back to article Black & Blue: IBM hires Bain to cut costs, up productivity

IBM has indicated to senior Global Technology Services management that a third of the global workforce will be “productively redeployed” in 2018 with tens of thousands of personnel “impacted”. Insiders told The Reg that Big Blue had hired consultant Bain & Company to help it plot a way forward for GTS, bringing in external …

  1. Amos1

    So this IBM'er cold-calls me yesterday...

    And wants to discuss our plans in security research and strategy while extolling the virtues of using their security services. I told the person that we do our own security research and offered to send them a copy of a recent report we created for their evaluation to see how it could be improved. They happily agreed.

    I sent them the link to the recent The Register article on how IBM has screwed up their response to Meltdown and Spectre issues with their customers.

    Oddly, the salesperson has not contacted me back yet.

    1. Anonymous South African Coward Silver badge
      Pint

      Re: So this IBM'er cold-calls me yesterday...

      Beautiful!

      'ere, 'aff a bakers' dozen on all of us!

  2. Anonymous South African Coward Silver badge

    A Bainmarie then?

  3. Bill M

    In Summary

    So in summary it sounds like they are going to get rid of loads of staff.

    1. Graybyrd
      Holmes

      Re: In Summary

      In summary, the Consultancy produces volumes of word vomit seeking to disguise the American-based multinational corporate Employment Plan Revisions, wherein the choice becomes: to reduce everyone's pay while demanding no decrease in production; or to reduce the staff and double up the surviving employees' workload. Or balance a combination of Plan A with Plan B. Sift through all the verbal crap. The end result rarely varies.

  4. Anonymous Coward
    Anonymous Coward

    IBM has been a dead ship that sunk long ago. They should just allow their ghosts to rest in peace and stop haunting the planet. Please IBM just close the doors once and for all. You died when you became a "business management" company and so did all your employee's (or at least their "souls").

  5. Anonymous Coward
    Anonymous Coward

    I had to check to see if Bain and company is the same as Bain Capital Management and the link describes it as not being although there are connections. so, this makes me wonder if IBM is letting them check out the structure to see what IBM is worth in a takeover. http://www.bain.com/about/press/press-releases/election_year_statement.aspx

    1. Anonymous Coward
      Anonymous Coward

      It would match what I'd heard from a manager last year - the IBM is planning to offload GTS but first they need to cut costs via headcount to make it attractive to a 3rd party. Most teams I know haven't had any replacements come in when someone has left - it's taken as a cost saving then they still come looking to cut another body even if they've saved $ from people leaving and not replacing them.

      The customer was so concerned that we had so few people left locally they formally raised it as a contract breach (they have to have a minimum level of people onshore for regulatory purposes.) Upper management's response was to fly offshore staff on 6 month visas and reclassify them as 'local' while they are here (and bill the customer for a 'local' resource while still saving costs as they don't pay them everything to which a local resource would be entitled.) The 'offshore staff located here' apparently don't count as 'offshore' while they are here (the funding coming out of yet another bucket of money so to a bean counter it looks like the offshore team has saved money (and avoid cuts.) I've heard they might cut us locals again because our costs have gone up because the overall 'local' costs have gone up due to the presence of the offshore staff being included in local numbers...

  6. Anonymous Coward
    Anonymous Coward

    Management Consultants

    I don't understand how these companies exist, and how they get hired. The executive management of a company hire another company to provide them with executive direction - isn't this simply confirming that they are failing to run the company in the first place?

    Incidentally, I've met many Bainites, my sister used to work there. Terribly nice people, virtually no soul remaining.

    1. GruntyMcPugh Silver badge

      Re: Management Consultants

      .. a timely reminder for the 'Management Consultant' joke:

      http://mistupid.com/jokes/page113.htm

      1. Anonymous Coward
        Anonymous Coward

        Re: Managers

        http://mistupid.com/jokes/page107.htm

    2. Anonymous Coward
      Anonymous Coward

      Re: Management Consultants

      And still those external companies fail to examine the root cause - executives who are sinking the company and are unable to figure a way out themselves, albeit being handsomely paid for that - although their brain have been hammered with the "maximize shareholder value", instead of "maximize the company value to its customers, to ensure real profit"

      All their reports should start with Directive One: "Replace actual executives and board members with competent ones".

      I understand calling in external consultants if you want to expand to new markets you don't know well, and need help, but if you need to know how to run your business, it's clear in the past you hired the wrong executive and management team. No changes of any level below them will help.

      Anyway, that's mostly responsibilities lifting - you call in the consultants, they give you directions, they leave. If you follow the directions and the result is good, it's your merit. If things still go wrong (and they usually do), it's the consultants' fault, not yours.

      1. Anonymous Coward
        Anonymous Coward

        Re: Management Consultants

        "although their brain have been hammered with the "maximize shareholder value", instead of "maximize the company value to its customers, to ensure real profit""

        I'm not even sure they try to maximise shareholder value anymore. More a case of "I'm here for a good time, not a long time, how can I maximise my bonus before I move on?". That's usually related to the share price so if they can bump up that in the short term they get their bonuses. Usually to the detriment of the longer term share price...

        1. Anonymous Coward
          Anonymous Coward

          Re: Management Consultants

          I'm not even sure they try to maximise shareholder value anymore.

          Even "Neuron" Jack Welch from General Electric have denounced "shareholder value" as possibly one of the worst ideas in business management - although first after retiring from GE (When the devil grows old, he begins going to Church, as we say).

        2. Anonymous Coward
          Anonymous Coward

          Re: Management Consultants

          They attempt to "maximize the shareholder value" as long as they still have some shares to sell...

      2. Anonymous Coward
        Anonymous Coward

        Re: Management Consultants

        > Anyway, that's mostly responsibilities lifting - you call in the consultants, they give you directions, they leave. If you follow the directions and the result is good, it's your merit. If things still go wrong (and they usually do), it's the consultants' fault, not yours.

        Sounds like the exec's know the charade is almost up, so are looking for someone to blame.

    3. The Man Who Fell To Earth Silver badge
      Black Helicopters

      Re: Management Consultants

      My wife worked for McKinsey & Company for many years. According to her, the whole management consulting business is predicated on finger pointing at straw men.

      Basically, management hires someone like McKinsey or Bain to pretty much tell them what they already should know but are too chicken to tell the board. But with an external management report in hand, they can point to it and say "these experts say..." (ignoring the fact that if the company's management aren't already the best experts about the company & its business, they should probably be replaced).

      If the results of (mis)implementing the advice turns out bad, management can point the finger at "those experts". If the results of (mis)implementing the advice turns out well, then management can extol it's brilliance for hiring the consultants.

      So the bottom line is that management consultants get the big bucks to be straw men.

      1. JLV Silver badge
        Unhappy

        Re: Management Consultants

        Good to see that Netflix's "House of Lies" is firmly grounded in real life.

        Sad icon, because this is such a sorry state of affairs.

    4. Anonymous Coward
      Anonymous Coward

      Re: Management Consultants

      I don't understand how these companies exist

      Simple there are several basic roles

      1/ Employed by government department to rubberstamp because elected dummies require an external entity to confirm what they want to do.

      2/ Independent entity to manage PMO and sort out shit fights between vendors and clients

      3/ To provide functions and features that the client company doesn't have

      4/ etc

      I have worked in all these roles for PwCC before IBM bought us. They then tried to turn us into box shifters. Most if not all ended up leaving hence the requirement for IBM to hire an external consultancy group. All I can say is Ha Ha.

    5. Stu Mac

      Re: Management Consultants

      I read "hired consultant Bain & Company" and realized IBM is now just HP/Yahoo in waiting.

      Sad days.

      Entirely attributable to disastrous corporate leadership and lack of vision and no doubt a few well stuffed pockets on the way through.

  7. adam payne Silver badge

    So redeploying your staff basically means your outsourcing, axing staff or moving people into jobs you can't fill.

    1. Anonymous Coward
      Anonymous Coward

      IBM-speak

      Increasing productivity means getting rid of people in IBM (by definition, working for IBM means you are unproductive) and assuming you will get a job elsewhere. If you remain unemployed, you productivity is almost identical to your productivity in IBM.

      I'm a little surprised no one has pulled up Bain on his obvious attempt to earn his bonus by firing people.

  8. Anonymous Coward
    Unhappy

    Why bother?

    Dear IBM.

    Why keep doing these little steps? Go straight for the end game by q3 2018.

    Sack ALL staff except accountants, lawyers and directors.

    Employ more lawyers.

    Employ more patent writers (no need for tech background)

    Use Patent portfolio to become worlds largest patent licensing entity, sometimes called Patent Trolls.

    Profit, profit, profit!

    1. Anonymous South African Coward Silver badge

      Re: Why bother?

      Then they'll have to change from IBM to IPM - International Patenting Machine...

    2. nerdbert

      Re: Why bother?

      Already done. Last I heard the patent portfolio brought in north of $1.5B/year. They pass it around to the latest fair-haired division to make that VP look good. Terribly political.

      BTW, in IBM-ese RA is not redundancy action, it's "Resource Action", although the effect is still the same.

  9. marky_boi

    Bain ??? as in the Bain of my life???

    Fools, turned up at our company, we all told them to piss off. report was never published or acted on. Great to f*^%$ up a company , unless it is f(**^ed up already, then it's a long slide to oblivion...

  10. Anonymous Coward
    Anonymous Coward

    Looks like their security is up to scratch.

  11. naive

    It fits

    From the article: "just shy of one-third of the entire organisation is now understood to be employed in India, circa 122,000 people."

    Indian Business Machines

    After Trump has terminated 750,000 H-1B visa's issued to IT staff hired from India, things are looking up, they can use the extra capacity to lower salaries in India.

  12. Salestard

    The old consultancy adage

    'If you're not part of the solution, there's good money to be made prolonging the problem' (which made it onto an Inspirational back in the days when that's all we had for memes.

    I'm not surprised about this to be honest - not the fact that they're shedding even more people in an effort to shore up profit, but that they're spending (a lot of) money on corporate assassins to tell them how many more rank & file can be thrown under the cost-cutting bus in order to keep the increasingly top-heavy ship afloat.

    It's win-win; middle management get to claim it is impartial, and have a clear conscience. Senior management are seen to be doing the right thing. Bain get to make a boatload of cash deploying a slightly more spreadsheet based version of Roman decimation. Oh, apart from the poor sods who will get redeployed out the door.

    On that point though; my natural sympathy for those in that position wanes a bit when you consider that a) this is now SOP for IBM, b) the writing on the wall has been there for many years, c) getting a job purely on the basis of being ex-IBM is still a thing. I do wonder if its just the meek, insane, or wilfully ignorant left there now.

  13. aussie-alan

    Not so great advice

    A few years back, at a former employer, the Bain consultants they brought in were telling our senior management that we "need to be more like Enron". Even after the Enron crash, they kept bringing in Bain consultants. If IBM needs an external consultancy to tell them how to reorg, then all their executives should be sacked for incompetence.

    1. Sector7G

      Re: The old consultancy adage

      @Salestard

      "I do wonder if its just the meek, insane, or willfully ignorant left there now."

      There are still pockets where you can find value, innovation and expertise. Try not to paint with such a broad brush it makes you seem callow.

      1. Anonymous Coward
        Anonymous Coward

        Re: The old consultancy adage

        The meek, insane, and wilfully ignorant describes the customers that still buy stuff from IBM. What do they have these days that you can't find better or cheaper elsewhere? Mainframes, the old AS400 stuff, and MQ...all the stuff they no longer seem to invest in. Everything else seems very uncompelling when you look at the competition...

    2. Anonymous Coward
      Anonymous Coward

      Re: The old consultancy adage

      ...getting a job purely on the basis of being ex-IBM is still a thing.

      I'm not so sure. At one interview with a job agency I asked if being an ex-IBM'er was considered a black mark, and they reluctantly said yes.

  14. Blotto Bronze badge
    Holmes

    Echo chamber feed back loop

    The Bain consultants are just telling IBM managers what they want to hear. IBM managers must need to justify their findings for some reason which is why they have brought in Bain to reinforce their stance.

    If Bain came in and said no your doing it all wrong, they'd not be in line for the next round of consultancy so why shoot themselves in the foot.

    As IBM have their own consultants then for Bain to get a foot in the door (i'm sure they had an existing relationship, but anyway) is a massive opportunity for future revenue.

  15. Anonymous Coward
    Anonymous Coward

    US Federal Government should do the same....

    There is no reason why the US Federal Government should not do the same....the swamp waits....

  16. liggiero

    As a public company -- shouldn't scrutiny start at the C-Level? They are the ones responsible for the future direction. The decisions we make today are where we will be in the future -- Apparently the no accountability lies with the C-Level management of this firm. Break it apart and sell off the pieces, this is easy anyone can do it. My suggestion, partner with the leader of the information age, "Google", disrupt how we connect information with people -- this is what was intended by a logistics company and "Watson".

  17. Portent
    Flame

    Down, down, deeper and down...

    IBM now firmly in a death spiral...

  18. a_yank_lurker Silver badge

    morons led by idiots

    Further proof Isty Bitsy Morons will going belly up. Rearranging the deck chairs on the Titanic did more good.

  19. handleoclast

    Time to stick a fork in it

  20. Anonymous Coward
    Anonymous Coward

    Shame they didn't encrypt their overhead projector.

    1. Anonymous Coward
      Anonymous Coward

      the don't have any tech people left who know how to do that.

  21. Anonymous Coward
    Anonymous Coward

    Bain? What a perfectly named business for what they do

    I love how the (US) Americans name these companies without a hint of irony. Reminds me of the finance company a former employer of mine was in hock to. Something along the lines of Promethean Finance. Can you guess what would have happened if former employer had not kept to the repayment schedule?

    1. Solmyr ibn Wali Barad

      Re: Promethean Finance

      Procrustean sounds even better. Fits the fiscal management style in many bigcorps. Chopping and stretching all day long.

  22. FozzyBear Silver badge
    Pirate

    Ah IBM I'll remember you with fond nostalgia

    Actually not really the last 5-6 years dealing with you has been an absolute bitch.

    Cya

  23. Howard Hanek Bronze badge
    Windows

    Tired Arms

    'Ol Massa' his arms got plum tuckered out whippin' dem field hands so he hired him a new overseer.......

  24. This post has been deleted by its author

  25. JLV Silver badge
    Trollface

    stop disrespecting Big Blue, please!

    with such a well-done, informative, trenchant, PowerPoint, success is assured and nothing could possibly go wrong.

    Bonuses all around lads! *

    'lads' refers to the C-levels, duh!

  26. AdamWill

    question

    Does anyone know precisely how much of your soul you have to sacrifice to the devil before you'll understand this?

    "Some 6,000 of GTS people (g & h) are to be moved to help IBM cut costs as it tries to in-source or eliminate vended services and in-source subK (sub-contractor) roles. The company wants to stop hiring cross-company resource and external services, a contact told us."

    I mean...wot?

  27. Anonymous Coward
    Anonymous Coward

    Redeploy as lawyers

    Presumably - if anyone can be redeployed anywhere there is a gap - the remaining service delivery people can be redeployed as lawyers ?

    They can then fight all the court cases with the few remaining customers when the hiring of the cheapest and most inexperienced staff in the cheapest parts of the world inevitably results in cock ups.

    Or maybe they can be redeployed to marketing ? How hard can it be to polish a turd ?

  28. Anonymous Coward
    Anonymous Coward

    PWC is the problem

    The takeover of PWC ( effectively GTS ) introduced the culture of bonuses ,making partner at any cost , and the obsession with monthly revenews.

    The merger destroyed the staid do the right thing and customer comes first corporate culture. Replacing it with a cut throat screw the customer, get the bills in, collect my bonus and clear off before the shit hits the fan.

    It's a pity one of these high flying consultants did not recommend sending senior management on a beginner's accountancy course so they could understand the subtle difference between revenue and profit.

  29. Anonymous Coward
    Anonymous Coward

    I've read somewhere that between 2012 and 2017 IBM have made $92 billion in cash. 80% of which went to the shareholders.

    No wonder they have no money to employ people.

    1. Anonymous Coward
      Anonymous Coward

      IT people are supposed to be logical, IBM IT are more logical than most but it seems many on this site have lost sight of this.

      IBM is a business built to service other businesses and is owned by shareholders for the purpose of getting rich and earning money. If the money goes to the shareholders then become a shareholder. Of course there are better investments out there and that is also your problem, if you don't feed the investors they will feed you to the lions and there will be no more IBM or jobs.

      Sadly there never were jobs for life and we all have to earn our corn or be born rich.

      " Everybody know the poor are always being f****d over by the rich. Always have, always will. "

      AC as sadly I am ex-IBM. They were a great company.

  30. GruntyMcPugh Silver badge

    Ah, I think there may be some Devil in the detail here,..... IBM Client Innovation Centres were referenced,.... now, from what I understand, those employed at such emporia aren't full IBMers,.... they were initially hired on contracts that were one day shorter than two years (so they wouldn't qualify for employment rights in the UK) and were not enrolled in the pension.

    So I wonder if part of the redeployment plan is to shovel full IBMers into CIC, and lessen the cost of employing them? TUPE should last for two years, so I'm not sure if they can pull off the two years -1 day skit, but I'm sure if there's a beezer wheeze to cut costs, IBM will have figured it out, although would TUPE apply if staff are getting shovelled into another branch of the same company? I know some staff were transferred to Manpower under one 'transformation' project and they lost all their IBM benefits. I wouldn't be surprised if staff remaining in host countries were made into contractors, via CIC, Manpower, or whatever, so they lost all employment rights.

    Anyone working for a CIC got any insider knowledge to add?

    1. Anonymous Coward
      Anonymous Coward

      Having been D(T)UPEd into IBM it is possible to ensure that existing T&Cs are maintained till retirement or RA. There is no need to have a 2 year limit.

      1. GruntyMcPugh Silver badge

        You mentioned RA, TUPE is at least some protection against that for those two years.

        Although when my firm TUPEd to IBM, IBM made my firm make a few people redundant pre-TUPE, 'cos IBM didn't want them, and didn't want to wait the two years to get rid.

        On the 'no need' to reduce T&Cs,.... well, ideally, but firms are always looking to reduce costs, so some other IBMers I knew had had their pensions changed from finally salary after TUPE protection ended, because IBM didn't want to stump up the cash. I know my on call payments were reduced after TUPE, so I'm struggling to think of anyone that TUPEd that didn't lose something.

    2. GruntyMcPugh Silver badge

      Answering myself. : -)

      .. just had a job advert pop up in my Linkedin feed, and it's at an IBM CIC:

      Infrastructure Specialist (multiple positions available)

      Contract Length: 23 month fixed term contracts & permanent contracts (dependent on eligibility)

      So it's one month short of two years, not the one day as I had previously stated. Same goal though, to prevent UK workers from getting employment rights. So this is perhaps the future for onshore IBMers, contractors, not employees.

  31. This post has been deleted by its author

  32. Anonymous Coward
    Anonymous Coward

    Bain?

    Not to worry, Batman will save the day.

  33. Anonymous Coward
    Anonymous Coward

    IBM Execs admit they don't know what their doing

    Towards the end of last decade, we had a visit from one of the big knobs from Big Blue HQ to give us a gee up after a big round of cost-cutting. During the Q&A someone asked why they had cut funding for an immensely valuable program for engaging with our with customers to help us deliver valuable and relevant features.

    He must have been jetlagged because he was very frank about the fact that when tasked with achieving a certain level of cost-cutting, they (the execs) would just defund random programs until the target was reached. Admitting they chose randomly because they had no idea what any of the programs actually represented (suggesting that we should have taken steps to educate him about its value before they unexpectedly cut the funding without any consultation).

    I resigned not long after.

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