phenomena, working in IBM with colleagues in Hyderabad and at Google partnering with Intuit in, IIRC, Bangalore. It's a cultural difference: in India, people become engineers because it carries prestige. They don't code because they love computing (this is measurable: ask how many outsourced engineers have GitHub accounts). The lack of actual interest in their profession demonstrates itself in their work. The best Indian programmers I've met have either left India or weren't born there in the first place, in either case I'd consider them westerners.
• thejosh 13y ago
  How many workers were actually cut?
  • negamax 13y ago
    According to article 'One analyst has estimated that IBM will cut 13,000 of its more than 434,000 workers'. Not sure how many (what percentage) is in India and how many are affected.
    • VLM 13y ago
      IBM is no longer a USA company and has not been for some time, logic would dictate that if they've only got ten thousand or so employees left in the USA, if they plan to downsize 13K, at least some citizens of India are going to have to go. They'll (probably) never get rid of the local USA sales force and some service techs, so by definition layoffs will now start to happen in India. GE is the same way, as are some other former USA companies, when all the Americans are fired you have to begin firing in India and China, which is new to those areas. Now if they really wanted inhumane, they'd make the Indian workers train their replacements, then fire them.
      • iends 13y ago
        The unofficial IBM union (http://www.endicottalliance.org/ http://www.endicottalliance.org/) estimates there to be ~66,000 FTE in the USA.
        • VLM 13y ago
          That's interesting, I was linear extrapolating from continuous losses around the last time an employer was a customer of IBM, leading me to think they're down to almost zero by now. The loss rate isn't as linear as expected.
    • gaspropelled 13y ago
      IBM has around 120,000 employees in India, around 90,000 in the US and around 20,000 in the UK. Around 35 billion dollars of IBM's revenue ( ie: around 35% )comes from IBM India.
• smoyer 13y ago
  I don't want to seem insensitive but ... The quote at the beginning of the article describes pretty much every layoff I've ever seen (or been through). The person quoted describes it as inhuman, but HR and managers are told to keep it impersonal (don't induce more crying than there is). You don't get notice (on purpose), you have to turn in company-owned property and they want you out the door (it affects the morale of the remaining employees). On the other hand, the severance and extended benefits are far more generous than any layoff I've been through here in the states. I'm not sure why employees in struggling business units don't recognize that THEY'RE PART OF A BUSINESS. If no one was laid off, the whole business would close when there was no money left to pay expenses.
  • arethuza 13y ago
    "Severance package was on an average 3 months basic component of salary, which is like 6 weeks full pay." That's not bad - probably more than most people would get here in the UK.
    • vidarh 13y ago
      For redundancy, 3 months is fairly common in the UK, and if certain conditions are met you can receive those 3 months pay free of tax.
      • arethuza 13y ago
        It's common amongst professionals or senior managers (sometimes even 6 months) - but the vast majority of people will be on statutory redundancy pay: https://www.gov.uk/redundant-your-rights/redundancy-pay https://www.gov.uk/redundant-your-rights/redundancy-pay
      • qwerta 13y ago
        It could be actually 3 months notice. Kind of problem in Europe if you want to change job.
        • walshemj 13y ago
• cones688 13y ago
  This article massively overstates what is occurring here, these people are members of staff involved with the part of the business which has been sold to Lenovo and surprise surprise Lenovo already has their own departments handling most of this stuff.
• deleted 13y ago
  [deleted]
• Max_Horstmann 13y ago
  | STG Bangalore literally turned into a slaughter house today obligatory: http://xkcd.com/725 http://xkcd.com/725
  • TeMPOraL 13y ago
    There's also an obligatory xkcd to that obligatory xkcd: http://xkcd.com/1108/ http://xkcd.com/1108/.
• victor27 13y ago
  The 3 months of compensation mentioned here - is equivalent only to 1.5 months in any other country. So not overtly generous. I'm sure their employment contracts mention 1-2 months of salary in event of termination (or a similar notice period in case the employee wants to leave) - so this is not more than committed. (In India the "Base Salary" component is often 50% of FIXED compensation, not including bonuses. This is done to reduce the statutory requirements on the company, especially in times like this.)
  • nailer 13y ago
    > The 3 months of compensation mentioned here - is equivalent only to 1.5 months in any other country. Why? 3 months of salary, to spend in India where things are relatively cheaper, seems like 3 months of Salary to me.
    • kranner 13y ago
      It's 3 months of 'basic pay', which would be half or less than half of the total salary. The rest is divided into so-called perks such as house rent allowance, travel allowance, education allowance, etc., which are partially tax-deductible for employees to various extents.
  • ScottWhigham 13y ago
    1.5 months salary is still generous though, no?
    • lmm 13y ago
      Maybe for a developing country. Here in Europe I'd expect 3 months' full salary as a minimum.
• PakG1 13y ago
  I have perhaps a unique perspective on this, as I was part of IBM in Asia and left in November 2013. I witnessed the 2013 layoff action and witnessed many good people in Australia and Singapore laid off in the name of cost-cutting. It is mentioned in the article that for this 2014 round, people with even PBC 1 and 2 were fired, which would have been the top performing people on their teams. I worked as a project manager doing datacenter/infrastructure work for IBM and was based in China. On my most recent PBC before I left, my manager gave me a 1, and I was managing a program for innovation projects in the Asia Pacific, as well as in charge of quality control work as part of IBM's global quality program called Global Delivery Framework (GDF). Project team members under me came from Australia, China, India, Malaysia, Singapore, South Korea, and Japan. Firstly, it is not surprising that this is happening. The technology in the IT industry has changed, and IBM was late to the cloud party. We were still manually building servers for projects as of the end of 2013. I myself was put in charge of a large project to virtualize hundreds of internal IBM application servers. Let's say that again: as of 2013, there were still hundreds of mission-critical IBM internal applications running on physical hardware until I was given the project to transition them to virtual servers. They now have the ability to run stuff virtually thanks to some new hardware they've installed, but processes are still very manual. As I was leaving, I told all of my teammates to be careful and get out while they could, because as soon as IBM went full-steam into cloud, all of their jobs would get automated. It takes anyone a few minutes to get a server with applications running on a cloud service. At IBM, it took me a month because everything had to be installed and configured manually, and the teams were always so busy that you had to wait until someone was available to do their part, whether it was installing AIX, installing DB2, configuring monitoring agents, configuring backup agents, doing BAU handover checks, whatever. If you were IBM's execs, which would you choose? The writing was on the wall for a long time. And while elephants can take a while to get moving, it is true that they can eventually dance, though they can cause a lot of damage when they finally do get going (and need to dance more frenetically to make up for lost time). Secondly and more importantly, it's sad that India was hit first in such a massive way, but it's not unexpected. I have nothing against Indian people and I think the situation is unfortunately more to do with IBM than it does with India. IBM was truly scraping the bottom of the barrel for their hiring, and in India, they went below the barrel in order to cut costs. It wasn't enough, as they went too far and hired too many people who were not capable of actually doing their jobs. I have plenty of examples, but we had sysadmins with senior in their titles that rather deserved to be labeled junior. My colleague beside me, a program manager of another program, turned to me exasperated when one of the Indian project managers in her program couldn't figure out how to fill out a project change request template. So the project manager wanted my colleague the program manager to fill out the form instead. Templates are there to make it clear what you're supposed to write. This level of incompetence was a trend, but I want to make it clear again, this is not the fault of the Indian people. This is the fault of IBM deciding to not have high standards. When the entire Domino team in Australia was let go (Domino is IBM's mail server) and replaced with a new, inexperienced, and untrained team in China, yet another colleague was again exasperated. Maintenance work that required only 6-hour change windows in her project became such that they needed 2 entire days because the new Domino team didn't know what they were doing. Again, it's not that the Chinese people were the problem. It's that IBM wasn't willing to pay to hire high-quality people, nor invest into training the people they did hire. As for why I think the issue of high/low standards is a bigger issue than technological change, I point you to an anonymous posting I made on Quora once. Being anonymous doesn't seem so important now. http://www.quora.com/IBM/What-are-the-weaknesses-of-IBM http://www.quora.com/IBM/What-are-the-weaknesses-of-IBM I tried copy-pasting the Quora post here, but then HN told me that my comment was too long. :D edit: clarification
• ck2 13y ago
  Um, what is happening in Syria is a slaughter, literally. What is happening in India is mass layoffs, sad and unfortunate but "slaughter" ? When AOL and other US corporations outsourced all the call centers to India in 2000-2010 , there were mass layoffs here too.
  • dominotw 13y ago
    Do you feel a sense of justice now?
    • ck2 13y ago
      No it is never a good thing when corporations discard people, anywhere. It is like they are throwing out an old sponge they have squeezed every drop out of.
      • KeepTalking 13y ago
        Respect
• BenSS 13y ago
  This is completely normal business for IBM. I saw it too many times during my tenure there and it was obviously well overdue for the India branches. There are regular cuts across the board, and there is actually very little attention paid to the internal ratings of the employees or keeping well-functioning groups together. Everyone left behind is expected to take up the slack, and additional hires are only made when things break badly enough for upper level management to be aware of it.
• linux_devil 13y ago
  What else you expect in country with poor labor laws? Layoffs is fine I think almost every company need to go through this phase one day or other for cost cutting. But there should be a procedure , a short 2 hours notice as seen in this article is shocking.
  • walshemj 13y ago
    Yes on sites like http://workplace.stackexchange.com/ http://workplace.stackexchange.com/ the questions about some of the labor practices in India are shocking almost pre Victorian in their harshness. And I suspect that getting a job in a MNC is seen a bit like the civil service is ie a job for life.
• manishsharan 13y ago
  If I had start-up capital , today I would have jumped on a plane to Banagalore. Regardless of the negative stories about Indian programmers, IBM does have some very talented and skilled people with a lot of experience and excellent work ethics. This being a massive lay-off and not a firing, the good and bad programmers alike have been let go. The interview process would have to be extra stringent and long and tedious, but you would end up with high quality people , who otherwise would never interview with a new start up. And after being let go from a blue-chip company, they would be more receptive of offers from early stage start ups.
• reversethrust 13y ago
  For what it's worth, a colleague asked a coworker (in Austin) who works regularly with India STG staff. To the coworker in Austin, they aren't aware of any of their Indian STG contacts, nor their teams, being affected. At least not as per the article.
• hungry_coder 13y ago
  Fire everyone. Keep the coders.
• known 13y ago
  Unlike Capitalism, Globalization is Zero-Sum.
• london12 13y ago
  IBM has spent an astonishing US$100K, per IBM employee!, on stock buybacks in the last 3yrs alone, and they are committed to more than half of that additionally in the next couple of years. They are only interested in increasing equity value among executives. IBM executives have stopped investing in their people, instead focusing on their personal bank accounts. IBM has given up on the idea of organic growth with the talent that they have -- they would rather chop off what they don't know how to manage and acquire new skills through acquisitions. Innovation is dying on the vine at IBM.