IBM US Cuts May Run Deeper Than Feared - and the Jobs Are Heading To India (theregister.com) 74
The Register: Following our report last week on IBM's ongoing layoffs, current and former employees got in touch to confirm what many suspected: The US cuts run deeper than reported, and the jobs are heading to India. IBM's own careers site numbers back that up. On January 7, 2024, Big Blue listed just 173 open positions in India. On November 23, 2024, there were 2,946 jobs available in the nation. At the time of writing, the IT titan listed 3,866 roles in India.
American jobs listed for these three periods are 192, 376, and 333, respectively, though at least among those being laid off, there's doubt those roles will be filled with job seekers in the States. A current IBMer who won't be there much longer said that after being told to teach recently hired workers in India "everything I know," the reward was a resource action, or RA -- Big Blue's euphemism for a layoff. After receiving an RA notification, employees typically have a set period of time to apply for open roles elsewhere in the mega-corporation. But just because there are open positions listed in the US doesn't mean IBM is making much of an effort to fill them, we are told.
American jobs listed for these three periods are 192, 376, and 333, respectively, though at least among those being laid off, there's doubt those roles will be filled with job seekers in the States. A current IBMer who won't be there much longer said that after being told to teach recently hired workers in India "everything I know," the reward was a resource action, or RA -- Big Blue's euphemism for a layoff. After receiving an RA notification, employees typically have a set period of time to apply for open roles elsewhere in the mega-corporation. But just because there are open positions listed in the US doesn't mean IBM is making much of an effort to fill them, we are told.
Tariffs? (Score:5, Insightful)
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Do you think the tech bros will allow the people of the United States to do that? They are fine with tariffs that make things harder for companies that need physical stuff from other countries, but they don't want tariffs on things they want to buy themselves from other countries.
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Do you think the tech bros will allow the people of the United States to do that?
Or, more specifically, the Broligarchs in charge.
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Well, almost.
Tariff's affect physical outsourcing. Remote Work outsourcing is essentially impossible to regulate short of having data requirements that customer data can not leave the country. Like the entire reason you have call centers in the Philippines and India taking American customer service calls is because there is no penalty to sending American's full name, address, Social security number (remember damn near everything asks for the last 4 of your Social security number to verify) and other informa
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Re:Tariffs? (Score:4, Interesting)
This is one place place where there should be tariffs: Domestic companies exploiting foreign workers as cheap labor.
Which would just see the jobs go overseas faster.
What you need is a punitive tax on these companies... I mean a 200% increase might see IBM, et al. facing tax bills of up to $12.
Seriously, a tariff punishes everyone as it's a tax on imports or exports on a specific product and/or to a specific country for everyone. A tax can be tailored to target specific behaviours and disincentivise them, which I suspect is your aim.
You'll also need punitive measures to ensure they aren't hiding profits overseas as well. Basically two things the US tax system is set up expressly not to do.
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I mean a 200% increase might see IBM, et al. facing tax bills of up to $12.
Laughing face emoji
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Congratulations, you've managed to come up with the one way in which tariffs could be worse than Trump's efforts. Punishing businesses for having non-US offices or obtaining services from overseas would grind trade to a halt.
If a company fires a large number of people because it's outsourcing, punish that specifically rather than using tariffs.
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This. Anyone care to place their bets on the Trump administration reminding IBM to Make America Great Again in a meaningful way?
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It's hard to do that with software and services. Remember what the now defunct Sun Microsystems CEO Scott McNealy said? He would gladly reincorporate his company in Bermuda or another country. That's what IBM and other software companies will do too. They can even incorporate subsidiaries in another country, which could manage the outsourcing for them. Tarriff's are not very effective in controlling service jobs.
It's labor market arbitrage playing against US workers. If US wages come down and Indian wages g
IBM's Tech Innovation is Gone (Score:2)
IBM's technical innovation has slowed to a crawl. They've been relegate to buying products and rent seeking on the product side along with trying to amp up their margins on consulting. Along with squeezing existing customer for fees, they're hoping to fatten their margins on services they sell. I don't expect that to be a successful strategy, but here we are.
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IBM's main problem is that their whole business was built around mainframes. That was obviously a limited time scenario in the 1990s [archive.org] when it became clear that clusters were the way forwards. The only reason we still have mainframes is that it's difficult and therefore expensive to migrate off of them because you have to do many things differently to get performance out of a cluster, and nobody wants to pay anybody to rewrite anything until there is absolutely no alternative.
Clusters are ultimately superior
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IBM's main problem is that their whole business was built around mainframes.
This was only the first first and solvable part of the problem. The second part where IBM totally messed up. Product categories peak and decline in popularity all the time. This is not a surprise. IBM initially did punch cards and tape machines and only later pivoted to mainframes. IBM's problem is that the pivoting to new and evolving markets stopped. PCs are still big business. Many of tech's current hot areas could have been IBM areas. Add to this intransigence was the MBA hunt for margins. The
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The outsourcing contract business was high margin, and executives were addicted to its lure. As a result, IBM missed the big tech innovations like cloud and AI largely because they weren't immersed in the hardware and software business anymore.
IBM is much more than the hardware and software business, but that business is still huge. They still have a huge part of the government market in particular, which is itself huge. And ironically, they have actually had some massive wins in clusters! But helping people migrate away from mainframes would kill them sooner or later (since their modularity makes it easier to replace pieces of them with other vendors' solutions) so I get why they did it.
IBM also bought a lot of cool software that runs on other v
MAGA (Score:5, Insightful)
Re:MAGA (Score:4)
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Awesome plan (Score:5, Insightful)
Let's replace all the workers with knowledge, experience, cultural understanding, language skills, customer relations and career investment in IBM with people who have none of those things. Because they're cheaper. Some VP will get a bonus because of the money they've saved even though it will cost the company 10x as much in the long term.
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Some VP will get a bonus because of the money they've saved even though it will cost the company 10x as much in the long term.
Ahem. Over-priced salary, annual bonus and golden parachute ARE the long term
The shareholders will applaud the gains they get.... until everything tanks and they shriek like stuck pigs....
In many respects, much like any democratic instituion.
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Nah, all the shareholders who pay attention will exit before the pain really hits. The only ones left will be the individual punters who do not have ready access to what is really going on.
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Re:Awesome plan (Score:5, Informative)
I can't imagine that there are a ton of highly skilled people left working in the consulting and internal support departments of IBM where they outsource the work to foreign countries. Mostly because they've been doing this since the early 2000's, and there can't be many veteran US employees left at this point.
I saw the writing in the wall back in 2007/2008 when I was creating about 20 source control accounts a day for people with Indian sounding names and disabling roughly the same amount US employee accounts a few weeks later. I figured that it was only time before my own name popped up on the cut list, so I got the hell out of there.
Re: Awesome plan (Score:1)
If you quit, don't you forgot the severance package?
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I think that they only give you a week of severance for every year you worked there. At least that seemed to be the going rate when I left, anyway.
IBM also tends to underpay about 15% under the industry average, so you can make up that balance pretty quickly.
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I bet the people there were much more proficient than those getting replaced. Of course there might be a lot of lifers there too. But they're still experienced and knowledgeable people.
I remember working for a US investment firm who outsourced work to India and I had to oversee people doing that work. Every single phone call with them was them asking "how do I do this?" rather than "I've been thinking about doing it this way what do you think?" - a sign of some independent thinking. It's like they were scar
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And given IBM's history of failing to capi
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While I don't know what question IBM is the answer to these days they do have a substantial portfolio of things to sell, both hardware and software and presumably their customers have very deep pockets and would very much like proper and prompt support. If they shed these jobs or outsource to some crappy Indian outfit then they're only hurting their own business.
Re: Awesome plan (Score:1)
What is sad (Score:1)
IBM (Score:2)
Re: IBM (Score:1)
MQSeries is still alive and well, iinm. Yes, that is COBOL.
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My sources say the mainframe and midrange divisions are still growing.
Re: IBM (Score:2)
They used to make pretty good cheese slicers https://m.youtube.com/watch?v=... [youtube.com]
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MAGA (Score:3)
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He's a 78-year old with dementia, you could tell him and he wouldn't remember is 10 seconds later.
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Turns out those AI programs are Indians too. Companies cutting jobs in US due to "AI advancements" are replacing those positions with Indians and not really AI. Because they don't want to sound like they are behind in the "AI race", lest their stock price might plunge. That's a well-kept secret across the board. AI == (some questionable automaton + Indian), really.
Re: MAGA (Score:1)
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HA! IBM would just buy some Trump coin or "donate" to something of his. Trumps freeze of H1B in season 1 actually resulted in a revamp and streamlining of the whole process to make it easier to do; it just didn't get into full swing because of the pandemic.... and also the limitations of the law which are outside his jurisdiction (in season 1; now I can't see his dictates hardly being stopped, just delayed so far.)
Everything I know (Score:2)
Removing all IBM Equipment and Software (Score:5, Insightful)
We've been ripping out all of the IBM equipment and software out of our large Enterprise environment for the last decade, and we've been successful at getting rid of all of the crap that I mentioned because the old-timers who purchased IBM decades ago for our Enterprise have finally left or retired so all of the business contracts and connections could finally be severed without upsetting the upper management who are now gone.
IBM gave us free software if we purchased or maintained our existing contracts and almost a decade ago they took some of it and it took year to get it to work and function correctly and now it's taking a decade to rip it out of our systems because it's such unmaintainable crap and their consultants that have been outsourced are literally useless in getting it function or work or keep it updated. It took literally months for them to get even their fundamental software to work with the basic functionality.
Even a simple thing like an IBM. Same time chat client? They had us build over 80 servers where Microsoft old Lync chat, video, and voice client took one server for the entire Enterprise.
IBM WebSphere software is absolutely horrible to try to keep it working and maintained and it keeps breaking constantly and their search functionality hardly works. We're looking forward to dumping that whole thing since it's only used for our internal corporate website resources. And frankly, it's so bad. We're glad that at least we can click on links and they function half of the time.
Good riddance IBM you've done it to yourself. You basically off-shored and outsourced yourselves.
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Re:Removing all IBM Equipment and Software (Score:4, Interesting)
It's a brand that's been coasting for a very long time.
They hit the jackpot with S/360, and as far as I can tell that was a well-earned jackpot that they've been milking to this day, though at times a bit awkwardly and definitely priced to make it intolerable to anyone who isn't already locked in.
Their biggest contribution to the world was from their perspective a mistake. From what I've heard a group at IBM wanted to make personal computers and the executives would let them try, but with zero budget. So they accidentally made the PC ecosystem where every participant, including themselves, were fungible. They thought holding the BIOS would make everyone but IBM fungible, but then that got reverse engineered and the rest is history. To the extent this at least kept them in the consumer's mind, they fobbed that over to Lenovo, who proceeded to take it to the biggest player in the market after IBM had let it languish.
Their next big success was consulting services during the dot.com bomb. Lots of money, not necessarily very well earned but they milked the tech boom pretty well.
Since then has been a decline of a company that continues to think "We're IBM" is enough and they don't need to do competent investment or development. They continually stay out of touch and keep trying to milk short term opportunities at the expense of long term viability. They've done absolutely nothing to foster any appeal to anyone under the age of 40 and most people under 50 only have vague memories of when they used to see the IBM logo on computers and cash registers. Professionals that join on to a mainframe shop might get a bit of an appreciation, but nothing that will convince anyone to start from scratch with mainframe.
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IBM WebSphere software is absolutely horrible to try to keep it working and maintained
Speaking to the choir here, I worked with it for years and I kept on pushing to go back to using ftp, or better yet scp/sftp. The worst part is is data going into the "black hole" with no indication it was ever sent or what was sent. If not for that, maybe I would not be addicted to shrooms and LSD :)
This doesn't surprise me. (Score:3)
one of my former clients is an extremely large healthcare insurance and PBM that used to go by the name Anthem. There are 160k employees and about 100k or so are Indians with IBM addresses as consultants. Leadership is all mostly McKinsey and Co. Do any large companies hire their own people anymore?
On that note, I was surprised at the time to learn IBM is more of a staffing company these days than a technology company.
the sun is setting on IBM (Score:2)
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Probably the worst company in the sector (Score:1)
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Yeah, at this headline has been pretty much the exact same headline over the last 20 years.
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Ignominious Bullshit Munchers
They're coasting on the 50k active patents going back to the 1960's.
International Business Machines? (Score:4, Interesting)
Those aren't cuts (Score:1)
Thanks Donald (Score:1)
Thanks Donald, for destroying the US economy while raking in billions through your open corruption.
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It figures (Score:2)
Teach this person everything you know... (Score:2)
Yeah when told that, I'd make sure to transition as little as possible. The company is obviously cutting me, and that is a sign of zero loyalty, so why would they expect any back?
Severance pay? Ok, I'll teach this person a bunch of BS garbage so they think they're picking up something...
Good luck with that
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We owe them no loyalty because they will show us none. 20 years of service just means I'm out of raises now.
They never learn (Score:4, Insightful)
During the 2000s every major corp tried to do this and ended up slowly reverting as they realized that (1) they'd lost talent with critical domain knowledge and (2) outsourcing to another country isn't far different from firing everyone in one office and attempting to rebuild that office elsewhere, except with the added issues of communication barriers and the new office being comprised of people who literally don't care about you.
It's a stupid policy, but IBM wants to try it again. Why? Corporate America just seems so utterly incompetent these days. If and when the current regime is replaced by a more left wing one, we need proper regulation because businesses have proven over and over again they're too stupid and sociopathic to make good decisions themselves.
H1-B (Score:5, Insightful)
This has been going on for many years. American IT has been replaced with both workers in India but also workers in the U.S. but Indian immigrants. Anyone surprised, doesn't know anything about the IT industry here. We just let 400K workers in last year. The most since 2000 [pewresearch.org]. This program was specifically never meant to replace American workers with cheaper foreign labor, but that's exactly what it does now, at least in IT. I'm not familiar with other industries, but I have 20+ in IT. It's been horrible for people in the field as it has effectively eroded pay and benefits. It also didn't used to be 90% Indian. Indian contract companies have really been the worst. They have proliferated fraud, while also eroded our security, and long term stability i.e. create. We had some protection. 60K was set as the minimum pay in 1989, but all bi-partisan attempts to raise it, have been buried in subcommittee where the bills died without a vote.
To be clear, I'm not anti-immigration but this program has been highly abused by companies and contributed to long term technical debt, as these teams are highly pressured to do more with less. It's also, basically, locks those people in to that one job/company until they get a green card, so they don't have a choice either
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The IDC (india development center) contractors are the worst in terms of getting anything done. I do not appreciate them much. The H1 program needs reform so that it works for the workers, not just in favor of corporations.
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The "I" in IBM (Score:1)
Bean counting basics: The "I" in IBM does not stand for "USA"
Lock down US resources, before Tariffs. (Score:2)
IBM experience (Score:1)
of course this would happen. (Score:2)
Face it corporations own your butt!