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IBM layoffs strike first in India; workers describe as 'slaughter' and 'massive' (wraltechwire.com)
148 points by giis on Feb 12, 2014 | hide | past | favorite | 137 comments



I don't want to seem insensitive but ...

The quote at the beginning of the article describes pretty much every layoff I've ever seen (or been through). The person quoted describes it as inhuman, but HR and managers are told to keep it impersonal (don't induce more crying than there is). You don't get notice (on purpose), you have to turn in company-owned property and they want you out the door (it affects the morale of the remaining employees).

On the other hand, the severance and extended benefits are far more generous than any layoff I've been through here in the states. I'm not sure why employees in struggling business units don't recognize that THEY'RE PART OF A BUSINESS. If no one was laid off, the whole business would close when there was no money left to pay expenses.


I've been on the receiving end of a layoff like that,but I've also seen it done vastly differently.

Our place has been through a couple of rounds of layoffs (as the result of outsourcing). Both went through lengthy - I'm talking months - periods of "consultation" where the company worked with employee reps to try to make sure the correct people were retained (both in terms of looking for opportunities for voluntary redundancy and seeing whether affected people could be reallocated to other areas), and for those who were going to be let go there was a lot of help in terms of career advice, working with external companies looking for new recruits etc, to try to make the process as pain-free as possible.

Unsurprisingly, the effects of those two approaches are vastly different both for those who are made redundant and for those who stay. I get the impression that many of the smarter companies, at least in the UK, are beginning to recognise this.


The law in the UK actually specifies that consultation has to happen during redundancy:

https://www.gov.uk/redundant-your-rights/consultation


The most painless I have seen is the one my it colleague got at a bank: "Hi, you are fired, if you go sign the paper at HR today and you are out of here before 9:30 AM, we give you 6 months salary and an added 10K compensation for the June bonus, quite better than the legal package of 4 weeks pay you are entitled to. What do you say ?"

Consultation periods are just draining the moral of the unaffected team. Good luck if you have any work to do with the affected team.


Agreed - a friend of mine who was part of an internal audit team at a large financial company was let go with similarly generous terms. We went on vacation for a couple of weeks, and she found another fantastic job a short while after we came back.

While it I have no idea if it would apply elsewhere in the world, I feel like giving people a window (doesn't have to be 6 months) where they truly don't have to worry can have a profound impact on their ability to move along with their career, even under these circumstances.


When I left Kidder (an investment bank long gone) I got six months pay and benefits, a end-of year projected bonus based on my earnings for the firm from the prior year and a nice bottle of bubbly.

I even got a job. They were closing my department not down-sizing. My VP told me the firm didn't want to leave "blood on the street" (Wall Street). In other words, rep.

Now in 2008 this changed seriously. Cause banks were dropping over like flies. When Bear (Sterns) and Lehman failed it got worse. But I hear now it's back to worrying about "blood on the street".

None of this applied to the back-office staff. You got fired there, you got a few weeks and that was that.


> the severance and extended benefits are far more generous than any layoff I've been through here in the states

Interesting. Are big tech companies less generous than big engineering firms in other fields? When companies like BP, Boeing, etc. have had layoff rounds, 3 months is just about the minimum package for an involuntary termination, and it's common to first offer much higher voluntary packages to reduce headcount without having to actually fire (sorry, "terminate") people, especially longtime employees. My dad accepted a voluntary severance package equal to 18 months' salary some years ago (something like "1 month per year of service up to a cap" is a common formula for voluntary offers).

I think this is in part due to what you mention: the morale of the existing employees can be significantly impacted by how their former colleagues were treated. Many people know each other out of work, so escorting the employees out of the building by security with no warning is not going to successfully keep them from talking, and if anything will probably just make them more resentful when they meet up for a beer after work to discuss how the layoff was handled. The former employees may also turn up in other situations (college recruiting, industry organizations, consulting/sales, etc.) where it's not to your company's advantage for there to be a lot of people floating around who hold a grudge about the manner in which they were abruptly laid off.


When IBM did their layoff action in 2013, people in Australia received 2 weeks pay for every year they had worked at IBM. I was there, saw those people leave, saw what they got offered. Was really sad about it because one guy in particular was possibly the best project manager for our department in all of the Asia Pacific region. They gave the most critical projects to this guy. He worked hellish hours to get a severely important project done, as well as managing the network program (project portfolio). Email was sent out that he'd go on a well-deserved extended vacation, and when he came back, he'd be reassigned to another critical role now that everything in Network and other stuff are under control. When he came back, he got his 2 weeks pay per year worked. That really pissed me off. If you're going to fire people, fire the worst guy, not the best guy. He was capable of doing the work of 3 project managers.


> They gave the most critical projects to this guy. He worked hellish hours to get a severely important project done, ... When he came back, he got his 2 weeks pay per year worked.

And thus was the lesson learned by one more person. We are all, each and every one of us, hardware to be virtualized and eliminated as soon as possible.

We are all, each and every one of us, an expense to be minimized. You may get along great with your boss and co-workers, mutual admiration all around, and the people may be loyal to each other, and really mean it.

But when the animal that is the corporation decides it needs to eject you, you're ejected. It may even fall to those mutually loyal people that you worked with to eject you. And they'll feel bad. But it's not them making the decision, it's the corporate animal.

So do a good job, but go home at night and play with your kids, or dog, or S.O. Don't waste your life at work, because work doesn't care about you.


... because an anecdote about someone good being let go is data showing that that's the way it normally happens.

... because the person who was let go and who worked very hard didn't learn anything, didn't improve his ability, couldn't take the tremendous experience he had gained and apply it in a new job or gasp start his own enterprise.

No, this isn't an anecdote that should serve as a red flag signalling IBM's continued move downward.

Far from it. This is an object lesson on why we shouldn't even try.


No, but it is an object lesson in being strategic in where and when you try. Go ahead and work long hours on projects that build your skills, that will make you look good to the organisation or to future employers (or clients), but don't do it out of loyalty.


[deleted]


Actually I believe object lesson is correct. Abject means severe, humble, or weak. Most commonly seen as "abject poverty."

http://www.merriam-webster.com/dictionary/abject?show=0&t=13...

http://www.merriam-webster.com/dictionary/abject%20lesson

http://www.merriam-webster.com/dictionary/object%20lesson


Sorry, I'm confused.

Are you plainly asserting that "this isn't an anecdote," and pairing that with a sarcastic statement that "this is an object lesson", meaning that it's not an object lesson, to reinforce your assertion that it isn't an anecdote?

Or are you plainly asserting that "this is an object lesson," and pairing that with a sarcastic statement that "this isn't an anecdote," meaning that is is an anecdote, to reinforce your assertion that this is an object lesson?

Or something else?


Big corps like IBM share surprisingly similar traits as an military army. The general in charge of the army commonly only deals with the grand strategies and communicates with a few of his high-rank colonels. He has no idea who is the most skilled soldier or lieutenant, or captain. To him, they are only a number, a faceless expendable resource. Throughout the long history of wars, a lot of times low level heroic soldiers managed to win some battles but the army still lost the war simply due to the stupidity of the general.


The reason most large companies give 2+ months paid severance isn't because they are 'nice'--it's to get around the 60-notice period required when laying off more than X% of your work force (due to the WARN Act).


Typical assuming that all coutrys have the same laws as the USA.


Did you notice that the quote at the top of mjn's comment says "here in the states"? The geography was clear from the start. The only person that did not realize this was you, but at least your ignorance was a nice excuse to get some America hating in before bedtime.


The op was explicitly about IBM in India and the redundancy there FFS. Where exactly does the WARN act apply to India? abotu as much as fucking TUPE does

Its fracking karma whoring civilians chiming in with anecdotes they heard from their mate down the golf club about labour law in a different country entirely that piss me off


Yes the original link was about IBM/India. Smoyer started a discussion by comparing the layoff in India to his personal experiences in the states. From smoyer down, this thread is about layoffs in the states. That is why someone commented on US labor laws. Why are you so threatened by a discussion of US labor law?


Just a note, they're not escorted out of the building to prevent them from talking to their colleagues, they're escorted out so they don't have a chance to do any damage to network stuff (rm -rf/deltree c:) etc.


IBM has come a long way from "Employment for Life" which was one policy that almost killed it.

A couple things jump out on this article:

1 - One analyst has estimated that IBM will cut 13,000 of its more than 434,000 workers, based on the amount of money set aside for the rebalancing This is actually very few. Cutting 3% is hardly a rebalancing. Many companies cut double that every year as part of annual performance management.

2 - "Just heard from a colleague in Bangalore that job cuts there have begun. Workers asked to leave on the spot. He claims 6 out of 23 people in his department." If that's the biggest you can find, again it's hardly notable. If you're in a division that's being sold off because it's low margin, expect a lot more.

3 - The one thing that did surprise me is that they're cutting first in India. Is that because of political pressure? Cutting 3% of your headcount in India won't cut 3% of your payroll costs, because the resources are so much cheaper there.

My heart is out to anyone who gets surprised with a cut. It's painful, especially if you are early in your career and don't have a lot of money tucked away. In the medium term it can be very empowering. In the long term, I don't know of anyone who was laid off who didn't say, "Good riddance!"


>Cutting 3% is hardly a rebalancing. Many companies cut double that every year as part of annual performance management.

Depends on whether there is a hiring freeze or not.


True. Though I find corporate hiring freezes to be a reaction to organizational disfunction. If you starve your growing areas because you haven't found a way to keep your stagnant divisions from increasing headcount, then you have bigger problems. Apple used to be guilty of this. They would do hiring freezes, then when they'd lift them, managers would hire everyone in sight. There was no concept of internal transfers because you could never get a backfill. Terrible way to run a business.


Agreed! Iowa's genius governor did a hiring freeze for the state universities. Which mean researchers could not spend their grants in Iowa; they fled. Brilliant move.


I hadn't even thought of that unintended consequence.

A firm I used to work for did a hiring freeze. The well run parts (in a part of the world that is easy to fire people) of the organization obliged. The poorly run parts (in a place that's hard to fire people) didn't. So the bloated core got fatter, and the money generators got starved for growth.


Happens so often - like executives can't do simple math. Example: I contracted at a mobile-handset company. Their best seller accounted to 40% of revenue. The CEO came to our site, gave a talk: you guys have to cut down R&D expenses, you amount to 20% of total R&D budget.

So, 20% of R&D yielded > 40% of revenue (more than one product came from our site). How is that a problem? I was flabbergasted. As a contractor I said nothing, but was astonished no one else spoke up either.


I get the need to improve productivity but blind mandates suggest that something else is wrong.

At yet another employer they did a very well thought out layoff of approx 15% of the workforce. It was very well thought out and preceded by 6 months of heavy analysis on new ways to work. The culture was hurt but the firm saw process improvements too. Perhaps it was too easy as every time management needed to cut after that, they skipped the process improvement step.


I guess I see it differently. It seems to me that you can cut back, and enter the profit-margin-death-spiral. Or you can invest in new growth.

And our site had the highest return on investment in the company. Cutting back was suicide. In fact, that's how it played out - declining revenues due to a stagnant product line, for years.

I work at a startup now.


I'm with you - I just don't think I wrote clearly enough above.

If a company blindly cuts every division the same amount, it's dumb. 20% across the board cuts penalize the productive too much, and don't cut the unproductive enough. It's better to get the same cost savings by shutting down or stopping unproductive activities, letting go or selling the least productive activities, and investing in the future. You can still get the 20% personnel cut, but some places lose 50% of their staff, and others gain staff.


>>the severance and extended benefits are far more generous than any layoff I've been through here in the states.

May be true in the US. In India its peanuts. In fact its more like alms.

>> I'm not sure why employees in struggling business units don't recognize that THEY'RE PART OF A BUSINESS.

If that was true, lay off's would be top bottom hitting the leadership positions first.

That rarely happens. Layoffs are just a way to immediately turn the revenue equation in the positive trend buy cutting costs. That works for the next 2 months or so. By the third month every one knows cheap tricks like that create no difference at all.


"Severance package was on an average 3 months basic component of salary, which is like 6 weeks full pay."

That's not bad - probably more than most people would get here in the UK.


For redundancy, 3 months is fairly common in the UK, and if certain conditions are met you can receive those 3 months pay free of tax.


It's common amongst professionals or senior managers (sometimes even 6 months) - but the vast majority of people will be on statutory redundancy pay:

https://www.gov.uk/redundant-your-rights/redundancy-pay


It could be actually 3 months notice. Kind of problem in Europe if you want to change job.


Not normally you normally get PILON (your notice period paid in one lump sum) which is taxed normally then the tax free redundancy payments.


Just to give a idea of how the salary structure works here. Suppose you are earning 50,000 per month, only 11,000 will be your basic, some 5000 will be your house rent. and another 5000 for some expenses and additional perks can be up to some 30000. So, they will earn only 11,000 pm instead of the 50,000. which won't even be sufficient to pay rent.


Just elaborating. The 'basic pay' part of the salary paid by tech companies in India is usually very less. (And it isn't due to sinister motives but rather to maximize the non-taxable chunk in salary).

This 'basic pay' will usually be 1/5 or 1/7 of monthly net/gross pay. So, for an average worker (say 3+ yrs) in IBM India, the monthly gross would be around INR60K => severance would be around INR20K, which is really a paltry sum.


>> That's not bad - probably more than most people would get here in the UK.

It isn't a huge chunk of money in India, just decent enough to get by barely for a month, considering that much of these folks might be having loans/EMIs to pay for.

If the news (that thousands of Indian IBMers from STG losing a job) is for real, they would have a hard time indeed; since there isn't much of IBM-STG kinda stuff happening around (except for shops like redhat/intel/VMWare which might be interested in few folks with sysprog background). People who had entire careers built on and around AIX (not programming, but maintenance/config/admin etc) probably will have a really tough time. Managers, well, guess they just had it coming.


I don't want to seem insensitive, but... Hi I'm your boss, you're fired, give me your laptop, pick up your shit, security is going to escort you out the building. Cause no trouble.

Just an interpretation to what's going on there.


For me (as that boss), it's been much easier to fire people who deserve it than to lay off people who are working earnestly (not necessarily profitably) for the business.

So I'd never tell an employee who's part of a RIF that they're fired. The rest of what you describe is exactly how HR trained us to handle the matter.


I was thinking something similar. 3 months partial pay also seems better than I would have expected in India.

This makes me wonder, is this the first significant downsizing they experience in Bangalore? Did they think they were invulnerable to these kind of things?


Layoffs are not that common in Indian tech industry like here. So it is bound to affect the perception.


yes India's tech industry been in growth mode for decades - now they are facing what those in the developed world have been dealing with.


>the severance and extended benefits are far more generous than any layoff I've been through here in the states.

IBM is pretty generous with the severance in the US too. Something like a week's pay per 6 months worked, capped at 26 weeks. If you've been working there a while, that's a half year of salary. Plus there is generally a month notice, in theory so you can find another job internally.


Former IBM'er here. The reason IBM gives severance and extended benefits is not to look good, it's to prevent their employees from filing unlawful termination suits.

Second, there is a rumor in IBM that once an employee is marked as an RA (layoff), they are placed on an HR blacklist preventing them from finding another job internally. Departments that hire an employee placed on the RA blacklist are believed to have to layoff another employee to take their place.


> Departments that hire an employee placed on the RA blacklist are believed to have to layoff another employee to take their place.

I don't understand. Why is it so important to prevent laid off workers from being rehired/transferred? What's the rationale?


I've only ever heard of one person being RA'd (she then went to Lenovo, and was eventually let go from there) and coming back. Now she's a manager at IBM again.


In my experience, a lot of people get laid off, then get hired back as contractors.


> Plus there is generally a month notice, in theory so you can find another job internally.

This is not really the case, it seems there is usually a hiring freeze for the month between when people were notified and when people are let go.


Right, that's why I said "in theory." I've never heard of it working for anyone, but it is one more month of pay.


the severance and extended benefits are far more generous than any layoff I've been through here in the states

Six weeks full salary is generous? You have worked for some very small or very cheap companies.


I think you nailed it yourself. Here is the message you get every day for years while working for big-corpo like IBM: > YOU'RE PART OF A BUSINESS

And here is your "thank you": > You don't get notice (on purpose), you have to turn in company-owned property and they want you out the door

Why you IBM would or any other big-corpo follows this scheme of laying people off is beyond me.


You do seem insensitive. Fuck their missed projections. Let all the managers quit for their failure. Did you look at the financials? Why are you pretending that you have the slightest clue what's going on in their business? If the employees were in charge like they ought to be, they could deal with their business properly and almost certainly avoid this fucking travesty. Tens of thousands of people losing their jobs is fucking bullshit.


Maybe you should read the article

> "Announced today including managers"

This is the failing X86 based server business (STG) which IBM has sold off to Lenovo, most likely duplicate test/support staff which Lenovo already have. They aren't just trimming - the departments are closing down.


IBM has sold the XSeries division, STG is a different division (storages and systems), and is not up for sale AFAIK.


Systems and Technology Group is the hardware wing and within contains X-Series Division. IBM is keeping the other power, storage and Z (mainframe) IIRC.


You're forgetting about networking and the STG software divisions (e.g. firmware, some cloud software, the products that they acquired when they bought Platform Computing..)


Did you ever notice that when someone says "I don't want to seem/sound/look XXXXX", they follow it with a statement that can be perceived that way.

You do seem full of hatred. If the employees had started IBM, bought out their division or otherwise owned the business, I'd agree with everything you say. In this case, management should also be sacked - On the other hand, maybe part of management's failure was hiring too many employees?


You never know, maybe they will be sacked after these layoffs are taken care of. One place I worked at, two managers were each told to select one of their underlings for layoffs. After they made their selections, the managers were then laid off.


IBM is selling, consolidating and closing whole lines of business ... there's nothing that says anyone has to be employed when they're done. I saw a layoff similar to what you described once ... a few of the managers laid off everyone in their groups, then the next day, HR came in from corporate, laid them off and closed the building down.


Well yeah; that's the eternal issue generally; top managers are considered doing well because they dared to reorganized. That's great, but they also messed up; if they didn't there would be no need for the lay-offs; IBM is big; they can put those people to work in another division. So after the re-organization I would suggest the responsible managers are fired with a few weeks severance as well. That never happens though and no matter what people come up with as excuses, they never sounds very valid. Giving some guys a few million bonus (don't say that happens here, but probably will, learning from the past) basically for firing 10.000 people is a weird concept in my eyes and it will always be. The bonuses and other incentives for the responsible parties should be put towards re-educating and re-hiring the affected people in other parts of IBM (and whatever other company you put here). IMHO.


Who says they messed up? IBM sold their server business and Lenovo didn't want all the employees. IBM made money off the sale, IBM saves money not employing everyone anymore, profits and shareholder value.

For a variety of other layoffs, adding management punishment would make some sense. This one, not so much.


Like I said; not messing up would be making sure they have other jobs either at IBM or elsewhere. Not calling laying off 13000 people messing up sounds strange to me; you have a social responsibility here. People are not things you can discard when you don't need them anymore. If you have no other way, then ok, but IBM is not close to any kind of bankruptcy or situation like that.


> not messing up would be making sure they have other jobs either at IBM or elsewhere.

Oh, I see. You're a Communist and think IBM exists to provide jobs, not to provide shareholder profits. That'll necessarily lead you to a different conclusion than it led me.


What the heck are you going on about? IBM sold a division of their hardware business to Lenovo, who apparently didn't agree to absorb all of the personnel IBM had supporting it, so they're -- poof -- redundant. IBM obviously wasn't making much, if any, money selling x86 servers, and it's perfectly reasonable that they couldn't find obvious positions for xx,000 people whose jobs and specializations suddenly don't exist anymore. This is as cut & dried as these things can be. Compare, for example, to the preemptive huge cuts many technology & manufacturing companies made in 2007 (the smart ones, foreseeing what their soft 2007 market would turn into in 2008++) and 2008 (the either less savvy or more empathetic/hopeful companies). "Sorry, we're cutting a large portion of our workforce because we're pretty sure the market is going to tank and we need to mitigate our risk exposure to the downside." That doesn't go over nearly as well with employees as "Sorry, we sold the division you work for and the buyer didn't want you."

I work in contract electronics manufacturing, for Sanmina, and in Oct-Nov 2007 we laid of 16% of our global workforce of ~50,000. Compared to our competitors who waited until 2008 (Jabil, Celestica, Flextronics, Plexus, Benchmark, etc), this ended up being a very smart decision. Just compare the stock prices of each company over the past five years. In 2003 we won the PC & Thinkpad manufacturing business from IBM, which accounted for about $3b/yr in revenues over each of the subsequent five years. Revenue, not profit. We only made about 1-1.5% profit on that ridiculously tight margin commodity hardware business. In 2008 we sold it to Foxconn & Lenovo, much like IBM just sold their x86 server division to Lenovo. It is a smart purchase for Lenovo because they have ready access to cheap manufacturing capacity and they operate at a scale that allows them to negotiate much better deals throughout their supply chain than IBM could. This is the same reason Foxconn, Pegatron, Compal, & Quanta are [roughly] the only ones making money hand over fist building consumer products: either they negotiate exclusive deals on high-demand, high-margin products (e.g. Apple) or they just operate on such a huge scale that they get optimal prices on direct material and freight. It's impossible to compete, which is why the smaller (say, $3-10b/yr revenue) EMS companies have intentionally focused on low vol / high mix / high margin areas over the past 5-7 years. This includes things like defense goods, medical products, network infrastructure (especially microwave & optical/fiber), robotics, and similar complex or highly regulated products.

In our deal, we had to layoff a few people, but not too many and mostly direct labor (factory workers) and lower level business management. We "sold" a full 10% of our global IT staff to Foxconn in the deal, and they took over a high percentage of the business folks responsible for the business, too. Why? Because they wanted to ensure continuity in the marketplace.

This just isn't something Lenovo needs very much of from IBM for server support. They're already a hardware company and already have the same or similar functions in their existing org. If these people being laid off are good, they'll be in demand and easily hired elsewhere. It's not like the Indian domestic market is suffering lack of demand, and it isn't like US companies aren't still clamoring for an increase in the H-1b limit (not to mention all the L-1/L-2 visas out there).


This is exactly it. The people that are responsible never pay the price.


The people responsible for selling the business to Lenovo?


Um, what is happening in Syria is a slaughter, literally.

What is happening in India is mass layoffs, sad and unfortunate but "slaughter" ?

When AOL and other US corporations outsourced all the call centers to India in 2000-2010 , there were mass layoffs here too.


Do you feel a sense of justice now?


No it is never a good thing when corporations discard people, anywhere. It is like they are throwing out an old sponge they have squeezed every drop out of.


Respect


This article massively overstates what is occurring here, these people are members of staff involved with the part of the business which has been sold to Lenovo and surprise surprise Lenovo already has their own departments handling most of this stuff.


I have perhaps a unique perspective on this, as I was part of IBM in Asia and left in November 2013. I witnessed the 2013 layoff action and witnessed many good people in Australia and Singapore laid off in the name of cost-cutting. It is mentioned in the article that for this 2014 round, people with even PBC 1 and 2 were fired, which would have been the top performing people on their teams. I worked as a project manager doing datacenter/infrastructure work for IBM and was based in China. On my most recent PBC before I left, my manager gave me a 1, and I was managing a program for innovation projects in the Asia Pacific, as well as in charge of quality control work as part of IBM's global quality program called Global Delivery Framework (GDF). Project team members under me came from Australia, China, India, Malaysia, Singapore, South Korea, and Japan.

Firstly, it is not surprising that this is happening. The technology in the IT industry has changed, and IBM was late to the cloud party. We were still manually building servers for projects as of the end of 2013. I myself was put in charge of a large project to virtualize hundreds of internal IBM application servers. Let's say that again: as of 2013, there were still hundreds of mission-critical IBM internal applications running on physical hardware until I was given the project to transition them to virtual servers. They now have the ability to run stuff virtually thanks to some new hardware they've installed, but processes are still very manual. As I was leaving, I told all of my teammates to be careful and get out while they could, because as soon as IBM went full-steam into cloud, all of their jobs would get automated. It takes anyone a few minutes to get a server with applications running on a cloud service. At IBM, it took me a month because everything had to be installed and configured manually, and the teams were always so busy that you had to wait until someone was available to do their part, whether it was installing AIX, installing DB2, configuring monitoring agents, configuring backup agents, doing BAU handover checks, whatever. If you were IBM's execs, which would you choose? The writing was on the wall for a long time. And while elephants can take a while to get moving, it is true that they can eventually dance, though they can cause a lot of damage when they finally do get going (and need to dance more frenetically to make up for lost time).

Secondly and more importantly, it's sad that India was hit first in such a massive way, but it's not unexpected. I have nothing against Indian people and I think the situation is unfortunately more to do with IBM than it does with India. IBM was truly scraping the bottom of the barrel for their hiring, and in India, they went below the barrel in order to cut costs. It wasn't enough, as they went too far and hired too many people who were not capable of actually doing their jobs. I have plenty of examples, but we had sysadmins with senior in their titles that rather deserved to be labeled junior. My colleague beside me, a program manager of another program, turned to me exasperated when one of the Indian project managers in her program couldn't figure out how to fill out a project change request template. So the project manager wanted my colleague the program manager to fill out the form instead. Templates are there to make it clear what you're supposed to write. This level of incompetence was a trend, but I want to make it clear again, this is not the fault of the Indian people. This is the fault of IBM deciding to not have high standards. When the entire Domino team in Australia was let go (Domino is IBM's mail server) and replaced with a new, inexperienced, and untrained team in China, yet another colleague was again exasperated. Maintenance work that required only 6-hour change windows in her project became such that they needed 2 entire days because the new Domino team didn't know what they were doing. Again, it's not that the Chinese people were the problem. It's that IBM wasn't willing to pay to hire high-quality people, nor invest into training the people they did hire. As for why I think the issue of high/low standards is a bigger issue than technological change, I point you to an anonymous posting I made on Quora once. Being anonymous doesn't seem so important now. http://www.quora.com/IBM/What-are-the-weaknesses-of-IBM

I tried copy-pasting the Quora post here, but then HN told me that my comment was too long. :D

edit: clarification


"Let's say that again: as of 2013, there were still hundreds of mission-critical IBM internal applications running on physical hardware until I was given the project to transition them to virtual servers."

Is this so shocking or even wrong? I would expect a company with the history and size of IBM to have tons of "old" hardware/processes. In fact it's that history, perceived wisdom and entrenchment that I would assume many in the enterprise world would would see as an asset for IBM. Am I the only one who doesn't think a business should jump on a new tech bandwagon at the expense of a solid and working business model? I'm not saying virtualization or cloud computing is a fad by any measure, but how does a company rationalize rebuilding old tech with the risk that it may be the wrong path/choice or jeopardize a working model?

I know little of IBM and cant say I'm part of the corporate/enterprise market but that fact that IBM has "old iron" in their portfolio seems to be less concerning for their customers and more of a perception issue among the media.


The reason why it wasn't nice was because of the complexity and inefficiency of maintenance. The senior managers who gave me this project wanted to move in that direction in 2010, but couldn't because again, they couldn't get the proper hardware in place in a timely fashion; just delay after delay. Then the Fukushima earthquake happened, which caused an emergency migration of applications from their Tokyo datacenter to their Baulkham Hills datacenter in Australia, which in turn used up all the capacity they were hoping to use for virtualizing everything.

It's not a bad thing if IBM wanted to stay on pure hardware for technical reasons (hey, virtualization can have performance hits, depending on the application). But even IBM didn't want to stay on pure hardware, and that's why it can be considered a sad thing that it took so long.

edit: clarification


Exactly.

Cloud is not the silver bullet. But at the same time, there is not much merit in choosing to be a luddite and not use the capabilities of cloud where there's a genuine need. I feel IBM, to an extent is guilty of not pursuing things on the cloud front and is now paying for it.


"Cloud is not the silver bullet."

You can say that again. And it depends on where you are. In South Florida the cloud - well - sucks. Due to the carriers not being able to keep their networks up. I know companies who moved their PBX into the cloud (I'm going to name carriers) with Earthlink, Windstream, Comcast and ATT - misdirected, noisy (like talking in a wind tunnel), dropped calls; all classic signs of over extended networks. Latency. And you feel helpless cause all you can do is call your carrier and wait on hold for 45 mins.

I know another company, a local gym, which (the owner is a SOB so he deserved everything he got) got talked into moving his cash register into the cloud. I warned him against it. But he accused be of not being "up-scale". His way of telling me I didn't know what I was talking about. Of course, a couple of weeks later his Comcast goes down. He calls me, begging for help. I was like, "Nothing I can do. You have to call Comcast".

In South Florida, the only reliable service is fiber. Even T1's are fragile. And fiber isn't cheap.


You're using a very, very basic definition of cloud- one that really shouldn't exist anymore.

You're talking about moving a physical service into a hosted service; IAAS/SAAS. We're talking about actually developing and coding the IAAS/SAAS solutions to be cloud ready and performant. This infers automation, utilizing version control systems, scaling, stateless servers etc.

What those companies did was move their servers onto the web. It's like me telling you that I'm moving my wordpress blog from my desktop to linode. Just because I'm using linode does not mean I'm utilizing the infrastructure in any sort of "cloud" manner. If the server goes down and I've not designed my stack to be resilient I'm not "cloud." We expected IBM to be designing underlying cloud infrastructure years ago. Instead they bought Softlayer. I'm not sure if they've even done anything remotely interesting since that.

Next year they'll probably start trying to massively hire Openstack developers just like Cisco/etc are doing now (also late to the party).

Semantics, but vastly different.


"You're using a very, very basic definition of cloud- one that really shouldn't exist anymore."

Really? This is exactly what the "cloud" service are selling. Ok there's a middle-guy in there. The actual service provider. But from a customer point of view - this is the cloud.

IBM, Microsoft, Google sales guys are all over the place "selling" the cloud. "Move your infrastructure to our cloud - cheaper and access everywhere on everything. No need to maintain a server, or even a PC. Run your business from your iPad".

Sounds great. And would be great, if we had the communication infrastructure in place to support it. Look, it doesn't matter what's running the cloud if no one buys the "cloud".

Back to your topic.. I agree. But we've seen this story before from IBM (and Cisco and MS). They are late to every party these days.


As for the whole discussion about IBM's involvement with "cloud" - I guess it depends a bit on how you define it. AIX first started virtualization on a large scale years ago, didn't they? And since AIX 5, wasn't every AIX instance an LPAR? PowerVM / VMControl had the essential features of the cloud - virtualization, metering, billing, partition mobility, etc. It was just never marketed in the high volume, low margin way that the public cloud providers are marketing. But, I guess, even then, due to internal politics and protecting their teams, PowerVM and VMControl became like beasts. Software that was produced (E.g. SmartCloud), by edict, had to use it, and those additional layers became a nightmare.

So, I think it's wrong to say that IBM didn't pursue things on the cloud front. There was some work on it. But the execs - not the worker bees - certainly screwed that pooch. And it'll be the execs getting the bonuses for courageously reorganizing their departments too.


Yes, for many customers it's the right solution. In early 2011 we were setting up some IBM technologies on Amazon Web Services for a Houston power company and IBM had just released some EC2 AMIs for Websphere, Portal, etc. If they didn't want to build their own cloud the way HP is trying to, it seems they could've just struck a deal with Amazon to have their own corner of AWS.


Sadly, I completely agree with you, and more specifically on the part about IBM going so low on the hiring process as to hire people that can not do their jobs. I would add that to add insult to injury, their level of english is terrible, to the point where many times you can not even understand what they are trying to say. This for both, India and China workers. Again, like you say, it is probably not the India and China people's fault, but IBM's own fault, either because they hired the wrong people, or they did not train the people they hired. By the way, IBM Domino is so much more than a mail server ;)


You are right, IBM Domino is much more than a mail server. It along with Notes is the single biggest cause of loss of productivity for offices infected by it.


Notes is a terrible piece of software. So outdated, slow, with a horrible UI and UX.

And Sametime is not lagging too much behind.


Not a big fan of sametime, but I don't have a problem with Notes...


Unicorns do exist!!! I kid, there were a bunch of IBMers who liked Notes too, so I'm sure there must be other people in the world who like it as well.


> Again, like you say, it is probably not the India and China people's fault,

> their level of english is terrible

Indians'/Chinese'


I'm pretty sure that level of nitpicking is outside the scope of what the the (non-native English speaking) poster meant when they said 'their english is terrible'.


While I don't completely understand your comment, I didn't say my level of english was perfect ;)


Appreciating that you're undoubtedly communicating better in English than I would in your native language, the fact is that if you're a (principally) English-speaking company, with (principally) English-speaking customers, hiring (principally) non-English-speaking support or contract services, there will be communications issues, and those lead directly to business issues.

I've encountered this in dealings with companies, as well as within companies (one, otherwise brilliant, co-worker had the specifically annoying verbal tic of pronouncing the letter 'R' as 'A', which given local acronym naming schemes was very frequently encountered.

I've also, of course, met (and worked with) foreigners of all stripes with flawless (and often charmingly accented) English.


And that is my point. You can not hire people who do not have a minimum level of english. It is not the person's fault, but IBM's fault for hiring them.


Fair enough.


"When the entire Domino team in Australia was let go (Domino is IBM's mail server) and replaced with a new, inexperienced, and untrained team in China, yet another colleague was again exasperated. Maintenance work that required only 6-hour change windows in her project became such that they needed 2 entire days because the new Domino team didn't know what they were doing. Again, it's not that the Chinese people were the problem. It's that IBM wasn't willing to pay to hire high-quality people, nor invest into training the people they did hire."

And that IBM decided to fire the people they had trained and knew what they were doing.


Outsourcing jobs. Outsourcing layoffs. Checks out, what did India expect?


Yes, not really a lay-off. More like winding down the scale of outsourcing. I hope jobs will re-emerge onshore later on.


I hope jobs will re-emerge onshore later on.

If by "onshore" you mean China, then you'll probably get your wish. Otherwise, probably not.


I've worked with 10 Indian employees that could easily be replaced with a single competent westerner (of any descent whatsoever) for 1/3 the price.

I suspect I'm not alone.


And I have worked with 10 westerners who also can be easily replaced by 1 Indian who will do the work in a much better manner.

Just because you might have had exposure to some idiots does not mean you label the whole bunch as incompetent.


It's certainly not a rule, just an observable phenomena, working in IBM with colleagues in Hyderabad and at Google partnering with Intuit in, IIRC, Bangalore.

It's a cultural difference: in India, people become engineers because it carries prestige. They don't code because they love computing (this is measurable: ask how many outsourced engineers have GitHub accounts). The lack of actual interest in their profession demonstrates itself in their work.

The best Indian programmers I've met have either left India or weren't born there in the first place, in either case I'd consider them westerners.


I've worked with 10 Indian employees that could easily be replaced with a single competent westerner (of any descent whatsoever) for 1/3 the price.

Funny. IIRC, in One Night @ The Call Center, Indian call center employees are told that a 35-year-old American has the intelligence of a 10-year-old Indian. Ouch.


When I started working with colleagues in ISL (and, later, CDL), i would concur. But, dammit, the ones i worked with learned FAST. And they were smart. The guys in CDL seemed to work 24x7 - on their schedule and on the north american time schedule. Like..when do they sleep?


Er, are you saying they were incompetent because they were Indians?


>> a single competent westerner (of any descent whatsoever)

> are you saying they were incompetent because they were Indians?

Quite obviously not.


Not that obvious, actually. What was the point that you were trying to make?


Many western engineers, including many people of Indian origin in the US or UK, would also be 10x more productive than an individual in an outsourcing company hired based on the low cost of labor.


| STG Bangalore literally turned into a slaughter house today

obligatory: http://xkcd.com/725


There's also an obligatory xkcd to that obligatory xkcd: http://xkcd.com/1108/.


low social oversight and regulations result in easily attracting jobs and fewer protection when jobs need to be cut. On a downhill slope, it's much simpler and cheaper to cut jobs in developing economies, precisely for the same reasons it's cheaper to create jobs there when things go uphill.


If I had start-up capital , today I would have jumped on a plane to Banagalore. Regardless of the negative stories about Indian programmers, IBM does have some very talented and skilled people with a lot of experience and excellent work ethics. This being a massive lay-off and not a firing, the good and bad programmers alike have been let go. The interview process would have to be extra stringent and long and tedious, but you would end up with high quality people , who otherwise would never interview with a new start up. And after being let go from a blue-chip company, they would be more receptive of offers from early stage start ups.


The 3 months of compensation mentioned here - is equivalent only to 1.5 months in any other country. So not overtly generous.

I'm sure their employment contracts mention 1-2 months of salary in event of termination (or a similar notice period in case the employee wants to leave) - so this is not more than committed.

(In India the "Base Salary" component is often 50% of FIXED compensation, not including bonuses. This is done to reduce the statutory requirements on the company, especially in times like this.)


> The 3 months of compensation mentioned here - is equivalent only to 1.5 months in any other country.

Why?

3 months of salary, to spend in India where things are relatively cheaper, seems like 3 months of Salary to me.


It's 3 months of 'basic pay', which would be half or less than half of the total salary. The rest is divided into so-called perks such as house rent allowance, travel allowance, education allowance, etc., which are partially tax-deductible for employees to various extents.


1.5 months salary is still generous though, no?


Maybe for a developing country. Here in Europe I'd expect 3 months' full salary as a minimum.


This is completely normal business for IBM. I saw it too many times during my tenure there and it was obviously well overdue for the India branches.

There are regular cuts across the board, and there is actually very little attention paid to the internal ratings of the employees or keeping well-functioning groups together. Everyone left behind is expected to take up the slack, and additional hires are only made when things break badly enough for upper level management to be aware of it.


What else you expect in country with poor labor laws? Layoffs is fine I think almost every company need to go through this phase one day or other for cost cutting. But there should be a procedure , a short 2 hours notice as seen in this article is shocking.


Yes on sites like http://workplace.stackexchange.com/ the questions about some of the labor practices in India are shocking almost pre Victorian in their harshness.

And I suspect that getting a job in a MNC is seen a bit like the civil service is ie a job for life.


IBM has spent an astonishing US$100K, per IBM employee!, on stock buybacks in the last 3yrs alone, and they are committed to more than half of that additionally in the next couple of years. They are only interested in increasing equity value among executives. IBM executives have stopped investing in their people, instead focusing on their personal bank accounts. IBM has given up on the idea of organic growth with the talent that they have -- they would rather chop off what they don't know how to manage and acquire new skills through acquisitions. Innovation is dying on the vine at IBM.


For what it's worth, a colleague asked a coworker (in Austin) who works regularly with India STG staff. To the coworker in Austin, they aren't aware of any of their Indian STG contacts, nor their teams, being affected. At least not as per the article.


Unlike Capitalism, Globalization is Zero-Sum.


How many workers were actually cut?


According to article 'One analyst has estimated that IBM will cut 13,000 of its more than 434,000 workers'.

Not sure how many (what percentage) is in India and how many are affected.


IBM is no longer a USA company and has not been for some time, logic would dictate that if they've only got ten thousand or so employees left in the USA, if they plan to downsize 13K, at least some citizens of India are going to have to go. They'll (probably) never get rid of the local USA sales force and some service techs, so by definition layoffs will now start to happen in India.

GE is the same way, as are some other former USA companies, when all the Americans are fired you have to begin firing in India and China, which is new to those areas.

Now if they really wanted inhumane, they'd make the Indian workers train their replacements, then fire them.


The unofficial IBM union (http://www.endicottalliance.org/) estimates there to be ~66,000 FTE in the USA.


That's interesting, I was linear extrapolating from continuous losses around the last time an employer was a customer of IBM, leading me to think they're down to almost zero by now. The loss rate isn't as linear as expected.


Most IBM employees are in India, over the years they've consistently trimmed their US workforce (got the treatment) to the point that only the research arm and a relatively small consulting staff and management remains US employees.

I suspect that is how they've been able to impress financially given all the multimillion dollar troubled projects they've overseen. Should be interesting times to come. Apparently Watson is now the great software hope, we'll see.


This is not actually true. The unofficial IBM union (http://www.endicottalliance.org/) estimates there to be ~66,000 FTE in the USA.


What is "not actually true"? OP's comment was not "there are no estimates that there are 66,000 FTE US IBMers."


"...only the research arm and a relatively small consulting staff and management remains US employees."

There are hardware and software engineers throughout the USA. I also wouldn't call 66,000 people relatively small.


Before replying I looked at your profile and read some of your previous posts. It is clear that you are somehow knowledgable on all things blue. This may be just due to your geography or because of more concrete connections. Whatever the case 66,000 is relatively small to the IBM of yester-day/year/decade. I was an IBMer in the 00s and 66,000 is smaller than it used to be. Moreover it is a lot smaller than how people remember the mighty Big Blue. I can not imagine any IBMer saying that number was not relatively small unless they had just finished on-boarding.

Do you know what percentage of these HW/SW engineers are in research? (i have no idea)


IBM has around 120,000 employees in India, around 90,000 in the US and around 20,000 in the UK. Around 35 billion dollars of IBM's revenue ( ie: around 35% )comes from IBM India.


If they cutting in low cost centers, then you can imagine, how bad the things are.


I'm not so sure. IBM seems to hire really cheap developers in India, so it could be they've realized they need to hire better engineers in the first place.


434 THOUSAND workers is incredible.

What you could you possibly do with so many people!


Need a big army to enforce all the patents and extort money!


Estimated is not the actual amount, I read the estimate and they are either high or lower. Cutting 3% of your workforce is not great.. but it's not an actual massacre.


Fire everyone. Keep the coders.




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