Business Insider Article- Laid Off IBM Employee Says The Company Is Blowing It By Cutting The Wrong People- Julie Bort
Laid Off IBM Employee Says The Company Is Blowing It By Cutting The Wrong People
Getting a job with IBM used to be the pinnacle of an IT career. Not so much today.
IBM is trying to strategically reduce headcount, and laid off over 2,000 people in 2012.
It also suffers from a corporate culture of cronyism that is costing IBM dearly, a former employee told BusinessInsider.
Note that in its last quarter, IBM's big services business, responsible for 57 percent of revenue, reported $15 billion for the quarter and grew a negligible 1 percent. But its profit rose 11 percent.
These cuts are affecting the company's business.Last month, Disney cancelled an IBM contract worth over $100 million annually.Texas booted IBM out of an $863 million, seven-year outsourcing contract. Last month, it awarded a $1 billion contract to IBM's competitors.The state of Indiana cancelled a 10-year $1 billion contract with IBM in 2009 and this year has been suing to IBM to get back the $437 million it had already paid.In recent years IBM has also lost other contracts, including one at the Department of Energy, the source told BusinessInsider.Poor project management is a big issue, the source says. IBM is routinely putting unqualified people into project management positions. "It's very hard to get promoted at IBM unless you know the right people," says the source. "People don't get promotions on merits or skills but on connections." For example, at Disney, IBM had "gone through five project managers and enormous staff transition" during its time there. IBM has laid off more than 1,800 workers in the U.S. and Canada, according to IBM employee watchdog group, AllianceAtIBM. Lee Conrad, national coordinator, says IBM seems to be specifically targeting older, or more experienced, higher paid workers and shipping jobs to cheaper labor overseas.
This is part of IBM's stated mission to increase shareholder EPS to $20 by 2015 which it calls Roadmap 2015. Internally, employees call it "Road Kill".
I'm sure the Corporate Communications division at IBM has seen it and if they dared, had passed it up the food chain. In many ways Ginni is stuck between a rock and a hard place, and her extrication strategy is to implement the cuts to take the path of least shareholder resistance. It's not easy being green or being Big Blue, either.
Everyone seems to recognize what is going on inside of IBM but the upper management. For some reason, the message is not getting through to them. $20 EPS in 2015 will happen, but at what cost? Imagine what 2016, 2017 and 2018 will look like. The number of people who built the company, created and are responsible for the phenomenal growth, and who were and are loyal to a fault, are dwindling fast.