Rober Cringely ran a story that 110,000 IBM employees laid off and the ever shrinking Big Blue said it would be more like 8,000. However writing in his bog Cringely said that Big Blue is spinning.
“I think IBM is dissembling, fixating on the term 110,000 layoffs, which by the way I never used. Whatever the word, what counts is how many fewer people will be paid by IBM on March 1 compared to today,” he said.
He said his sources tell him that IBM has other ways of getting its workforce down rather than ordinary layoff. He claimed that IBM is pushing some people out using poor performance rathings.
This includes people who were on IBM’s “bridge to retirement’ program that took that option, thinking it kept them ‘safe’ from layoffs/firings.
“There is a loophole that says they can be dismissed for ‘performance’ reasons, which is exactly why many of my long-time, devoted, hardworking peers are suddenly getting the worst rating, a 3. It’s so they can be dismissed without any separation package and no hit to the RA, or workforce rebalancing, fund,” Cringely said.
It used to be something like 10 percent of employees ‘had’ to be labeled 3s, but recently IBM required an increase in number of 3s.
Cringely said IBM got rid of some employees by ‘stuffing’ them into the Lenovo x86 acquisition, shipping tons of people over there that never even worked on x86 stuff.
Lenovo has discovered this and has given some of them a way better package – year salary and benefits, and taking it up quietly with IBM, he added.
Still it would be hard to fire a quarter of your staff by the back-door in this way, but as Cringely said the 110,000 figure was not suggested in his original story.
IBM has brought back annual performance bonuses for its chief executive and her top lieutenants for 2014 despite falling profits and a tumbling stock price.
According to a regulatory filing, the outfit withheld annual bonuses in 2013 at the executives’ own request. The company has had more than 11 quarters of falling profits and is still trying to lose staff.
The bonuses returned as a feature of IBM’s executive compensation for 2014, according to a document filed with securities regulators on Friday, despite the fact that IBM’s net profit from continuing operations fell 7 percent last year and its stock shed about 14 percent.
IBM CEO Virginia Rometty will get a $3.6 million annual incentive payout for 2014, according to the filing. Chief Financial Officer Martin Schroeter and three other executives or advisers were also listed as getting smaller annual incentive payouts.
Rometty will receive a base salary of $1.6 million for 2015. This is her first rise in pay from the $1.5 million she got each of the last three years after taking up the post of CEO at the beginning of 2012.
She will also get a target annual incentive award of $5 million for 2015 and a long-term stock grant worth $13.3 million, which would be payable in 2018, according to the filing.
IBM last year withdrew its long-term plan to hit $20 per share in operating earnings for 2015 as it failed to get the sort of focus on higher-margin businesses such as security software and cloud services.
IBM has been divesting underperforming businesses in an attempt to move into the new era of cloud computing, a struggle shared by other established technology leaders.
No bonuses for the lesser suits, but at least they are not being fired.
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.