So the once-great IBM took another step into the Abyss of Forgotten Giants today with another round of layoffs, including approximately 150 at its Essex Junction plant. The fact that it was “only” 150 conpared to last year’s roughly 400 is, I suppose, cause for a teeny-tiny bit of celebration. Cue the Kazoo Chorus.
The numbers are all approximate and rough because IBM refuses to disclose layoff numbers or, for that matter, the size of its domestic workforce because the actual figures would be so damn embarrassing. The IBM watchdog group Alliance@IBM keeps track of the numbers as best it can; it reports that IBM’s domestic workforce peaked at 154,000 in the year 2000. That number had dropped to an estimated 88,000 by the end of last year, and will now fall even further.
But wait, there’s more. Alliance@IBM says the 88,000 figure includes more than 20,000 vendors, contractors, and supplemental workers. Which brings its actual salaried workforce to a pitiful 66,000.
(IBM’s global workforce has remained basically stable, with thousands upon thousands of new positions in India, China, and anywhere else labor is cheap and fungible, up to and perhaps including Elbonia, Freedonia, Anvilania, Yukkabukkoo, and perhaps Tatooine*, essentially displacing employees in the United States.)
*That Jabba, now there’s a guy we can cut a deal with.
No wonder the Alliance “Job Cuts” message board is littered with reports from laid-off workers whose primary emotion is relief rather than sadness. IBM has become a toxic workplace, and a lot of people are just glad to get the hell out, even if it wasn’t their choice.
In corporatespeak, the layoffs were the result of a poor fourth-quarter earnings report. Which is, if I may put it bluntly, either a lie or spectacularly poor management. You shouldn’t react to a single disappointing quarter with massive layoffs that will cost a billion dollars in reorganization charges.
Well, you shouldn’t unless your one and only goal is boosting profits, even if it means cannibalizing the company’s future — or, as technology reporter Robert X. Cringely puts it, “eating your seed corn.” Cringely has reported extensively on IBM’s one and only strategic goal: to goose its profits as quickly as possible. Preferably by growing the business; but failing that, by selling assets and slashing payroll.
And IBM has been steadily “failing that,” and resorting to corporate cannibalism. Alliance@IBM’s figures don’t lie, and neither does IBM’s stonewall on domestic workforce.
David Sunderland, head of the Vermont Republican Party, reacted to the IBM news with complete predictability:
We call on Governor Shumlin to take immediate action that will ease the burden on Vermont’s businesses and individuals by; reducing Vermont’s tax burden to encourage growth, easing Vermont’s regulatory burden by reducing bureaucratic red tape, and lowering our state’s energy costs for individuals and small businesses.
If Sunderland has a brain in his head, he knows damn well that IBM is doing what it’s doing because of its global strategy (or lack thereof). The Essex Junction plant would be slowly withering away even if we ripped off all the red tape and gave IBM free electricity and a tax rate of zero.
(Speaking of Sunderland, Bad Journalism Alert: The Burlington Free Press’ online article on the IBM layoffs puts Sunderland’s boilerplate in the headline: “Republican Chairman Chides Governor on IBM Job Cuts.” Way to thumb the scales, Freeploid!)
Now, back to our story.
Interestingly, Lt. Gov. Phil Scott, Republican Enough For Most Sane People, issued a more nuanced statement. He naturally called for more action “to grow our economy, create high-paying jobs, or make it easier to do business within our borders.” But he put the blame, not on Shumlin or the Democrats, but on “we in Montpelier.” Classy. I’m sure it earned him no points with the Darcie Johnston wing of the party.
In any event, the takeaway from today’s layoffs is Same As It Ever Was: IBM’s circling the drain, putting short-term profit above actually building a business, As far as is practicable, it is abandoning America, it is outsourcing and cost-cutting everywhere, and selling off valuable parts of its business. Shareholders and top executives win big; everybody else takes it in the shorts.
IBM used to be a good corporate citizen and a valued source of stable, high-paying jobs. The lights may still be on at Essex Junction — well, some of ’em anyway — but that IBM is already long gone. We know how this story will end.