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The Downfall of IBM
BetaNews.com ^ | April 27, 2012 | Robert X. Cringely

Posted on 04/29/2012 8:00:09 AM PDT by Daffynition

Reducing employees by more than three quarters in three years is a bold and difficult task. What will it leave behind? Who, under this plan, will still be a US IBM employee in 2015? Top management will remain, the sales organization will endure, as will employees working on US government contracts that require workers to be US citizens. Everyone else will be gone. Everyone.

(Excerpt) Read more at betanews.com ...


TOPICS: Business/Economy
KEYWORDS: corporations; ibm; ibmcorp; outsourcing; pensionplan; pensions
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Nice way to celebrate a centennial.


1 posted on 04/29/2012 8:00:13 AM PDT by Daffynition
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To: Daffynition
At the highest levels in Armonk they think things are going beautifully because they are out of touch with the reality of their own company.

That sounds strikingly familiar????

2 posted on 04/29/2012 8:05:07 AM PDT by bigheadfred (MY PET TAPEWORM (OBIWAN) IS AN INSANE MILITARY HATING LEFTIST)
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To: Daffynition

Reduce their work force by 3/4? When did they announce this? How has it been kept so quiet?


3 posted on 04/29/2012 8:07:14 AM PDT by DManA
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To: DManA

Who knows why? We’ll see if Cavuto talks about it tomorrow.

**The direct impetus for this column is IBM’s internal plan to grow earnings-per-share (EPS) to $20 by 2015. The primary method for accomplishing this feat, according to the plan, will be by reducing US employee head count by 78 percent in that time frame.**


4 posted on 04/29/2012 8:10:14 AM PDT by Daffynition (Our forefathers would be shooting by now.)
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To: DManA
How has it been kept so quiet?

Thick severance packages and a fat stack of paperwork accompanying. I know two people that were "let go" from IBM in the past couple years. Entire departments are being killed off quietly.

5 posted on 04/29/2012 8:11:32 AM PDT by Michael Barnes (Obamaa+ Downgrade)
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To: bigheadfred

When was the last time IBM was relevant?


6 posted on 04/29/2012 8:11:59 AM PDT by Daffynition (Our forefathers would be shooting by now.)
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To: DManA
How has it been kept so quiet?

They probably have a man in Washington to smooth things over.

IBM, though still showing goof financial results, is out of gas. Like Microsoft and many other behemoth entities, IBM would benefit from breaking itself up into much smaller, leaner, and smarter operating units (Lenovo, anyone?). They still have some very good products and services, but molding the whole thing together into one package with a famous label on it hasn't worked very well - and the days when "Nobody ever got fired for buying IBM" are pretty much over.

7 posted on 04/29/2012 8:14:43 AM PDT by Mr. Jeeves (CTRL-GALT-DELETE)
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To: Daffynition
"The Downfall of IBM"

What? Again?!

I thought they went out of business a few decades back.

8 posted on 04/29/2012 8:15:41 AM PDT by Flag_This (Real presidents don't bow.)
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To: Daffynition

It would be nice if the author had a clue ....

IBM Hardware Products are still amoung, if not, the best. The US Market has been tanking and there is no need to maintain the workforce where there is no demand. Asia is “growing” and so is the demand - thats why they are investing there.

Manufacturing of almost ALL computer products has been shifted to Asia, regardless of who (including the authors belove Apple!).

Programmers and Co in India aren’t top notch? THE MARKET DOES NOT CARE! They want cheap. It’s been that way for over a decade. And you get what you pay for.

Sales and Technicians? You need those where the customers are - and - THAT IS NOT in the US (or Europe) at the moment.


9 posted on 04/29/2012 8:15:52 AM PDT by An.American.Expatriate (Here's my strategy on the War against Terrorism: We win, they lose. - with apologies to R.R.)
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To: DManA

They’ve always managed to keep things quiet, including pretty massive lay-offs. They’ve laid off basically all of the dead wood in the U.S., outsourced every job they could, and now are laying off the good workers (around 2,000 more just a month+ ago).

“Roadmap 2015” is affectionately known as “Roadkill 2015.”
All employees were given stocks that would vest in 2015, most people figured they would never see that stock.

The U.S. count has gone from about 150,000 in 2000, to 98,000 now. IBM doesn’t release numbers, but there are other websites/places that keep track.


10 posted on 04/29/2012 8:16:28 AM PDT by Borax Queen
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To: Daffynition

Global Services is IBM’s business now and they are struggling to renew their major contracts because their offshore competitors are now viable on that scale and can usually deliver high customer satisfaction, so IBM can’t renew their contracts at their current pricing structures and they have to find savings in their delivery.

Whether they can successfully reinvent themselves yet again and in that way is still to be seen, but I think the inefficient layers of administrative overhead and effective management of offshore delivery are more of issue than their shifting to a higher ratio of offshore labor.


11 posted on 04/29/2012 8:17:02 AM PDT by 9YearLurker
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To: Daffynition

IBM: Technologies Graveyard.


12 posted on 04/29/2012 8:17:08 AM PDT by King Moonracer (Bad lighting and cheap fabric, that's how you sell clothing.....)
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To: Daffynition
Oh, IBM ~ those guys. Used to program COBOL for a 360 mainframe. Learned JCL ~ worked with those systems up through the umpty-umpth release.

Then somebody came out with PCs and I never looked back.

Sitting here today in front of an Apple in fact.

Corporate folks went DEC then went Dell ~ for a variety of reasons America's then largest employer just didn't need IBM anymore, and neither did I.

The scent of death was on the land. Kodak went down last year. GM went down 5 years ago. Things change.

13 posted on 04/29/2012 8:17:12 AM PDT by muawiyah
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To: DManA

This is the first I’ve heard of this “plan”, but I can believe it. The “bean counters” run the company and they are not known for looking into the future very far.

The end result will be another U.S. company destroyed as they get rid of the “Dead Wood” also known as older employees with all of the experience necessary to keep things running smoothly.


14 posted on 04/29/2012 8:17:46 AM PDT by The Working Man
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To: Daffynition

“IBM seems to believe it is cheaper to replace a skilled worker with two or three unskilled workers to do the same job. That is like hiring nine women to make a baby in one month. While it looks good on paper it is not practical and is not working. The language barrier for IBM’s Indian staff is huge, for example. Troubleshooting, which was once performed on conference calls, is now done with instant messaging because the teams speak so poorly. Problems that an experienced person could fix in a few minutes are taking an army of folks an hour to fix. This is infuriating and alarming to IBM’s customers.”

ummmm, yes.

How about an experienced guy in the field (like me) who can fix it in minutes?
(No, I have never worked for IBM but that is the new paradigm across all of technology)


15 posted on 04/29/2012 8:17:52 AM PDT by vanilla swirl (searching for something meaningfull to say)
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To: Daffynition

May 17th, 1979. Ask Mrs Grover.


16 posted on 04/29/2012 8:18:14 AM PDT by bigheadfred (MY PET TAPEWORM (OBIWAN) IS AN INSANE MILITARY HATING LEFTIST)
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To: Daffynition

Looks like they’re backing off. Trial balloon. Show across someone’s bow?

http://www.informationweek.com/news/windows/opensource/224700807

IBM Denies Plan To Cut 75% Of Workforce

Big Blue dismisses report that it intends to replace three-quarters of its global staff with independent contractors.

By Paul McDougall InformationWeek


17 posted on 04/29/2012 8:20:11 AM PDT by DManA
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To: An.American.Expatriate

Dear IBM: Cheap || Fast || Good. Pick two.


18 posted on 04/29/2012 8:20:33 AM PDT by central_va ( I won't be reconstructed and I do not give a damn.)
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To: Daffynition
The Downfall of IBM
Oh yeah, more companies should be suffering such a fate.


19 posted on 04/29/2012 8:21:02 AM PDT by oh8eleven (RVN '67-'68)
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To: DManA

It was announced a few weeks ago. It hasn’t been kept quiet, at least not if you’re in the software industry.


20 posted on 04/29/2012 8:23:09 AM PDT by discostu (I did it 35 minutes ago)
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To: Daffynition

Boards are going to have to do a better job of picking CEOs. Anybody can talk a good fight about running a business. If we could sell talking, our country would own the world. Look at our President. He talks a good fight, but he’s inexperienced and dumber than donuts. Hire the best person for the big jobs. Hint - that is the person who will get the most effective and efficient use out of the resources.


21 posted on 04/29/2012 8:25:46 AM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: discostu

To say it could have implications for the election is something of an understatement.


22 posted on 04/29/2012 8:26:01 AM PDT by DManA
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To: DManA

Another 150,000 unemployed people over the course the of the next 3 years won’t really change anything in the election. For one thing this has nothing to do with who’s in the White House, this is all part of a direction IBM has been going in for close to 20 years. The “international” part of their name used to be a pipe dream, now it’s their core market.


23 posted on 04/29/2012 8:29:17 AM PDT by discostu (I did it 35 minutes ago)
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To: Daffynition
When was the last time IBM was relevant?

Years ago, I read that IBM held the patent to the 'cursor'.

24 posted on 04/29/2012 8:30:04 AM PDT by aimhigh
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To: 9YearLurker
Global Services is IBM’s business now and they are struggling to renew their major contracts because their offshore competitors are now viable on that scale and can usually deliver high customer satisfaction, so IBM can’t renew their contracts at their current pricing structures and they have to find savings in their delivery.

In IBM's defense, they can always make a good buck - one that usually requires a US citizen-based workforce - off the Government's ineptitude.
25 posted on 04/29/2012 8:30:27 AM PDT by tanknetter
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To: Daffynition
0bama can destroy even the best run enterprises.

26 posted on 04/29/2012 8:31:10 AM PDT by Uri’el-2012 (Psalm 119:174 I long for Your salvation, YHvH, Your law is my delight.)
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To: discostu

The symbolism is unmistakable.


27 posted on 04/29/2012 8:31:46 AM PDT by DManA
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To: Daffynition
BetaNews.com ^ | April 27, 2012 | Robert X. Cringely
I don't know what IBM is planning, but I do know that Robert X. Cringely is not the reporter's real name - it's Mark Stephens.
He has a bit of a checkered past and perhaps a bias, axe to grind, shorted IBM ... who knows?
28 posted on 04/29/2012 8:32:14 AM PDT by oh8eleven (RVN '67-'68)
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To: DManA
Reduce their work force by 3/4? When did they announce this? How has it been kept so quiet?

IBM has not been publicizing their downsizing. Business Insider reports on layoffs and unhappiness among IBM sales people.

29 posted on 04/29/2012 8:32:24 AM PDT by PapaBear3625 (In a time of universal deceit, telling the truth is a revolutionary act. - George Orwell)
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To: PapaBear3625
IBM has not been publicizing their downsizing.
If a company lays off 100 or more employees at the same time, they are required to publicize it by Federal Law.
30 posted on 04/29/2012 8:39:19 AM PDT by oh8eleven (RVN '67-'68)
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To: aimhigh

I heard they own the ZIP algorithm.

IBM has patents up the rear. It wouldn’t surprise me one bit if Big Blue makes a couple bucks on EVERY car, camera, PC, cell phone, television sold in the world. Well, maybe 99% of them.


31 posted on 04/29/2012 8:40:21 AM PDT by djf (Life's a play, we're actors not authors, and nobody even cared to give us the script!)
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To: The Working Man
This is the first I’ve heard of this “plan”, but I can believe it. The “bean counters” run the company and they are not known for looking into the future very far. The end result will be another U.S. company destroyed as they get rid of the “Dead Wood” also known as older employees with all of the experience necessary to keep things running smoothly.

The problem seems to be intrinsic to large, public companies. CEO's have little incentive to look further than the next quarterly report. They therefore focus on what will deliver short-term profits, and ignore the fact that they are bleeding institutional knowledge and trade secrets.

32 posted on 04/29/2012 8:40:59 AM PDT by PapaBear3625 (In a time of universal deceit, telling the truth is a revolutionary act. - George Orwell)
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To: DManA; Envisioning

Ding, ding, ding, Ping!


33 posted on 04/29/2012 8:45:35 AM PDT by waterhill (I Shall Remain. FUBO: GOD BLESS DICK CHENEY! D.C. FOREVER!)
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To: djf

“I heard they own the ZIP algorithm.”

It is “ZiiP”, yes?


34 posted on 04/29/2012 8:46:11 AM PDT by AlexisHeavyMetal1981 (Old dinosaurs never die, their skin just falls off.)
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To: 9YearLurker
“Global Services is IBM’s business now and they are struggling to renew their major contracts because their offshore competitors are now viable on that scale and can usually deliver high customer satisfaction, so IBM can’t renew their contracts at their current pricing structures and they have to find savings in their delivery.”

They just lost some major contracts due to unresponsiveness and poor service. They shifted the customers call centers offshore and they were getting huge complaints not to mention they cut staff until they couldn't keep up with the work.

35 posted on 04/29/2012 8:49:00 AM PDT by dljordan ("Tyranny, like Hell, is not easily conquered.")
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To: oh8eleven
If a company lays off 100 or more employees at the same time, they are required to publicize it by Federal Law.

The federal law says:

A WARN notice is required when a business with 100 or more full-time workers (not counting workers who have less than 6 months on the job and workers who work fewer than 20 hours per week) is laying off at least 50 people at a single site of employment.
You can get around this by having the layoff numbers be under the threshold at any one time, moving people around, and spacing the layoffs in waves.

Also, IBM has a program where they are transitioning to contract workers. So you're told that you can keep your job for a while if you move your job to a contracting basis. Then when contractors are laid off, there is no reporting requirement.

36 posted on 04/29/2012 8:49:21 AM PDT by PapaBear3625 (In a time of universal deceit, telling the truth is a revolutionary act. - George Orwell)
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To: DManA

The original article said IBM was to reduce its US workforce by 78%. The response from IBM denied they were going to reduce their “worldwide” workforce by 78%.

Both articles could be true if they hire 3 unskilled workers in India and China for each US worker.


37 posted on 04/29/2012 8:51:09 AM PDT by Tai_Chung
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To: Daffynition
" It is in Global Services where you see the most jobs being shipped offshore. "

It must be because of Unions. No, wait, IBM doesn't have unions. Like in all such offshoring, it's not taxes, it's not regulations, it's the cheap labor, stupid.

38 posted on 04/29/2012 8:58:03 AM PDT by ex-snook ("above all things, truth beareth away the victory")
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To: AlexisHeavyMetal1981

No.

ZiiP is a special Processor on some of the newer mainframes.

I mean ZIP, otherwise known as PKZip. I think the guy who invented PKZip worked for IBM at the time.


39 posted on 04/29/2012 9:11:58 AM PDT by djf (Life's a play, we're actors not authors, and nobody even cared to give us the script!)
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To: Daffynition

BUMP


40 posted on 04/29/2012 9:13:40 AM PDT by Lancey Howard
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To: Daffynition
It was over in 1994-5 when IBM surrendered the PC OS market to Microsoft.

OS/2 was, and still is, a superior Operating System, so far above Windows. But IBM bigshots didn't have the backbones to fight for it.

They thought they could make it with "global consulting," but seriously, who is going to pay $300-500 per hour for IBM "experts?" Only fools, and they don't stay in business for long.

Surrender is NEVER the answer. But that's what IBM did.

IBM execs betrayed their most loyal partners, users and customers, all because the media liked Bill Gates better. The media swallowed all Gates' balderdash. He knew how to manage the media and the media responded.

Come to think of it, Republican Party bigshots are doing the very same thing, aren't they? Surrendering their principles to please the media.

41 posted on 04/29/2012 9:15:13 AM PDT by eCSMaster (Conservative patriots, Rise up!)
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To: Daffynition

This is not news to my family..........


42 posted on 04/29/2012 9:29:36 AM PDT by Gabz (Democrats for Voldemort.)
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To: Michael Barnes

Not too many of of those thick severance packages in the trenches.

Forget about departments, entire divisions are being done away with. My husband is now servicing clients he had when he was with IBM. One of the reasons he is no longer with IBM is they started ditching those clients leaving the field techs with no work.


43 posted on 04/29/2012 9:33:00 AM PDT by Gabz (Democrats for Voldemort.)
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To: Daffynition; bigheadfred; eeevil conservative; hoosiermama; ml/nj; ExTexasRedhead; ...
From this IBM stockholder's point of view, writer Cringley is just mouthing nothing more than the usual leftist diatribe against large corporations, which sounds swell to the MSM outlets that provide him with his bread. Wouldn't be surprised if he's offered a job by the Obama administration, which thinks along the same lines.

I happen to be pleased by what IBM has been doing: creating increasing value for its shareholders. Look at the stock price charts over the past few years and you'll see how IBM has been greatly outperforming the market in general, based primarily on its bottom line strategy. That's what a publicly held private corporation is there to do!

44 posted on 04/29/2012 9:35:40 AM PDT by justiceseeker93
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To: An.American.Expatriate
Sales and Technicians? You need those where the customers are - and - THAT IS NOT in the US (or Europe) at the moment.

IBM are ditching their US customers left and right. My husband now works for another company and most of his service calls are the same ones he had when he was with IBM. he runs into store managers he used to know back in his IBM days. Also a goodly number of the guys he works with now are also former IBMers.

45 posted on 04/29/2012 9:36:53 AM PDT by Gabz (Democrats for Voldemort.)
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To: eCSMaster
OS/2 was, and still is, a superior Operating System, so far above Windows. But IBM bigshots didn't have the backbones to fight for it.

Was an IBM employee when this was happening. Talk about frustrating even us low peons could see the mistakes that mgt was making. Main frame people who ran IBM in the 90's never understood the PC or PC OS's. There is an arrogance to main frame people that is UFB.

46 posted on 04/29/2012 9:37:04 AM PDT by central_va ( I won't be reconstructed and I do not give a damn.)
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To: The Working Man
,,, The end result will be another U.S. company destroyed as they get rid of the “Dead Wood” also known as older employees with all of the experience necessary to keep things running smoothly.

Great Definition!
47 posted on 04/29/2012 9:39:27 AM PDT by khelus
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To: oh8eleven

I worked for IBM for 7 1/2 years, from 2001 through mid-2008 when (unlike so many afterward) I voluntarily left to take over a Vice Presidency at another firm in my field (high performance computing, or HPC).

I learned a lot from IBM; it was mostly a tremendous experience. I had some outstanding managers....but at the end of my time there, also had some real duds. I mean seriously clueless putzes.

I was part of a very small team that built a $1.1 billion HPC business almost from scratch in just under four years. You’d think the company and the division I worked for would have been ecstatic, no?

Wrong.

Instead, after lavishing positive attention on us for a few months once they realized what we’d done....they decided to manage the living s**t out of the business. This new crop of idiots waltzed in, an entirely new chain of command with a couple of “extra” management layers, mind you.....and, for example, never gave me 5 minutes of their precious time to ask how to get us to $2 billion...or even HOW we did what we did in the first place. They couldn’t possibly have cared less.

Nada. Zip.

IBM rewarded automotons; clueless bureaucrats who understood process (the author of this piece nailed that part) and could talk the talk. If you stuck your neck out, your head got chopped off.

It stopped being fun....and I couldn’t get out of there fast enough as I watched them starve a huge business that I put blood, sweat, and tears into for years. It was disgusting, sad, and incredibly stupid.

I don’t regret my time there; I’m grateful for the experience. That said, I’d never go back. The company is run by people who are slaves to “the almighty Quarter”; to Wall Street. They could give a damn about the people who MAKE it all happen. Your chart shows impressive shareholder value....but it doesn’t begin to tell the whole story.

When a company becomes a slave to the Street, they forget who they are and what got them to a position of prominence. That is precisely what has been happening to Big Blue.

What makes it doubly sad is that some of the finest people, some of the finest minds I’ve ever known work (or worked) there.


48 posted on 04/29/2012 9:40:01 AM PDT by RightOnline (I am Andrew Breitbart!)
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To: central_va
Dear IBM: Cheap || Fast || Good. Pick two.

ROFL. Very accurate saying. The trouble is bean counters only recognize cheap and fast as relevant to quarterly profits.
49 posted on 04/29/2012 9:42:13 AM PDT by khelus
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To: Gabz
IBM are ditching their US customers left and right.

Other way around IMHO. IBM products have become too expensive for the US Market, so customers are resorting to cheaper and, IMHO inferior, products. IBM's unquestioned position as a leader in Quality is no longer sufficient to keep customers.

he runs into store managers he used to know back in his IBM days. Also a goodly number of the guys he works with now are also former IBMers.

Which only proves that the companies with market "growth" also hire to meet demand.

Is IBM making a mistake by reducing US Operations? Possibly. But I have the distinct impression that IBM is simply completing plans it has been pursueing for quite a long time now. IMHO, IBM will become a foreign entity with a US presence in the next 10 years.

50 posted on 04/29/2012 9:43:36 AM PDT by An.American.Expatriate (Here's my strategy on the War against Terrorism: We win, they lose. - with apologies to R.R.)
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