IBM Says 'Couldn't Fire 150K US Workers If We Wanted To'

theodp writes "In an e-mail worthy of the Dilbert Hall of Fame, IBM execs responded to Robert X. Cringely's Project LEAN layoff rumors, reassuring employees by pointing out that they've already wiped out too many U.S. jobs to be able to lay off another 150,000. Big Blue's employment peaked around 1985, when it had about 405,000 workers who were acclimated to a long tradition of lifetime employment. IBM puts its current global workforce at 355,766, with a 'regular U.S. population' of less than 130,000."

We're Hiring!

Silly Cringley! We're Hiring negative 20 thousand employees!

Maths 101 Exam question

If there are 120000 people in a room and then 150000 leave, how many people have to enter the room again for it to be empty?

IBM Town

I've always wondered why they don't just move all of the IBM employees and their families into one big town.

Re:IBM Town

I've always wondered why they don't just move all of the IBM employees and their families into one big town.

It's called "Bangalore".
     

Re:IBM Town

Well, at least it's not Auschwitz. You gotta be glad it hasn't come to that yet.

Seems pretty silly that in this 21st century the billionaires can move their funds and trade across the globe in milliseconds... But the ordinary people still need some silly visa permit from the king to move their skills likewise. Trade at the post-industrial level, immigration at the Napoleonic law level?

Kind of a sweet deal for the industry: move your production to whichever country has cheaper citizen slaves knowing the people cannot follow in kind.

Great Napoleonic Law

Excuse me but the Napoleonic Law [wikipedia.org] was innovative and revolutionary - so much in fact it remained the legal code of choice for the countries formerly-occupied under Napoleon. If anything the French Code Civil was and is a very good system of law. And today most of the world's legal systems are based up on the Civil Law legal system [wikipedia.org] with deep French roots. The US legal system however is mostly based up on Common Law..

Duh

Is this evidence enough that Cringley's stuff can never appear on Slashdot ever again? He's a complete hack of a "journalist". I'd rather see blogs written by 12-year-olds than "articles" by Cringley.

I'm ashamed that he is funded in part by non-profit funds from US taxpayers and makes a bad name for PBS in general.

Re:Duh

Is this evidence enough that Cringley's stuff can never appear on Slashdot ever again? He's a complete hack of a "journalist". I'd rather see blogs written by 12-year-olds than "articles" by Cringley.

Looks like he's taken a page from Dvorak [youtube.com]. First, incite them with a ridiculous story which generates tons of traffic. Then, post a follow-up explaining how they mischaracterized what he wrote. Rinse and repeat.
 

Re:Duh

I don't see how IBM could fire 150,000 regular employees.

I can easily see how they could dump that many combined regulars, long-term supplementals, and contractors.

Re:Duh

As a follow up, PBS has an internal, independent ombudsman. You can contact the current ombudsman, Michael Getler, at pbs.org [pbs.org] or call him at 703-739-5290. You can also find and contact your local PBS member station [pbs.org] as they control your local content schedule. The less stations that maintain Cringley programming, the less likely it is that PBS will retain him, and the less relevant he becomes.

Re:Duh

I have no problem with Cringley being called a hack. But like the old saying goes, even a stopped clock is right twice a day. Whether or not he's got his numbers exactly right, if you've got any doubt there are massive layoffs occuring at IBM, read the comments attached to Cringley's articles:

http://www.pbs.org/cringely/pulpit/2007/pulpit_200 70504_002027_comments.html [pbs.org]
http://www.pbs.org/cringely/pulpit/2007/pulpit_200 70511_002058_comments.html [pbs.org]

Not to mention reports from other IBMers here:

http://www.allianceibm.org/jobcutstatusandcomments .php [allianceibm.org]

Also, consider that IBM's employee headcount doesn't include contractors. I don't know how much including them would effect the headcount, but it's certainly by a substantial amount.

Being an idiot doesn't necessarily preclude his occasionally being somewhere in the ballpark of the truth.

Re:Duh

Whether or not he's got his numbers exactly right, if you've got any doubt there are massive layoffs occuring at IBM...

It appears IBM didn't dispute claims of mass layoffs either. They only discounted Cringley's numbers. IBM seems to be using Cringley's number problem as a red herring agaist the existence of coming layoffs.
         

Re:Duh

Being an idiot doesn't necessarily preclude his occasionally being somewhere in the ballpark of the truth.

No, but what's the good of the analogous "stopped-clock" that is wrong most of the time? You certainly can't depend on it, so even if occasionally correct, you have no way of knowing that until after the fact, so it's completely worthless.

Re:Duh

One can only wish, but I wouldn't hold my breath. After all, we still see Dvorak drivel making the front page. One would have thought that after the "my idle process is hogging 95% of the CPU cycles" whine, that would have been the last any tech-savvy site ever links to Dvorak, right? Well, dream on.

TBH, though, much as Cringely _is_ just a hack, I'd rather /. gave up on the whole class of "computer pundits" entirely. It's an easy job, and it's really about entertainment not computer expertise, ok? It's just a glorified SF version of the astrology columns in some newspapers. It just requires a thick enough skin to pretend it never happened, or that you were misunderstood, when 99% of the predictions don't come to pass. Better yet, phrase your predictions in a way that (A) gives them a time or an event, but never both, so it can't really be disproved, and (B) in the tried and tested "why X should do Y" way, so if it doesn't happen, it's obviously only because X is more stupid than you.

Briefly, it's not just about Cringely, but the whole caste is little more than a bunch of entertainers, and not one iota more reliable than astrologers. Linking to any of them, not just Cringely, as if they actually predicted something about to happen, is akin to linking to an astrology site. "The great Mr Psychic says this is your lucky day, go do an interview for a job if you're a Capricorn. [Read more...]" No more, and no less.

Sadly, he did write that

Sadly, he did write that, and no, it doesn't look tongue in cheek at all. Catch: XP Decay [pcmag.com].

Genuine quote from the great pundit: "When I hit Ctrl-Alt-Delete, I see that the System Idle Process is hogging all the resources and chewing up 95 percent of the processor's cycles. Doing what? Doing nothing?"

I've read the article again, just in case there might be some subtle sarcasm I've missed before, but it looks as serious as it gets, if anyone asks me.

The whole list is framed between:

- "This week's column is about exploring the commonly observed problems that crop up with each new release. Maybe Microsoft should patch the patches once in a while. Here are a few of my gripes - most of them a result of excessive patching." which doesn't really sound like the start of a joke, and

- "And please, will the characters who "have never had a crash or blip" in 10 years of "heavy use" not contribute. I'm sick of these people. They're full of it." Which, again, would indicate that not only he's not joking, but he thinks that anyone who hasn't had those newbie problems is, in his own words, "full of it."

Speaking of which, the rest of the complaints sound... shall we say, computer illiterate. And that's putting it mildly. He sounds like the average Uncle Osric or Aunt Emma, who are terminally stumped as to why would their computer suddenly be sluggish or takes a while to connect on the network. It must be all those MS patches, really. Not like the kind of expert who fixes such things for fun, and/or knows exactly what worm was hogging the network.

Believe me, I've tried finding some trace of tongue-in-cheek irony there. I've hoped it would be an April 1st article. Nope.

But, hey, judge it for yourself. If you can detect some trace of sarcasm there, please tell me.

"they've already wiped out too many"

Yep sure did. Including my job to cheap out sourced labor at $16hr to people who know absolutely nothing about computers. Thanks IBM... morons.

IBM Global Services New Tasks

Recently IBM Global Services has been fighing for its life on many fronts especially when they are competing with IBM Partners.
It used to be the case that the Sales Execs didn't care where the revenue comes from. Partner or GS it didn;t matter. Now GS is walking all over Partners in attemts to wrest business away from partners and as a consequence several partners I work with are getting right pissed off.
Once the quote/order info get put onto the Internal Siebel System, it becomes visible to GS who then walk mob handed into the Parner and take the biz away from the partner.

I see this as a last ditch attempt to save their jobs. Therefore IMHO a reduction in GS headcount is long overdue.
There are a lot of really good people in GS but the metrics in which they are having to work are awful. Many are good ones voting with their feet leaving the dross.
This ends up with the customers suffering as the people left in GS to actually deliver the solution can't.

This is nothing new. I saw this 10+ years go in DEC with their services division. It got even worse when Compaq came in a bought the show. Try fitting a services business model into a volume PC business model. They just don't fit.

Just my 2$ worth.

It IS reassuring...

... because it shows that Cringely's claim is not based on real IBM figures.

The dollar is dropping.

Americans are getting poorer and cheaper. They're 25% cheaper than just a couple of years ago. The urgency to outsource to cost effective workforces is reducing.

 

Look on the bright side

IBM stock has reached a 52-week high and is set to go higher. After a quick look, it seems the job cuts are a balance vs their investments in future growth. Gotta have good quarters and making the Street happy.

IBM/Amazon patent dispute

Looks like IBM is getting some money from Amazon [blogs.com] (via thenewsroom) to settle some patent disputes, maybe they can hang on to a few of those employees after all....

In defense of Cringely

I find it interesting that people have clung to the "US" bit so much that they feel the need to point out that IBM doesn't have 150k US employees, instead of pointing out that IBM does have well over 300,000 workers internationally, which is more relevant.

I worked at Nortel Networks, a company that had 105k - 110k employees in 2001. In the first 4 months of 2001 the company fired 27k people. In the rest of the 8 months of the year, they fired another 26k people. They fired even more in 2002. Overall, the company fired 57,000 people, over half the company.

IBM has 150k people to fire, and it can do so with ease. The "US" reference is irrelevant, since even 50,000 US workers would be a huge amount of people, but possible.

As for Cringely, he isn't a journalist. He's never claimed to be one, and his 9 years of weekly articles speaks to this. Cringely is a tech insider and writer who writes about interesting topics, and wrote this article not to report it, but in the hopes that IBM employees, and the publicity his articles garner, could help to prevent IBM from making a mistake. And he is right to do so - at Nortel the CEO wiped out half the company and walked away with a 9-figure compensation for inducing mass unemployment and wiping out billions of value and spinoff value when the tech sector of the TSE crashed.

The effects of 150k layoffs in the US would be very bad, and that's what he hopes to stop, because the way they do it is slow and steady, and if people don't figure it out ahead of time, they find out when it's too late. So in that respect, his article is very worthwhile and commendable.

Bah!

Just send a preemptive pink slip strike in on all the prospective employees.

The top 40 people at IBM

Were compensated damn close to 800 million dollars last year if not more. I hope all the Libertarians here starve in the freezing cold this year.

Also on his numbers...

That 130,000 number is total US employees. Cringely's previous estimate supposedly just included Global Services employees, which only represents a fraction of the total workforce. So if we assume half of all US IBM employees work for global services, that still means IBM needs to hire 85,000 new employees before his estimate is even mathematically possible.

This whole thing reminds me of a scene from the South Park episode, "Two Days Before The Day After Tomorrow".

Reporter: Tom, I'm currently ten miles outside of Beaverton, unable to get inside the town proper. We do not have any reports of fatalities yet, but we believe that the death toll may be in the hundreds of millions. Beaverton has only a population of about eight thousand, Tom, so this would be quite devastating.
Anchor: Any word on how the survivors in the town are doing, Mitch?
Reporter: We're not sure what exactly is going on inside the town of Beaverton, uh Tom, but we're reporting that there's looting, raping, and yes, even acts of cannibalism.
Anchor: My God, you've, you've actually seen people looting, raping and eating each other?
Reporter: No, no, we haven't actually seen it Tom, we're just reporting it.

Isn't journalism so much more fun when you don't have to worry about those damn things called 'facts'?

Some new terms for your lexicon

We said when we released 1Q results we would be putting in place a series of actions to address cost issues in our U.S. strategic outsourcing business. We have undertaken efforts toward that, and recently implemented a focused resource reduction in the U.S. While any such reduction is difficult for those employees affected, these actions are well within the scope of our ongoing workforce rebalancing efforts.

I dunno, if I ever get "resource reduced" or "workforce balanced" I'll probably still feel like I was laid off.

He apparently hates LEAN

But has no idea what it's about.

He wrote: It has to be since the very essence of LEAN is foreign hiring.

LEAN http://www.lean.org/ [lean.org] has nothing to do with foreign hiring. It's a philosophy for process improvement that focuses on eliminating wastes in that process. Such wastes include: excess inventory, re-work, moving things around more than needed. It's about redesigning the process so that there is as little wasted effort and material as possible.

LEAN is well-executed when the culture of a company is changed to empower workers to have more control over the way they do their work - and those employees are encouraged to find better ways to do what they do. For example, Toyota is often held up as a prime example of LEAN. There, an employee who finds a better way to improve a process is rewarded with cash bonuses.

Now it may be that a company has hired a consultant to tell them do do layoffs and they call it LEAN, but that's not what it is.

But, everyone here seems to be of the opinion that Cringley's full of shit. I'll have to agree.

LEAN Methodology

I've never read Cringely's stuff before, but he does seem to have missed a key point in his article. He calls it "IBM's mysterious LEAN program" as if LEAN itself is the project. If you read the reply from IBM, they point out that they're using the LEAN methodology and not that this project is called LEAN. He also says that "the very essence of LEAN is foreign hiring", which is tripe.

He's deliberately scaremongering by using the term out of context to suggest that it is the title of a project that's synonymous with cutbacks, knowing that most people won't be aware that LEAN means something else entirely. Maybe he should read up on the LEAN methodology first before he starts worrying people by writing all this nonsense.

And here's the obligatory Wikipedia article:

http://en.wikipedia.org/wiki/Lean_manufacturing [wikipedia.org]

Orwellian language

Orwell was right. The English language is dying. From IBM's e-mail:

We said when we released 1Q results we would be putting in place a series of actions to address cost issues in our U.S. strategic outsourcing business. We have undertaken efforts toward that, and recently implemented a focused resource reduction in the U.S. While any such reduction is difficult for those employees affected, these actions are well within the scope of our ongoing workforce rebalancing efforts.

Mysterious Lean Project?

Lean isn't mysterious. It's popular, especially in manufacturing.

It ain't about laying off people. Not if you do it right.

However, for many companies, it's a radical re-think of the corporate culture and hard to implement because far too many managers can't wrap their heads around some of the concepts and think it's just simpler to get rid of people. That's not Lean. That's just stupidity.

--
BMO - "I'm not anti-business. I'm anti stupidity" - Dilbert

Lifetime employment

Is there such a thing anymore in the US? Or did it all disappear with "trickle down"? Is it only in government where you can expect lifetime employment now? I had an Uncle who put in 40 years with the post office. Retired with 95% percent of his pay till he kicks the bucket. Does anybody know anybody who is still working a non government job with the same employer for over 20-25 years? Do they expect any retirement benefits? Will they be able to trust the company to come across with it?

From an Ex-IBM employee

The rumors about LEAN and layoffs at IBM have been circulating for a few months, but have really intensified over the past few weeks. I jumped ship two weeks ago and two days after I gave my notice I received frantic IMs from co-workers who have been laid off, because 80% of the department is supposed to be outsourced - primarily to South America as part of LEAN. Two days later some of my ex-co-workers got re-hired, but, of course, as contractors without benefits. Yea, it is that easy.

The F500 clients are "not pleased", because they have been struggling with communication and logistical issues for quite some time with the new overseas staff, because you simply cannot expect that a non-native English speaker with (most of the time) heavy accent can elaborate highly technical and complex issues. We have been rolling our eyes for months while listening to daily conference calls with our South American or Indian peers. It simply does not work. The clients are paying a high premium for "excellence" and get served an understaffed, underpaid and "not very motivated" workforce. A server goes down in NJ and there is no staff to physically reboot the machine. I have seen instances where the client has to wait 3 months, before someone was found for "on-site" support.

My US co-workers are naturally all pissed off. Contractors are let go without notice after almost a decade of service. Managers are trained to be naturally unemotional alpha-males with mostly poor people skills. Teams primarily consists of an equal number of computer-illiterate managers/techleads and technically skilled people who *do the job*. Sure, it's their right to lay off people, but the way it has been implemented has been traditionally poorly managed. After all a serial number is easier to let go than a human being. The published reports don't surprise me at all. I know plenty of ex-co-workers who have been let go (and rehired) a dozen times during my time at IBM. I am not disgruntled ex-employee, because I thought that the IBM way was the "way to go", because I never experienced any other work environment.

I worked for IBM for almost a decade and I didn't even realize how miserable I was until I started my new position. When I got home from my first day at my new (non-IBM) job, I was so (positively) overwhelmed that I uncontrollably sobbed. This is what 10 years of working with IBM have done to me.

Slashdot will believe anything!

Gullible fools... hey I heard Bill Gates eats babies! It must be true!

Those BASTARDS

So they're going to hire 20,000 more workers and then quickly FIRE them?

Wow - and we thought Microsoft was evil!

The key paragraph

-- snip --

We said when we released 1Q results we would be putting in place a series of actions to address cost issues in our U.S. strategic outsourcing business. We have undertaken efforts toward that, and recently implemented a focused resource reduction in the U.S. While any such reduction is difficult for those employees affected, these actions are well within the scope of our ongoing workforce rebalancing efforts.

-- snip --

Translation:
------------
Q1 sucked, so we'll sack undisclosed number of technical people in the worst managed division, to make likely failure of that division more or less assured, but less costly. Some folks will be hired in Bangalore, etc... so we can keep milking the contracts we managed to land for a while until our reputation as a vendor is truly in the toilet. But this is business as usual, so you shouldn't be worried.

You Miss the Point: Hire Plus Fire

What Cringely is saying is that IBM will both fire and hire, resulting in minimal change to the number of employed robots. IBM will fire the highly paid employees in Europe and the USA and will hire cheap labor in India and elsewhere.

So, Cringely's scenario is entirely plausible. IBM could fire 150,000 Western employees and hire 130,000 Chinese and Indian employees. Certainly, most outsourcing work is in India. So, putting the core of Global Services in India makes economic sense.

I am a former IBM employee. When I was axed in a layoff in 2003, I had worked at IBM for about 2 years after just graduating from college. Upon receiving my pink slip, I visited the job fair at my old college and saw a big IBM table recruiting new employees. IBM was hiring and firing on the same day.

Re:Nobody Owes You a Job for Life

I think you'll find that "security of tenure" has valid arguments for it in some situations. Perhaps you were not referring to these, but I take issue with mindless blanket statements.

Re:Nobody Owes You a Job for Life

If enough voters get screwed by offshoring, the politicians won't have long careers either. How long before people realize trading good jobs for cheaper Wallmart trinkings has big downsides? Free trade is gonna turn us all into either salesmen or Wallmart greeters.

How many plants can they close?

I used to work at a company, where the standing joke at headquarters was if a plant (factory) did anything wrong, they would close it. The big boss would say: "Either they make target, or I'm going to close the plant!" Of course, the targets were completely unrealistic, so the next meeting would be: "Well close the plant dammit!!! Close the plant!"

The people at HQ would keep a running tally of how many divisions (plants) were closed that week. 15 plant closures was a bad week, as the company only had 13 plants. At one point, things got so bad they had to purchase a few more plants to make up for the plants they really did close. I'm glad I'm not working for that company anymore.

Yes, it is possible for management to discuss closing more plants than they have, and to fire more employees than they have hired ...

Re:Nobody Owes You a Job for Life

I'm sure the King of France said the same thing to the angry crowd outside his palace gates.

Of course no one owes anyone anything... But if you don't bother to take care of the people, they tend to "take care" of you. We could have quite easily became another Nazi or Communist country had FDR not instituted his New Deal reforms during the great depression. Free market capitalism works... up until a point.

Good.

All too often the people who say as you have either 1) have a job from which they haven't been fired, or 2) fire their "inferiors" and need a maxim to assuage the guilt over the damage theyt've done, or 3) are sociapaths who really don't deserve jobs.

As they say in reality television: "You're fired". Two years from now when the market turns up, you'll wait in line to hear the potential employers in your field say "If you had been good; you wouldn't have been let go. Someone would have hired you." and ask, "Are you an alcoholic?"

I haven't had the above said to me, but I've heard accounts from many others. They weren't alcoholics. They chose the wrong initial employer. That is their only "sin".

You should expect a job and expect to be retained; if you do the work assigned. You shouldn't be promoted, but you should be retained. What's happening now is that even those who do good work are not retained and treated like dirt if retained.

Re:Nobody Owes You a Job for Life

Thats what my wife always tells me..

Re:Nobody Owes You a Job for Life

They do if they expect anything resembling employee loyalty. Pay cuts plus a murky employment future will leave you only with fair-weather employees all too willing to jump ship when a better offer comes along, ultimately making lean times leaner for the company.

One would think that the events of the Nineteenth and Twentieth Centuries have shown that the company needs its employees as much as the employees need the company, if not moreso.

A cynical approach to hiring only nets you cynical employees.