
Reports Coming in of Big IBM Layoffs Underway in the U.S. - zeveb
http://spectrum.ieee.org/view-from-the-valley/computing/it/reports-coming-in-of-mass-us-layoffs-underway-today-at-ibm
======
jwiley
During the dot-com bust of the early 2000s, I was working at a super-market.
One of the guys stocking shelves was a software engineer laid off by a large
company after 40 years. The management at Winn Dixie put him stacking boxes in
the freezer section...since they knew he needed the money and wouldn't quit.

Maybe he deserved to get fired, maybe he didn't. The lesson to me that has
been reinforced over my career in the tech sector is: don't ever expect a
company to value you more than the next quarters earnings reports.

~~~
SilasX
And learn how to job search. There's surely a better job that guy could have
found.

~~~
ryandrake
I think you're forgetting what the early 2000's were like for software
developers.

~~~
epx
Had a friend that literally had no money for food in this time (2002,
actually).

~~~
enjo
I entered the job market in 2002, it was absolutely brutal. It took a REALLY
lucky set of circumstances to come together for me to find a job. That one job
was it too. I was in Dallas while my wife was in PhD school and I had two
interviews in 6 months.

------
moonlighter
Meanwhile, IBM's CEO Ginny Rometty not only pocketed a salary of $1.6M in
2015, but also took a bonus of $4.6M. Not bad for 16 straight quarters of
shrinking sales, evaporating profits and a falling stock price.

[http://www.latimes.com/business/hiltzik/la-fi-mh-ibm-s-
ceo-w...](http://www.latimes.com/business/hiltzik/la-fi-mh-ibm-s-ceo-writes-a-
new-chapter-20160129-column.html)

~~~
komaromy
That doesn't sound like all that much for the CEO of an IBM-sized company.

~~~
alayne
17.9 million total compensation for 2014, 19.9 for 2015

[http://www.businessinsider.com/ibm-ceo-ginni-rometty-
gets-a-...](http://www.businessinsider.com/ibm-ceo-ginni-rometty-gets-a-
raise-2015-1)

~~~
x5n1
Only? Poor CEO.

------
mathattack
Here's what I don't get... If you have any options at all, why stay at a
company with sub-par technology that abuses their workers? They've been stuck
in low 3 Glassdoor [0] range for a while. It's layoff after layoff as they
slowly dismantle the company. Why stay? Geographic limitations? Narrow
skillsets?

[0] [https://www.glassdoor.com/Reviews/IBM-
Reviews-E354.htm#trend...](https://www.glassdoor.com/Reviews/IBM-
Reviews-E354.htm#trends-overallRating)

~~~
dredmorbius
Among other factors mentioned: employer-specific skillsets.

Technology jobs are _very_ highly specialised. And I'm not just speaking of
computer tech.

I'm old enough to have seen several generations of obsoleted "gold tickets".
Nuclear Engineering, future destroyed March 28, 1979. Freeway engineers, the
freeway protests of the 1960s/1970s. Big Three auto manufacturers, dream
destroyed with the first oil embargo, and sudden onslaught of more fuel
efficient, less expensive, and _better quality_ imports from Japan and
Germany. Petroleum engineers, dream destroyed as the oil market collapsed in
the 1980s. Aerospace engineers, dream destroyed with the fall of the Soviet
Union and redundancies in the military-industrial complex throughout NATO
powers.

Travel agents, newspaper journalists, and Perl hackers are only more recent
victims of the same levels of specialisation.

It's not that these people are _dumb_ , many were brilliant. But they're also
laden with a _tremendous_ amount of arcane knowledge, that, unfortunately,
_gets in the way_ of learning new skills.

It's been painfully obvious for a long time that, individual success stories
notwithstanding, retraining and "reskilling" typically does very little to
alleviate this.

Yes, _future_ generations get trained into new skills, some of which may still
be germaine 4-8 years after they've completed schooling. But my observation is
that job and skill cycles are iterating faster.

So that's a part of it.

Yes, there are other dimensions. Obligations, family ties, social ties, fears,
the fact that the most mobile _do_ jump ship first, and more.

But really, it's quite crushing. You may not understand it now, but you almost
certainly will, eventually.

~~~
ransom1538
Regarding skill sets. I have only been in software 12 years or so, but I
noticed a type of tech 'gamble'. Basically, when you decided to learn
something in tech you are basically gambling that the tech will last. In 2007
many faced a simple decision: AS3 or iOS. Supposed you chose AS3. Then, worked
on it from 2009-2012, quite profitably. Currently the AS3 job outlook is
horrific, and all that knowledge is a waste. Now, iOS people are skilled,
wanted and are taking lead roles. (Oh yeah, now you are old). Want to learn
GO? Be careful.

~~~
mathattack
In up markets it's easy to say, "I'm a mobile developer" but in a down market,
only iOS will do. You're right there are gambles.

I see 4 ways to mitigate this:

1 - Live somewhere that has many companies or be prepared to move.

2 - Keep in contact periodically with everyone who respects your work. (Don't
make the "Hey it's been 5 years" call one where you're asking for a favor)

3 - Always keep learning.

4 - Communicate in your customer's language. If you are strictly an
ActionScript expert, you are very narrowly pegged if you haven't learned iOS
on the side. But if the buyers of technology view you as "A mobile expert who
makes brands come alive across many devices" then you can survive technology
switches.

4.5 - Help others before you need help.

In the grand scheme it's still better to be a laid off technology worker than
a laid off steelworker. I still feel their pain though - it sucks to lose your
job, especially if family is involved.

~~~
dredmorbius
There's a professor, Economics at Harvard IIRC, who points out some telling
characteristics of cities in this regard. Those with large numbers of smaller
firms are _far_ more creative in the long run than those with small numbers of
large ones. Specific contrast were NYC and its garment district vs. the large
industrial cities of Pittsburgh (steel) and Detroit (autos). Ironically, it's
the cities which most successfully employ division of labour and assembly-line
techniques which are penalised most harshly.

Link in a sec....

Benjamin Chintz came up with the theory. Edward Glaeser is the lecturer.

[https://plus.google.com/104092656004159577193/posts/3uGHCweF...](https://plus.google.com/104092656004159577193/posts/3uGHCweFxEy)

[http://fixyt.com/watch?v=r3Mvz-Mg2_A](http://fixyt.com/watch?v=r3Mvz-Mg2_A)

------
rdtsc
That is a good sign. It means the ship is slowly turning around. It sucks for
the employees being laid off, no doubt. However they have to do this. There is
no other way. They bet big on support and services in early 2000s. So they
have lots of those employees. Could they all start to learn new things adapt
to the new environment, yeah, some will but not everyone will.

Heck, if they didn't lay off people, they'd still have punch-card machine
cleaners and even cheese slicer designers (they used to sell those way back in
the day).

~~~
mattzito
See, these types of comments are (again) why people have negative opinions
towards silicon valley types.

You may be right, but a good sign for whom, exactly? For the people who lost
their jobs? For shareholders? For fans of IBM the company?

Sure, yes, I agree that IBM probably has to shed people in order to stay
competitive. However, it's not the fault of the people who are being affected
by this, as by and large _they_ were not responsible for IBM's decision to get
more and more into support and services.

(an aside: it's not clear those are the people being affected, I'm just
responding to the parent comment)

Instead, I would say a better discussion is: why is it that when IBM made a
bet that did not play out, that they have cut people's severance benefits
signifcantly? Why is it that we treat this as a necessary evil, instead of
something to be disappointed about? Why are we not holding IBM up to be
responsible for the well-being of their workers?

I'm not arguing that this isn't something that IBM should have done. I _am_
arguing that we shouldn't talk about layoffs as a "good sign", and I think we
should try to keep in mind the lives of the people affected.

~~~
makecheck
Executive pay doesn’t seem to follow the high-risk-high-reward scenario; they
keep the “high reward” but see apparently none of the “high risk”.

A much more balanced system would be something like, for each executive:

\- Your base pay is $51 million.

\- If you FAIL at your task, YOU OWE THE COMPANY $50 million.

\- If you succeed, you receive an extra $20 million. If you choose to split
$15 million of this reward with employees in terms of stock however, your
portion of the stock will be doubled.

That would put some skin in the game. And if a failing executive is forking
over most of his millions back to the company, they could probably avoid quite
a few layoffs. And if the executive doesn’t fail and has a direct incentive to
share success with employees, the workers would be even _more_ loyal to the
cause.

~~~
PakG1
_\- If you FAIL at your task, YOU OWE THE COMPANY $50 million._

No sane person would take a CEO job with that type of compensation clause.
While the CEO bears responsibility, the world doesn't make it easy.

1\. Today's stock market doesn't reward long-term disruptive thinking that
isn't guaranteed to be a sure bet. Heck, and there are no sure bets anyway.
The stock market rewards profits here and now that also extrapolate to good
future profit trends. Why screw up a good thing to grab something unproven?
That's why BlackBerry's stock was so high as the iPhone was coming out. CEOs
are indirectly pressured to not take risks. If they do and they fail, they
deserve to pay a huge penalty? Exactly what could Blockbuster have done with
all of its investments into real estate and retail employees to win against
the Internet? There is no scenario where they could have won without
decimating everything the company used to do.

2\. Black swan events are extremely unpredictable precisely because * nobody*
sees them coming. If I ran an ice harvesting business, how could I have
predicted the invention of freon? Once I learned about freon, how should I
have responded with all of my investments made into labour and equipment for
sawing ice out of frozen lakes? There aren't many situations where a win is
easy if an entire industry gets destroyed because of some black swan event.

3\. All of the above goes double when the new CEO is supposed to lead a
turnaround. They negotiate their parachutes first so that they can focus 100%
of their energy on saving the company instead of worrying about themselves.
It's why on airplanes they explain to you to put your own oxygen mask on first
and then help others. You can't help others if you yourself are in trouble.
Not to mention, turnarounds are not fun. They're also paid for stress and the
need to make often uncomfortable decisions where they must play the villain.

~~~
ryandrake
> No sane person would take a CEO job with that type of compensation clause.
> While the CEO bears responsibility, the world doesn't make it easy.

Wait, what? $51M salary, if I fail I give back $50M? I pocket at least $1M
risk-free. Sign me up. That's more than most people make total throughout
their entire lives.

~~~
PakG1
Well, first, guess let's assume that's after-tax money. If that's before-tax,
you end up losing money. Secondly, let's be honest. That's not really a $51M
base salary. That's a $1M base salary with a $50M signing bonus that you can't
spend. Because if it goes south and you need to pay the $50M back, you better
not have spent it buying some nice house and other stuff. What sane person
would risk the chance of going bankrupt to pay back a salary after they
received the money? The smart decision is to just not touch the money until
the clause is up. So put into perspective, it's not a $51M base salary at all.

Besides that, the issue is that these decisions aren't made in a vacuum, and
the rewards are too short-term to make it really viable. The CEO will consider
the offer and compare it to other opportunities out there. Free agents always
have options if they're that good. It happens in sports, and it happens in
business. So you have candidates comparing options, and those options drive up
the price. If the price is driven up because options exist, any sane person
would be a fool to not take the best price if the opportunity also fits right.
"Sorry, your offer is the best offer, but I'm going to turn it down because
this other company wants me to give back 98% of my salary if I fail. That's
more my cup of tea." I don't deny there can be non-monetary factors that may
be more important than money in these decisions. But I'm talking about an all-
else-equal decision. Especially when it's a turnaround situation. Nobody wants
a turnaround job unless they enjoy pain. The money is to compensate for that
pain. Nortel had a really tough time finding its last couple of CEOs. In
Canada, it was known as the CEO job that nobody wanted. How do you attract
someone for that kind of job unless you guarantee them nice money?

Finally, the market does reward for the short-term. When IBM made the big
switch to go all-in into services with the purchase of PwC Consulting, mass
global hiring for labour-intensive work, and so on, they opened up a huge
profit tap. Palmisano was hugely rewarded for growing this decade-long
windfall. He parachuted into retirement with a very nice package. Never mind
that the strategy worked for only a decade and created a big mess of financial
misallocation that his successor would need to clean up. Should he have been
able to predict that IT was changing and that this huge IT services workforce
that he had hired would turn into a huge albatross that Rometty would need to
slay in order to ensure IBM remains a relevant company? Maybe. Is it fair that
Rometty is left dealing with the albatross while Palmisano is happily and
richly retired? Yeah, Rometty was part of executing that services strategy as
a senior executive before she became CEO (in fact, she was apparently the one
responsible for integrating the PwC acquisition), but the question stands.
Under the proposed scheme, why is Palmisano rewarded and Rometty not? Rometty
is dealing with the fallout of a changing industry overshadowing what made
perfect sense to Palmisano at the time. They were hit by technological trends
that they didn't predict well.

Compensation is a complex subject, especially at the executive level.

~~~
ryandrake
That's a lot of words, but at the end of the day, if you offer me $1 million a
year regardless of whether I succeed or fail, I'll be your CEO. IBM, please
hit me up on LinkedIn. I'll save you a bundle.

------
ImTalking
I worked for IBM during the 80s at the height of IBM's power. It was the
golden ticket. 400,000 employees and everyone was convinced it was going to
hit $100B market cap. When I quit to form my own business, my 2nd line manager
said "Why would anyone want to quit IBM?". Long time ago.

~~~
SilasX
Crazy -- they could have almost been as big as Uber!

~~~
hkmurakami
well, inflation.

~~~
ngoede
Just for the record this would work out to about $220B in modern money.

------
JohnTHaller
There have been a couple folks on Facebook reporting that the H1-B folks they
trained are staying while they are let go (ala Disney et al).

~~~
product50
This is probably heresy. No one talks about the H-1B worker who got laid off -
it is only about the ones who stay. Not sure if everyone in this thread is
aware but if an H-1B worker is laid off, he/she gets only 30 days to find a
new job. If he is not able to land a new gig within 30 days, they have to
leave US for good. So I will not judge here based on a couple of FB comments.

~~~
belltaco
There is actually no grace period. They can be legally picked up and put in
deportation proceeding the minute they're fired and they start accruing
illegal presence immediately.

~~~
daodedickinson
What percentage of people that can be legally picked up get picked up?

~~~
negrit
They don't pick you up. You have to leave. However the company has to pay for
your expenses.

But the USCIS generally approves petitions to change from one employer to the
next if the gap between jobs is short. 30 days is acceptable

~~~
eru
Does the new employer have to get a new H1-B from the lottery?

~~~
jacalata
No, the H1B goes with the employee. They/you have to apply for a H1B transfer.

~~~
negrit
But the previous employer has to approve the transfert.

~~~
jacalata
Absolutely not. The previous employer has no role at all and does not even
have to know it happened - you could apply for a H1b transfer, get it
approved, decide you don't want the new job and continue working for your old
employer without them ever knowing you had looked around. Everyone I know has
had the transfer completed before giving notice at the old job so that if it
somehow is denied (eg new employer does not have a job that qualifies for a
H1b), the current employer doesn't have to know you wanted to leave.

------
dsmithatx
I was at IBM from 1999 until my layoff in 2002. It was the 9th layoff for our
group (Websphere). These layoffs suck and the stress nearly killed me. Back
then the layoffs occurred after the dot com bubble burst. Lately I've been
hearing lots of rumors from investors of wide spread belief of a tech bubble
about to pop again. I'm guessing IBM is aware of this speculation and trying
to be ahead of the game this go round.

They hate to see their stock price drop and I'm very glad I'm not in a
situation like that anymore.

~~~
edwinnathaniel
I can't believe they did this kind of thing in 1999 - 2002 for WebSphere. That
is the era where Enterprise Java, XML, and SOAP took off and App Server was
selling pretty hot.

Having said that, the 1999/2000 dotcom bust is different than if it was to
happen today. In 1999/2000, open source wasn't as mature/diverse/strong as
today so companies will buy commercial technology provided by SUN, Microsoft,
IBM, Oracle.

These days, majority of the VC backed companies are using FOSS software with
minimum Oracle/Microsoft software (probably the ERP/Finance/HR modules).

~~~
gedy
2002 was really bad for any tech spending..

------
negrit
It's interesting considering that IBM and IBM India filled 836[1] and 5420[2]
LCAs for H-1B workers this year already. They are probably still hiring but
are getting completely away from some aspect of the business.

[1] [http://data.jobsintech.io/companies/ibm-
corporation](http://data.jobsintech.io/companies/ibm-corporation)

[2] [http://data.jobsintech.io/companies/ibm-india-private-
limite...](http://data.jobsintech.io/companies/ibm-india-private-limited)

------
mark_l_watson
That is awful. I wonder how much of this is cursed by the bet everything on
IBM Watson strategy that I have read about. Are they laying off non-Watson
staff?

~~~
adventured
It's the consequence of their bet everything on services approach while the
global economy stalls out. Simultaneously they gutted the technology side of
their company and vastly under-invested in R&D/innovation, instead choosing to
focus on financial engineering to fake earnings per share growth.

They should have been at the forefront of cloud services, with a business as
large as what AWS is. Instead, they spent their resources on buying back stock
and lying to investors about the future. Their financial engineering was so
good, they even snookered Warren Buffett, likely ultimately costing his
shareholders billions in losses.

~~~
JustSomeNobody
The stock market doesn't reward investing in R&D because you can't benefit
from it in three months.

~~~
gozur88
I see people repeat this but it's not true. The stock market heavily rewards
investing in R&D if investors think the research is going somewhere. Biotech
companies are a good example.

~~~
mdorazio
Tesla is another. Their expected future value is based almost exclusively on
R&D, and the stock is massively overvalued in comparison to other
manufacturers.

------
apo
IBM layoff rumors have been around for awhile:

[http://www.cringely.com/2015/01/26/ibm-right-
gadfly/](http://www.cringely.com/2015/01/26/ibm-right-gadfly/)

I'm not sure what to make of this one.

~~~
ReadEvalPost
I'm unsure on the actual sizing but that wasn't exactly a rumor, that's when I
was laid off. This was after a furlough and narrowly avoiding another layoff
less than a year into my employment.

Needless to say I'm glad I'm gone, even if it wasn't my choice.

~~~
danso
How easy was it to find something new if you don't mind me asking?

------
manishsharan
IBM borrowed a ton of money to buy back its stock to boost share prices. With
interest rates set to go up, their interest payments will go up as well and
they don't have a runaway hit product to makeup for interest and principal
payments.

------
davidw
Sort of relevant. Paul Graham tweet on IBM patent trolling:
[https://twitter.com/paulg/status/705416252563419136](https://twitter.com/paulg/status/705416252563419136)

~~~
mtgx
IBM and Microsoft were instrumental in stopping the abolishing of business
method patents - and surprise surprise, now they use them to patent troll
other companies:

[https://www.washingtonpost.com/news/the-
switch/wp/2013/11/20...](https://www.washingtonpost.com/news/the-
switch/wp/2013/11/20/software-patent-reform-just-died-in-the-house-thanks-to-
ibm-and-microsoft/)

------
SilasX
Anyone know how this affects their Watson division? They have a new SF office
and they've been recruiting pretty heavily in the Bay Area.

~~~
johnward
Watson is a growth play. I would expect it to be the last group affected.

~~~
SilasX
What do you base that on?

~~~
johnward
IBM's commitment to growing Cloud, Analytics, Mobile, Social, and Security
(CAMMS). Investment into Watson branding and advertising. Maybe the feeling
that I want to feel secure since I am in Watson group.

~~~
SilasX
>Maybe the feeling that I want to feel secure since I am in Watson group.

Interesting, didn't realize! Very cool But that might not be a good reason to
believe Watson is immune; reality doesn't work like that :-p

------
swalsh
No one ever got fired for choosing IBM, but apparently working for them is a
different experience.

Seriously though, IBM is a dinosaur of a company that is quickly losing its
merits. They cater to "old" large enterprises. They charge big licensing fees,
and huge consulting rates.

Young "enterprises" that embrace open source software are finding it
competitive advantage. We don't have to wait for IBM to fit us into their dev
schedule (hint, we'll never make it in) because we can modify the product to
do what we need.... and we don't have to keep paying for the privileged to use
it every year.

If you think of IT as a cost center, you probably are an IBM customer, if you
think of IT as a competitive advantage you're probably avoiding IBM...

------
justsaysmthng
As technology gets better, it also gets cheaper. Probably exponentially so.

That's why we're going to see this trend accelerate within the industry during
the next couple of years - layoffs, bankruptcies, etc.

There's just too much really really good technology out there.

A lot of the problems that tech people were hired to solve years ago, have now
been solved by the improved software/hardware.

So it would be a good idea to start working on a really narrow skill set,
which is something about human beings, before the AI takes over what'll be
left of today's tech jobs.

------
michaelZejoop
Does this mean it'd be waste of time to write up my "let me tell you about my
favorite database" story as part of an application for a job at compose.io ?
(serious question)

~~~
strongai
I just submitted mine. The job looks attractive for a techie who likes
writing. Mind you, I'm not _entirely_ sure I like the idea of big blue sitting
there in the background, metastasizing its woes everywhere.

------
fencepost
I saw some reports that a lot of those affected are ones who've been there for
a long time (= older workers), along with comments along the lines of "last
year I'd have gotten 25 weeks severance - now I'm going to get 4."

Makes you wonder whether any of those folks will now decide that the reduced
severance payment isn't worth giving up the opportunity to sue.

------
tschellenbach
Well more talent for the rest of us :) Stream is pretty close to the IBM
offices and we're hiring in Boulder, CO: angel.co/stream

------
artur_makly
or u can change your environment parameters and simply move to a country where
the USD is 4-10x. Then u will have the extra bandwith of time to work / study
on the next big idea/framework/rev stream. ive done this 10yrs ago. went from
a cog ina a wheel at Aol to a serial entreprenuer. stay flexible.

~~~
easytiger
That assumes a cash surplus for the individual. Where did you move?

------
yeukhon
IBM has a fortune of so many old technology they built and acquired over the
years. However, these money making recipes are also the dead weight of IBM and
stopping IBM from actually making a change. IBM at this point is already too
big to fail, so IMO there is no other way but to spin off IBM into multiple
companies.

------
pfarnsworth
It seems untrue if an IBM spokesperson denied it. It would look really bad if
their official spokesperson denied it and then the next day had to say the
opposite.

~~~
lr4444lr
Didn't that happen with Marissa Mayer's accidental leak and cover-up of the
Yahoo layoffs a week early not too long ago?

[http://www.breitbart.com/tech/2016/01/19/marissa-mayer-
taunt...](http://www.breitbart.com/tech/2016/01/19/marissa-mayer-taunts-her-
employees/)

------
anfroid555
Sad to see one of the giants slowly dieing that you grew up with.... Hard to
change the direction of a major company

------
AYBABTME
What I don't get is why anyone would accept an offer from them.

------
reddytowns
What a dastardly fellow! How dare the elected officer run his company as he
sees fit

WHY ALL THE DOWNVOTES!!?!?!?!

~~~
jacquesm
She.

~~~
reddytowns
Damn English and its lack of gender non-specific pronouns!

Seriously, though... what is the implication that I am missing? What is the
point of bringing up the CEO's pay? Should it be government mandated, is that
what you all believe?

~~~
dandelany
Singular "they" is gender-neutral and grammatically correct, I don't know why
more people don't use it.

~~~
patrickaljord
People probably don't use it because at every English school in non English-
speaking countries, they teach you that "they" is for plural only. I had
personally never heard until recently that "they" could be singular too. It
also really sounds weird to a French like me.

~~~
ams6110
They also taught that "they" is plural in American schools up until the last
decade or so.

I remember getting points off of papers for misusing "they" in a singular
context.

So it sounds weird to me too. We were always taught that "he" is a gender-
neutral singular as needed.

~~~
dpark
When were you taught to use "he" as a gender neutral pronoun on English? I've
never heard anyone in an educational position advocate that.

I was taught to use the horribly awkward "he or she" (his or hers, etc) or
alternatively to restructure to actually refer to plural. e.g. Instead of "A
software engineer should test his code" use "Software engineers should test
their code".

I'm glad the "neutral they" is catching on.

