Trade unionists feared already last year the job losses in the IT group in Germany. At that time there was talk of 2,500 jobs over the next two years. With the new announcement is not yet clear that it will not come to a further job cuts, said the Verdi representatives. Nationwide, the US group most recently employed about 16,500 employees. 2009 there were still 21,100 employees.
In addition, Facebook group Watching IBM reports 17% of Big Blue's U.S. tech sales force will be laid off to make room for new "Open Source positions," and that it has heard 185 layoffs were announced for Australia/New Zealand three weeks ago. The group has also reported 225, 160, and 900 workers will respectively be laid off in Sweden, Denmark, and Germany - the last part appears to back up the Berlin Morning Post's report. Last November, WirtschaftsWoche reported IBM is thinking of cutting up to 3K German jobs over the next two years. ...
In a sense, the layoff reports and today's announcement regarding the acquisition of cloud software consulting/implementation service provider Bluewolf (reportedly for over $200M) are linked, as each further one part of IBM's two-pronged strategy to offset secular declines for large portions of its on-premise enterprise hardware, software, and services ops. The first is to boost near-term EPS via job cuts, buybacks, and (with the help of financial engineering) lower tax rates. The second is to make a series of acquisition targeting high-growth tech segments (more often than not related to cloud services and/or analytics). ...
But for now, IBM's two-pronged approach isn't doing enough to keep sales and EPS growth positive: Revenue fell 9% Y/Y in 2015 after adjusting for divestitures (it fell 1% if you also back out forex), and EPS from continuing ops dropped 10% to $14.92. More pain is expected in 2016, followed by some stabilization in 2017.
The redundancies will hit IBM Germany's Global Business Solutions, Management and Business Support, and Business and Technology Services. Watching IBM says the staff will be let go in a “socially acceptable way” within the next 12 months.
That's in a stark contrast to the home market, where staff have complained that severance has been slashed to a single month.
IBM Germany ran with a now-familiar line, that it will continue hiring staff with “key skills”, something it told The Register in early March while discussing the pink slips it's handing out in America.
Selected reader comments follow:
They're (IBM) pushing many legacy skilled people out of the door, whilst "pulling in the future". A great idea you would have thought - however many grads are there as a door opener to the IT industry, they no longer see IBM as a career, they see IBM as a stepping stone to their next position in Google, Amazon or similar.
In a few years IBM will be Ginny, her loyal disciples, and passing through grads. Not a great model.
Via an recently ex-IBM
In return, the company agreed to take over key facets of the university’s IT operations, including the management of sensitive student personal and financial data, hire 70 USC employees from the university payroll, and take over a OneCarolina project already millions of dollars over budget and behind schedule. ...
Now, two years later, many of the employees USC shipped to IBM are gone and replaced in large part by H-1B visa workers from India, and the OneCarolina project over which IBM was given oversight continues to suffer from the strain of implementing two competing software systems, thanks to a mid-project vendor switch that alienated on-site technical support, led to the firing of nearly 40 consultants and leadership positions and halted the HR/payroll programs in its tracks with no rollout date as yet on the calendar. ...
A former Budget and Control Board employee with knowledge of the USC-IBM deal who asked to remain anonymous said he did not see enough benefits for the state to justify circumventing procurement law. ...
With only fledgling experience managing complex academic partnerships and a roster of only two schools (Michigan State and LSU) prior to the USC deal, former UTS employee Whit Ashley, who was one of the employees transferred from USC to IBM, said it’s a sweetheart deal for Big Blue because it adds credibility IBM desperately seeks in a market it’s determined to enter. ...
“At the meeting where we were told we had two weeks to decide whether we wanted to go to work for IBM or find other employment, (USC CIO) Bill Hogue started out the session saying how one day last year (2013), Pastides came to his office and handed him some materials on IBM and said to Hogue, ‘I think you’re gonna like this.’
“Hogue said to us, ‘And so when the President of the University says you’re gonna like something, you say ‘Yes, sir’ – and at this point, Hogue gestured a military salute – and you go look into it.’ He basically indicated that you do what you’re told and learn to like it.
“I’m glad I got out when I did. I feel badly for those who couldn’t. They’re stuck working for IBM not by choice while trying to fix software issues with Oracle and working with temporary H-1B employees from India and consultants who rotate in and out from multiple vendors when it used to be all handled in-house by people who loved working for USC. It’s a shame.”
Selected reader comments follow:
They claim to educate students in Comp Sci and engineering, they take their tuition money and allow them to rack up student loan debts, and then hire foreign workers--I'm wondering if they didn't force them to train their H1B replacements like they did at Disney. Parents and alumni should be outraged! The legislature should step in and force them to hire their own graduates.
This is a truly immoral/amoral bunch of eduthugs running things, talking out of one side of their mouths about no limits and then refusing to look inward for workers. Or demanding college degrees for jobs that pay 26k a year.
Selected comments from the Watching IBM Facebook page concerning this article follow:
In his ruling, presiding Judge Toru Yoshida said the company “had no justifiable reasons,” for firing the five plaintiffs and had committed “an abuse of power.”
Although there were actually some signs of decline in their job performance, they weren’t strong enough to justify firing them because they were still competent enough to continue their work, the judge said.
The plaintiffs claimed they were suddenly called in by their bosses and handed just one or two weeks’ termination notice due to “poor performance.” ...
Giving such short notice is rather common at foreign firms, but the Labor Standards Law states that employers must give at least 30 days’ notice before dismissal or pay the fired employee the equivalent of 30 days’ salary or greater.
“I believe the ruling this time was epoch-making as the court has put a brake on hasty U.S.-style layoff procedures,” Yosuke Minaguchi, a lawyer for the plaintiffs, said at a news conference after the ruling.
The plaintiffs also claimed that IBM Japan targeted particular union members to undermine the union’s power, but the court rejected this. ...
IBM Japan said in a statement Monday it was “extremely regrettable” its claim was not recognized by the court, and said it will decide on the next course of action after carefully examining the ruling.
Selected reader comments from the Watching IBM Facebook page follow:
Here’s what I need you to do. If you are a U.S. IBMer age 40 or older who is part of the current Resource Action you have the right under Section 201, Subsection H of the Older Worker Benefit Protection Act of 1990 (OWBPA) to request information from IBM on which employees were involved in the RA and their ages and which employees were not selected and their ages.
Quick like a bunny, ask your manager to give you this information which they are required by law to do.
Then, of course, please share this information anonymously with me. Once we have a sense of the scope and age distribution of this layoff I will publish part two.
Selected reader comments follow:
We read a book called “The process is the punishment.” IBM & Donald Trump can file a law suit every time they exhale. But most people are broken by the process. So, if you are getting laid off you are rarely in a position to file a law suit.
Now some lawyers will take it on a contingency basis, and maybe with a notorious opponent like IBM they might. But IBM is surely counting on people who are losing their jobs aren’t going to be in a position strong enough to file a law suit. There might be some guy working there, who does it because he loves it, not because he needs the money and might file, but most people won’t.
As Bernie Sanders says, the game is rigged. Actually I think George Carlin said it even better. It’s a club and you’re not in it.
Several years ago, IBM stopped giving out the position, location, and age information, citing privacy concerns (yeah right.) I will say that based on my observations, they seem to go after people approaching retirement age (because if they can call it a “retirement”, it doesn’t count as a layoff) and those who work from home or in smaller locations (so that the W.A.R.N. act isn’t triggered in the U.S.)
Selected comments on the Watching IBM Facebook page regarding this survey follow:
Advice to Management: Management sucks. And HR sucks even more
Pros: Great job to gain valuable experience and the agile principles that corporate has implemented show promise for better management in the future. Also, great place for young professionals as there are many recent college graduates at the office. One of the best work-life balances I've seen for an entry level position as there are ample opportunities to work from home/remotely and paid time off is good for entry level.
Cons: High turnover for employees (leaving for better opportunities, not fired) and even small changes can take months to become implemented. Even in Rochester, cost of living is essentially the same as MSP but employees are not compensated as such. Not the only option but the best option to make a salary that is comparable to an FA in the MSP area is to move to New York where cost of living is much higher as well.
Advice to Management: Work on new hire training as the current training is too broad and much of it did not apply to my role.
Pros: IBM provides lots of pretty advancement opportunities IF you can take the time to look for them and IF they are not in another one of their many many downsizing projects which seems to always be going on. IBM employment looks nice on the resume.
Cons: IBM is not what it used to be and they do not care at all about their employees in my opinion. Like so many other big companies, it's all about making more money than they did last year regardless of what that means to their employees. Working for IBM used to mean a lot more than it does now.
Advice to Management: Stop being so bloody greedy and show some loyalty the many people who make your company run! One of these days you will cut one too many US jobs and hire folks that have no idea what they are doing offshore.
Advice to Management: A generational change at senior executive level is urgently required. All of the Band AA and A should go, as most of the band B. Company should get rid of most GBS Consultancy area and other low-profit services, and focus on technological edge competitive solutions to expand its market, complementary to Watson. Infrastructure Software and Services should be merged and offered on the cloud.
Pros: Great culture, great talent, very good work-life balance and a great brand with some cool ideas. The company has many assets, but the most important of them is the people and the talent working there.
Cons: IBM has become a very unstable company; their finances are not good; too much bureaucracy and layoffs even in "strategic" areas just tell you how much the company cares for their talent.
Advice to Management: You're not doing enough and most are disconnected from reality. They live in a world that doesn't exist anymore, IBM loves to complicate things, the more complicated, the better, and that doesn't work anymore. Also, the Agile mentality is not true; you can see it in small and big things.
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