IBM is right, I am a gadfly

gad·fly (ˈɡadˌflī/) noun.  1. a fly that bites livestock, especially a horsefly, warble fly, or botfly. 2. an annoying person, especially one who provokes others into action by criticism.

Sometimes being a gadfly is exactly what’s required. That’s certainly the case with IBM and has been for the almost eight years I’ve been following this depressing story. Gadflies came up because IBM finally reacted today to my last column predicting a massive force reduction this week. They denied it, of course -- not the workforce reduction but its size, saying there won’t be even close to 110,000 workers laid off -- and they called me a gadfly, which was apparently intended as criticism, but I’m rather proud of it.

So what’s the truth about these job cuts? Well we’ll know this week because I hear the notices are already in transit to be delivered on Wednesday. (I originally wrote in the mail but then realized IBM would condemn me if they are coming by FedEx, instead.)

I think IBM is dissembling, fixating on the term 110,000 layoffs, which by the way I never used. Like my young sons who never hit each other but instead push, slap, graze, or brush, IBM is playing word games to obscure the truth.

There are many ways to spin a workforce reduction and here’s how one IBM source explained this one to me just this morning:

If you are following the Endicott Alliance board (an organization of IBM workers) you know that they are only 'officially' laying off several thousand (maybe 12K I’m guessing), but others are being pushed out by being given poor performance ratings. This includes people on their 'bridge to retirement' program that took that option, thinking it kept them 'safe' from resource actions (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, hard working 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. Pure evil. The same trick allows IBM to not report to the state’s WARN act about layoffs. It used to be something like 10 percent of employees 'had' to be labeled 3’s, but recently the required number of 3’s was way, way upped according to some managers. So that’s how they are doing it… Some managers have teams of hard working people that put in tons of overtime and do everything they are asked, and by requirement some must be given 1’s, some 2+, some 2, and unfortunately some 3’s. It’s 50’s era kind of evil. They also 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.

I love this Lenovo detail, which reminds me of when Pan American Airways was failing in the early 1980s and sold its Pacific routes to United Air Lines. With that deal came 25 PanAm 747s, but before handing them over PanAm installed on the planes its oldest and most worn engines.

My further understanding of Project Chrome is IBM plans to give people notice by the 28th (Wednesday) so they will be off the books by the end of February. That timing pretty much screams that these are more than just layoffs, which could involve weeks or months of severance pay. It suggests outright firings, or offshore staff reductions, or contractors released, or strongly motivated early retirements as mentioned above. None of those are layoff’s, though there will undoubtedly be layoffs, too.

What really matters is not the terminology but how many people IBM will be paying come March 1st.

A source reputed to be from IBM today told TechCrunch "the layoff number was 10 percent of the workforce (or 43,000) and that the layoffs would be conducted in approximately 10,000 employee increments per quarter until the company righted the ship".

What if that takes 11 quarters?

For the last few months, I’ve heard that senior managers have been pleading with IBM executives not to go through with Project Chrome because it will break accounts and inevitably lead to IBM’s failure to meet contract obligations, losing customers. But that’s apparently okay.

Just don’t call them gadflies.