Posted on 05/04/2007 8:21:14 PM PDT by Golden Eagle
Last year I wrote a series of columns on management problems at IBM Global Services, explaining how the executive ranks from CEO Sam Palmisano on down were losing touch with reality, bidding contracts too low to make a profit then mismanaging them in an attempt to make a profit anyway, often to the detriment of IBM customers. Those columns and the reaction they created within the ranks at IBM showed just how bad things had become.
Well they just got worse.
This is according to my many friends at Big Blue, who believe they are about to undergo the biggest restructuring of IBM since the Gerstner days, only this time for all the wrong reasons.
The IBM project I am writing about is called LEAN and the first manifestation of LEAN was this week's 1,300 layoffs at Global Services, which generated almost no press. Thirteen hundred layoffs from a company with more than 350,000 workers is nothing, so the yawning press reaction is not unexpected. But this week's "job action," as they refer to it inside IBM management, was as much as anything a rehearsal for what I understand are another 100,000+ layoffs to follow, each dribbled out until some reporter notices the growing trend, then dumped en masse when the jig is up, but no later than the end of this year.
LEAN is about offshoring and outsourcing at a rate never seen before at IBM. For two years Big Blue has been ramping up its operations in India and China with what I have been told is the ultimate goal of laying off at least one American worker for every overseas hire. The BIG PLAN is to continue until at least half of Global Services, or about 150,000 workers, have been cut from the U.S. division.
(Excerpt) Read more at pbs.org ...
It all for the Shareholders. Don’t ever forget that. ;)
This is why of what’s left of American manufacturing, there isn’t much left. Did I really say that?
Companies that sacrifice the customer service for salary and benefit cuts continue to alienate customers.
On the other hand, more and more customers are overseas and there's a lot of regulatory overhead involved in hiring an American citizen.
(Thankfully, I already have a new job getting more $, so I'm cool with the change :-)
IBM sought a China partnership, not just a sale
http://www.freerepublic.com/focus/f-news/1300424/posts
In July 2003, Sam Palmisano, the chief executive of IBM, traveled to Beijing to explore the sale of the company’s personal computer business. But he did not start by making the usual visit with executives of IBM’s preferred partner, Lenovo, China’s largest personal computer maker.
Instead, Palmisano first engaged in a bit of old-fashioned courtship. Before formally approaching Lenovo, he sought permission from the parents, by meeting privately with a senior Chinese government official in charge of economic and technology policy.
The idea, Palmisano explained, would be to build a modern and truly international Chinese-owned corporation. The move, he added, would demonstrate China’s desire to take that next step toward economic maturity by investing abroad instead of merely serving as a manufacturing hub for the rest of the world.
There were other interested bidders, including one from an American buyout firm whose offer remained on the table until the end. But apparently the Chinese option was the only one seriously pursued by IBM.
Wow! And I thought that the layoffs in 2002, the year I was laid off from IBM were bad. I’m glad that I’m now in a completely different line of work that will most likely never move to India or China.
Sounds like the final management cash-out from
a company that was rendered brain-dead after
Lou Gerstner.
This article is about IBM Global Services, not manufacturing.
As an Electrical Engineer, I’m finding that I am discouraging young people from pursuing this career. Job stability is a thing of the past, layoffs are commonplace. Intel, IBM, AMD, Dell, Cray, Motorola, you name the company; they are laying off engineers like crazy.
This is very short-sighted, but this is the nature of business. Engineers require years or decades of training to reach their peak; but when you have layoffs the competition for the remaining jobs gets tight. Add the foreign engineers brought in by the tens of thousands on H1-B Visas; and the result is a void of engineers between the ages of 40 and 60. Engineers get laid off, and they open a coffee shop.
College students see this, and change their major. I can tell you that there are far easier courses to take in college than engineering based courses. And, as I foretold on this site over 5 years ago - we are graduating fewer engineers.
Who’s going to build the computers in 50 years? Who’s going to be designing space vehicles, automobiles, medical devices, business computers, software and leading the world in R&D? I’m afraid I can state with a fair amount of certainty that it is not going to be the USA, our graduates can barely write a sentence.
And I’m trying to get a better position … better off getting a newer grocery cart (for my future collectibles) and forget bout it.
bookmark
IBM is going to die.
Every company I’ve known that has done offshoring has regretted it. Crappy work, missed deadlines, and lots of rework. Or they have to deal with the reputation of being a cheap company with all the lousy customer service.
India seems like a good idea until you realize how untrained their technical people are and how difficult it is to manage them.
150,000 jobs are still 150,000 jobs regardless of department or area. Was part of GTE’s 220,000 dump in the late 80’s. Didn’t make any difference which department … 10% across the board. Jobs lost, careers lost, lives distroyed. Took over 30 years to build the “fat” and only one year to lose it.
Well it's no longer PC's. They sold that entire division to the Chinese government a couple years ago, a $10 billion/year business for $1.5 billion total. The Chinese (who operate under the name Lenovo) are now laying off most of the remaining Americans who work for them in North Carolina.
2002 was the year Palmisano took over. He's been gutting US employees ever since, with no apparent end in sight.
These are not manufacturing jobs. These are computer services jobs.
Remind me again why we need an H1-B Visa extension?!
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