As end of Q2 nears, IBM employees fret 'resource actions'

As end of Q2 nears, IBM employees fret 'resource actions'

Summary: IBM appears to be making good on its promise that it will make the bulk of its workforce rebalancing moves in the second quarter. Employees ranging from consultants to data center workers to sales are sweating.

SHARE:
TOPICS: CXO, IBM, Tech Industry
23

The clock is ticking on the second quarter for IBM and a number of employees are worried about "resource actions," quiet layoffs that largely go unnoticed.

Layoffs have been front and center as an IBM employee concern since April. IBM reported a disappointing first quarter and said it would move quickly to preserve profit margins and hit its earnings target. "By taking the bulk of our workforce rebalancing actions in the second quarter, we'll start to get the benefits from those actions earlier in the second half," said CFO Mark Loughridge. Typically, IBM has cut workers throughout the year.

Given it's June 18 and the quarter ends June 30, unions seeking to represent IBM workers are noting layoffs. Specifically, the Communications Workers of America have tallied 3,000 cuts and are keeping a running tab of units affected. We're getting numerous reports that IBM is cutting more workers than expected and global business services is a big target. The problem is that IBM employees don't have confirmation on the number of job cuts and whether there are 6,000 cuts or 12,000.

ibm-businessman-dark
The end of the second quarter is bringing a lot of angst for IBM employees.

Needless to say the stress levels are rising among the IBM rank and file. An IBM spokesman said that the company's core competency and strength is transformation and that it needs to "remix our skills" to focus on segments such as social business, mobile, cloud and big data. IBM won't comment on specific restructuring numbers or percentage of workforce being trimmed. IT buyers need to monitor the situation given employee morale often affects delivery. 

IBM's full statement:

IBM is investing in growth areas for the future: big data, cloud computing, social business and the growing mobile computing opportunity. The company has always invested in transformational areas, and as a result, we need to remix our skills so IBM can lead in these higher-value segments in both emerging markets and in more mature economies.

Change is constant in the technology industry and transformation is an essential feature of our business model. Consequently, some level of workforce remix is a constant requirement for our business. Given the competitive nature of our industry, we do not publicly discuss the details of staffing plans.

One thing is clear: IBM is looking to rebalance its business away from weak businesses and markets that don't hold a long-term payoff. Shortly after IBM's quarterly results, reports surfaced that Lenovo was interested in buying Big Blue's commodity server business. That move would free IBM to focus on higher-end integrated systems designed for cloud computing, analytics and big data.

IT jobs: A specialist economy or reign of the polymath?

It's possible that IBM would need to pare down its server unit before Lenovo was really serious about a purchase. Other likely areas for IBM to cut would be in strategic outsourcing where the Big Blue acquires assets and people from another company and then runs the infrastructure. Those deals, which often feature losses in the early years of an outsourcing agreement, are increasingly risky for IBM. Many of these job cuts would be overseas as well as in the U.S. For instance, Europe, Middle East and Africa workers are likely to get hit, IBM employees are saying.

In other words, IBM's cuts appear to be going beyond the usual sales, marketing and distribution targets.

The bottom line is that many IT jobs can be automated away and IBM is most likely looking to keep architects and cut data center integration and migration labor. As IBM moves more into cloud, analytics and big data it needs fewer workers---or at least a different type of employee.

Topics: CXO, IBM, Tech Industry

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

23 comments
Log in or register to join the discussion
  • 'Resources'

    Gotta love how corporate America has finished the total marginalization of humans. We're now resources. Not human resources, not employees, not even human. Just resources. Like coal or iron ore. Mine us, ferry us around, grind us up, burn us out and then dispose of us like furnace ash. All for the highest profits so the executives can get their bonuses from their buddies on the board. Just like the two-story outhouse with the upper floor reserved for management.

    It's articles like this that make me look at our country sort of how a person watches a wreck of a loaded passenger train.
    Zorched
    • Resources

      Welcome to the new America - No Loyalty either way. Be ready to jump to another job at any time and beat the rush.
      stminton@...
    • Time, money, and people: All resources.

      Think of all the resources that will be available for companies who need them to grow. Creative destruction is always hard in the short term, but makes everyone stronger in the long term.
      Jeff Richardson
      • Really Jeff?

        Just exactly how many times have you been downsized??? Probably never, huh?

        Lucky you you're still young and "viable". Meanwhile the rest of us get demoralized and pushed to the margins.

        Try spending a little in the real world buddy, and see how the rest of the world lives....

        Rick in Bay Area..
        rick.sheeley
    • Start a business...

      Well, if you really don't like it, you could always try starting your own business and create an environment for you employees that fits with your ideal.

      I am with you though. I have been with the same company for over 20 years. In the beginning, we had just 500 employees, and a real family environment. They treated us like they really cared about us...handing out turkey's at Christmas time in the parking lot, holding a company-wide party at Christmas time. Now we have over 5000 employees, half the perks, low morale, and a feeling that we are just a "resource", and nothing more.

      If I could come up with a brilliant idea for a business, and the capital to get started with, I'd do it in a heartbeat.
      M4v3rlk
    • next classification

      from 'resources' we will be downgraded to 'disposable resources'. No need for FTEs, the H1-Bs seem to fit the bill better.
      LlNUX Geek
    • Resources

      Yup, the "current" IBM is a microcosm of what is going wrong with the world. A bunch of immoral and unethical elite leaders marginalizing the blessed middle class and poor human beings into, as you say, resources. History suggests this will NOT last much longer. There will be a resurrection of the poor and the middle class and with a little bit of "devine intervention" this will happen sooner rather than later...Watch how world events unfold. Hint...see what is happening with the PIIGS countries in Europe, the Middle East as well as major economic fractures ready to hit Japan and China. As far as IBM is concerned, they will go through a management cleansing not unlike what happened during the transition from Akers to Gerstner. It will hit upper management very hard when the whole paradigm changes with new leadership. While this will occur for reasons much different than in the Akers transition, the RESULTS, will be exactly the same and a "reborn" IBM will be the result.
      billiam22
  • One More Reason Not to Work for Big Blue

    IBM has had odd priorities for decades. In the '90s, it was a big deal that people no longer had to wear ties, but they still couldn't have competitor's software at their desk. So much for learning from the competition...

    Notice that Lenovo is trying to buy another part of IBM. It looks as if the functional part of IBM has become Lenovo, and that IBM will become little more than a collection of server farms.
    wnematollahi
  • Dumping People

    and sections of business does not sound like good sense. If Lenovo wants to buy their commodity server business then perhaps Big Blue should revisit that and other departments and have a deep rethink. If it can turn a profit and keep in the black, why offload it? Why give something to a competitor that will make them richer?
    All of this Human wastage is doing nobody any good. Its going on all around the world.
    Tonydid
  • Why is it MANDATORY for double digits?

    I have never understood the mentality that unless businesses achieve double digit growth EVERY YEAR, then it is considered a failure. When do we finally saturate the markets this year, then have the expectation of having double digit grow the next year. What is so bad with maintaining the current level or maybe 3-5% growth.

    I think that we do have small growth, and then inflate number by getting rid of the people who worked so darn hard the previous year, just so Corporate America can show a larger profit.

    Its just wrong, my thoughts
    ron.delaware@...
    • "Year over year growth" is not sustainable in a finite world.

      I totally agree with you sir. "Year over year growth" is impossible in a finite environment such as the planet we live in. I hope some time in the very near future this madness of eternal growth created by the capitalism is stopped, otherwise the practices to simulate growth (such as the one you describe) or the politics (wars) to stole the richness from someone/somewhere else will continue.
      Herberius
    • Mandatory double digit growth

      CEO performance bonus ... //so it goes
      awilson77584
    • Why is it MANDATORY for double digits?

      1 word... GREED!
      Venuscolt
  • GTS UK has a "voluntary separation program" underway right now!

    This will lead to a compulsory program if they don't reach their target of 10% of the UK workforce.
    techie_with_no_name
  • It's not just IBM

    Many IT companies are doing the same thing for the same reasons.
    One of the reasons that no one seems to consider is the cost of American employees, thanks to government meddling like in healthcare, the EPA and any other alphabet government entity that has the sole purpose of forcing companies to spend a lot more money to produce a product thanks to government mandates and regulations.
    For the most part, you can thank a liberal for the additional wasted money.
    bharris0@...
  • Retired

    After working for EDS for 37 years, I took a retirement package. Most of my friends had already been "rightsized" (replaced by offshore "resources") or had taken retirement. Then EDS got bought by HP and EDS is gone. Now HP is in difficulty. So happy to be out of the rat race. Today's tech world and tomorrow's will be good only for the very brightest of Americans and for Americans with the right connections. Most tech jobs can now be done from anywhere. It's cold out there now.
    cwr64
  • Just part of the deal.

    This is just the latest round. IBM is not talking about the trickle of terminations that occur every month, the resource actions with the contractors. The contractor side got hit HUGE over the first quarter.

    IBM has been shuffling customers to the GDF model, but are unable to retain those customers after being sent over seas. So they are losing huge accounts, and the ones that are left you have HUGE SLA issues. But the staffing level is at 1/3 or often worse on what is required to maintain the accounts, and they come back after the employee's saying do more.

    Its a horrific mess. Everyone keeps talking about the 2015 goal of 90% staff reduction in global services.
    ceward_z
  • The difference between Democracy and Slavery

    Slavery: OK, N*****, go to that field, pick that cotton, live in this house and eat this food.

    Democracy: OK, N*****, go to that field, pick that cotton. Here's some money, get your own F****** house and your own F****** food. Oh and be prepared to move when we need it.
    trm1945
  • "the world turned upside down"

    corporate America owes its loyalty (such as it is) to its workers and its customers in equal measure. the workers produce the product and the customers finance it.
    the almighty share holder is no more than a casino lizard watching the roulette wheel.
    and we all know about porcine salaries and perks the executives haul out of the trough.
    somehow, we've convinced ourselves these last conditions are natural and have been sanctified.
    Sunon@...
  • Race to the bottom

    Containerized, globalized, outsourced and off-shored race to the bottom.
    neil.postlethwaite