So does that mean we can finally stop listening to Cringely altogether? I am an IBM employee and I can tell you a lot of my fellow IBMers had a really bad week-end because of his ridiculous claims.
I don't think today's IBM ever planned to layoff 110k at once.
Lay off 10k here, 10k there, call one a workforce restructuring, another "an innovation related rebalancing plan", blah blah blah.
It seems highly unlikely to me that IBM would just up and lay off 110k workers. Ignoring any other issues, the political blowback and PR blowback they'd get from politicians would be huge right now. IBM doesn't want to get in the middle of the current job-related wranglings.
When they laid off 60k in 1993, you can see it didn't really happen all at once then either.
International Business Machines is a stack of paper registered out of Delaware. The fact that people are employed by this stack of paper does not mean the stack of paper has a soul.
to prove this, note that their stock was up on the rumor of 110k layoffs. Other stacks of paper without souls caught wind of this stack of paper reorganizing, and promptly bought shares.
I hear what you are saying but if it means than 330k people still with IBM can keep their jobs (as opposed to the whole thing going under) it could be a good thing.
Hundreds of thousands of other people, like teachers and firefighters, depend on returns from companies like IBM to fund their retirements. If IBM can't profitably retain employees, holding onto them anyways comes at the expense of all the shareholders, not just the ones with cigars and monocles.
It would be a good thing because following the principal of maximizing profits is what is most socially beneficial, in the absence of externalities. And jobs are not an externality.
You have only calculated one side of the equation. You haven't considered how investors would have reinvested that money, and the jobs that this would have created. We can and should develop a theoretical framework that allows us to predict both sides of the equation. Such a framework exists and is called general equilibrium theory, which predicts that profit maximizing companies maximize social utility.
> It would be a good thing because following the principal of maximizing profits is what is most socially beneficial, in the absence of externalities.
"In the absence of externalities" is a pretty enormous qualifications -- very few real world exchanges have no externalities.
> Such a framework exists and is called general equilibrium theory, which predicts that profit maximizing companies maximize social utility.
It predicts that, in a market with rational actors (as defined in the rational choice model -- utility maximizers with perfect information) and no externalities, a Pareto efficient equilibrium will be achieved. But Pareto efficiency means that for anyone to do better, someone would have to do worse. This is not the same as maximizing social utility (while it seems obvious that the point of maximum social utility must be a pareto efficient point, it is not clear that all pareto efficient points maximize social utility.)
And, of course, the conditions in which it makes those predictions (both the perfect information part of the rationality condition, and the no-externalities condition) don't reflect real world decisions very well.
Externalities don't invalidate the entire theory, they just mean that adjustments have to be made in the cases where there are externalities. Hence my emphasis on the fact that a person losing their job is not an externality.
I think you read my sentence as "(following the principal of maximizing profits is what is most socially beneficial) in the absence of externalities" where what I meant was "following the principal of (maximizing profits (in the absence of externalities)) is what is most socially beneficial".
Classical economics with optimal "Pigovian" taxes can be thought of as a first order approximation to reality.
Also, you can produce any Pareto efficient outcome from free markets + redistribution. In practice things aren't quite so simple since redistribution has some deadweight loss (e.g. some estimate that it costs $1.30 to the economy to raise $1.00 in taxes).
EDIT: rewrote after a better understanding of the parent.
EDIT 2: added more explanation.
> Externalities don't invalidate the entire theory, they just mean that adjustments have to be made in the cases where there are externalities.
Are your adjustments the epicycles upon epicycles hammered onto ancient astronomy's theory of mechanics to make the orbits of the planets appear to work? Or are they like the relatively slight adjustments to Newton brought about by Einstein?
I personally feel that any discussion of sociological issues cannot be reduced simply to linear optimization problems, which implies the former view for me.
I think the best analogy is that general equilibrium theory is a zeroth order approximation to reality, and optimal (Pigovian) tax theory is the first order approximation. You might think a priori that no simple model can tell us much about sociological issues. All I can say is that I was very skeptical before I studied economics, but the theory is actually very compelling. I would recommend looking more into it (e.g. textbooks on micro or macro).
There is this strange disconnect where educated people who don't know much economics believe that economists have become tools of the ruling class, and therefore don't need much consideration. And economists are so stuck in their bubble that they don't believe that any educated person would completely reject economics (e.g. I specifically asked them if they thought that reasonable people could disagree with my original post, and they said no).
> Externalities don't invalidate the entire theory
The model is a simple deductive truth only when its premises -- which include actors that behave strictly according to the rational choice model (including perfect information) and the absence of externalities.
Neither of these is generally true in the real world.
> I think you read my sentence as "(following the principal of maximizing profits is what is most socially beneficial) in the absence of externalities" where what I meant was "following the principal of (maximizing profits (in the absence of externalities)) is what is most socially beneficial".
Both have the failing when being applied to the real world that they silently assume the assumptions of the rational actor model, including perfect information, and either way they present problems when used as a statement about a real-world decision in which externalities are present (though the exact nature of the problem differs between the two.)
> Classical economics with optimal "Pigovian" taxes can be thought of as a first order approximation to reality.
Not justifiably. I'd agree that approximating optimal Pigovian taxes is a worthy goal for government policy, but I don't think that there's any justification for assuming that actual government policies do that.
(In fact, given the distribution of power over government policy that would have to occur for that to be true, there's a pretty good reason to assume that its not even approximately true.)
Further, the behavioral model underlying classical economics are a tolerable first order approximation of reality in select markets, and useful baseline from which, via different circumstances in other markets which explain variation, to explain the behavior that occurs in other markets were they aren't good as such an approximation, which (aside from the prominence of ideologies which are justified by giving that model too much weight) is why its still taught.
> Also, you can produce any Pareto efficient outcome from free markets + redistribution.
Making many of the same assumptions with limited and occasional connections to real behavior that underlie your previous statements, starting with the rational choice model (including perfect information), this is true.
Not sure what your point is with it, or how it is supposed to be germane to the discussion.
I am aware of what is meant by externality in economics however economics have a lot of blind spots, the consequence of technology being one of them which makes it an externality for exactly that reason.
ok so your point is that when technology creates long term downwards trends in the value of labor, anything that decreases the value of labor can be thought of as an externality?
Redistribution can counteract this effect. If productivity increases but it also increases inequality, then there is some level of redistribution that will correct the inequality while making everyone better off (in the sense that the number of people earning more than X increases for all X). Not exactly a theorem, but a rough consequence of general equilibrium theory. You might claim that this kind of redistribution is impossible, but there are countries (e.g Scandinavia and Aus/NZ/Canada/UK) that redistribute a lot more than the US.
> ok so your point is that when technology creates long term downwards trends in the value of labor, anything that decreases the value of labor can be thought of as an externality?
Almost certainly, it is an externality in the strict economic sense, in that the "thing that decreases the value of labor" is almost certainly the product of investment decisions made by actors that are not the same set of people who are impacted by the reduction in the value of labor.
> Redistribution can counteract this effect.
Right, but in practice rarely does not, because what redistribution occurs is controlled by who has power over government, and power over government is disproportionately in the hands of those who have gained the most benefit from the economy, so those harmed by externalities and who would be most inclined, on a self-interested level, to seek redistribution are also the least likely to see their wishes reflected in government policy.
> If productivity increases but it also increases inequality, then there is some level of redistribution that will correct the inequality while making everyone better off (in the sense that the number of people earning more than X increases for all X). Not exactly a theorem, but a rough consequence of general equilibrium theory.
Its not really a "rough consequence of general equilibrium theory", whereas general equilibrium theory holds that without externalities (and with rational choice) a pareto-efficient result will be achieved, your conclusion requires the assumption (which general equilibrium theory does not support) that with externalities, a pareto-efficient result will not be reached, and further that the actual result will be such that there will exist an alternative result reachable by redistribution which features less inequality by whatever the relevant measure of inequality is, and is closer to being pareto-efficient.
But general equilibrium theory does not guarantee pareto-inefficiency with externalities, and if a pareto-efficient result is attained prior to redistribution, no redistribution can "make everyone better off" (since the definition of pareto-efficiency is that no one can gain without someone losing.)
> general equilibrium theory, which predicts that profit maximizing companies maximize social utility
No, it doesn't. It can't, because "social utility" is visible to the market only through the proxy of willingness to pay. If you assume that the marginal utility of money is roughly proportional to 1/wealth (equivalently, that the utility you get from $X in wealth is roughly proportional to log(X)) then what the economy kinda maximizes is total weighted utility, where every person's utility is weighted in proportion to their wealth.
What markets give us (in theory, subject to various conditions) is a Pareto-efficient allocation of resources. And there's a theorem that says that (in theory, subject to various conditions) one can get any Pareto-efficient allocation of resources by doing a bunch of pure money-transfer operations and then letting the market do its thing.
That's nice, but it's only equivalent to saying that the market maximizes social utility if you regard those money-transfers as net-utility-neutral.
So, suppose I have $1M and you have $1K. Under the logarithmic-utility assumption above, an extra $10 for you gains you about as much extra happiness as an extra $10K for me. Consider a transaction in which I find 1000 people like you and pay you each $10 in exchange for what you consider to be $10 worth of inconvenience or pain; I have lost $10K but will be content if I get what I consider to be $10K worth of convenience or pleasure. So we have a possible transaction to which all participants are indifferent: I get a certain amount of happiness; 1000 people each get a roughly equivalent amount of unhappiness; and some money is transferred between us. If money transfers are net-utility-neutral, then by reversing those transfers we get another simpler "utility-neutral" transaction: X units of happiness for me, X units of unhappiness each for 1000 people. So long as they're 1000x poorer than me.
(Is that logarithmic-utility assumption reasonable? Not entirely. I think it's generally held that the marginal utility of wealth decreases faster than that, which would make the factor by which markets weight rich people's utility more important than poor people's utility greater. On the other hand: If we consider the wealth and utility of corporations as well as individuals, we might want to say that a corporation's utility doesn't drop off the way an individual's does. I haven't fully got my head around the right way to think about this so I'll stop at this point.)
There is another part of the theory which says that you get back the full set of Pareto optimal outcomes, by redistributing wealth (e.g. through taxes and welfare). Although see my comment above on the limits of wealth redistribution.
Does the framework predict monotonic utility growth? Does profit maximization occur instantaneously? Does it provide any guarantees on the timeframe required to experience maximal social utility?
>Does the framework predict monotonic utility growth?
I don't understand that question. I know the language of economics very well, but you're not using the terms in way that has an obvious meaning.
>Does profit maximization occur instantaneously?
Time is not really an issue in general equilibrium theory. E.g. the assumptions can be interpreted as saying that all companies make the decision that, at that time, given all information available, maximizes the expected value of the companies future time discounted dividends.
>Does it provide any guarantees on the timeframe required to experience maximal social utility?
Social utility is timeless. E.g. it can be restated to say that if you were to make a plan (where plan can include contingencies, e.g. if X happens, do Y) to maximize the (time discounted) total social welfare over all future time periods, then this plan would involve instructing all companies to maximize profit (in the sense of my answer above).
Basically, general equilibrium theory takes into account time, by adding dynamic programming. But this augmented theory is fundamentally the same as the theory when all consumption, production and trade occurs in one instant.
Minus all the econ jargon, I think you may have been hinting at the adjustment costs for the workers involved. There are indeed adjustment costs, but you can't speak about these costs in the same terms as the actual value of having a job. It's like comparing the cost of moving from one home to another, to losing one's home entirely.
>I don't understand that question. I know the language of economics very well, but you're not using the terms in way that has an obvious meaning.
I'm not sure if economics uses the term.
Monotonic growth would mean that the dependent value (in this case utility), never decreases as a function of the independent value (time, in this case). In other words, does this framework guarantee that total utility will never decrease, even in the face of events such as 110,000 IBM employees being fired?
>Time is not really an issue in general equilibrium theory.
Then what use does it have in a universe where time appears to be fundamental?
>E.g. the assumptions can be interpreted as saying that all companies make the decision that, at that time, given all information available, maximizes the expected value of the companies future time discounted dividends.
Is there any reason to believe that these assumptions are well founded? Companies are likely aware of a tiny fraction of the total available information and they likely can only understand an even smaller fraction of that information. How does the framework respond to grossly misunderstood and sparse information?
>E.g. it can be restated to say that if you were to make a plan (where plan can include contingencies, e.g. if X happens, do Y) to maximize the (time discounted) total social welfare over all future time periods,
Is it possible to make such a plan? My guess is that any practical attempt would fail for many reasons, including being unable to define what 'social welfare' means as well as not being able to acquire enough computational power to compute across 'all future time periods'.
>There are indeed adjustment costs, but you can't speak about these costs in the same terms as the actual value of having a job. It's like comparing the cost of moving from one home to another, to losing one's home entirely.
I'm not sure exactly where you're talking about here. What is the actual value of having a job?
An error of what magnitude? IBM has not said exactly how many people will be laid off so we do not know what the magnitude of the error will be. Furthermore, they can certainly perform a 110K layoff by splitting it into multiple layoffs of thousands.
Response from IBM (via its Hong Kong office’s blog):
IBM does not comment on rumors or speculation. However, we’ll make an exception when the speculation is stupid. That’s the case here, where an industry gadfly is trying to make noise about how IBM is about to lay off 26 percent of its workforce. That’s over 100,000 people, which is totally ludicrous.
The fact is that IBM already announced, after 3Q earnings report, that the company would take a $600 million charge for restructuring. That’s several thousand people. Not 10,000, or 100,000. Moreover, IBM currently has job postings for more than 10,000 professionals worldwide, with more than half of them in growth areas such as cloud, analytics, security and mobile technologies. IBM’s new cloud leader, Senior Vice President Robert LeBlanc, told Fortune this week that IBM has plans to hire 1,000 cloud professionals.
A little perspective on IBM’s earnings is in order. The company still makes huge profit… $21 billion in operating pre-tax profit last year. And IBM’s “strategic imperatives” represent 27% ( and growing ) of the company’s total revenue… $25 billion in revenues, up 16 percent. We have high growth in a substantial portion of the portfolio, and those areas (CAMSS) have better-than-normal margins in areas that matter most to clients today — that’s the heart of the IBM transformation.
I don't feel that an apology cuts it anymore. We have so many sources of complete garbage. Imagine if this was what caused the significant drop of the IBM stock price (on the 21st)
Could we create a blacklist of sources that just aren't credible that we can just filter them out? e.g. Sky News.
Perhaps negative weighting won't work; perhaps we should add a credibility weighting for respected works (web sites, or authors?)
That, most likely, was the point. A few months ago, Marc Adreessen credited the proliferation of this kind of market manipulation with the demise of the IPO. In his view, a company as well established as IBM can roll with punches like these, but (for reasons he describes in some detail) fledgeling companies can't. So they stay private until they're big enough to fend off the hedgies who make money by planting and fanning rumors like this.
The macro-problem is that companies are past the steep part of their growth curves before they're public, meaning that the benefits of economic growth flow largely to a small number of pre-IPO investors, and not the broad range of people whose 401(k) plans depend on growth in public markets.
Anyway, the entire interview if really good, and crap like this IBM rumor indicates that he's got a point.
That's interesting...Ben Horowitz said he suffered the same types of attacks from hedge funds; they'd spread a false rumor and because he was under some type of regulatory restriction, he couldn't correct the record unless he simultaneously updated all his institutional investors at the same time. He had to let the rumors ride out...and he only had a 90-100 million market cap. Somebody has to reign in these useless zero-sum fucks.
Ben is not a dumb guy. I may be dulling out some of the details, but Im sure it was not that simple. Especially since it was about 7 years before the advent of twitter and involved SEC regulatory compliance.
He's long had some sort of issue with IBM, I'm not sure what the source of it is, but regularly he publishes sensational articles about them with little or no basis in reality.
It this is far enough off base to warrant their response, I'd say the only way he'd gain any credibility is to list his sources and also make his investments clear. Is he buying puts on ibm?
What it looks like to me is that he heard a rumor about some cuts, not unusual and it sounds accurate. He elaborated it into a gigantic story of his creation. I expect better from Forbes.
I'm not predicting doom, i'm predicting that given their revenue is dropping for the past 11 quarters, and they can't they will cut the number of people to match the size of the market in most places, since they don't believe they can grow those markets.
They don't need 400k people if their future is providing cloud and cloud services, and not tons and tons of services contracts in every walk of life
etc
Given they've taken restructuring charges between 600 million and 1.5 billion the past few years (which is about 7000-20000 people a year), why do you think they are going to magically reverse course?
IBM has re-invented itself more times than you remember. They did it when mini computers came along, when the PC hit (an own goal if there ever was one), they did it when the Internet came of age (and when everybody else was still playing catch-up or even ignoring it) and I'm pretty sure they'll be able to survive the transition to the next phase of things (the cloud or whatever is fashionable). IBM is about as stable as they come, they do IT in whatever form it comes. When it was big iron they rolled their own hardware and software to go with it, now it is Linux, so they'll do Linux (on mainframes if you want it), if that changes, they'll change again.
I'd write off a lot of companies long before I'd write off IBM and while they're laying off in one set of divisions they're hiring in others.
So they're not 'magically' going to reverse course, they are gradually going to change course, like they've always done (and like every other supertanker does, move too fast and you'll break things for real, this is not a start-up).
Each and every one of those changes was heralded as 'the end of IBM'. They definitely messed up during the OS wars, I'll give you that but for the most part they rode the waves better than just about any other tech company that has been around this long. Rumors of IBMs imminent demise are most likely vastly exaggerated and any prediction of lay-offs should be henceforth accompanied by some evidence or I'll simply not buy them any more, especially when they entail 100K+ lots of employees.
How are Sperry, Control Data, Data General, Burroughs, SGI, Cray, DEC and a whole slew of others doing these days?
In its pursuit of EPS, IBM has lost its rank and file within the USA. Morale is pretty low. When I left in 2014, "resource actions" were a weekly discussion topic. In Software Group. On a very profitable product.
Layoffs have been happening yearly from when I was an intern in 2007 until I quit IBM about a year ago. IBM stopped publishing its US employment counts for this very reason.
I can't agree more. IBM is so old it says something. But .. what's there for them in the future ? I don't know how much money they get from consultancy, or their mainframe/big-customers. Maybe the trends don't really matter in IBM's case. But when I see proliferation of tiny yet capable computing devices, self-driving cars, wearables etc etc I hope that IBM didn't leak all their hardware R&D talents out by aiming at services (subjective anecdatum: I wouldn't regret their software design / appserver for a second)
Apple has failed itself more times than you remember. They did it with the Lisa, they did it when they tried to launch a PDA (Newton), and I'm pretty sure they'll crash and burn when they try to release an MP3 player or a smartphone. Apple is as volatile as they come. When it was business computing, they made the Apple III, and when it was USB, they made a mouse.
Good example, thanks! Apple in fact did nearly crash and burn and all that kept them alive at some point was a hand-out from Microsoft.
And from a utility point of view: if all the apple hardware in the world would disappear tomorrow we'd get on just fine, but if all the IBM hardware (and software) would disappear tomorrow the world would grind to a very swift halt and it would be quite a while before we could say we're past the worst.
Microsoft's investment was too small to save Apple at that time, their revenue and losses were in the billions. The $150 million was symbolic, the more important thing was their commitment to the platform.
This article says that the investment was actually a result of a legal settlement.
It's not the end of Feb yet so how do you know he isn't right? Also there is still a chance they plan to get rid of a large number but are avoiding the negative PR but staggering it.
I agree that it's unlikely. Even if they would want to get rid of that number of people it would take years. Plus you would think they would try to sell off a part of the business instead of laying off so many people and paying out severance.
I feel lucky like yourself of being in one of the divisions with massive growth.
I don't think people appreciate the size and breadth of IT IBM does, my "tiny" division of security if an independent company would be the 3rd biggest Security vendor in the market.
I wonder if IBM would change their plan based on this leaking. If he really had this totally and completely wrong, then of course that is very irresponsible of him to say.
I don't see how you can stop listening to Cringely altogether though. They did abandon their $20/share EPS plan, which was a pretty epic change. The claims about global services having <50% college grads servicing IBM clients from india is also pretty damning for the company.
I would like to see IBM do well, it makes me angry to see big companies squander their history and abuse their people.
Something like laying off 25% of the company is as drastic a measure as you can ever take other than closing up shop. If they were thinking about it, they were not thinking about it lightly. They certainly wouldn't change their mind just because the news leaked.
????
IBM is highly likely to have to lay off that many given the dryup of various markets.
When HP splits, it's likely they'll do the same.
This is just the way the services market is going.
As for whether they'd change, uh, people like their current CEO definitely change their mind based on the way the wind is blowing, and how much crap will hit the fan.
Have you ever thought about the logistics that go into planning a layoff of 25% of the workforce? In order to get the list of who stays and who goes there is a lot of work involved. Many of the people involved in that work end up on the list to get laid off. It's terrible for morale. Once you've gone down that road, you aren't turning back just because someone found out 2 weeks ahead of time.
I am suspect that IBM would layoff so many at once even if it were their intention to reorganize. The negative press involved with such a huge record breaking layoff would just add insult to injury. It would be much more likely to be 100,000+ over a length of time.
Regardless I am sorry for the terror that this week must be based on this potentially unethical news article.
Note that his wikipedia article says he finally figured out "[A] new fact has now become painfully clear to me: you don't say you have the Ph.D. unless you really have the Ph.D."
It would be naive to think IBM upper management didn't run simulations of letting go 100,000 employees in order to optimize profits or focus operations . Letting go not in the sense of actually firing people but also by selling divisions or splitting up the company. It doesn't mean they will do it (right away), but it's not as ridiculous as you would like it to be. One thing's for sure: more than 11 consecutive quarters revenue losses will have a drastic effect on the workforce of IBM.
My guess is that he turns "possible strategic plan for 110k layoffs over the next five years starting in January 2015" into "110k layoffs in January 2015."
I've known more than a few IBMers over the years associated with IBM Almaden and other places. Many of those on contract/part time/etc, kept their heads down. Many full timers, the same thing.
Cringley may or may not be right on the magnitude of the numbers, but the one thing he is right about is IBM is purely governed by pleasing Wall Street above all else.
The IBM that existed when I was growing up and seeded more than a couple of the early founding staff of the UC Santa Cruz Computer Engineering staff (Patrick Mantey and Glen Langdon -- my advisor to name two), is WAY different than the IBM of today.
IBM is a shadow of itself, there are still interesting groups, but even the research arms are being hit hard by genuflecting to wall street.
I think IBM should stop selling the ultra crap software that is selling right now like Websphere commerce and all the crappy enterprisey stuff. They really need something good to change and if layoffs are for the better, it's probably worth trying. If the plan is to keep this stuff going, it's gonna be bad.
That's not really a solution to anything. Websphere is used and essential to lots of companies. They might hate the software but they'd hate hearing it being end-of-life'd even more.
With a company of IBM's size, there's no need to move people from Webpshere to some other project. You can shake out a few dozen engineers from anywhere without their managers even noticing.
Firing a few thousand bureaucrats would go a longer way toward improving product quality than ending product lines.
Yes the most interesting revelation in Cringely's rumor was that IBM made software.
Let's be honest: An big IT product is about 25 programmers and 25 diverse people (incl marketers, designers, accountants) working for 3-10 years. With this you make a GitHub, a Word, an IE. IBM could be owning the planet today. But no, they're in the business of hotels, golf, and conferences.
I wasn't commenting on IBM's methods - although I think attributing the entirety of their profit to scammery is extremely far-fetched - but on the choice of market. My comment was simply to point out that I don't think there's any shame in targeting boring market segments, and that there's clearly plenty of money to be made.
> Before you say I'm wrong again, no this Excel-in-js isn't isofunctional. It's just what the customer needs.
isofunctionality is implied by saying you could make 'a Word'. I wouldn't dream of disputing that you could make a word processor that offers some limited subset of Word's functionality with a small team - but that's not making a Word-class product, it's making a simple word processor.
I agree we can't reproduce Microsoft Word with isofunctionality with 25 people (obviously). I agree my past comment made it sound like that.
I currently feel negatively from the readers, so I'm testing that again: I've written a comment below with figures and sources to back my claims - See comment https://news.ycombinator.com/item?id=8956544
I think you have an incredibly short-sighted view of the difficulties associated with software engineering. In particular, your view of how hard it is to write large pieces of software seems to be way, way off.
Please provide your own estimates on how many people are required to make great software. Not talking about Word in particular.
I've worked in large companies, now I make a living off my own company, so I must know something about software teams, complexity and feature creep. I didn't provide these estimates in the void.
Let's take public figures I can talk about: According to Wikipedia [1], Atlassian has 1148 employees and 20 products. It's 57 employees by product. BUT Atlassian also grew by 44% in 2014, [1] and recruits intensively, so we can estimate that they had 797 employees in 2013. If correct, it means the products they have now have been built by 40ppl on average, including support people, accountants and marketing. Sorry I know some products are bigger than others and I can't talk about those specifics.
And Atlassian does make world-class products which certainly compete with IBM. Please downvote if you prefer IBM ClearQuest to Atlassian JIRA.
I apologize for making an unbounded claim. It was unprecise because I didn't want to be specific about previous workplaces I've worked at. I have felt a shred of hatred from the HN community in the present situation, with the downvotes and negative comments.
Internet Explorer 3 had 100 people and IE5 a thousand [4], which is superior to the figure I was once told, which was 25 people for the development team. I had never been surprised by that low number because complexity grows exponentially and brings problems. I admit downvoters were right that Word didn't take 25 people to build, because of course everyone knows Microsoft has 128k employees [6].
GitHub is 255 employees[3] - Half of which for Enterprise [unbounded claim] and they weren't so many when they got famous. Git itself has had 100 developers over its history [5]; If they were employees, they wouldn't have been simultaneous employees.
So let's change my proposal: Who thinks world-class products are built by rather medium teams (<100 employees) in a few years (about 3 years)? Who has estimates for well-known products?
I work on a product that's pulled in >$2bn in revenue over the last 20 years. All with an average of 25 developers working on it. It's still going strong.
The correction is coming, and companies are starting to lay off people (like EBay doing "restructuring"). Some companies do global office "optimization" - i.e. completely closing offices in some countries/locations. Given that IBM commented on such a "baseless and ridiculous" claim puts a lot of foundation under it. Obviously not all the 100K at once. After all laying off people in Germany is completely different process than in CA. The fact that they point to open listings just shows that a lot of it will be sold under the sauce of "rebalancing" - lets layoff 10K there and hire the "best" 1K of them here. I've seen that an another legendary SV company (some of its former offices are occupied nowadays by a very "Like"-able company) I think IBM has big plan to close some regional offices, downsize/close some projects and to spin off some pieces with resulting IBM headcount expected being 100K less than today.
> The correction is coming, and companies are starting to lay off people.
In the last 3 companies I have worked for over 10 years this seems to happen every 6 to 12 months. Restructuring or right-sizing as HR love to call it is a fairly standard thing these days as companies search for optimal profitability. Every company I have worked for preaches employee loyalty in their mantra but I've never really seen it.
Cringely definitely tends to... exaggerate but I have to say, getting IBM to even ballpark the number of people they're cutting is quite a feat. Remember this is the company that doesn't break down its head count for "competitive reasons" and prefers to stagger cuts so they don't trigger WARN in various jurisdictions.
Not sure of the original source, but a meme I've been seeing around the Internets lately goes something like
"The best way to get an answer to a question on the Internet, is not to ask the question, but to give a wrong answer and wait for people to correct you."
I'm not sure whether this was is what Cringely was up to, but if it was, well played indeed.
Trying to wrap my mind around the number -- 6 employees per 100,000 people worldwide is equal or higher than the number of physicians per 100,000 in Benin, Ethiopia, Niger, Burkina Faso, Central Africa Republic, Chad, Malawi, Mozambique, Papua New Guinea, Rwanda, Senegal, Sierra Leone, Somalia, Tanzania, Togo and Zimbabwe.
Very surprising given how easy it is to become a doctor, relative to getting hired by IBM. Combined with how appealing it is to live in those places, I too share your mind-wrapping-around-difficulty.
Project Chrome? It's hard to fathom that a tech company would name their layoff program after a competitor's technology. That just strains credulity. If that part is true, it's a sign of bad things in the company.
First off, it's just a name, not really a big deal nor would it really be a sign of anything. Secondly, if your requirement is "not a competitor's technology" then practically every single word would be excluded because it would have been used, at some point or another, by one of the hundreds of thousands of competitors IBM has and has had.
For context see previous discussion on the 110000 employee layoff that won't happen: https://news.ycombinator.com/item?id=8944637