IBM and the Functioning Assumption
February 26, 2015
I read “Could IBM Really Function with Tens of thousands Fewer Staff?” I think this is an interesting headline. It contains an assumption that IBM is indeed functioning with its present staffing levels.
The write up moves blithely forward offering up:
According to a recent report from India, IBM reduced its India-based workforce from about 165,000 in 2011 to 113,000 in 2014. The report quoted sources close to IBM’s plans who said this number will fall to 100,000 in 2015. The introduction of modern technologies that make services less labor-intensive is reducing the need for staff in lower-cost locations. At the same time, IBM, like much of the industry, is trying to move away from linear business models based on the provision of full-time equivalents. And talk of IBM cutting swathes of staff is nothing new. In 2010 a senior HR executive at the company told Computer Weekly’s then sister publication, Personnel Today, that IBM was looking into the possibility of cutting its workforce by almost 300,000. He said the strategy would involve making people redundant and rehiring them on a project-by-project basis. It would have reduced IBM’s 399,000 workforce to 100,000 by 2017.
Bloomberg reported:
IBM’s global employee count fell for the second year in a row, the first two year decline since 1993-1994. Even before the 2015 firings, IBM reported 379,592 employees at year end 2014, down 12% year on year (3.9% excluding divestitures). But there are allegedly 15,000 job openings, IBM claims.
Lots of figures. Lots of people. But let me go back to the word “functioning.” IBM, like HP, has been around a long time. The company’s notion of agility is to market wild and crazy ideas with zest. I see Watson as an example of the new IBM. Open source technology and home brew code. The search system is presented as a “basket brand” into which many different and discrete products and services have been gathered.
The challenge remains. The company has to generate sustainable revenue that yields a profit. So far that seems to be very difficult. I struggle with the “functional” assumption. Perhaps Watson has the answer?
Stephen E Arnold, February 26, 2015
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