IBM: 100,000 Lay-Offs?

[OhioChick]

May 06, 2007

The Inquirer and a columnist at PBS are reporting that IBM (IBM) may be plannning to lay off as many as 100,000 to 150,000 members of its US workforce. The reason would be that most of them could be re-hired as consultants at lower fees and without benefits. The potential plan is possible because of the growing number of people IBM has in India and China. The project, which IBM apparently calls LEAN is a plan to cut IBM costs by billions of dollars: "LEAN is about offshoring and outsourcing at a rate never seen before at IBM." According to the PBS reporter: "The BIG PLAN is to continue until at least half of Global Services, or about 150,000 workers, have been cut from the U.S. division."

Whether firing this many people and moving their functions to India or bringing some back as consultants is even possible is very tough to gauge. Issues of time zone, proximity, and morale can't be known before hand.

IBM's stock is flat with where it traded in early 2004. The company has about 375,000 employees worldwide. Cuts of this magnitude would be an awful risk, but it may take that to get the market to look at IBM as a grow company again.

And, if IBM moves forward, why no HP(HPQ), Yahoo! (YHOO) or Cisco (CSCO)? There could be no end to it.

http://www.247wallst.com/2007/05/ibm_100000_layo.html

[bluerum]

1. Oh isn't it fabulous the way productivity has soared. One worker class

person can now do the work of 20. It is amazing what reduced opportunity and wages will do for the worker class. Now that a substantial portion of the nations wealth has been transferred into our bank accounts, we can pretty much rule in anyway we want to.
:sarcasm:

Now, if we can steal more of the worlds wealth, we will have a strangle-hold on the entire world. Hmmm,,, I have always wanted that palace in India for a summer home.
:sarcasm:

[wakeme2008]

2. That's what GTE Data (later Verizon) did in Tampa.

Fired 2,000 software types and hired contractors. Because of the wages GTE/Verizon pays contracts I have never been able to get a reasonable paying contract in Tampa. Brokers are always contacting me to work at $25 no benes in Tampa, and I always know the name of the firm I would work at :grr:

[happy5]

3. And all this...

because they are not a "growing company" under the market, even though they still made a boatload of money. This damn economic structure, in which companies need to appear as growing or their stock crashes, is a like a serpent eating its own tail. It is not sustainable, and these guys are just going to go ahead and do something crazy like fire 100K people.

[JHB]

4. Remind me again how high education in technology areas...

...was supposed to allow one to obtain "the middle class jobs of the future in this modern, post-industrial economy".

[antigop]

5. And what was IBM CEO Sam Palmisano's compensation package? n/t

[sinkingfeeling]

6. Sam pulled in $26.4 million in all last year. And he's scheduled to receive $12 million a year in

retirement. Sam does have 34 years with IBM, but forgot about what the company had been when Lou Gersner took up his plan to teach the 'IBM elephant to dance'.

[antigop]

8. So why aren't the employees trying to protect themselves by unionizing? n/t

[sinkingfeeling]

9. They have been for about 8 years. See allianceIBM.org

[antigop]

11. But they don't have a collective bargaining agreement yet n/t

[mile18blister]

7. Big Blue (IBM's knickname) seems to have changed its philosophy.

When I was in college I worked there part-time. I was told that IBM was very careful about hiring full-time employees, because they never laid off workers. Even during the Great Depression they never let anyone go. Seems like we are barreling towards a Great Depression II.

[sinkingfeeling]

10. First major IBM layoff came in 1992. I left them, after 30 years, in 2002.

[mile18blister]

12. My time there was around 1979/1980.

I remember part of their pitch (if I wanted to work there after graduation) was that they never laid off anyone. That was still back in the days where if you were loyal to an employer, they
tried to be loyal to you. And now, of course, it's all a race to the bottom and the workers are all considered interchangeable, if now downright disposable.

[htuttle]

13. A Modest Proposition

Why doesn't IBM convert these employees directly into cash by selling their vital organs, instead?

Seems a lot easier, and would certainly help their stock price.