One post made to the Alliance@IBM website on Monday captures quite well the disruption that continues to sweep through the ranks of IBMers, let alone among IBM shareholders:
“Ginny said this morning in her depressing video to employees that we will simplify and streamline our company. Yup, we all know what that means. Buckle up and sign up, or bend over. Read those tea leaves, people. It s[…] to see your company crash this badly, but there is some gratification in knowing at least one of the causes is treating your employees so horribly an[d] underestimating the impact of the low morale you have brought upon yourself by those actions.”
So posted “ReadTheTeaLeaves” in reference to IBM Chair and CEO Ginny Rometty.
Rometty also went on CNBC, warning of more changes, more streamlining.
Yes, IBM (NYSE: IBM) is shedding workers faster than trees drop leaves. More than 7,000 in the x86 server sale to Lenovo. Thousands more in giving away – yes, literally giving away with a $1.5 billion cash bonus – by dumping its chip business.
But Rometty believes she is correct.
“These divestitures do give us an opportunity to go ahead and simplify the business and remove layers,” Rometty said on a conference call as reported by Bloomberg news. “Make no mistake, that is important because the strategy is correct and now it is our speed of execution that needs to continue to improve.”
And coming next? A $600 million resource action. In other words, more layoffs.
- Analysis: Chip unit, x86 deals are key to IBM’s transformation strategy. (WRAL TechWire Insider)
- Cuts at Cisco: John Chambers on big layoffs each of the last two years – which were harder? (WRAL TechWire Insider)
One thing is clear: As IBM reported a drop in revenue for the 10th consecutive quarter on Monday its management is doubling down on even more rapid changes.
Wall Street analysts are all talking about what the dumping of chips and the dropping of IBM’s “roadmap” to achieve $20 a share in earnings by next year means for investors.
But hardly anyone is talking about the impact on IBM’s diminishing work force.
Globalfoundries says it’s taking onboard the thousands of Big Blue workers in New York affected by the chip giveaway. But for how long?
Lenovo said the same thing when it made the x86 deal. But as soon as the deal closed, Lenovo said there were no guarantees for continued employment.
So the chip workers may have jobs for a while, and New York government folks are tickled with that. But, again the question is, for how long?
A $600 million expense for a “resource action” – IBM’s term for layoffs – means more job cuts.
Defenders of IBM’s constant reorganizations, selloffs and job actions say the company must change or die.
Well, what company doesn’t have to change in order not to die?
But what about all the management people who keep making decisions that lead to all these problems and failure to accelerate change fast enough?
“So our ‘leadership team’ has finally acknowledged what the rank and file has been saying for years. The 2015 roadmap is unsustainable. Do you suppose there is any hope that our ‘leaders’ will start listening to those who are closest to our customers?,” posted an “Alliance member”. “They could start by a significant resource action of the excessive number of middle managers and V.P.’s instead of the workers.”
Yes, Rometty and other execs have given up pay raises. Workers ask: So what about your stock options?
And IBM on Monday said management wants to seek board approval for even more buybacks – clearly a move to keep some kind of a “floor” under Big Blue’s sinking stock price.
But with shares down 8 percent Monday, who knows where that “floor” will be?
If a big investor like Warren Buffet bolts (and Bloomberg says Monday’s sell-off cost him hundreds of millions of dollars), watch out..
The transfer of 2,000 RTP IBMers to Lenovo earlier this month means Big Blue employs fewer than 6,000 people across the state. That’s well under half its peak of more than 13,000 just a few years ago.
How much lower might the number go?