Layoffs at Microsoft, Intel, and IBM 623
Normally I try to avoid posting straight business news, but I think that these 3 stories combine to something meaningful.
Muleguy noted Microsoft is laying off 5,000,
Mspangler reports that
Intel is cutting 5-6k, while
nonyabidness afraid4myjob submitted that IBM Layoffs have begun with no number, but estimates as high as 16,000.
WTF is up with IBM? (Score:5, Interesting)
So yesterday, IBM posted great profits that beat wall street estimates [cnet.com]. And today they're doing layoffs? That makes no financial sense to me. Why should any company lay off people just because "Everyone else is doing it"?
Some perspective. (Score:5, Interesting)
Microsoft are cutting up to 5,000 from a total of 90,000 employees - 5.5% of its workforce.
IBM might cut 16,000 from a workforce of 387,000, a cut of 4%.
Intel are cutting up to 6,000 from a workforce of 84,000 - 7% of jobs.
When will it end? (Score:5, Interesting)
Economists like to pretend that they're dealing with a hard science but they are wrong, so very wrong. Economics is certainly a complex field of study but it is also one of the squishiest sciences there is. Economics is psychology with graphs and math. You can talk about supply and demand, this curve and that, but we're ultimately talking about human psychology. You can't use normal logic to figure this stuff out, you have to work with crowd dynamics, herd instinct, quit talking about how people should behave and pay attention to how they really behave.
If you want to understand how everything is going pear-shaped, just look at the Great White club fire. Huge crowd, small venue, and the band's pyrotechnics set the place on fire. Rationally speaking, there's no reason why anyone had to die. There were sufficient doors and sufficient time for a calm and orderly evacuation. And our economists are the ones who would look at that situation and not quite grasp why there was a panic, a human log-jam at the door, and a whole lot of dead bodies. "That wasn't rational behavior! That was irrational exuberance, or maybe irrational shit-the-bed terror. The problem here is that my observations of this event do not fit my models."
That's what we're seeing in this economy, a fire in a club. Everyone is working to maximize their own survival even though it will harm the chances for the group as a whole. Companies are shedding jobs everywhere, getting work is damned near impossible, and we've got a negative feedback loop that nobody seems to be able to break. And nobody wants to take a look at the wall where the writing stands hundreds of feet high -- "we need to reform the way we're doing business and this will change our entire economy as we've come to know it." The thought is too frightening.
Re:When will it end? (Score:3, Interesting)
Re:WTF is up with IBM? (Score:5, Interesting)
Re:Is it cos I iz black? (Score:5, Interesting)
To be fair, it was Hoover's fault. Not that he could know; most of the techniques we use today to try and mitigate the effects of a long term downturn weren't even invented during Hoover's administration. It wasn't (at that time) recognized that unregulated capitalism was perfectly capable of committing suicide.
Re:When did things change? (Score:5, Interesting)
Re:Steve Ballmer's memo to employees (Score:3, Interesting)
I would rather get an offical word from the management folks ahead of time. I can only suspect IBM management is afraid of sabotage or people getting upset in public - from those that are to be shown the door. I can't think of any other reason for keeping us in the dark.
To quote Grand Moff Tarkin (sp?) - "Fear will keep the local systems in line..."
Re:WTF is up with IBM? (Score:4, Interesting)
Don't know how it works at the there companies mentioned in the header, but it's been my experience that layoffs at many companies are based on seniority, not job performance. The jumior people tend to get the axe.
Sometimes those people are the weakest link, but sometimes they aren't.
Re:Is it cos I iz black? (Score:3, Interesting)
Really, it was the Federal Reserve's fault. Trying to fight inflation in a recession is stupid. But that was long before Milton Friedman's monetarism.
Of course, Hoover's protectionist policies didn't help. Hopefully Obama listens to his well chosen economic advisers and doesn't follow the same path.
Re:Some perspective. (Score:5, Interesting)
>It's not that simple. A lot of those visas do in fact go to workers for jobs that an employer can't fill locally.
Yeah right. Im sure thats true a certain percentage of the time but the scenario "why pay someone 80k when we can get a slave for 24k" plays itself out too.
Re:When will it end? (Score:2, Interesting)
Amazon is just ridiculously picky. I interviewed there a few weeks ago and asked what percentage they hired of those they flew out: the answer was about 5%. They said I was "good, but not good enough". I answered all the interview questions competently, and kept hearing stuff like "we normally don't get to this part, because the interviewee starts out with an O(n^2) solution rather than an O(n logn) solution..." Well anyway, you may think of it as sour grapes and maybe it is, but I was definitely qualified. Give me any programming problem you think I wouldn't be qualified to solve, and I'll prove you wrong.
Re:Not H1-B: Try Offshore Contracting (Score:2, Interesting)
Ping pong, air hockey tables, and barber chairs (Score:3, Interesting)
Remember what that was deemed appropriate must have office equipment for the hip IT company?
Why don't they sell some of that crap?
If Ballmer and Gates chipped in half a billion each, that would pay 1000 employees a hundred grand for a year.
Re:The Vista Factor (Score:3, Interesting)
Let's be honest about the situation here. With one major electronics retailer going down and layoffs in droves from other industries it's pretty clear to see that MS is taking a wise point of view to realize that PC sales are going to be somewhere between stagnant and declining.
Windows sales are largely driven by PC sales. If PC sales are in a slump it's going to directly relate to Microsoft sales. This shouldn't be a hard concept. Otherwise you'd need to provide me with numbers that show that PC sales are either increasing or steady. If you could do that you would be able to show that there is a market swing from Windows based systems of 8% in the last year. Those kinds of numbers simply don't exist anyplace.
IBM just announced creating 1300 jobs... (Score:2, Interesting)
International Business Machines Corp. said Thursday it plans to open a technology service delivery center in Dubuque, Iowa, creating 1,300 jobs in the northeast part of the state.
http://www.startribune.com/science/37635999.html?elr=KArks:DCiUo3PD:3D_V_qD3L:c7cQKUiacyKUnciaec8O7EyUr
Cheaper digs and salaries (average salary ~ $45K), and Iowa and locals are giving around $50-80 million in cash and prizes to get them.
http://www.desmoinesregister.com/article/20090115/BUSINESS/90115020/-1/BUSINESS04
Re:Ping pong, air hockey tables, and barber chairs (Score:3, Interesting)
Most indicators at this point show that the PC market is in a decline much like most other markets during this current economic crisis. Paying the same number of employees to put out less product is a terrible business move.
Re:well... (Score:2, Interesting)
Re:Gov Pay Not Perpetual Motion (Score:1, Interesting)
Re:WTF is up with IBM? (Score:4, Interesting)
hey man everyone who actually works for ibm knows that the real bloat is up top. if ibm wanted to save money they would take the ax to the ridiculous tripple tiered management. then you wouldnt need to make excuses for getting rid of your best guys. (and they were the best)
stop drawing blood from the stone already and cut all the fat from up top. Why does every customer need 3 project mgrs??? why are new tools introduced and the old ones not repaired? why is every data center walk through an exercise in tickling 10 managers butts with a feather?
its only a matter of time before they begin to feed on themselves.
bunch of "personalities"
Re:WTF is up with IBM? (Score:4, Interesting)
You might not like it, but it does work. From 1980 to 1985, Jack Welch reduced GE from 411,000 employees, to 299,000 employees, while substantially increasing their market capitalization. Plenty of people thrive in highly competitive, pressured environments. In my experience, the ones that don't are the ones that prefer "group work" as it allows them to more easily pass the buck to the people that actually perform.
Re:Gov Pay Not Perpetual Motion (Score:3, Interesting)
While that may be true, you must also understand that in a consumer-driven economy you must have *large* numbers of consumers with disposable income to drive the economy. Any long-term concentration of wealth can act like a money sink, preventing the "trickle-down" from taking effect.
In other words there are only so many yachts and mansions Bill Gates can possibly own and at some point more money is just the billionaire equivalent of any other form of pensu waving. If the government takes more of his money and gives it to consumers to spend, they will spend it on consumer goods, thus increasing sales, and stimulating the economy. But like any strategy, the negatives can overtake the positives if you go too far... take too much money and the rich man can't make investments that provide capital for business to function. But even then too much investment in infrastructure and capital projects without enough consumers creating demand for those products and you are back in trouble.
I think the case can certainly be made that we have moved too far into the concentration of wealth category and a little government taking and spending can help rebalance the economy. Then when that goes too far, the next Regan can come in and cut taxes, starting the cycle over again.
Re:They're just playing with themselves (Score:1, Interesting)
When I said they hire only 5% of those they fly in, that means they only hire 5% of those that pass all the phone interviews. So they really only hire 1 or 2 in a 100 they interview at all. Personally, I had four phone interviews. I figured at the point they wanted to fly me in I should have been a shoe in as long as I didn't totally screw up the in person interview. I turned out wrong. My word of advice is to say, "no thanks, don't waste my time" if you're contacted by Amazon recruiters.
Re:WTF is up with IBM? (Score:5, Interesting)
Joking aside, most of the "journalism" I read today from major news outlets is filled with apostrophe errors, spelling errors, grammar errors, and just plain poor writing style. Go back 25 years or more and compare newspapers from then with newspapers from today; today's "journalists" can't write for shit. My local paper is even worse: "too-to-two" errors, words left out, just plain unintelligible writing, and more.
Newspapers aren't just being killed by the internet; they're being killed because no one wants to pay for such poor quality writing any more, especially when many papers are so blatantly biased in their reporting.
Re:well... (Score:4, Interesting)
China did not buy much of mortgage backed securities - they did not need to, since most of banking and social security out there is government controlled. The gulf investors did buy tons of it though
On the other hand China did buy trillions of government debt from US. This allowed them to export tons of stuff into US while keeping a fixed exchange rate. And before you go Caveat Emptoring them, remember that they have not yet played their hands -- they could always dump that debt back on the market at any time.
And about "economies being separated the way they should be " - such strict separation only leads to eternal poverty for poor countries and slow decay for the rich. Japan may be the only country in the world to develop in relative isolation (not after 1945, but their first industrialisation).
Re:Not H1-B: Try Offshore Contracting (Score:4, Interesting)
Re:When will it end? (Score:1, Interesting)
Its not impossible to get a job, but its pretty tough right now. I tried monster and careerbuilder to find work, and while there are many postings, I didn't receive a single response. I sent out over 100 resumes with custom coverletters for each site and I tried follow-up calling when that strategy failed. I've used print newspapers classified sections, craigslist, city websites and have only received 1 response from the city of oceanside. I'm a capable system administrator with experience and so far I've received little attention. Now with the layoff of thousands more tech workers my chances of employment seem even smaller. Maybe its a recession, but it sucks all the same. Time to go back to school again.
Re:Gov Pay Not Perpetual Motion (Score:1, Interesting)
Doesn't matter if it works or not. It's a loss of freedom, therefore it's unacceptable.
You can't opt of socialism. You are forced to participate. Just because it might work doesn't mean it's the right thing to do.
Re:H1-b's old news; offshore the new hip thing (Score:3, Interesting)
The only way to combat offshoring is: a) as a US customer, demand goods and services that originate in the US; b) US gov't remove any tax benefits to a company that has X percentage of the workforce in other countries
Or c) Produce more value than offshore workers. This isn't that hard to do, not because foreign labor is inherently worse, but because of the substantial inefficiencies caused by trying to run offshore teams.
Re:When did things change? (Score:3, Interesting)
When did IBM go public? I have pictures and remember stories from my grandfather and mother (who was a customer service engineer - went onsite to fix mainframes - based out of the Salem Oregon IBM Computing center) in the 50's, 60's and 70's where they hosted huge camping trips and vacations at various resorts for all their employees.