The Australian understands the latest restructuring exercise began last week with about 400 positions potentially affected.
One person close to IBM, who declined to be identified, said morale was “extremely low” at the company. “Workers say anyone could be next and that’s the thinking they go into work with everyday,” they said.
An IBM spokeswoman didn’t reveal specifics but said the company “continues to rebalance its workforce to meet the changing requirements of its clients”. “We continue to hire for key skills in Australia and around the globe,” she said. ...
The computing giant and the Queensland government are gearing up for a courtroom clash on February 19 following the much-publicised botched payroll implementation.
The Newman government, in caretaker mode for the January 31 poll, alleges that IBM engaged in misleading and deceptive conduct to bag the deal. It wants compensation for a system that’s estimated to cost taxpayers $1.2 billion to fix.
An IBM spokeswoman said it was “another example of the Queensland government’s continued efforts to shift blame for its own failings” on the project.
But Tuesday was a pivotal day for the company and she was no where to be seen, missing a chance to show leadership. ...
But this wasn't a typical earnings report for the company. In October, at the last quarterly earnings, Ginni Rometty had some particularly harsh news to share: She had to tell investors that IBM was abandoning its years-long promise, made by her predecessor, to hit $20 earnings per share by 2015, a plan internally called Roadmap 2015.
The news in October sent the stock into a tailspin from which it has yet to recover. However, that decision, as we argued at the time, was the best decision she could make for the long-term health of IBM.
Until she abandoned Roadmap 2015, IBM had been twisting itself into pretzels to grow profits, even though a massive shift had since occurred in the enterprise tech industry that caused the floor to drop out from under IBM's revenues. ...
IBM did all sorts of financial engineering to keep profits growing while revenue began to tank: layoffs, shedding business units, spending billions on share buy-backs to reduce the number of shares in circulation (even issuing debt to pay for the buy backs). ...
Typically IBM leaves CFO Martin Schroeter to meet with analysts on his own to talk about the quarterly financials.
But when the time came to ditch Roadmap 2015 in October, Rometty broke tradition, joined the call and did the TV interviews. It was good that she showed up.
When asked at that time about the the new plan for 2015 and beyond, she promised IBM would reveal that stuff at the next quarterly earnings report.
IBM reported earnings on Tuesday, but Rometty was not on the phone. She did not do the TV interviews. CFO Schroeter was back, on his own, explaining how the company's transformation was going. ...
Still, this was a leadership miss for Rometty when she can ill afford it. She has a mere 48% approval rating from her employees, according to job hunting site, Glassdoor.com.
In comparison, other CEOs who are also leading their companies through a transition are using every opportunity to be visible and articulate the vision and the turnaround plan. ...
Being a great leader doesn't just mean biting the bullet when things go wrong. That's important. It's also important to share your vision as clearly and as frequently as you can. IBM needs Rometty to keep showing her personal leadership throughout this transition.
She’ll need to come armed with a specific plan to refocus a massive organization of more than 430,000 employees on industry-changing trends like cloud computing and the proliferation of smartphones. If she joins the earnings call, investors and analysts are likely to pepper her with questions about how IBM will start increasing sales again and what the financial expectations are for 2015.
Selected reader comments follow:
They have hollowed out the skill base (replacing it with cheap but largely ineffective outsourced or cheaper, less educated domestic labor). How have they managed to (mostly) cover this up? Consolidating skilled organizations. Less skilled technicians, but at least they can be found in (say the US organization) to deal with emergencies. (Yes, not taking care of the customer with enough skilled resource does, over time result in more emergencies to deal with -- as well as a trend toward unhappier customers. (Go figure).)
I left that organization in disgust in 2007. My friends who have stuck it out so they can get full retirement report that the situation continues to slowly deteriorate.
The current destructive trend started during Lou Gerstner's tenure. Turning a loyal, productive workforce which was encouraged to produce into a "hanging on but hating it" workforce, encouraged to save money at all costs (including their own career opportunities) has to let the damage show eventually.
I think we've gotten there. I don't expect empty platitudes from clueless management about "the cloud" to somehow even come close to magically fixing this train wreck.
IBM needs a new management team staring from the top. Managers in IBM have no education, no leadership qualities, have no communication skills, no clue of the process their managing.
An IBM manager becomes a manager in IBM because he is a golden boy, and can play the political game very well. If IBM does not change the way their executives and managers are selected, IBM will continue to decline in revenue.
Outsourcing is reliant on reputation more than anything. Customers want to reduce their cost, their risk, and seek a competitive edge. If they have reason to believe your tech company can do that for them, you're in the door. IBM's reputation as the reliable choice has been demolished as the skills just aren't there any more.
When your market differentiator was once "No one gets fired for buying IBM", that's a long, long way to fall, yet somehow IBM's decided competing on cost is a better choice - and have discovered they were wrong.
You cannot compete on cost when your internal reporting and management overheads are ridiculous, with multiple overlapping systems managing every aspect of the business and multiple redundant information channels required by multiple layers of executives with no readily apparent function.
Despite the overall decline last year, Ginni Rometty, IBM chairman and chief executive, said the company’s “strategic” businesses of cloud, analytics, mobile, social and security grew 16 per cent in 2014 to represent 27 per cent of revenue. These businesses are forecast to grow in double digits next year, the company said.
“They’ve got to get that revenue growing. How are they going to get there?” said Dan Morgan, a senior portfolio manager at Synovus Securities Inc., which manages about $10.2 billion including IBM shares. “We want to know she’s trying to put some sort of timetable together.” ...
IBM’s billions of dollars spent on stock buybacks, which help boost earnings per share, have become a point of contention for the company. Chief Financial Officer Martin Schroeter has defended the strategy, writing that it’s a “false choice” to think IBM has to choose between reinvesting in the business or returning money to shareholders.
Has Rometty spent the $6.4 billion remaining in its repurchase program as of October? Does the company intend on being as aggressive with buybacks? Or, will it allocate more money to capital expenditures, research and development or acquisitions?
The quarter, as has become custom, was ugly. Revenue was down an eye-popping 13% as sales were crushed by weak demand. EPS was a bright spot as it was 40 cents ahead of expectations but it didn't matter; there was too much here for investors to care that EPS came in high.
When I last looked at IBM I called the company directionless as the stock continues to lag virtually everything, including the major indices. My gripe at the time was that IBM's years of trying to game the system through financial engineering has left a business with no strategy or purpose other than to try and produce free cash flow that can reduce the share count and boost EPS. It's as though IBM's management doesn't realize they're running a business. It seems to be a game to them to try and engineer their way to EPS growth. But it still isn't working. ...
Even the company's services backlog took a beating, losing $15 billion during the quarter. The lone bright spots for revenue? Cloud-delivered services skyrocketed 75% and security revenue added 19%. Those are great gains, but not nearly enough to overcome the rest of the ship that is taking on water. I applaud IBM for trying to add sources of growth, but it's just not enough right now. And I'm afraid by the time it is enough the rest of the company will be so small it will be too late.
Chief Executive Officer Ginni Rometty is focusing on returning International Business Machines Corp. to growth through new initiatives like data analytics, mobile and cloud computing -- where technology is delivered via the Internet, instead of stored onsite. Cloud computing gives clients more flexibility in ordering software and can limit their need for IBM’s servers and mainframes, crimping profits. ...
“For 2015, specifically, we are dealing with some transitions in our business,” Martin Schroeter, IBM’s chief financial officer, said on a conference call with analysts. “For example, while we are fully participating in the shift to cloud, margins are impacted by the level of investment we’re making and the fact that the business is not yet at scale. We will see some year-to-year benefit to margins in 2015 as the business ramps, but we won’t be at scale.”
It's a huge number, but back in fiscal 2011 the same quarter recorded $1.2bn in storage hardware sales. Charting the numbers illustrates the point we're making; IBM's storage hardware sales trend is dire. ...
Our view is that IBM's storage is profitable overall; there is no mention of getting out of that business, but there is also no mention of arresting its revenue decline. As long as the business makes money IBM seems happy to keep it simply ticking along.
Pros: I started the team who developed the first speech recognition software on PC's and embedded products in 1993 in Boca. The extended team included executives, Yorktown research scientists with PhD's, and direct report employees. We worked on great technology, implementing the first speech-enabled Netscape browser in 1995. The rapport and support from executives in Watson was exciting as were the great products we created.
OS/2 Warp 4.0 was shipped in 1996, at the same time, moving 400 developers to Austin. The day after we shipped the product, IBM announced there would be the last release of OS/2. So, all the talented operating system developers were told their new assignments were device drivers for AIX. My job was to be the planner for OS/2 — which is the place for requirements from the field for service releases to land.
But, there was no money in the budget for any service release of OS/2, even though it would have been very easy to accomplish a small service release, while the skills were in place and there was great customer acceptance of Warp 4.0, due to its inclusion of VoiceType Dictation, thanks to my team.
Advice to Senior Management:
Pros: The flexible policy for allowing employees to work remotely is a relief to a long commute into the office. They offer good benefits to full time employees. I enjoy the work I perform, and there is good camaraderie amongst most employees.
Cons: Based on which division and management you work for, your experience may not be the same.
"Work/life balance" does not exist. The projects are always chaotic and almost never meet the contracted deadlines. Employees are worked to the point of burn out, due to a serious lack of project management skills and understanding of the client's industry.
Managers come and go like a revolving door due to poor project management. There have been no less than ten management changes in the last two years alone. Brown nosing is commonly accepted, and those who do, are rewarded with above-par ratings, no matter their actual experience or lack of contribution to the projects.
Forget raises, they are non-existent, but the expectation is that you will give all your time to the "company". Too many have sacrificed family, social lives and vacations to meet last minute timelines. Gender discrimination has been and continues be a serious issue, without any intervention from upper management. HR always takes the low road, by not protecting employees. Career advancement is frowned upon, and suggestions for improvement is not encouraged.
For those who refuse to brown nose, you will reap the wrath in your review. The review rating system is ridiculous and unfair. Employees are never rated on their individual accomplishments and contributions, but instead rated against others who lack the skills required for the job. The current system allows managers too much leverage to to discriminate, since they are never held to proving anything stated in an employee's review. The IBM motto is, "Someone has to be 3 (worst rating before being fired). So unless you are on the "Manager's list", you will be at the mercy of a manger who may not like you, for whatever reason. If being female puts one at a disadvantage, then having a female manager give new insight into what power will do to a woman moving up the ranks.
Out of nine years working at IBM, the last four have been nothing but torture. I work like a dog all year long, only to have it totally undermined at the end of the year. Communication between employee and manager has not existed until six months ago, but still employees are blind sided at year's end.
It's no wonder that so many employees and businesses are leaving iBM. Seriously, who wants to do business or work for an institution on their last leg to survive and rated as the worst company in America. I am so ready to leave the status quo mediocrity, disrespect and and unprofessionalism that abounds. I am excited about my future outside these walls.
Advice to Senior Management: Stop turning a blind eye to what is happening to your projects and employees. Communication and respect are essential to making a successful company. Teach your managers that they are responsible for the business and in doing so; this does not give them the right to use that power to boost their own personal inadequacies.
Pros: Smart peers and strong teamwork spirit. If your coach is good, your days are in sunshine.
Advice to Senior Management:
Pros: Work from home, set own hours. Good benefits. Working with some of the top minds in the tech world.
Cons: Too many cooks in the kitchen (so to speak), employees stay in a position for six months before being transferred to another job making it impossible to follow through on projects. With so may products and services, its impossible to know what other departments are working on. Very little communication with lower level employees, people have a tendency to work in silos.
Advice to Senior Management: Give your employees more encouragement when they do something well. Stop over working your sales teams and maybe they'll produce more.
Pros: Flexibility in work location (though that has been challenged, and is dependent on division), and schedule. Direct managers are generally good at working with you to provide a level of work-life balance.
Cons: Promotions are non-existent; raises and bonuses are extremely small, if they happen at all. Managers present your bonuses and raises, but really have no control over the distributions. Risk is encouraged on paper, but not in practice. Cooperation and trust are mandated, but stacked rankings and the continual threat of layoffs create a competitive atmosphere that counters that notion. Upper-level leadership is short sighted and uninformed, but not held accountable.
Advice to Senior Management:Advice Try actually listening to and conversing with your direct reports if you don't want to keep losing good people. Streamline and modernize your engineering philosophy. Streamline and modernize your productivity tools and processes. Restructure your incentive system. Focus on the growth of your employees.
Pros: Was a great company at a department level — intelligent people who got stuff done, and a product we could be proud of. Real sense of teamwork.
Cons: Doesn't invest in its people. Several big releases in a row, leading to tired employees. The reward for doing good work was more work. The training budget was cut, but that didn't matter any more, because at that point there wasn't any time to train anyway. Technical debt built up, and we didn't have enough people to address it.
Advice to Senior Management: Try to think beyond the next few quarters, and invest in your software development.
I guess the big 2015 RA hasn't hit yet, so much for the Jan 15 predictions. I was told by a manager that they are doing the re-org in layers, they are done at the director/VP level now and the 2nd line managers and FLMs are basically interviewing for their jobs. In my org I was told they are going from 13 managers to 5 at one particular layer. After they have the managers settled, they will begin figuring out which of us worker bees to axe. So, it will be soon, I imagine. Maybe more like the Feb 15 that someone mentioned.
For now, grab some popcorn and snacks and sit back to see what happens this week when Ginny and her CFO do their tap dance in the 4Q results call to the street. And please, please go to the page here and see how little it costs to move that thermometer a little, be strong and sign up for the alliance. If for nothing else, to give back for all the benefit you get from this site. Certainly that's worth something! -WaitingForACallFromMyManager-
At least some people now know an IBM resource action is just another IBM wordspeak for permanent firing and not a layoff and is repeatedly used just to trim costs to help maximize lousy profits due to clueless middle and upper management direction started and now stultified from that evil past IBM CEO Gerstner.
Even worse, the thing I see in IBM non-management is sheer apathy instead of at least trying to get changes for the betterment of IBM employees (even just refusing to be labeled or referred to as a RESOURCE is a start of leaving that apathy behind) and if you don't try to take action history will repeat itself with another RA, then another, another.
IBM is playing you as fools. Worse than a flock of sheep. Sheep are better than resources since they know how to flock together for their own protection. And when you continue to do NOTHING but keep your head down you allow the bad history to repeat and, dare I say it, maybe get even worse for the future at IBM? -Something-anything?-
I also needed medical for the kids. The IBM guy was very rude and told me if I don't sign and take it and go, he will very likely take away any severance benefits. There was an employee who was the FLM's friend who go to stay and was promoted. This employee hardly did any work and knew very little. IBM is one of the worst companies of third world standards I have ever worked for. This company simply cannot survive with these standards. -FED-
Today I got a 3 on my PBC review because of "relative" contributions. More in my band had higher "relative" contributions. I asked if I had completed the ONE thing I had tried to do and failed, what would my rating be then. The answer. "2". The one thing I didn't do was purely customer based and the customers weren't interested. Anyone hiring? I have over 35 years in the industry. I'm done. -Ben Dover-
Alliance reply: The advice is meant to be used as collective action. Regradless of IBM FLMs using a rubber stamp, IBMers acting collectively to impede the system itself, from functioning the way IBM abuses and fires their employees, is a good way to make IBM aware that the employees are fighting back in a group effort. That's the purpose. It's a small step; but once taken, becomes a loud collective voice. Do something collectively!
Now due to the expected woeful IBM 4th QTR results IBM has less money for stock buybacks. That's bad for IBM financially-engineered cooked books. Very bad for IBM executives. I can see IBM raising money for a bigger buyback by instituting "Pay Reordering" for all number bands (2-10). Supposedly, IBM management with bands D-A have much of their compensation 'at risk' already so that is why they couldn't be pay reordered.
The Pay Reordering is not a pay cut; you just get less money in salary and hourly pay if IBM stock price makes a high water mark for a particular date when you might get your pay reordered totally back to what it was. Don't think this is possible? Remember re-banding and Pay Remixing? How about your 401k match? Call it all the "Great Holdback" which might have been a drop of poison left from Roadmap 2015. IBM also gets a 0% loan; all on part of your pay.
With a union contract this could all be avoided completely and you woundn't have to worry about this if you make it through the next RA. -ItCanHappen-
My manager confided in me that the new "automatic PIP" plan is just a cost cutting measure that allows IBM to get rid of people without the expense of an RA. Most importantly, he told me that no one who goes on a PIP will succeed, you will fail and leave IBM with little or no severance.
So, if you got a 3, you will be put on a PIP. If your severance is more than you would make staying until the end of the PIP, take the money and run, because you'll leave IBM either way. If you stay, you'll create extra work for your manager, so some of you might choose that option :-) You will not be part of an RA, this is the best deal you will get. Once I get the details of the PIP package I'll post an update, unless someone else does so first. -Survivor-
Two people testified for me. I was warned by many that this could affect my career (even though IBM allegedly has a no retaliation policy), and I think it has, but there are no careers at this company anymore. Even if you don't win, you make them back up their decisions, shine some light on the dishonesty, and show them you aren't their patsy. What is the worst that could happen? You are going to lose your job anyway.
Make them work for it, these people who are willing to do the dirty work for the board of IBM - the board who are taking money out of the company millions at a time, cooking the books, treating it like a cash cow, performing re-org theatre for the sake of wall street, and getting rich while they pretend they are trying to run a company. -SC-
First we don't all have rich neighbors who can drop 750K on stock so I don't see how that is suppose to make us feel. Secondly, she needs to stop what she and her cronies are doing since it is not working.
My FLM, has not given anyone on our team our PBC rating as of yet and he wants all of us to work this weekend to resolve any outstanding issues for an upcoming release. I suspect (actually I know) he wants to delay telling us since whoever got a 3 would definitely not be working this weekend. I agree with most other comments, the majority of FLM are incompetent and lack leadership skills. I guess the apple does not fall far from the executive tree. -Mr. Wonderful-
I work literally every single weekend, 24x7. The client calls me if a fly shits in the trees. I have no life. My wife is about to leave me and after 30+ years of this I don't blame her.
The client is offering me a job. I think it's time to move on. And, please, please, please, don't equate my minor problems with those dropped to a 3. I feel for my brethren and how this company is screwing them. My problems are minor in comparison. I'm at a crossroad and maybe you are too. -Ben Dover-
P.S. Does IBM have Employee Development Plans (EDP) anymore? If so, do they ever come to fruition what is listed in them? -sby_willie-
Heard of a dept that ALL given PBC 3 yesterday...how's that for a thanks! If IBMer were united, we could do a work slowdown together and force some improvements. -Band 9 Not Doing Fine-
I will say that I don't know who any of you are, but the best thing about working in IBM my almost 20 years has been the people. It pisses me off that good people with families and kids are being treated like this because of greed. Maybe we should all wear glittery headbands and pearly white buck teeth grills to our interviews and ratings meetings as a sign of protest. -ReadTheTeaLeaves-
My plea here is for those of you that either leave on your own, or get "managed out", PLEASE do not go back as a contractor. This only hurts your previous co-workers, but it's unethical and underhanded. I pray they don't call me to come back...it won't be pretty. -Time2Live-
This is how one can go from being told that they are doing very good work but then still get a PBC 3; yes, you did good work and completed everything you were asked to and with good quality and on time, but there were others that did more (or so they can claim). And since you are compared to employees within your unit, and not just your department, it is sometimes like comparing apples to oranges when looking at the true value of the work performed. -OutIn2013-
Post IBM and after a business degree, my career settled in the unionized private sector. I work every bit as hard as in my IBM days, however without any of the health-ravaging stress due to management abuse. A union contract will save you (and your family dynamic), and save your company. A union contract gives you a collective voice, provides an agreed upon set of rules, and will require the group comprising Idiots Became Managers to be accountable. -Irish-American-Canuck-
Well, all I can say is you will suffer the same fate as many other X-IBMers did in the past 15 years because you refuse to consider that collective action really IS an option. You're not a consumer regarding this. Don't act like Alliance has to "sell you something" and reach you through ridiculous "marketing and advertising" stunts. You are an IBM worker and producer of a service or product that IBM is selling to its customers. Fight for your jobs and fight to help turn this company in a direction that values customers 1st, then employees, then stockholders and lastly, IBM executives.
Stop waiting for a queue to join the Alliance from someone else. YOU DO IT, first. YOU Take a step forward. Is it hard to do? Yes. No one in the Alliance ever told me or anyone else that it would be easy-peazy. What are you waiting for? You've been waiting too long, for what ever it is...that bus will never come. Join the Alliance. I'm a member and I have been for over a decade. Sign-up, and then get busy organizing other IBMers. Get busy fighting for your job...or get busy losing your job. Your choice. -Mr. Potato head-
The system is also flawed as managers could exaggerate their employee's contribution without any solid proofs. What's worse is that it discouraged team work as employees do not want their peers to rank above them. There are companies such as Microsoft which are bold enough to admit such system was flawed and terminated it. -Anonymous-
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