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IBM Restructures Global Services

By: Dan Morrill

In a global restructuring that is going to impact workers here in the Seattle area, IBM Global Services is undergoing...

... a yearlong restructuring plan that is going to end up in major layoffs worldwide.

Not to take a provincial look at this, the restructure is not good for the workers, obviously, though it is something that IBM Thinks they need to do and something they are going to do.
As a big part of the effort, Big Blue will institute a series of changes in its operations, including planned layoffs of between 10,000 and 13,000 employees, the company said Wednesday. The brunt of those changes are planned for its European operations. The goal of the restructuring is to reduce bureaucracy, eliminating the need for a traditional pan-European management layer and creating small, more flexible teams that can work better across borders. Around the world, IBM plans to consolidate service work into fewer locations. Source:
European operations influence American operations, and while the use of contractors for work at Google and Microsoft is well known, the smaller companies like Volt/VMC and others that specialize in Break Fix will step in and perform those functions. The cost structures though do keep wages low, to keep the contracts competitive, and bidders will normally underbid each other to get the contract. The employees that are then hired for those contracts end up not making what they could make somewhere else.

On the flip side of that, some workers really do like being contractors and it is not all about money, these kind of positions also make great entry level positions, as well, some of the folks I know who were once full time employees went contractor just so that they could get their lives back.

The IBM layoff is going to help stagnate wages globally depending on the number of people laid off by area. Some areas where there is a high concentration of IBM Global Services employees will be hard pressed to absorb them, meaning more time on the dole and living on food stamps. Or finally moving on and doing something else.

The problem that we are noting is that company's fight over the top 10% of employees that are out there. There is nothing wrong with that, but the other 90% of employees that are living a healthy work life balance often find themselves on the list of people to cut unless they have pull in the organization.

Those 90% of employees end up in contract positions, or getting out of the business altogether because the industry has yet to fully stabilize. Combine that with unrealistic HR or departmental job descriptions, and always open until filled positions, the ability to find employment becomes either an ever downward spiral, or they land on their feet with some other company.

If you are thankful to have a job, any job, you are unlikely to rock the boat, unlikely to complain, and unlikely to excel, exceed or do anything innovative.

Therein lies the crux of the problem, unstable work force means that employees will not be empowered to drive change. Companies that can not drive change and be innovative will not succeed. Companies that take actions that lead to a destabilized workforce or localized work force polices that lead to market place flooding cannot hire that top 10% that everyone is fighting over.


View All Articles by Dan Morrill

About the Author:
Dan Morrill has been in the information security field for 18 years, both civilian and military, and is currently working on his Doctor of Management. Dan shares his insights on the important security issues of today through his blog, Managing Intellectual Property & IT Security, and is an active participant in the ITtoolbox blogging community.

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