IBM is quietly axing jobs, source says
theregister.com
theregister.com
"As with prior layoffs, or "resource actions" to use IBM's euphemism, we're told those affected are substantially in the 50-55 age bracket with 20-24 years of seniority.
"It seems exclusively people in L7 and L8 and L9 bands, at the top of the band in payment structure," the insider said.""
When all of your outcomes result in same treatment of the same group of individuals, there just might be a little fire to that smoke.
Disparate outcomes most definitely imply disparate treatment, at least enough to merit further investigation
What OTHER advantages, disadvantages, preparation levels, etc. are working for and/or against that group?
Can those factors account for the differential?
What is the groups' actual relative performance in the situation (i.e., do they tend to perform at|above|below the level to which they have risen, e.g., legacy college admissions with "Gentleman's Cs" are performing below)?
And so forth.
The point is that statistical disparities are not conclusive, but are most often indicative of some kind of structural favoritism, like smoke to fire. Not always, and you can always cherry-pick some counter-example, but the default assumption is that it merits investigation.
Between the two of us, I am looking at a well-researched and widely understood example of why a disparate outcome doesn't actually imply what we would intuitively think, while you are talking about metaphors of smoke and "taking closer looks" as if those justify angrily jumping to conclusions.
If you have some sort of correlation coefficient to justify jumping to conclusions even mildly, I'd appreciate that contribution. But "something isn't equal" isn't even necessarily reason to look into something further, let alone a reason to presume the cause. Nothing is ever equal. Equality is a fictional concept, and doing deep dives into every example of it would exhaust our collective resources.
In any case, none of this conversation is at the level of a dissertation, neither enough time or space.
The start was a seven-word comment with a tone I read that was entirely dismissive of even the concept that IBM could be practicing ageism.
It cannot be dismissed so easily (and I have family working there trying to evade exactly those ageist axes to get to retirement with full benefits).
The point of the smoke/fire is that a single good counter-example of disparate results likely not implying discrimination does not disprove all examples. The fact remains, such statistics remain a good starting point.
You have many words, but beyond the first general wave of the hands that statistics do not imply discrimination and one non-correlating example, I've missed where you provided any info or evidence to show IBM is not practicing ageism, in particular to effectively cut pensions.
Since IBM are clearly managing the workforce for profit, the multiplier of cutting older people is far larger; you save not only a few years of higher salaries, but also up to decades of zeroed or reduced pensions. Pretty strong financial incentive.
> when a layoff predominately targets a specific division or pay level it means the strategy leading up to that point had been wrong.
This is fair but isn’t also this what we want? Like if you run a company, if you realize that mistakes were made, isn’t it reasonable to expect a correction? And by “what we want” I mean the admitting a mistake and correcting it.
What will happen is that they rehire, and rehire young.
And it’s clearly a stupid argument because there are other factors and not just age.
But, as you said, C-suite comps won't go down. Neither do VP comps. But the people rehired, oddly, are all younger. And that is ageist.
Not if they axe the position. Neither if it's in a single instance. But if, at scale, older people are fired, younger people are rehired, and comp doesn't change significantly - yeah, sorry, that's ageist.
There's a reason many companies instead offer folks a juicy "if you leave, have a chunk of money" package - they do want younger people for one reason or another (and I don't think it's fundamentally wrong to want a change) and this a way to do this in a way that does not discriminate.
IBM's leaning hard into being an asshole instead. There's a reason they've had reams of discrimination lawsuits. Significantly more than comparable companies. Let's not make excuses for them, they have lawyers for that.
Is it though? Or is it just that younger people are just cheaper to hire? It’s the same reasoning in reverse. Older people with more experience demand a higher pay. And if you’re motivated—again, wrongly—just by money you probably will end up hiring younger. Because it’s cheaper.
And again, I think it’s dumb. Just not ageist. It’s probably greed which is not uncommon in the business world.
That's the issue.
It's a nonsensical hypothetical.
Now, what I’m pushing against is this idea that it is “ageist”. I’m no native speaker but ageist is defined as
> a bias against individuals and groups based on their age
Now if I decide to fire everyone who’s making more than 500k at a company and it just so happens that those people are all above a certain age I don’t think that’s ageist. It’s certainly stupid and I think I made it clear. It’s a money driven decision, which is also stupid.
I just think it’s important of accuse people of the right thing if you want to accuse them of something. That’s all I’m saying.
But again, the fuck do I know. I don’t work in corporate, don’t play the stupid ladder game, will never get a promotion. I’m just here sharing a random thought on the bizarre business world you people live in.
They don't have a habit of hiring young rockstars with insane salaries (because these people wouldn't fit the culture).
I've always thought the term "resource" was dehumanizing, but at least on its own it could be interpreted positively, but "resource actions" is just upsetting
Band 10 and above include good soft-skills, people who can persuade the industry and organization, give TED talks, etc.
Sam Palmisano skinned IBM then too a knife to its belly and gutted it. All in the name of his “Roadmap 2010” which was a plan to double the share price by 2015.
So basically the pharaoh said “fuck it, we need a new pyramid. Get the whips out and all worker carcasses are to be dump on the left please”.
https://www.forbes.com/sites/stevedenning/2014/05/30/why-ibm...
Edit: roadmap 2010 not 2015
• https://www.fool.com/investing/general/2014/12/13/the-worst-...
And was responsible for "22 consecutive quarters of revenue decline between 2012 and the summer of 2017":
https://en.wikipedia.org/wiki/Ginni_Rometty#Industry_recepti...
Not a place of growth for anything other than financial engineering. :(
The quality of work coming from the offshored teams was significantly worse and the cost to the end customer certainly didn’t get reduced accordingly.
2 years later I had recruitment consultants calling me multiple times a week to get me to "come back" to IBM as the offshoring had been a disaster for the customer. And this was despite of me having a lifetime IBM ban for flipping off my manager's manager on the way out.
No way, no time, no thank you, no how.
Knowing this I had another job already lined up ready to go as soon as my contract ended. If you treat staff like cattle, you reap what you sow.
Reading about IBM CEOs, before and after Gerstner, the CEO was an IBM-lifer who came up through sales/marketing. Though Gina Rometty started in tech-related area at IBM. The current CEO has the deepest tech background of any IBM CEO. The company has pivoted towards cloud, esp. hybrid cloud.
IBM has exited many hardware/software segments to concentrate on consulting and being the goto for outsourced IT departments since the dot-com crash.
They've tried goosing sales by touting AI a couple times before the current wave - Deep Blue and Watson, which didn't have much long term impact revenue-wise.
They've gone after the cloud, esp. hybrid cloud, with recent acquisitions, esp. RedHat.
From the start of its Wikipedia page:
> IBM is the largest industrial research organization in the world, with 19 research facilities across a dozen countries, having held the record for most annual U.S. patents generated by a business for 29 consecutive years from 1993 to 2021.
I know that in semiconductors they're still doing bleeding edge R&D which they then try to license to foundries. Their mainframe business is still doing quite well too.
And I'm sure they're active in many other niches that I know little about.
They have a very strong brand in traditional corporate industries, which have an endless demand for IBM services.
I'm pretty sure I came pretty damn close the one and only time I opted for IBM Cloud (which was called "Bluemix" back then). In fairness, running a PostgreSQL DB in a container wasn't the brightest idea on my part, and it was also my fault for not having backups in place, but when Bluemix ate our entire prod DB, and the multiple-weeks-long back-and-forth with IBM's support only yielded something along the lines of "whoops, that sucks, good luck building a new DB instance from scratch", we rather quickly jumped ship to AWS and never looked back.
I'm sure IBM Cloud is better these days, though it was a bit telling that during my brief time working for IBM my primary job was to build customers' stuff on AWS instead of IBM Cloud. Go figure.
That said, I’m confident that they know better.
In 1990, IBM's market cap was $27B and Microsoft's was $5B.
In 1999, IBM's was just under $100B and Microsoft's was just under $400B.
For the last decade+, IBM has hovered (rather wildly) around $160B, while Microsoft has grown from $250B (post dot com crash) to $2,500B.
so yes, IBM really has been a declining giant relative to their market share in the strong technology sector
IBM selling off more and more businesses might be "the right move" for shareholders and props up the share prices, but it shrinks the overall business and in terms of value creation (where wealth comes from) indicates a shortage at IBM
MS has (mostly) products and licensing, and as far as I understand, IBM has consulting and licenses. Pretty different in this day/age.
could easily compare IBM with other companies; google didn't have a presence prior to 2000, Apple pre 2000 and post iphone are entirely different businesses, nothing else came to my mind. Amazon? they were around in early days of the dot com (1994!) but I'm not really that familiar with where they stood back around 2000 and didn't want to sample apples and oranges. IBM's other competitors like Digital disappeared, but not because IBM gobbled up their share.
IBM compared to itself has not grown. Other companies have grown, through survivorship bias if no other reason.
IBM invented many of the technologies that went into the early PCs but pissed away their lead with every single one until we find ourselves today where they no longer manufacture anything that can be found in a modern PC as far as I can tell.
Companies with 100B+ market cap don't die away. They just fail to continue to innovate and stay relevant - thus robbing their shareholders of even more returns.
This is why companies like sears were considered failures despite lasting for 100 years. Somewhere along the line they lost the plot and forgot how to stay relevant.
* https://ycharts.com/companies/IBM/stock_buyback * https://www.theregister.com/AMP/2024/03/15/ibm_ceo_pay_jumps...
Also, federal US capital gains tax rate is 20% only for those earning $518k+ per year if single and $583k+ of married filing joint. Otherwise, capital gains tax rate is the same 15% as qualified dividends.
Source: an IBMer who got out
It will create far more jobs than it eliminates. And yes, the purpose is to remove jobs and make skilled people more effective.
I realized that one day when we have a breakthrough in energy production and battery tech it will usher in an age where we have robots that can move about, find energy sources, and have the knowledge and capability to reproduce themselves. Whatever we all write online and offline will be the sum of that beings' knowledge as it eventually makes its way into the cosmos without us. We are the creator.
they have way too many employees, and it will take them a decade of such cuts to "rightsize"
> Despite numerous past and ongoing age discrimination lawsuits, IBM maintains it does not systematically discriminate on the basis of age.
Lawsuits of this sort are a little ridiculous. If you work at a company that pays people more just for being older, then you shouldn't be surprised when the "more experienced" people are the first to get laid off.
If IBM actually had the ages of their employees available to the system that did the layoffs, then that would be age based discrimination. But I'd be willing to bet that wasn't a factor.
If you start with a pool of people with large salaries, and look for people not adding at least that much value to the business, you are going to find people who have that salary for reasons other than merit.
The discrimination, if any, was in their favor until the business couldn't afford to discriminate in their favor.
That means a junior engineer hired yesterday makes more than a junior engineer hired two years ago, but it doesn't mean that the junior engineer hired yesterday makes more than the staff engineer hired a decade ago
(1)The ones with skills "to keep the lights on" for these services - those will be hired back as "consultants" - let's hope at twice the daily rate they worked before if they want to continue to work.
(2) The others - for them, the tax payers will pick up some of the balance, but generally, it will be dire for them to find new ways to continue.
Overall, age discrimination is a topic on which most companies and the public are mostly in denial while trying to please everybody else or demonstrate how inclusive they are.
Within many industries you will be excluded "quietly" during the selection for up to mid-level jobs when you are 50+ - quietly, because companies know that such discrimination openly could result in reputational or potential legal challenges.
On exec jobs, it is even more ludicrous - people who are much older than the candidates, block (competent) 50+ candidates based on their age to become their peers.
At the same time, often these companies also do not promote staff above a certain age e.g. when taking on new responsibilities that gets all others promoted (aka substantial pay rise / cost). As a result, while in a few countries here in Europe, 50+ workforce will have more holidays or pension contributions, the salaries of 50+ high achievers might be lower than younger staff in comparable roles. Give the above, some swallow that pill, but those that can afford leave (independent of age the old saying: good people leave, wood stays). Might not apply to most of the 50+ workforce, others might just have better employment contracts (historically), e.g. in the German car factories you have people on payroll with the company, some as contractors through 3rd party, and at the end of the food chain some with a low paid contract for work and labour with a body shop - all doing the same work at very different pay for the workers. In such setups, getting rid of the older workers might result in a higher bonus for top management, achieving KPIs for middle management, and certainly in high consultancy fees for restructuring advice from McKinsey e.a at daily rates per (senior) consultant at about the monthly salary of the worker made redundant - after these "cost" making younger or older workforce redundant becomes a marginal difference.
Overall, from what I've seen, where competence is key and valued, age and other things will not be used to discriminate the best candidates or staff. I've seen 70+ old engineers being hired by top-names for their knowledge, experience and achievements.
With aging societies in many western countries, TMK, in about 5 years the majority of the workforce will be 50+ in most of them.
In the west, during the last 40 years we have shifted from "engineering pride" to prioritising financial markets vs innovations & products. This has certainly created many activities, tasks /jobs particularly in large orgs, that will become "redundant" when the music stops or when some of these orgs fade away due to lack of product, market, leadership or competencies.
We need to look into how our "established" companies stay or become competitive and innovative again with their products and services in a global environment short / mid and long term vs. making most of their money on financial markets. Such companies don't need to care about the age of their staff - they care about skills and competencies.
With the baby boomers leaving the job market, low-birth groups / demographic change of those entering the job market plus technology advances there is now a chance that this puts pressure on companies (and employees) to re-invent themselves.