I’ve blogged previously about how I, Cringely talks a lot of bull. It’s (seemingly) great and intelligent for uninformed people, but people who have at least some background in the area that he writes about know that it is generally off-base. That’s how I feel about Cringely’s latest article on IBM, even though I have no inside knowledge of what’s going to happen (and if I did wouldn’t blog it publicly).

He spews that IBM has a plan to layoff at least a third of its staff or 100,000+ of its 350,000 employees worldwide. I’m not sure whether he means IBM Global Services or IBM in general, although it seems implied that he’s talking about IBM’s services business. This claim is entirely broken. IBM has basically 3 business groups: Services, Hardware and Software, which plus some supplemental workers (janitors, HR etc) make up that 350k number. Of course the number of people in Services and SWG should dwarf the employees in Hardware (STG), but let’s assume that they’re split equally. Cringely is basically saying that IBM will layoff its entire Services offering and replace it with outsourced labour. Yeah right.

Ok, so maybe Services isn’t making a lot of money. This can easily be fact-checked through the annual report, and you would find that it’s actually the Hardware division that’s dragging along. But let’s just say hypothetically that Services isn’t a profitable part of the business. Would it make sense to fire everyone and replace them? No, there would be more money in selling off the Services arm like they did Lenovo. Even that hypothetical situation is completely off base, because only a decade or so ago, IBM bought the PwC’s technical consulting group to bolster its Services division.

Oh and about the fact that the personnel laid off will be replaced by outsourced labour, IBM India is already a large and growing part of the company. I forgot the exact number of employees in India but I think 50k is reasonable. So in fact, Cringely is proposing that IBM moves half of its worldwide operations to India. Likely to happen? No.

Posted by Kevin in Blogs Tags: dumb, IBM