Big Blue has denied claims that it is about to fire 26 per cent of its workforce.
The dark satanic rumour mill manufactured a hell on earth rumour which tipped up in Forbes magazine. If the rumour was right, 112,000 employees could be laid off.
IBM admitted that it is cutting jobs, and said as much in its latest earnings report last week, but those reductions will affect “several thousand” employees, a “small fraction” of what Forbes reported.
The technology giant has been steadily reshaping its 400,000-plus staff for several years, laying off workers in some areas and hiring in new growth businesses.
The source of the rumour was pseudonymous Silicon Valley technology gossip columnist Robert Cringely who claimed that Biggish Blue was going to break with that gradual approach and suddenly lay off 26 percent of its global workforce.
IBM did not issue a formal denial of the report, but strongly suggested it was inaccurate.
A spokesperson said that if anyone had checked the information in IBM’s public earnings statements, or had simply asked it, she or he would know that IBM has already announced the company has just taken a $600 million charge for workforce rebalancing. This equates to several thousand people.
Last week, Chief Financial Officer Martin Schroeter told investors on IBM’s fourth-quarter earnings conference call that the company was taking restructuring charges of around $580 million, but he did not specify the number of jobs affected.
But Schroeter said in the same meeting that IBM was not going to replicate the same level of restructuring that we had last year… “It will be a lower amount.”
All this seems to suggest that IBM will fire about 8,000 people this year, in line with recent years.
Amazon has admitted that it has lost a pile of dosh on its Fire smartphone.
Chief Financial Officer Tom Szkutak confessed to investors that the company took a $170 million charge related to the write-down of costs associated with its smartphone.
The smartphone was supposed to be one branch of Amazon’s expanding family tree of devices, which has grown from a single e-reader to tablets, a media-streaming box and the smartphone.
The company last week reported a third-quarter loss that significantly widened over a year ago and missed Wall Street expectations, while warning that its fourth-quarter revenue would also disappoint. The Fire Phone charge was a large component of the $437 million lost in the period.
But the Fire Phone, its first foray into the smartphone business, was supposed to do to Amazon what its tablet had done. Make piles of dosh by forcing people to buy its content. The phone itself was not bad either with some technology which should have helped it elbow its way into the market. It could display 3D images and graphics and scan certain products and media for additional information and purchasing options.
Where Amazon went wrong was that it did not subsidise the phone in the same way that it had done for its Fire Tablet. Even with an exclusive partnership with wireless carrier AT&T in the US. The phone has failed to make a dent in the market, and after two months, went from $200 to 99 cents with a two-year contract. In the UK it’s free on various contracts from the O2 network.
The exclusive deal with AT&T in the US did not help either. Most high-profile smartphones opt to go with multiple carriers, but Amazon tied itself to AT&T in exchange for more prominent promotional positioning in the carrier’s shops. However that did not explain why it also tanked in the UK.
All those who paid over the odds for an Amazon smartphone will probably be gathering together their pitchforks and torches for a lynching.
When Amazon released its Fire smartphone, analysts wondered what it was playing at. Amazon’s Fire tablets had done rather well because they were subsidised, but the bookseller had put out a smartphone which was not only unsubsidised but also rather expensive.
As a product the phone was not that bad. It had a dynamic perspective screen that gives it a 3D look. It also has a new feature, Firefly, that lets users capture in physical objects, text and tag content from TV or radio, with the press of a button.
You could find better on the market for the sort of price that Amazon wanted for it. It appears that after a few weeks, no one wanted to buy one.
Now six weeks after hitting the market, Amazon is slashing the price of its Fire Phone to just 99 cents with a two-year contract.
For 99 cents, the Fire Phone will come with unlimited cloud storage for photos as well as a free year of Amazon Prime. The Fire Phone comes with 32GB of storage, so the new, lower cost is a pretty good deal.
The Fire Phone is only available on AT&T in the United States; the 99 cent offer is available both on Amazon.com and AT&T’s website as well as in AT&T stores.
A price drop this soon is not an encouraging sign that the Fire Phone is doing well and it is not clear if there will be any form of subsidy when the Fire hits the UK later.
Amazon’s Fire Phone was launched in July to a great fanfare over its 3D-effect maps and multiple front-facing cameras.
But apparently it has been greeted with a collective yawn by actual users and there are signs that Amazon priced itself out of the market.
The Fire Phone cost $200 for a 32GB version on an AT&T contract – the same price range as the iPhone 5S or Samsung GS5.
According to a release from Chitika, looking at activity on its ad network in the 20 days after the Fire Phone’s release, the Fire Phone accounted for 0.015 per cent of activity.
This sounds a low number, but it is possible to work out how many phones that might represent. Using data from ComScore for the three months to the end of June 2014 there were 173m smartphones in use in the US.
That figure is rising by between a million or two a month so two months later, by mid-August, when the Chitika data was collected, there would be about 177 million smartphones in use in the US. .015% of 177 million means 26,550 Fire phones in use.
Of course, you have to assume that Amazon’s Fire Phone will show up on Chitika’s network as often as any other phone, but even allowing for errors, does seem that the Fire sold only 35,000 Fire Phones during those 20 days.
Amazon said that it was in the phone game for the long play and it intends to be patient. That might work in the long term, but we would have thought Amazon would go for a cheaper more popular product, as it did successfully with its tablets.
VMware has become the latest company to announce that it will be slashing jobs.
VMware, which reported revenue growth of 22 percent for 2012 compared to 2011, raking in around $4.61 billion, said that it would be handing around seven percent of its 13,800 staff their pink slips as part of a restructuring effort.
The announcement was driven by a slowdown in its 2013 earnings predictions,
However, it said it plans to hire in other areas.
Speaking with analysts, VMware chief exec Pat Gelsinger said a lack of government spending, plus increasing competition from the likes of Microsoft, meant that the company had to focus on specific products and geography.
This means taking away a focus on areas such as its online presentation software, SlideRocket and looking more at software-defined data centres and hybrid cloud services. Translated, this means VMware will slash 900 jobs in areas that are not profitable, where it hopes to save roughly $20 million for the first quarter of 2013.
Gelsinger did say that 1,000 jobs should be created by the end of the year as the company keeps up with competitors in its new focus areas. He said the company will shovel talent into the new roles, which support “growth opportunities” as well looking for new recruits in these areas.
The announcement comes after security software firm Symantec admitted it would be culling management jobs to save cash.