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Bob Cringely: IBM Will Jettison 78% of Their US Workforce by 2015
Gregg Eldred    

Bob Cringley has written a series of five articles concerning IBM. The last time he did that, in 2007, he revealed that IBM was ready to offshore and outsource thousands of IBM jobs, impacting employees and customers alike. He was rigth. Now, he returns, predicting, well, here it is in his own words (emphasis, Bob Cringely).

The direct impetus for this column is IBM’s internal plan to grow earnings-per-share (EPS) to $20 by 2015. The primary method for accomplishing this feat, according to the plan, will be by reducing US employee head count by 78 percent in that time frame.

Reducing employees by more than three quarters in three years is a bold and difficult task. What will it leave behind?  Who, under this plan, will still be a US IBM employee in 2015? Top management will remain, the sales organization will endure, as will employees working on US government contracts that require workers to be US citizens. Everyone else will be gone. Everyone.

Let's continue on to his second article.

Global Services is a mature business that has been around for about 20 years.  In IBM’s 2015 business plan big income is expected from newer businesses like Business Analytics, Cloud and Smarter Computing, and Smarter Planet.  Can these businesses be grown in three to five years to the multi-billion dollar level of gross profit coming from Global Services?  Most of these businesses are tiny.  A few of them are not even well conceived as businesses.  It takes special skills and commitment to grow a business from nothing to the $1 billion range.  Does IBM have what it takes?

Probably not.

Do you remember eBusiness?  Do you remember On-Demand?  These are recent examples of businesses IBM planned to grow to billions in sales, businesses that no longer exist today.  Some claim that Blue Gene is shortly to be shuttered, too.

Actually, I see "eBusiness" nearly every day. It appears on my Linux server after I start WebSphere, ". . . ready for e-business . . . " Thanks, IBM, for that little advertisement.

Here’s a simple thought experiment. When it comes to these new software and Internet services, IBM’s competition comes from a variety of companies including Amazon, Apple, Dell, Google, Hewlett Packard, Oracle and others. Does IBM have an inherent advantage at this point against any of those companies? No. Is IBM in any way superior to all of them and thence in a position to claim dominance? No.

Ouch.

If IBM is planning a 78 percent staff reduction, then that will of necessity involve all USA operations, not just Global Services.  Hardware, systems, software, storage, consulting, etc. will all see serious staff cuts.  This means IBM could be moving a lot of its manufacturing and product support offshore.  Raleigh, Lexington, Rochester, and several other IBM communities are about to lose a lot of jobs.

That does not bode well for anyone, especially those organizations that pay IBM a lot of money for support, expecting a certain level of competence and knowledge from the support technicians.

IBM’s goal appears to be to have as few employees in the US as possible, maximizing profit.  But doing so clearly hurts customer satisfaction. Major IBM customers such as Amgen, The State of Texas, and most recently the Walt Disney Company have cut ties with IBM in favor of other providers. Many other customers are scaling back the services they’re buying from IBM as the perceived value continues to drop. Customers are starting to realize that they can directly hire offshore companies such as TCS, Wipro, HCL and Satayam and book the savings directly instead of paying IBM top dollar for support and then seeing that support fulfilled from BRIC [Brazil, Russia, India, China] countries. When IBM first started its big push to offshore technical work, the account teams were asked to make a list of reasons why customers’ work couldn’t be offshored, but were not allowed to use skills as a reason. That makes no sense in a rational organization but it makes perfect sense to IBM.

Link: Bob Cringely: Watch Out IBM!

Link: Bob Cringely: Not Your Father's IBM

Link: Something's Rottern In IBM Dubuque

Link: Bob Cringely: Magical Thinking at IBM

Link: Bob Cringely: How to Fix IBM in a Week



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http://www.ns-tech.com/blog/geldred.nsf/plinks/GELD-8TN2KB
Apr 23, 2012
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Recent Blog Posts
452


Forbes: How to Fix IBM
Fri, Oct 24th 2014 8:03a   Gregg Eldred
I’ve been waiting for this article, since IBM announced that they were abandoning their 2015 plan (I think that a lot of people were calling it “Death March 2015″). The money quote comes early in the article: IBM forgot the most important part of running a business.  While shareholder value is important, it is customers that make business possible. On Global Services: IBM’s Global Services have seen the worst cost cuts and the most layoffs.  These cuts have hurt many of IBM [read] Keywords: ibm apple applications google microsoft mobile
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iOS 8 and Traveler
Tue, Sep 9th 2014 7:13a   Gregg Eldred
A new TechNote, published yesterday, outlines iOS 8 and Traveler issues/responses. The good news: If you are currently on Traveler 8.5.3 UP2 or later, you are ready. If you’re on Traaveler 9.0.1 IF5 or IF6, you are really ready (those versions recognize iOS 8 devices). But watch the TechNote for notification of any Interim Fix that addresses iOS 8 specific issues. [read] Keywords: ibm traveler
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Golf as “Exercise?”
Wed, Aug 20th 2014 2:20p   Gregg Eldred
Last week, from Thursday to Saturday, I was again asked to play in an annual Ryder Cup. It pits a team from Ohio against one from Michigan (Ohio State versus Michigan/Michigan State, or more accurately, friends from the states of Michigan and Ohio). I, again, played on the Michigan team. They need me to round out the number of players and also, so that I can play with my friend, Steve. The format is Thursday, 36 holes, Friday, 36 holes, Saturday, 18 holes. Or, 90 holes in 3 days. The actual tour [read] Keywords:
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A Lesson From Riding New Mexico and Colorado
Wed, Jul 9th 2014 10:40a   Gregg Eldred
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Dash4Dosh 2014: Let’s All Laugh
Mon, Jun 9th 2014 2:00p   Gregg Eldred
For your enjoyment, some random pictures from Denmark, Sweden, and Norway. First up, Chris pitching his tent. Yes, the photo looks grainy, but that isn’t the fault of the photographer, it was raining. In an epic fashion. Doesn’t he look happy that he will be “sleeping” in a tent? I found Paul’s toilet in a Statoil station: And Paul’s bike: The Arctic Circle, Sweden: Chris, in his natural pose, taking photos (at the Sweden/Norway border): And photograp [read] Keywords:
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Dash4Dosh 2014: A Quick Overview
Sun, Jun 8th 2014 3:20p   Gregg Eldred
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Finding Connections on Google Play
Thu, May 1st 2014 2:40p   Gregg Eldred
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Open Mic Webcast: Notes Traveler Support – Common issues, Interim Fixes, Q&A – 30 April 2014
Wed, Apr 30th 2014 6:00a   Gregg Eldred
Anyone else get this invite just a day or two ago? Join members of the IBM Notes Traveler Development team as they share information on supporting IBM Notes Traveler, including common issues, Interim Fix deliveries and more. After a presentation, attendees will be given an opportunity to ask our panel of experts questions. Throughout the event, attendees will also be encouraged to comment or ask questions in the IBM SmartCloud Meeting Web chat. Join us for this interactive, educational, lively s [read] Keywords: ibm notes traveler development
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Dash4Dosh 2014: An Update
Tue, Apr 29th 2014 10:50a   Gregg Eldred
We are less than a month away from riding motorcycles to the Arctic Circle, via Denmark, Sweden, Finland, and Norway. And camping. God, are we REALLY camping? We must be, I have a sleeping bag, a camping pad, and a spork. Paul Mooney bought a tent! (let that sink in for a minute). Never before have I asked for donations to any sort of cause. Yes, I support those that ask, but fundraising just isn’t my thing. When Paul setup the Dash4Dosh 2014 JustGiving page, and I saw the £4,000 goal, I [read] Keywords: atlantic facebook google skype
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Dash4Dosh 2014: Riding to the Arctic Circle
Tue, Mar 4th 2014 7:10p   Gregg Eldred
I really haven’t figured out a good opening paragraph to this story. Too many thoughts going through my mind (giving back, relatives lost to cancer, father beating cancer, and so on). So, let’s cut to the chase. I have scheduled eleven days of my corporate provided holidays to join Paul Mooney, Sean Cull, Vladimir Veletic, and Chris Harris, to meet up with some friends from Denmark, and a few support cars, and embark on a motorcycle ride that supports Macmillan Cancer Support. This i [read] Keywords:




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