Revenue continues to fall. Profits are shrinking. New businesses are faltering. Internal processes taking precedent over customer issues. Service is being cut. Moral is in the toilet. What else can go wrong? Time to reevaluate the performance of this CEO. She has failed over and over again. Time for a change.
2 years ago IBM stock was near $220. That is about a 33% devaluation. Imagine if the employees cut back their production by 1/3, they would shot at sunset. Why is Ginni allowed to have such (p)iss poor performance and still accept a salary, stock, and probably a raise? Not to mention keep her job?
What you and most of the rest of the "free enterprise" people ignore is that the people that are being cut are not fat. To the contrary, many of these people are working longer hours with increased responsibilities. These cuts are not due to deflation or anything of the sort. IBM is not losing money, they made $16.5 Billion in profit last year. The simple reason they are being cut is because IBM is trying to reduce expenses to reach the ridiculous, arbitrary goal of $20 EPS by 2015. Revenue is declining, that does not mean that the people who are working there are not needed, it means that customers are not buying what IBM is selling. They may be cutting good, viable, potentially cost saving or revenue producing projects based on affordability and not on the technical merit of the project. When you continue to cut the base of the tree, eventually the tree will fall. The moral at IBM is absolutely in the toilet. No one is happy to be there. From high level directors to the guy sitting in his office pounding out lines of code each day. That in itself should give any investor reason for pause. Through the never ending cuts, IBM has tacitly implied that their employees do not matter to them as long as the stock issues are protected. To me, these are morality based investment decisions. I have to take into account the point where money is more important than people. IBM has already shown where they stand on that one.
Yes, I think they are laying people off simply to save expenses. There is no doubt about it. The projects are not failing, they are being dropped because they are laying people off and the non stop "cost challenges". They are stepping over dollars to pick up dimes. IBM is being run by accountants, not technologist and innovators. Sad to see it happen, but it is eerily similar to the early 90's with top heavy management so far removed and shielded from the day to day activities of the boots on the ground employees that they have no idea what is happening. Example: In 1998 I had 3 or 4 managers between me and the CEO, today I have 7 or 8. What do you think the chances of reality being sugar coated though those layers of professional BS'ers is?
Sentiment: Strong Sell
$1 Billion (give or take $100 Million) charge for Layoffs in 2014. Will be complete by March.
How will this company survive if they layoff $1 Billion worth of employees each year? These are not new hire, tops on bottoms factory workers we are talking about here. They are already gone. They are skilled programmers, senior developers, and the most experienced and knowledgeable of all employees in most cases.
IBM is known to target older, American workers who tend to earn more than their 3rd world counterparts.
They brought in Rod Adkins to take over hardware from zSeries and the results are the same if not worse for x, p and storage. It is not the manager, it is the product. zSeries is the best in the market and has an almost monopolistic market share, it has no choice but to succeed. Ginni is following Palisamo's fools errand 2015 Roadmap, of $15 EPS by 2015. The moral within IBM is in the toilet, old employees, new employees everyone below the 3rd lines and directors. The off-shoring of work is failing miserably. This is going to get a lot worse before it gets better.
Doesn't anyone else see a problem with this douche's name? Swap the first letters. I guess you think it is OK. Well it isn't OK. Azzwipe.
Call me where the revenue starts to increase. The multiple quarters of trending down revenue, combined with the aforementioned employee morale issues, and recent cloud loses to Amazon make me nervous. I got out about 3 months ago and will look to get back in around 150. It is on the way and then I will catch the bounce on the next next best thing....just like 2 years ago.
Published: 1:45 PM - 09/07/13
Last updated: 1:49 PM - 09/07/13
ESSEX JUNCTION, Vt. — IBM says it has taken down a job posting for Hopewell Junction and other locations that raised questions about age discrimination about six weeks after it laid off hundreds of employees at several locations.
The advertisement was for entry-level development engineers in Hopewell Junction, Albany and Essex Junction and required that "all applicants must have graduation dates of January 2010 or later."
IBM Spokesman Doug Shelton said Friday that the posting was a thoughtless mistake.
He said it would be pulled down and replaced.
Everyone knew, here is the proof.
About six weeks after eliminating 419 jobs at its Essex Junction site, IBM is hiring.
IBM’s advertisement for entry-level development engineers in Albany, N.Y., Essex Junction and Hopewell Junction, N.Y., posted on Aug. 30, included the following requirement: “All applicants must have graduation dates of January 2010 or later.”
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.
She clearly stated in an interview that IBM saved $50M by withholding raises simply because IBMers would not leave because they don't get one. From Seeking Alpha interview.
As we’ve worked on productivity, the rest of margins improved, right. You have a perfect example of two different views. One to cost, one to productivity and if I look at this two things that you would tell me typically people do by their gut, not analytically driven because I think that’s the secret about productivity and future is this idea of predictive analytics.
And so it’s not just what I felt, but I believe. So as an example salary increases, typically the way most companies do salary increases maybe yours, there is some sort of budget for salary increase to beat up, given to different units, managers and make their decisions, who gets what kind of thing based on their market competitiveness.
We have research work on predictive algorithms to predict people who might predict. They didn’t say they were going to leave and did say anything. They were top performers, predict who would be what it would take to make them not even think that way. We did it in one big country. We probably avoided $50 million of what would have maybe been a salary program we have to do there.
That to me is pure productivity. That’s not cost cutting.
To me is it sickening that IBM is using the very tools it's employees develop to screw them. What a slap in the face to the employees of IBM.
First off, IBM does not employ "hundreds of thousands" in the US. They no longer employ even 100,000 Americans. After today, based on published numbers that I will grant are by people other than IBM, it is probably much closer to 75,000. I would estimate that 35-50% of those are new hires at market rate salaries, not generous salaries. Those days left with Gerstner and will never return. If IBM adds value, they do it through their US employees too. It is not a one way street. Those US salaries are also a boost to the economy, you can not say that about the globally sourced employees from China, India and Mexico.
Your assumption that Americans do not understand how a capitalistic country runs, is insulting. The idea that because you are an American employee you have to sit down, shut up and take everything they dish at you is absurd. It is not the way this country was founded, and it certainly it not how it has prospered and become the industrial leader of the world. Employees matter and they are the backbone of any corporation no matter where they reside.
The American and European employees are treated the worst and are the most senior of the company. Most of the institutional knowledge resides in the US and Europe. I have no issue with expanding and hiring overseas, but I do have a problem with the blind cost cutting to reach the utopian $20 per share in 2015 at the US, European and Canadian employees expense.
Robert Djurdjevic, head of Annex Research in Maui, Hawaii, found IBM’s report disappointing. “One cannot count on ‘financial engineering’ alone to boost profit margins. One needs new revenues. Period. No currency, tax rate, share buybacks, quarter-to-quarter overflows or other adjustments or explanations. True new business is the missing factor in IBM results.”
Thank you Robert, my exact sentiment.