IBM is about to cut 26 percent of its workforce? Jesus Christ.

On my dad’s last birthday (last April), I walked over to this little mini-mall thing in Minneapolis (where I was living at the time), got a coffee, and shot the shit with him. It was a real “my old man” type moment. At that specific point in time, I was about to finish a Masters degree but had no job prospects. He told me this story of one of his friends: long-time IBM manager. Dude probably worked at IBM for 27 years or so. Every 5-8 years, higher-ups came to him and said, “You need to slash payroll. Get rid of some people.” The first time, he did his duty. The second time, he did it but cringed a bit. The third time he pushed back hard, but ultimately did it. The fourth time he pushed back, threatened to kill his own salary, and ultimately did it — and it destroyed his month. The fifth time they came to him? He basically took early retirement, saying he couldn’t do that to his own people anymore.

The long-held joke about IBM is that it used to stand for “I’ve Been Moved.” Apparently now it’s about to stand for “I’ve Been F’n Fired,” because there are rumors out in the world that they may lay off 110,000 employees — 26 percent of their company, essentially — in the coming weeks.

Some in the unions and tech media are claiming that number is totally ludicrous, while also admitting “anything can happen” and “this is the time of year IBM does layoffs.”

The whole thing is called “Project Chrome,” and it’s a “re-organization,” which is corporate America’s absolute most tedious attempt to take something awful (I lost my job and am unclear of the future of my family) and re-contextualize it as something OK (you’re just being moved from Pile A to Pile B, with Pile B being “unemployed”). It’s what’s called “an accounting resource decision,” which again is a horrible way of re-wording something: basically, the rich at the top of an organization want to get richer themselves and make their financials look better — so they fire people and things look good for 3-4 quarters out.

People are terrible.

Here’s the broader thing that’s interesting about this: IBM is actually one of corporate America’s best-ever survival stories. Of the top 25 companies in America in 1961, only six existed in 2013; the average tenure of a Fortune 500 company has gone from about 75 years to about 15-20 years in the last two generations. That’s absurd to think about.

There was a long-running argument about IBM that it survived in 1992-1993 (when it had close to $10 billion in losses, and brought in a new CEO) because it started refocusing on actually listening to customers, as detailed in this book. The basic concept goes like this:

  • Business changes rapidly.
  • The one core tenet that doesn’t change is that, whatever you do, you have clients or customers.
  • Clients/customers can be like TV users with the remote — for technology, the cost of changing isn’t always massive, so they have some increased power.
  • The only road to success, then, is to consistently please/delight customers.

I mostly agree with that, although I would add the path to success is really about pleasing customers + pleasing your employees (or else you lose good people with institutional knowledge, and possibly to competitors), but as we know … when the finances are bad (and I believe IBM has 13 straight quarters of declining revenue), no one talks about employee engagement. It’s all about putting that head down, going to work, and bucking up those sales numbers!

And that, right there, is where we get really misguided.

Ted Bauer

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