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Next Week's Bloodbath At IBM Won't Fix The Real Problem (forbes.com/sites/robertcringely)
367 points by randomname2 on Jan 25, 2015 | hide | past | favorite | 189 comments

IBM employee here. I have no idea if the cuts are true or not but keep in mind that Cringely has made dooms day predictions in the past that were widely innacurate, see for example: http://www.pbs.org/cringely/pulpit/2007/pulpit_20070504_0020... or http://www.cringely.com/2012/04/18/not-your-fathers-ibm/

I am part of Watson and we have been hiring a lot (as well as providing great internships).

It's amazing how if someone said blatantly false things over and over again about Google or Yahoo laying off employees then it would get flagged out of existence, yet somehow Cringely makes the same false "prediction" over and over again about IBM and people vote it right up. Check your source people, you are actively spreading disinformation by a known doomsday prophet, and like most doomsday prophets he has been wrong every time.

If other HNers Are anything like me, they perceive IBM as this massive, outdated company that's behind the times and only useful for supporting COBOL systems. This is obviously not true, but that's the perception. This makes people quick to upvote "news" that confirms the bias.

I think the problem is that IBM has transitioned itself largely into a services company computing with the likes of TCS, Wipro, Infosys and Cap Gemini, and for people like us, those companies add zero value in the tech space. Unfortunately, whatever they're doing with Z/OS and the Z13 platform, Watson, and who knows what else is so marginalized that no one really cares.

Services company maybe - but along the likes of TCS, Wipro, Infosys? Come on.

IBM's heavily into research - and has its fingers dipped into a lot of exciting areas. "A boy and his atom" come to mind.

That they're not customer facing is the issue.

Even a broken clock is right twice a day. People are hoping that to be the case here, since IBM is largely perceived by HN to be a hopelessly outdated enterprise behemoth.

Unfortunately not very uncommon. I'm amazed how much trust people seem to give to business intelligence companies like IDC.

A good example is their predictions on mobile phone OS market share. According to them, windows mobile is poised to take the no2 spot from iOS in just two years. The problem is that they move those two years forward every six months when their latest report on actual market share and updated predictions are published.

Does IBM never do large firings?

In Rochester, MN, IBM has been doing several very large rounds of layoffs over the past 5 years. Nearly half the building is empty now and being rented to other companies.

Rochester was the AS/400 facility wasn't it? Or iSeries in latter years.

The article almost opens with a line about the previous biggest ever layoff in history of 60,000 people. In 1993. By IBM...


The original link went to http://www.itworld.com/article/2875112/ibm-is-about-to-get-h... - it got changed (for good reasons) to the origoinal Cringely page (which _doesn't_ have the comparison to IBM's 1993 layoffs)

Link has clickbait all over it. Hasn't hooked me yet.

But more seriously, have there been any other large, but not "biggest ever" firings since 1993? Anyone have a chart?

I dunno - 60,000 people? I can't think of anything of that magnitude (not that I keep on top of that kind of stuff...)

Watson is probably one of the most valuable projects that IBM is currently working on. Cutting people from the Watson team would be an extremely bad decision. I have no doubt that you guys are in good shape in that department. Also, all the publicity that IBM has been working on with Watson has been very wise and well executed.

If it happens, I wish they would publish the aggregate stats on the age of employees laid off versus the age of employees not laid off. I remember my dad was laid off from IBM after like 25 or 30 years of service, just before he got full retirement benefits. He's fine, not eating cat food or anything, but I'd really like to see those stats.

Layoffs are generally never easy.

When my friends project got cancelled as conexant, they gave everyone a list of the ages of everyone being let go, likely to avoid an age discrimination suit.

Even if they didn't make it public, one bets they look at age if to just avoid a reason for a lawsuit.

I was laid off once, and got a similar thing - a couple printed pages listing everybody's age and sex.

It's shitty, but I'm sure a company as big as IBM will make sure they're ass is covered.

I was laid off by IBM in 2013, I can confirm that they handed out exactly such a thing.

I would be very surprised if this report holds true. He writes he heard about it before Christmas. I simply can't believe such information didn't leak deliberately or unintentionally during the month since.

I do not work at IBM, but from the outside, it seems that the Watson team is doing very well - and working on extremely interesting problems. I wish you the best.

@pesenti, would love to get someone on the Watson team to come down to Miami to give a talk at my group RefreshMiami. email me brian @ refreshmiami .com if you're interested.

I had heard that Watson had a hiring freeze over the summer. It sounded strange given such a high profile bet on the cloud.

It would be better if we linked to the original Cringely article. This is basically a retelling of the same.


So yeah, the move to the cloud is hurting IBM's traditional core business. But as to the criticism of the current CEO for "doing nothing", the partnership she just inked with Apple seems like a step in the right direction. It's exactly the thing they should be doing to adapt themselves to the cloud era.

Look at this stuff. It's fucking beautiful: https://www.apple.com/business/mobile-enterprise-apps/

Enterprises don't need as much help setting up and running their disappearing data centers. But they do still need help building better software for their business. And more than ever before there's a focus on the ROI of better designed software. Definitely most enterprises don't have that kind of software expertise in house.

I think it would be mistake to advise IBM to try to just focus on competing with Amazon. The margin in enterprise services has moved up the stack and that's where it looks like IBM is moving. Definitely some pain along the way though.

Not that beauty is a bad thing, per se, but it's never been high on the list of requirements for enterprise software. Functionality and configurability tend to be more important.

Things are changing; people see no reason to put up with shitty design and hard to use applications in-house, especially if their employer has nice customer-facing applications. It's analogous to the PC revolution, when people started using their own copy of VisiCalc or Lotus.

> Things are changing; people see no reason to put up with shitty design and hard to use applications in-house, especially if their employer has nice customer-facing applications. It's analogous to the PC revolution, when people started using their own copy of VisiCalc or Lotus.

Except that "people", i.e. employees, are not the decision makers when it comes to what software/hardware they get.

When the CO or GM level staff start using their personal iPads because they hate battling with their XP-era laptops so much*, change happens.

I'm seeing an increasing trend in business users having budget and spending it without it anywhere in the conversation. Especially with the rise of SaaS where the cost is easily buried on an expense report...

I expected this comment.. When I say "beautiful" I'm not just referring to the aesthetics. I'm referring to the user experience design. Good UX helps users be more successful -- we've seen it happen in the personal computing space over the past decade -- and that translates into ROI. That's the theory, at least, that a lot more enterprises are coming around to.

I'm always kind of shocked that people are so meek and enamored with the idea of stability that they just shoot themselves in the foot. The tech industry is the wild west and most people in it aren't very good because they either lack drive, talent or the backbone to rise above those who lack drive and talent.

A better outlook is to make IBM (or any other company) work for _you_.

Work there for a couple years. Be bold. Challenge inept management and others that are only looking for stability and a paycheck regardless of outcomes. When you get tired of being stonewalled, bail to a smaller business and poach the people you identified as top talent.

Nobody's looking out for you but you. It's silly to expect an impersonal thing like a corporation to always try and take care of you. Making the company work for you doesn't have any factor in leading an ethical and fulfilling career. You can still deliver real value for a while despite a bloated middle management culture that is scared of the idea of bottom up leadership.

It is truly not fun being that guy: http://randsinrepose.com/archives/a-toxic-paradox/

This is especially true if you're in an organization as large and bureaucratic as IBM and not in a senior position. I think you overestimate how much influence you can really have on upper management. True story when I worked there as a GDF lead, talking to a senior manager.

Me: "Hey, I think I found an error in the formula we use to calculate one of the GDF metrics. This is creating garbage data." SM: "Oh wow, you're right."


SM: "Actually, we made the formula that way on purpose. It's OK." Me: "What? How? Why?" SM: "It's OK, don't worry about it."

What am I supposed to do then? Escalate to a VP? On a regular basis? I did. A senior manager got in touch with my manager and delivered the message that I need to get in line. I quote: "No more complaining." Depending on the environment where you're working, it's not easy to be the devil's advocate. It's usually not easy in the first place. In certain environments, it's almost impossible, you might as well have not even joined.

edit clarification: GDF was IBM's attempt to create its own version of the Six Sigma program.

You're most often actually fighting a political battle masqueraded as something else, and a necessary shift is to recognize that early on.

Once you realize it, you can work on those obstacles. By-with-and-through: there will be friends, frenimeies, and enemies that you can use and be used by to advance whatever you set out to do. You can often play political factions against each other and ride between two or more to propel your own. If that sounds deviant, it's not - it's real leadership and starts at the lowest levels.

Set an aim point rather than specific criteria for success, so you may lose some battles but you can win you own long term campaigns.

As long as you are ethical and not simply an outright ass, the penalty for crossing the line is not really a penalty - maybe you get squeezed out of somewhere you don't want to be and are at least as valuable elsewhere. When you get some confidence, you'll find that the line is quite a bit farther than you expected once you enact this outcome based mindset that is in line with the real intent of the organization.

It will never be fun all the time. But you're there for some reason, and the alternative is at best purposeless mediocrity.

Some further sources of reading: * http://www.artofmanliness.com/2014/01/22/john-boyds-roll-cal... * I stumbled across some interesting second hand stuff of a mainframer that brought Boyd inside Big Blue: http://www.garlic.com/~lynn/subboyd.html. Some of it seems interesting.

I understand what you're saying. But I have several reasons why I think it doesn't matter for what I'm saying. Perhaps we are not on the same page. Apologies if this is long.

1. I am claiming that for many of these battles, it's not simply political. It's a fight for the existential foundation of what the organization should be all about. When the web team at Microsoft went head-to-head with the Windows team in the late 90s, that wasn't simply a brouhaha over who should get power. It was much more than that. It was a question about Microsoft's future ability to dominate/survive/die. Yes, the weapons to fight the battles and the war are political in nature. But something at that level isn't simply about the politics.

> You're most often actually fighting a political battle masqueraded as something else, and a necessary shift is to recognize that early on.

Likewise, let’s not let the weapons being used mislead us to incorrectly conclude what the fight's really all about.

2. Once the strategy has been decided by the top, it's hard for one person, especially at lower levels, to change the momentum. The executive team is all in. If an executive is not all in, the executive is demoted, reallocated, or leaves the company. It's the CEO's job to get his/her executive team on the same page. He/she should have the political savvy necessary to accomplish this. It’s each executive's job to get their directors on the same page. It's each director's job to get their senior management team on the same page. It's each senior manager's job to get their managers on the same page. And it keeps trickling down until it reaches the bottom. A CEO who is not able to achieve this organizational buy-in cannot be considered someone who can lead the company. Someone at the bottom cannot and will not change the existential direction of the company, no matter how politically savvy he/she is.

Once Microsoft settled that Windows would be their focus and won the browser wars with IE6, they sat on that for years. It would not have mattered how politically talented you were, you were not going to convince Microsoft to invest into improving IE for a long, long time. Pretty much the only way to win at this is to be a super genius and create something fantastic on your own time in secret from the organization. Like the story of how OSX was ported to x86. http://www.theverge.com/2012/6/11/3077651/apple-intel-mac-os... Otherwise, you need a concerted effort from multiple parties and sponsorship and political protection from a very senior level.

3. > It will never be fun all the time. But you're there for some reason, and the alternative is at best purposeless mediocrity.

Or you can leave if you can’t find any reason to stay. Staying can also mould you into purposeless mediocrity, whether or not you resist it. Let’s not underestimate our environment’s ability to influence our life, mindset, and behaviour. When I was graduating from university, I asked a prof which job offer I should take. He said whatever I choose, be careful if I choose the larger corporations. He said they’re like zoos. If you stay in them too long, you become tame and become unable to survive in the wild again.

Another piece of advice I received from a very senior engineer who had run his own fairly successful company was to always be aware of companies where decisions and promotions are made based on politics instead of data and merit. In such organizations, the people who stay and get promoted are the ones who are the most politically savvy, not necessarily the ones who are correct/capable. Sometimes there’s overlap. Often, there isn't. Ultimately, I think we have to decide if we’re more interested in becoming good at politics or good at doing our real jobs. Politics are supposed to be a means to an end, not the final product that a customer receives. As such, it’s better to have people who are good at product, and it’s just a nice bonus if they’re also good at politics because politics are inevitable, especially as an organization grows. But the focus should never be on politics primarily.

Note: I've never worked for Microsoft, I've only cited their examples here because their history is so well-documented through various books and media, especially due to their monopoly trial. I just chose the example that I thought would best get my point across. I have worked in other large corporations where my job was to create organization-wide disruptive change. We actually won an international award for it. But nobody would relate to that stuff. ;) My thoughts are mostly taken from those experiences, Microsoft is just the vehicle to convey those thoughts.

Dead on. So many companies have modeled themselves after IBM that this type of bureaucracy is pervasive in most large tech companies that aren't Google, Facebook, etc. Nobody wants to rock the boat. Nobody wants to jeopardize the gravy-train. If something is blatantly stupid and you aren't directly responsible for it look the other way. Hell even if you are responsible but as long as it isn't too visible you're encouraged to keep quiet. What if you're given the go ahead to fix it but your team can't do it? What if corporate doesn't like the mistake to begin with? What if you're tasked to fix it but not allocated any time or resources? Nah, just keep your mouth shut.

Honestly I too would hate "that guy." This isn't his fault though it's corporate's fault. Just know this is how things work in tech.

Thanks for linking to that. I currently feel like I'm the toxic asset currently working at a big medical company. I just wanted to actually make progress and get stuff out the door instead of (not exaggerating) redoing the same work 4 times now...

In other words, "be exceptional."

A fine platitude, but not useful advice that you can reasonably expect everyone to follow.

You can only be exceptional if there is a large group of ordinary people to stand out from.

Being exceptional is nice, but living in a society that nurtures everyone's talents and gives everyone a useful way to contribute is better.

Yeah but that society is rare right now. Again, the only person you _know_ is looking out for you is you.

Remarkably, really caring about outcomes does make you exceptional in a mid to large size business. Most people's vision begins and ends with not rocking the boat and group think of the way things are and always have been.

The more willing you are to do the right thing per outcomes regardless of self-assessment of "keeping a job", the less likely you will worry about finding employment there or somewhere better down the line. Good managers can taste this zeal and will seek you out.

Wow. 111,800 people is a huge number. That's a whole city looking for work, and over $1 billion saved (in the long run) for each $10000 of employee salary.

> The question I have to ask is why isn't Rometty one of the 110k. IBM has seen 11 straight quarters of declining revenue and it's hemorrhaging customers, according to both my source and Cringely.


So what should IBM do here? For one, IBM needs a complete makeover. Why should I pick SoftLayer over AWS, Google, Microsoft, etc? They need a new image, something that will draw customers and something other than being the canonical story of corporate bloat and mismanagement.

Rometty is the fall person.

Palmisano bailed when he recognized the ship was going down. She got handed the keys to the titanic. IBM has been on this collision course for a decade.

That's not to say she's executing brilliantly (or not), but I don't believe there's anything a new CEO could have done about this mess in the last few years that would have made a difference short-term. The consequences from the last 10 to 15 years of mismanagement were going to be paid for one way or another, sooner rather than later.

Keep in mind that a developer being paid $100K gross actually costs the company way, way more. Health insurance and other benefits, cost of office space, electricity, transportation, and so on. It varies greatly between companies and countries, but it's not unusual to have "man year" cost 2x more than what is actually being paid as direct salary to the employee.

Office space+additional overhead could be reduced by remote workers. That would involve transforming management culture though, which is long overdue for it. And I'm not talking about some new crappy book about moving cheese or others of its ilk.

Sure, but for every $100k staffer in the west, there's an Indian IBMer making $10-15k.

Where are you getting the $1B savings number?

$10000*100000 employeees - I had to think about it too.

Who makes 10k a year?

1 billion saved per 10k of salary. You need to read the parent in context of its parents.

> Who makes 10k a year?

A lot of employees in developing countries in which IBM has a presence.

A better question is, who doesn't make at least 10K per year? Are there many?

If not, then the billion figure represents a reasonable lower bound estimate on the savings.

>for each $10000 of employee salary

So a billion saved per 10k of average employee salary, just way of quantifying it in something understandable.

A rule of thumb I've heard from various companies is that employees should be worth at least three times their salary to the company. That is your turnover should be more than sum(3*salary_i) for i employees.

A nice Fermi problem: IBM's revenue (2014) is around $90bn, from this rule of thumb this could support around 300,000 developers at a mean salary of $100k. From the model above, IBM's 400k employes should be producing a turnover of $120bn. The shortfall of $30bn equates rather nicely to the 100k employees they're laying off.

This seems oversimplified. IBM is big internationally. They have as many perhaps even more employees in India than in the US. Using a "mean" salary of $100K seems oversimplification, not just India and US but most other countries have different payscales, though its interesting that you've made the numbers work

I highly doubt all IBM's employees are developers, in fact I highly doubt it's even over 30%.

Of course not, this is a gross oversimplification. I was just surprised at how well the numbers worked. I would argue though, that it is a good rule of thumb, i.e. their revenue is not sustainable given the number of employees that they have.

IBM like any company will employ support staff, admin/HR, cleaners, managers and so on. Plenty of those people earn over $100k and plenty of people earn a lot less. Ultimately we don't know the mean salary of the people they're (maybe) laying off.

But hey, it's a Fermi problem, order of magnitude. I would guess it's not too far off.

this may be true. I use a lot of IBM server/development techs & pretty much all of them are missing the magic they claim, boiling down to "confusing forced development paradigm that bleeds millions from your company in infrastructure and niche developer costs" (Web Experience Factory, Coremetrics, Portal etc.). None of the out-of-the-box-everything-integrates-seamlessly aspect is there, despite that being the whole basis for these monstrous sales prices. In short, many of their products have laughably little value and even non-technical corporate management is realizing this.

(You can tell a lot of the software is sold with IBM thinking "We'll tell them its their fault for a couple of years unless they hire a few of our consultants, then if they realize the product actually sucks hopefully we will have an upgrade ready by then.")

However, whenever I see articles from that Cringely dude (the one referenced repeatedly in this summary) I have to think "eh, maybe.... I'll believe it when I see it". He is pretty much an anti-IBM conspiracy theorist from what I can tell, though of course they are a strange enough organization that a lot of what he says turns out to be true.



I've worked with IBM ClearQuest and IBM FileNet and I concurr, those products are retarded bloats of off-market junk. The free golf courses in Orlando are nice, though, so I've renewed the purchase for two more years.

Yup. Message Broker wasn't all that bad, but the all-expenses paid trip to Vegas for a week was better.

hah i am jealous of you both... i don't get the kickbacks, i just get one more team of consultants that i have to work with on every project who relish the tiny bit of authority they have now been granted (Message Broker team thinks they're hot shit cuz they are a bottleneck on every project & we can't revise our service interfaces without their permission).

Funny thing is, all the consultants who specialize in these products are awful pseudo-programmers & I end up bypassing their techs (WMB, BPM, etc.) with pure Java solutions whenever possible since the overhead of speaking to them creates like a 10x productivity loss. If the nosy busybodies (awful below average pseudo-programmers within our own group) didn't tattle to mgmt to help them reign us back in, the whole company would be none-the-wiser & we'd get work done at breakneck speed... ALL MOST OF US NEED IS A GODDAMN SPRING OR EE CONTAINER + THE JVM, hah.

I know the feeling, but that's how IBM makes their money. We have some great negotiators in our company and as a developer, I was given the Vegas trip. I'm an influential developer, but still just a lowly developer none the less. It didn't work for them though.

Anyone have stories about the logistics of the previous 60K layoffs? How does a company and the survivors deal with that many departures at once - were they distributed evenly across divisions or were entire divisions eliminated?

The cuts were made by Louis V. Gerstner, Jr., a fascinating executive who made AmEx and IBM major players in the 80s-00s.

Most of the layoffs happened in the summer of 1993, but in all, Gerstner reduced IBMs workforce by about 100k in a couple years.

The 1993 job cuts saved IBM about $4b/yr and IBM's market cap rose from $29b in 1993 to $168b in 2002 when Gerstner retired.

If you're interested in more, I recommend the book, 'Who Says Elephants Can't Dance' - a memoir by Gerstner.

Many of those people were rehired as contractors or FTEs though. I was working at Boca Raton as a very young intern in '95 (just before they closed the site in favor of Austin), and one of the brilliant guys I worked with took a package in 93 but...they had to hire him back at higher pay because no one could do his job. There were also lots of vendors working at the Boca site who were laid off in 93 (though I think they where finally let go before the move to Austin).

define many. What percentage? Think of company employees as software that has been installed, where the company is the OS. Package management has made it dramatically cleaner to install and remove software, but there isn't any such thing for companies and employees.

Over time, companies accumulate cruft... employees who underperform. Same thing with governments and their programs (not software).

One of the ways to clean house is to dump a massive chunk and rehire the people on an as needed basis, likely with higher pay. The company has still managed to get rid of the dead weight, and the employees who are genuinely needed get more money. Similar to doing a clean OS reinstall.

That's the theory anyway. Very disruptive but it can be successful.

In Australia we have a delightful government spin on this process.

It's decided that the civil service needs to be reduced by some factor. With heavy heart, it is decided to do this the humane way: voluntary redundancies are offered to those who want to take them, with a generous severance.

If you've been doing well, great deal! You will get a good reference, and can easily find a new job.

If you've been twiddling your thumbs...uh...no thanks, I'll stay put.

I really appreciate when a solution is so almost-right that it is very, very wrong.

I always thought those voluntary retirement schemes were weird! Another interesting feature of the schemes is that they need to be individually approved by the taxation office,[1], probably because payments under them are tax-free,[2] while 'normal' redundancy payments are often taxed at about 30%.[2]

It's hard to see how it is in the public interest to promote these schemes with tax incentives. It would be interesting to see an official rationale for them.

[1] eg. http://law.ato.gov.au/atolaw/view.htm?docid=%22CLR%2FCR20137...

[2] https://www.ato.gov.au/Individuals/Working/Working-as-an-emp...

[3] it gets complicated, but see page 6 of https://www.ato.gov.au/uploadedFiles/Content/MEI/downloads/B...

I experienced this at a network ad agency office I worked for in 2010. Financial crisis of 2008, massive cuts, layoffs, etc. Everybody who was a go getter with qualifications took off, leaving the bottom barrel people at their posts. Since the agency had some guaranteed work from network wide contracts, it never closed up shop, but by the time I was hired on, it was the blind leading the blind.

I only have anecdata from being there in the aftermath, and have no idea what the real numbers are.

But the layoffs weren't merit based from what I understand, and they usually never are for legal reasons. You just lop off whole teams of people. And you are right: they cut too far, and have to rehire some of those people back...but I'm not sure if they would hire the right people back. You know, the ones that could get a job somewhere else just pack up and leave pretty quickly, what was left were the good people who didn't want to leave South Florida, and once they did the move to Austin, they lost all of those people anyways.

That's the theory, but there's the argument to be made that in practice, those smart enough not to put up with that bullshit and also talented enough to get hired elsewhere go do just that.

> The cuts were made by Louis V. Gerstner, Jr., a fascinating executive who made AmEx and IBM major players in the 80s-00s.

Are you claiming IBM wasn't a major player by the 1980s?


> IBM's market cap rose from $29b in 1993 to $168b in 2002 when Gerstner retired.

When you optimize for market cap you may end losing sight of long-term relevance.

IBM is the oldest, biggest company you can think of. At least for most of the industrial era, IBM has not had any trouble focusing on the long term.

Doesn't that assume the investors are by and large fools?

Not necessarily - it assumes they're more interested in short term profits than long term growth.

Investors don't bid up a stock for short term profits. It doesn't make any fiscal sense to. When investors find out a company is sacrificing the long term, they dump the stock.

The P/E pretty much says it all.

How is growth like that over 9 years "short term"?

When it's followed by a decade of decline?

I know what you mean but rising nearly 6 fold over a decade feels like the very definition of making yourself long-term relevant.

My father was a PM at IBM who was hit in one of the smaller rounds of layoffs in 92 leading up to the big one in 93. He worked at the Westlake campus in DFW at the time. The entire project he was on was cancelled and all of its staff were cut, and it was just one of many. Personal metrics didn't enter into it, it was just a question of whether you were lucky or unlucky in project assignment at the time.

Over those couple of years IBM went from using almost all of the sizable campus it had built to just one small section, renting out the rest. DFW was otherwise undergoing massive growth at the time though, so the cuts were readily absorbed by Dell, MS, and many others (my father went to AMR). It wasn't like in the early 2000s when virtually everyone in DFW was downsizing or closing and as a fresh college graduate I was competing for entry-level jobs with admins with 10 years at MS.

My father started with IBM in 1963 and work in Cape Canaveral building the radio systems that eventually put the first man on the moon and all the Apollos. When the Space Program closed down he was transferred to Fishkill NY and then to Boca Raton a year later where he worked on the Robotics. He was a brilliant man. In 1993 at the age of 59 he took the package and went back to school and got his Masters. He taught high level math. And yes, they did hire him back as a contractor. He used to brag about IBM. I think he was disappointed when the layoffs came. http://articles.sun-sentinel.com/1998-02-01/news/9801310114_...

I was in middle school at the time, but I recall that it was devastating in the Hudson Valley. Cities like Kingston were just devastated... When I was last there about 5 years ago, it was like a time warp to 1991.

The past 5 to 10 years at IBM have shown their aggressive strategy to buy software companies but fail to integrate them into their many different IBM suites properly. Institutional knowledge and strong business relations previously held with purchased companies dies out quickly and ultimately results in low profit.

Not sure where you get your info. IBM acquired my 150 people company 3 years ago. They haven't lost a customer and have increased revenue 4x in that timeframe. In their quarterly report they also highlight performance of all their acquisitions and they have a good track record of 80% or so above business case.

Every IT behemoth that grows by acquisition is an idea graveyard. Just look at CA.

Or Cisco. Wait, Cisco is incredibly successful thanks to acquisitions.

Jeez. That's more than a Google (55,030 in 2014Q3 earnings) plus six Facebooks (8,348 in 2014Q3 earnings). And I have no idea what they may have been doing.

Soaking up paycheques and pretending to be busy.

What is the ratio of cuts in India vs North America/Europe? IBM for a while has been laying off non-Indians in favor of hiring Indians. Has this contributed to the nosedive?

IBM's nosedive has nothing to do with Indians.

IBM has three problems that are coming home to roost.

1) They abandoned a large portion of their technology business, and became a consulting & services business. There is very little special about them now, they are almost a commodity business with a famous name.

2) They invested a very large sum of their earnings, not into innovation, R&D, science - but into financial deception and gimmickry. Basically they've attempted to deceive investors by projecting earnings per share growth through share buybacks, while the underlying business was rotting.

3) The consulting & services business they've chosen to focus on, rises and falls with the global economy. The global economy hasn't been great the last six years, and most of the governments of the world are struggling when it comes to spending and budgets. With global economic weakness, even big corporations have been restrained on spending for IT the last six years, there have only been a few bright spots.

Let's hope they still have a strong enough core of smart people to bounce back. IBM is old and have seen this industry nascent and changing many times, they're still massive, thus having the resources to adapt (IMHO). Microsoft managed to bounce too. Kodak didn't.

I'm still very curious about the partitioning of these claimed layoffs.

ps: 4 times 'still' in one comment.

"...pie-in-the-sky ideas like commercializing Watson..."

I'm not knowledgeable about the product, but it seems to me commercializing Watson is the smartest thing you could do. I feel like Watson could allow IBM to become dominant in almost every field and produce trillions in value for their customers. Am I off base? Has Watson development stalled over the past few years?

So, I used to work on Watson. The way I see it, it's not that development has stalled but that it's nowhere near as impressive as you've been lead to believe. The natural language processing is its biggest weakness. I worked with Watson in a medical context and the NLP was absolutely atrocious. But to be fair, parsing English which is usually informally structured is really difficult! Compound that with the fact that IBM was asking developers with limited domain knowledge to write the parsing rules and well... it's about what you expect.

I should also point out that IBM talks up Watson's abilities way too much -- to the point that customers have thought that Watson could essentially tell the future.

> The natural language processing is its biggest weakness.

There were several documentaries about Watson after it won Jeopardy, and this weakness was quite evident to those paying attention.

Watson never really understood Alex's Jeopardy "answers" at all. This was quite obvious in "final Jeopardy". Watson's response clearly showed its limitations.

Here's how it went down:[1]

   The category was US Cities, and the answer
   was: “Its largest airport was named for a
   World War II hero; its second largest,
   for a World War II battle.”

   The two human contestants wrote
   “What is Chicago?” for its O’Hare and Midway,
   but Watson’s response was a lame
   “What is Toronto???”
Basically Watson's Jeopardy responses were a very refined equivalent of the Google "I'm feeling lucky" button.

I have to believe that the situation gets a lot lot trickier in a "medical context".

Still, couldn't it be possible to harness Watson as a super-smart assistant to humans? But there's probably not enough money to be made in that.

[1] http://asmarterplanet.com/blog/2011/02/watson-on-jeopardy-da...

When I was a researcher at IBM's Watson lab in Yorktown Heights, a standard explanation for many of the research projects was to give "luster" to the company.

It's easy to suspect that the main goal of the Watson computer playing Jeopardy was really just luster.

Really, there were some severely negative attitudes on (1) Research working on projects that could result in revenue and (2) transferring projects from Research to the rest of the company for development or sales. Our project in Research was quite exceptional and transferred two projects, both of which went to customers and got sold, but our group was unusual, and our success was not wanted by the higher ups.

At one time Gerstner mentioned "all the exciting projects coming out of Research" -- right, about like the wings about to sprout on all those pigs.

The explanation I like about IBM is one given to me by the manager of the Chicago branch office: "You might think of IBM as an electronics company or a computer company, but you would be wrong. IBM is a marketing company, and it would get into the grocery business tomorrow if it saw a business opportunity there. You might think that Research comes up with new product designs, development turns them into products, and marketing sells them, but that is exactly backwards. Instead, marketing figures out what they can sell, development builds it, and they go to Research if necessary."

So, maybe the current changes amount to IBM trying some new things to market.

In all fairness the Toronto answer isn't as ridiculous as it seems at first blush. If you confuse Lester B. Pearson with Alastair Pearson (something quite possible by NLP when you have to match "Pearson international airport" then you at least match you end up with a British World War II hero. Not being a U.S. city would involve either underfitting or ignoring category information, and trying to stretch buttonville or billy bishop into a WWII battle takes work, but it seems like precisely the kind of error that would be caused by actual NLP rather than optimizing page rank variants.

I also think IBM has the right model by creating Watson as a service on 30% revenue share -> Let external developers find all the various products and business models. They'll be better at finding and optimizing new products than a services companies would be and some of them will be able to go after much smaller products. You end up with more diversification and less of IBM's capital at risk for 30% of what's likely to be a much larger pie than IBM can generate on their own.

It would be very interesting to find out how Watson actually interpreted both the category and the "answer".

I don't know the actual amounts of time contestants are given, but on TV the final category is disclosed many minutes ahead of the "answer". Then a contestant has perhaps 30 seconds to formulate a "question". An eternity for a massively parallel computer like Watson. Quite different from the rest of the show, which relies on lightning reflexes when played by "champions".

Viewed from 30,000 feet (quite appropriate for an airport question, eh) I think that Watson didn't understand the category. Watson did not know what the words "US cities" meant. Those aren't words that would normally have any sort of double meaning, so if Watson understood the category, why would it have "ignored" category information? That doesn't make sense, especially for final Jeopardy.

As Dr. Venkman might say: "good guess, but wrong!" In Watson's defense, it did not have very high confidence in its answer.

We'll probably never know the real story. That's not the kind of information that IBM would want to disclose, mainly because it would probably make Watson look bad.

The confusion probably arose from the Billy Bishop Toronto City Airport, named after the World War ONE flying ace, Billy Bishop.

I always get dubious when people suggest letting external developers find business models / use cases.

I think if a product were truly compelling, they'd be able to find (and polish) at least one really awesome use case internally.

Looks like they've been writing the 2nd chapter of the IA winter.

Be careful not to assume too much of Watson. IBM's marketing makes it seem like a do-everything general purpose AI, but that likely isn't the case.

The program that won Jeopardy was more of a specialized search engine with really good query parsing. Many of the other things they have announced as "Watson" look like entirely separate programs that they are marketing under one brand name. While looks like one amazing AI is just a mish-mash of domain-specific algorithms with some well-built glue.

In fairness, "a mish-mash of domain-specific algorithms with some well-built glue" is also not a bad summary of how some people see the human mind. See, e.g., https://en.wikipedia.org/wiki/Modularity_of_mind.

(For the avoidance of doubt, I am not suggesting that Watson is anything remotely like a do-everything general-purpose AI.)

The human mind is a behavior copy algorithm, IBM's Watson is effectively an expert system with a search algorithm.

The way they answer questions is very, very different. Watson effectively translates the question into something equivalent to an SQL query, then executes it, and answers the top result.

What a human mind does is very, very different. It could perhaps be described like this : "put the electrical impulses on the outgoing nerves that seem like past successful Jeopardy players would have put on theirs in this situation". Your mind doesn't "answer" any question for starters. It simply reacts to the situation, the difference is in that your mind doesn't know or care about the difference between a question and a rocket falling out of the sky. Same prediction happens.

This reaction contains far more data than Watson will ever output. It contains the actual answer, encoded in had movements necessary to write them down. It contains instructions to pick up the pen, hold the board, crouch over the board so your hand would be in reach of the board, hide the answer from your competitors, ... You could easily write a 1000-page book about the response of your mind to simple situations (I've read a near-2000 page book that talks exclusively about the 3d math needed to control two fingers). This answer was produced by your cortex, which contains more computing elements than the internet. More data was transferred in your mind to weak computing elements than gets transferred on the internet in an entire US state for the same time frame. Granted, those computing elements are somewhat (a LOT) slower than a CPU, but there's 100 neurons in your cortex for every CPU ever sold, which is estimated to be a billion. (and I'm cheating with those numbers, for example the total data transfer that occurs in a single CPU easily outstrips internet traffic for a medium city. So your mind looks at the same amount of data as about a dozen cpus in the same time, much less impressive)

Fundamentally it's the "best" reaction your mind knows how to have. Best being defined something along the lines of "if you did this in front of me, you'd get maximum attention from my mind" (in this case hopefully because you'd win Jeopardy. But it's the attention that matters, not the win. E.g. if your girl/boyfriend plays, you'll play more like him/her, regardless of who wins).

Well, Jeopardy was 4 years ago, so there that. If Watson were really believed, internally to IBM, to be as revolutionary as their marketing copy says, then I would expect to hear great triumphs of how IBM deployed Watson internally to, say, their sales department (which has got to have communication issues, given their size) and let it absorb information and then let it answer questions sales guys have about their products, turning them into believers.

The fact that we've seen little of Watson since Jeopardy makes me wonder if development hasn't stalled.

Well, Watson (Watson Q&A) can only "answer" with a set of verbatim selections from the texts it has previously digested and been trained upon. Lots of folks struggle to understand this, and IBM seems not particularly diligent in correcting them, thus the idea that Watson can synthesize novel answers or insights persists.

Given a large body of literature that exists; say, all of IBM's marketing documentation, it's my understanding that Watson is able to parrot an answer to questions on things in there.

Something like "What's the minimum supported number of CPUs to run IBM DB2 on a new system Z?" or another customer-focused question.

Things like that don't require any insight, but would be a boon to the sales/marketing team when the customer has questions of that ilk.

Yes, that's positioning Watson simply as a better search, but what was Google, originally, other than better search than Altavista?

This seems like a case where Watson might be helpful, although the effort to train the system is considerable; out-of-the-box, Watson does not really know how to answer any kinds of questions, so the recommended approach is to (manually) walk it through thousands of Q&As. And even clearing that hurdle, would there be any payoff for the user _or_ for IBM above the Google results for "system z db2 requirements"?

Color me ignorant... What is the difference between Watson, Cortona, Siri and Now? What does Watson have that those services don't?

What does Watson have that those services don't?

IBM sales force - on a non-tech level that is.

I'm as ignorant as you, but here's a stab with something I found "This may seem similar to technology such as Apple's Siri or Google Now, but a cognitive computer becomes smarter over time as it learns from each interaction, a function far beyond typical computers. And let's face it … Siri is stupid.". As I understand it, Watson continues to learn with the goal of being a domain expert.

How many queries do you think google or Siri have had to learn from?

Regardless of their corporate mismanagement and lack of a sound business plan, this is incredibly unfortunate. 111,800 people are going to be losing their jobs and many of them may have difficulty finding new ones. To everyone at IBM, good luck and I hope this all works out well for you!

In many ways I'm a hardware guy. I enjoy building infrastructure in datacenters from bare metal. Yet I can't think of a single use I would have for these IBM mainframes, nor even what they run (DB2?).

IBM's product line just seems completely irrelevant to modern tech companies.

Think of them like old, proven architectures of yore that run virtualization stacks with APIs with the same kind of capabilities of Docker and you'll understand how awesome they could be if we as an industry put more effort into adopting them as platforms (sans enterprise BS vendors though). You can run Windows and Linux on modern mainframes as well, so they're handy there as well. Add in features that are very, very mature (like, since the 80s) like hotswap CPUs and memory that VMware has added a few years ago themselves. If you're in a typical F500 with terrible, fragmented IT management, mainframes are a breath of fresh air practically because there aren't roving bands of sales goons trying to sell you more management software driving wedges between different silos of dysfunction.

If you'd like to view them more from a hardware deployment perspective, you can think of them more like the Dell Poweredge VRTX series than your usual decoupled stacks of network, pizza box servers, and SAN chassis. Cisco UCS is more connection-oriented with the emphasis upon making your network topologies far more flexible than with mainframes, so mainframes are compute-oriented versions in that respect with historically weaker support for scaling out with interoperability across the rest of your network infrastructure (not sure if anyone at IBM or CA has seriously taken standards like BGP and OSPF into account for mainframes, that is). People still remote into mainframes with TN3270 commands, I know we had customers still asking for that as of 7 years ago with no expectation of sunsetting.

Oh give me a break.

The mainframe market is still $10B, and the fact that you can't think of a good use for one does not mean that IBM's product lines are irrelevant. The market should be addressed by major hardware manufacturers, there is still profit to be made here.

The fact that you are comfortable as a "hardware person" saying things like this publicly is a pretty clear indication that your world is much, much smaller than you think it is, relative to the size of the real world.

No doubt. "Big iron" for me is something like a $30k Dell R910 (pretty beefy for commodity x86). I'm guessing these mainframes go for at least an order of magnitude more per unit. A sibling post added some interesting facts (and without the condescending tone of your post), but the question remains: if the hardware is so superior, why aren't Google et al using it? Surely they can afford it.

Yearly IBM revenue is $100B. It's quite a small part of IBM.

You have no idea just how hilariously wrong you are. Just read this passage from an Economist article about IBM mainframes:

> At any rate, the mainframe is a hugely profitable business for IBM. Only around 4% of the firm’s revenues come from mainframe sales. But once additional hardware, storage, software and all kinds of related services have been factored in, the mainframe accounts for a quarter of IBM’s revenue and nearly half of profits, estimates Toni Sacconaghi of Berstein Research.

Read that again. HALF of profits. A QUARTER of revenue.

Source: http://www.economist.com/blogs/schumpeter/2012/09/ibms-mainf...


johansch, you were wrong in such a fundamental way about this subject that it is hard for me to believe you know anything about it at all.

If you have any suggestions about how I can phrase this in a way that makes you both comfortable, and that still makes it clear that I do not believe you have any business speaking on this subject, then I am 100% happy to listen to you. :)

I'm sure you're otherwise intelligent, but this is an area where you should probably just listen.

Ok, so.

You first write:

"The mainframe market is still $10B" and then

"the mainframe accounts for a quarter of IBM’s revenue" (that would be about $25B).

Which one is it? :)

It's both.

$10B are spent each year on sales of actual mainframe computers. [1]

The article quoted in the last article claims that everything you sell around mainframes, like services, is a quarter of revenue.

Now, it's your turn to do something for me. Don't respond if you're not willing to read before you speak. I should not have had to explain this to you.

[1] http://europa.eu/rapid/press-release_IP-10-1006_en.htm

I think you are underestimating the scale of what a Z system can run... You might not have a use but every fortune 500 and banking institution in the world does - and they need it to work, 5 9's isn't good enough.

> IBM Hursley laboratory director Rob Lamb says: “There are 6,900 tweets, 30,000 Facebook likes and 60,000 Google searches per second." The mainframe CICS runs 1.1m transactions per second, which equates to 10bn per day [0]

[0] http://www.computerweekly.com/feature/Can-the-mainframe-rema...

That equivalence is bogus. If a search was as simple as a single CICS transaction, Google would just run that and be done.

Mainframes are overpriced and inefficient, but they are the only option for a F500 without the in-house talent to build any kind of distributed, fault tolerant system.

If as you say mainframes are overpriced and inefficient, that means there is a great opportunity for some organization to move with a much cheaper, more efficient option.

But people have been predicting the death of big iron for several decades now, yet they live on.

I don't doubt mainframes might be overpriced, but I also suspect the reason they persist is they have yet to come up with a cheaper option, offering the same performance figures.

Long one of the main reasons for IBM mainframes was the bet your business software that wouldn't run anywhere else and that would be too expensive to rewrite to run somewhere else.

Also, there is a remark that in major parts of the financial industry, running an IBM mainframe is nearly a necessary condition for compliance.

> would be too expensive to rewrite to run somewhere else.

I'm don't doubt that is a major factor. Add to that the major risk that what every new system you move to might actually fail to work or end up costing more.

> If as you say mainframes are overpriced and inefficient, that means there is a great opportunity for some organization to move with a much cheaper, more efficient option.

But isn't that what Facebook, Google, and Amazon are doing? Using massively distributed commodity x86 hardware to eat away at incumbent businesses that would outsource their IT services to mainframes? Last I read, Google is about to go into auto insurance, and all three companies I listed do payment processing.

If software is eating the world, SV behemoths are eating business verticals.

The electrical power ($600/day vs $32/day), floor space (10,000 sq ft vs 400 sq ft), and cooling costs for those mainframes were less than those of distributed servers handling a comparable load. In addition, those mainframes required 80 percent less administration/labor (>25 people vs <5 people); “Mean Time Between Failure” measured in decades for mainframe vs months for other servers.

96 of the world’s top 100 banks, 23 of the 25 top US retailers, and 9 out of 10 of the world’s largest insurance companies run System z Seventy-one percent of global Fortune 500 companies are System z clients Nine out of the top 10 global life and health insurance providers process their high-volume transactions on a System z mainframe Mainframes process roughly 30 billion business transactions per day, including most major credit card transactions and stock trades, money transfers, manufacturing processes, and ERP systems.

The new mainframe delivered in 2010 improved single system image performance by 60 percent, while keeping within the same energy envelope when compared to previous generations. And the newest mainframe which shipped in 2012 has up to 50 percent more total system capacity, as well as availability and security enhancements.

It uses 5.5 GHz hexa-core chips – hardly old technology. It is scalable to 120 cores with 3 terabytes of memory.


[1] http://www.share.org/p/bl/et/blogid=2&blogaid=234

A single search on Google could lead to 10x-100x actual requests to the backend system. So the comparison here is not really a fair game.

Second, since I assume, most of the programmers here don't have access to mainframes, it is hard to testify those numbers. Also, since it is a benchmark it will be useful to revel what exactly the task they are using here, otherwise I would simply throw this claim into my 'pure PR mess, don't take it seriously' bin :)

CICS itself is essentially just a way to put up the forms for a user interface, but a CICS application usually makes heavy use of database, say, relational database, e.g., DB/2 although there may still be some IMS usage still hanging on.

One use of CICS was for heads down medical claims processing, across all four US time zones. The site our team from IBM Research visited wanted high reliability: If the site was down for, say, an hour, then the data entry staff would have to be called back on a Saturday, for at least half a day, at a higher rate per hour. One such outage in a year, and the CIO could lose his bonus. Two and he could lose his job. The site was very uptight. Getting into the glass house was not easy; might have been easier to get into the White House Oval Office.

At one time to make CICS more secure, there was some interest in having processor hardware support for address sub-spaces. Another idea was cross memory where a program could call and execute, say, a function in another address space. There were also data spaces, that is, address spaces with just data and no code but that could be accessed by other address spaces with code.

Net, the IBM mainframes are not really simple things. Cloning one would not be easy, and at IBM's next version of hard/software, the clone could be unable to run the newer software and suddenly be a boat anchor.

I have practically zero experience with mainframes, but I've always heard about their insane throughput figures. I've never really seen much on their architecture. Any insight in how they work and do so much?

Here's an old 2012 article about zEC12 (previous) generation of the mainframe. http://www.theregister.co.uk/2012/09/05/ibm_z12_mainframe_en... zEC13 was just released this year.

The mainframes have their own CISC type architecture and typically have massive amounts of cache and a high clock speed (5Ghz and above)

Their instructions sets are also different in that its not strictly of the von-Neumann variety. Mainframes can do things like memory copies directly in memory without requiring copying via registers. This kind-of attacks the von-Neumann bottleneck directly and is good for batch and high volume transaction processing.

The software for mainframes is also typically fused into their kernels, things like CICS and DB2 are not "user" programs, they're part of the OS so I/O is handled much better and things don't "block" as much.

At some point in the process of you getting your pay check, there's a good chance a mainframe was involved.

modern really?

if you want reliability and solid software you don't go anywhere else other than mainframes and minis from IBM (z, i, and x)

The companies that run these do so because they are proven, the languages they support are all business oriented (math is a specialty), and the code bases are vast and stable. Oh, they all do Web-centric work just fine too.

db2 is just fine with SQL and highly optimized as well. Modern is what they are, quit thinking small is modern

> db2 is just fine with SQL

Also people seem to forget IBM invented SQL.

Modern tech companies sure... but old enterprise companies still use this stuff and it's a tough sell to move them to more modern systems.

IBM doesn't and never has as far as I can see targeted "modern tech companies." They target large enterprises, and research/academia (in the later case often with mainframes on the administrative side, and linux clusters on the research side).

Edit: I believe that the linux server lines have recently been moved to Lenovo though

Not entirely, not for the purposes you're describing: https://www.olcf.ornl.gov/summit/

Ah yes, but those are POWER systems. I was thinking of more familiar x86 systems.

"I can't think of a single use I would have for these IBM mainframes"

High throughput transaction processing with ~100% uptime guarantees, and someone to call who will Fix It Now should anything go wrong.

I left IBM in 2012 because I saw that the division I was working for was never going to be competitive. It is surprising that it took almost 3 years for what was obvious at the bottom to reach the top and be implemented.

Could IBM turn itself into a generic tech consultancy? Accenture & co. seem to be doing fine.

I had a look at the 2013 annual report. This is the simplified division of revenue:

Services: 57%

Software: 26%

Systems & Technology: 14%

Financing 2%

(http://www.ibm.com/annualreport/2013/bin/assets/2013_ibm_ann... - page 37)

Accenture's market cap is 1/3 of IBMs currently however, so management probably isn't too interested in that route.

Accenture isn't exactly killing it. They're suffering from the same problem IBM is: the global economy sorta sucks.

Accenture has averaged 3.x% sales 'growth' in the last two fiscal years. Account for inflation, and they're lucky if they're not contracting as a business.

> Could IBM turn itself into a generic tech consultancy?

Not that anyone necessarily cares, per se, but if they do this, what happens to the companies invested in platforms like System z that only IBM can really support? Does "generic tech consultancy" include developing and supporting proprietary hardware and software?

Enter the multitude of companies whose entire business model is selling products that emulate IBM platforms on top of commodity UNIX hardware and RDBMS.

> Enter the multitude of companies whose entire business model is selling products that emulate IBM platforms on top of commodity UNIX hardware and RDBMS.

As I understand it, the big selling point of Big Iron has always been the idea that it's more stable at the hardware level than other kinds of computer. Is that actually true? If it is, can a company get similar uptime with non-Big Iron hardware? Because it seems like that would be a hard prerequisite for replacing those systems.

If that were still true I don't think virtualization would have caught on to the extent that it has. I work in a pretty conservative business that used to run everything on IBM and then HP mainframes but has since migrated to commodity x86 hardware running VMWare. Downtimes do happen but modern monitoring and deployment processes can address them quickly and cheaply.

They would probably stop developing it in that case and just support remaining customers.

A large portion of their business already is. I wouldn't be surprised if this layoff was in part shedding the non-consultancy parts of their business.

Yet another manifestation of the tech worker shortage we keep hearing about...

There IS a tech worker shortage ... of those willing to work for third world salaries.

Guess I won't apply for an internship there for the summer....

FWIW, if you're looking all over the place for an internship, maybe don't rule them out[1]. Often companies lay off employees who aren't useful to them, but are still looking for employees who will be useful. In particular, someone who's good at programming[2] and junior[3] might be the kind of person they still want to hire.

[1] Then again, the fact you're commenting on HN probably means you're a strong candidate who'll find an internship with ease. So follow your dreams. ;)

[2] Again, just assuming this based on the fact you're an HN reader. You might be horrified to see what proportion of people in a BigCorp company can't do even basic reasoning.

[3] Pay an intern pennies to do pounds worth of work! Yay!

"[3] Pay an intern pennies to do pounds worth of work! Yay!"

And that's why they are (or could be) losing customers... charging a premium for intern work.

I know what my skill was worth straight out of school... vs after putting years of practice in...

I don't know to what extent this is a problem at IBM, but I've seen a few places where it is a huge problem. And I agree with you. The "yay!" was sarcastic.

On a related note, Blackberry is now hiring hundreds of interns for this summer!

I interned for IBM twice: once in '95 (Boca) and once in '00 (Hawthorne as a research intern). The second was by far much better (working with all those great researchers), but there is just something about working for IBM that is a bit depressing...it really is Big Corp.

My current employer (Microsoft) has a reputation...but the reality is no where near what I felt when I was at IBM.

Just be sure it's in a "cool" part of IBM that's growing, not a "dead" part.

You should still apply, especially if with Watson group.

For some insight/rumors/thoughts from IBMers you can check out this board:


At the moment it seems to be down, probably from being overrun with traffic now that this story is trending a bit.

What does the CEO's comp package look like this year?

ASSUMING this is true...

The information industry in in an exponential power curve right now. Participants are either in the stage of disruption or already evolving democratization. The classic monolithic mega-company just isn't engineered to twist and turn like that. I'm amazed they've lasted this long.

One way to survive is to admit failure and do an emergency fracture. Break off all divisions with any profit potential into their own manageable chunks which don't suffer from upper management overload. Wow that would be an expensive proposition. And IBM stock would burn.

IBM made their bed in switching from being a technology company to a consulting & services company. At best they will grow and shrink with the global economy now.

When the global economy hits a wall, as a consulting & services company you can't innovate your way out of it, you depend on eg growth in government spending and big corp spending, both of which are shaky around the world right now.

"It's becoming apparent she is not up for the job and can't pull the company out of its nose dive."

I wonder who would be the right person.

Marissa Mayer seems to be the goto for a struggling giant.

Only a specific kind.

It could be related to Lenovo buying IBM's x86 server business http://news.lenovo.com/article_display.cfm?article_id=1755

That closed a while back and has already been accounted for.

Does that business employ that many people?

I'm not sure, the two pieces of news are just quite close together.

I think this is where IBM is trying to go - http://www-03.ibm.com/press/us/en/pressrelease/43523.wss

Mostly unrelated: I've always wondered how anyone in the tech industry would go to IBM as a business consultant, when they can't even figure out how to have a website that doesn't require things like "www-03.ibm.com" to be the hostname.

And it's not even like they're just maintaining legacy URI's for search engine purposes, either: Go to ibm.com and click on "Services" > "Cloud Services". For me I got sent to http://www-935.ibm.com. Do they know how load balancers work? Do they just not want a global namespace in the HTTP paths, and everything has to be namespaced by the hundreds of different servers it runs on?

Cutting storage is also foolish, as we are in the era of Big Data and Data Lakes and storage is vital to these concepts.

Whether or not the layoff rumor is true, this doesn't feel like the most insightful of articles.

I'm really interested to see if they follow suit with Microsoft and close one of their top research labs.

A legacy of bad management. Whilst IBM might have a reputation of top research in the past, they've been cutting R&D in a very short sighted manner for many years now. That their revenue is declining and they need to cut staffing (again) is just them reaping what they sowed.

They've still done good research lately. This is just the nature of business I think. Eventually others catch up to where you are, and it is difficult to constantly remain competitive. A further problem in IBM's case, which maybe isn't as pronounced in other industries, is how quickly the computing landscape is changing.

Yeah I wasn't trying to insinuate that they don't still have a great research department. But you can only see so many cuts happening over the years without thinking that it'll impact their bottom line eventually.

Whilst I'm sure these ~100,000 are from services and sales - I'm equally sure that if they had something unique to sell in the first place, they'd be doing a heck of a lot better.

Impose Tax On Corporate Revenues, Not Profits And See The Result;

Now is a good time to send a resume to IBM...


What about Unica?

"Nobody ever got fired for choosing IBM"[1] ...except as an employer!

I'll get my coat...

[1] http://www.quora.com/What-does-the-phrase-Nobody-ever-got-fi...


How many people work at the US Post Office? About half.

This would certainly explain all the publicity over Watson. Perhaps IBM is looking for someone to buy them, and are trying to put as much makeup as needed to seem valuable?

Anyone who read IBM & The Holocaust[1] is probably celebrating right now.

1. https://en.m.wikipedia.org/wiki/IBM_and_the_Holocaust

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