from Hacker News

IBM fires small-town workers

by jmsduran on 3/2/14, 5:02 PM with 42 comments

• by mattdlondon on 3/2/14, 7:41 PM

  I was previously an IBMer (not US based) until I left a couple of years ago, and I know someone very close to me who has just been offered redundancy from IBM (also not US based).

  I appreciate the company's responsibilities are to the shareholders, but their approach seems to be short-sighted.

  The culture in IBM seems to be if you are a sales person or a project manager you are the well-treated elite, and anyone else (i.e. the researchers, the developers, designers, consultants - basically anyone who actually makes anything that IBM sells) can go fuck themselves and are treated as dispensable/replaceable assets.

  They're painting themselves into a corner - there are only a limited number of times you can get rid of the people on the ground actually doing anything before it really starts to hurt.

  I think they've realised this and that is why they are now just buying companies rather than creating their own offerings.

  Is it too late? Probably - they are only just getting their act together with cloud offerings whilst a bookshop has become a market leader. I dont think they can catch up.

• by pcurve on 3/2/14, 6:21 PM

  When your compensation consists of $500,000 fixed salary with bonus of $2 mil - $5 million, naturally you're going obsess over Wall Street numbers.

  I think executives should be penalized for layoffs, because with proper resource management, layoffs can be greatly minimized.

  In fact, EPS increase through asset sales, layoffs, stock buyback should all count against their bonus figures.

• by yeukhon on 3/2/14, 6:30 PM

  To me, IBM is a dead company, no matter how cool Watson is. My perception of IBM is a consultant company. While IBM research still makes tons of awesome progress in AI and security, IBM looks like GE and Bell Lab to me. I don't know who is the legacy now... I wonder how IBM employees feel about their job.

• by linuxhansl on 3/2/14, 8:05 PM

  Typical scenario: - layoffs for short term EPS - current pipeline continues momentum for a bit - CEO gets credited with great success... and moves on to the next company - then the "oh shit" moment, when the lack of personnel becomes apparent

  Some CEOs are like locusts. Moving from company to company for a short term frenzy, then moving on to the next.

  I hope this is not happening here.

  Personally I do not quite follow the current mentality of only thinking about the "shareholder value". If a company is just break even, it still pays earning the livelihoods of its employees. That should count for something - but of course is doesn't because investors can make more money elsewhere.

• by walshemj on 3/2/14, 6:55 PM

  Rather like when the GMG (guardians parent) let those staff go in some of the local press they own when the margins went down for local newspapers?

• by nimish on 3/2/14, 6:12 PM

  Killing itself for $20 EPS.

• by hopeless on 3/2/14, 9:54 PM

  I can't have been the only one to view the $1000 (or whatever it was) in stock options as a blatant bribe. It was pretty clear that the 2015 roadmap was going to sacrifice staff (or bonuses, or conditions, etc) in order to meet its targets and I honestly never understood what the motivation behind it was.

  (I left IBM 1.5 years ago)

• by BU_student on 3/2/14, 7:40 PM

  It's sad to see IBM gut its workforce in the very place it was founded, just to increase its EPS.

  I go to a college that is right next to the village Endicott. The population of the nearby city of Binghamton, a member of the Rust Belt, saw its population decline from a peak of 85,000 to its current total of about 47,000 when the manufacturing jobs left. The decline has taken it's toll on the city. Binghamton is now one of the fattest, most depressed cities in America.

  http://www.syracuse.com/news/index.ssf/2012/03/america_fatte...

  http://www.businessinsider.com/most-depressing-cities-in-ame...

• by mseebach on 3/2/14, 6:39 PM

  This sucks for the people concerned. But IBM's core responsibility can't be to maintain comfortable jobs that aren't sufficiently profitable. The world has changed dramatically and IBM hasn't changed with it. The longer you go without shedding the dead weight, the more painful it gets, but you still have to do it.

  The article suggests that shedding jobs equals not investing in the future, while also mentioning several paragraphs later that IBM is investing billions in new business areas. Increasing EPS means freeing up more cash to invest.

• by drpgq on 3/2/14, 6:50 PM

  "Employees in the US, and in those small towns, also say they’re unhappy that IBM is shrinking in America while outsourcing to countries like India."

  Aren't they laying off in India now too?

• by fennecfoxen on 3/2/14, 6:33 PM

  As opposed to doing what? Keeping these workers on board as an act of charity? IBM operates for the benefit of its shareholders, not its employees; also, water is wet.