IBM Layoffs — The Rest of the Story

The grand old typewriter company has grown over several decades into a huge corporation employing 100’s of thousands of people all over the world.  Before the 90’s IBM was a ‘full employment’ company — you get hired, you’re there for the duration.  But around 1993 that all changed…

With the hiring of Lou Gershner (aka, the hatchet man), IBM decided to trim down a bit.  Having 400,000 employees world wide, one can fairly assume there was some ‘fat’ in the company.  So, they dumped 150,000 people!  As a result, the stock price jumped and the company looked good!  Ultimately however (over several years) they hired people back into the company and they were back up to 400,000 world wide.

Ah, but wait, there’s the rest of the story.  At that time IBM had 250,000 employees inside the U.S. and 150K in other countries.  Until recently (this year), they had 400K again.  But, the employees within the U.S. is now closer to 60,000!!  Why?  Because they can get Russian programmers as an example for 1/4th the cost of an American.  The Indians for 1/8th.  And the Chinese for even less!!  Of course we don’t care about ‘quality’ any longer.?

What is stunning is the fact that IBM refuses to report their layoffs per government order.  And to help hide their actions, they layoff a few at a time so as to not bring attention to themselves.  And from what I hear, they are significantly reducing their ‘sales’ workforce..?  I’m not sure how that works?  But then I’m not a ‘gifted’ corporate executive…

What’s your point you ask?  My point is simply this.  If America is going to reignite this country’s GDP, we’re going to need to start ‘producing something’, a LOT of somethings.  Consuming products does not make for a healthy economy.  Making things does.  It’ll be interesting to see where IBM ends up.??



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