IBM (NYSE: IBM) turned in a remarkable fourth quarter earnings report and forecast 2009 would be even better. The market pushed its stock up on the assumption that the big tech company would be one of the few to dodge the recession. It made some sense. IBM has large hardware, software, service, and consulting businesses. It also does business in almost every country in the world. All of that makes for a large and unshakable foundation.
So, why is IBM laying people off and keeping the news a "secret"?
According to The Wall Street Journal, "International Business Machines Corp. employees have informed Alliance-at-IBM, an affiliate of the Communication Workers of America, that workers at a number of locations have been told their jobs are being eliminated."
The news may be unsettling because IBM is doing so well, but the actions by the company are a sign of why the company does so well. IBM is a brutal cost cutter. It is part of the culture of the current management to keep expenses as low as possible. Even when times are fairly good, executives at IBM think nothing of moving facilities and jobs to countries where labor is inexpensive and the populations are well-educated.
IBM may not want to talk about letting people go, but in many ways, it is why investors have had such a good ride in the stock.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
1-22-2009 @ 10:19AM
Michael said...
I have some family that work for IBM that told me there were big layoffs coming very soon.
1-22-2009 @ 10:35AM
Kent said...
IBM undoubtedly is a force to be reckon with over the years. I believe their actions and decisions have significantly affected local, if not nationally, economies due to their size and financial clout. As the writer states, they have no compunction to move manpower requirements around the world at will at the drop of the hat. I remember in the very early 80's while working in Tokyo, IBM moved their HQs from Hong Kong to Tokyo that drove up foreign housing rentals 3 - fold within months. I believe this started the property boom that got Japan into trouble when the bubble burst in 1990. IBM subsequently moved their HQs again back to HK soon after.
1-22-2009 @ 10:35AM
nick said...
If you want the stockholders to stay with a company, the company has to fire the deadwood. We can't run a company like obama wants. His motto is what can you get from the company and your country, not what you can do to improve your company or country. This guy is trying to make the folks more dependent on him and the dummy crats, the plan is simple. It doesn't take a rocket whiz to figure out what to do to fix this country. First we have to have a massive freeze on all rpt all spending. Number 2 we need the banks to offer 5 or 6 on CD'S and Money Markets, their would be money pouring into the banks. Number 3 these make work projects need to be stopped, this is a bunch of bull that is bringing down this country. Number 4 we need more oversight of companys and need to be putting people on boards that know something, not just names like Powell who are raping these companys, the guy has no clue about the companys he sets his ass on and collects millions each year. We need a rule put in, if your company does not make a profit you get no extra money, and your pay for the next year is cut 20 per cent. The Wall Street thugs are being treated like ball players who make millions for having a bad year, give us a break. We got people like Couric and Crammer, Kudlow getting rich running their mouth and readjing a telpromter, give us a break.
1-22-2009 @ 12:33PM
BHarrison said...
The American people have some hard and difficult decisons to make if they want to revitalize our country.
We will have to "sacrifice" some "savings" by "buying Made in the USA". That is the only way to help our fellow citizens and our nation in general, which helps us (and our children and grandchildren) in the future. We need tarrifs on foreign made products to provide a reasonably competitive market for our manufacturers.
One only needs to look at the escalating thousands and thousands of unemployed on a weekly basis to see the need for such tarrifs. We are experiencing the impact of the "One Worlders" commerce system.
An undeniable problem is that we have already provided the tools and planted the seeds of competition from manufacturing and services in third world countries . . . in essence, we've given our wealth and our means for creating wealth away. That is a "done deal".
Now we are seeing the TRUE IMPACT of NAFTA and the other trade agreements that have undermined our manufacturing and services . . . and our economy, and even our economic structures. The American people are paying the price for their indifference and apathy to MANY DECADES of this type of "politics".
We've continued to re-elect those old dog Congressmen and politicians who have "sold out" our national interests to fatten their incomes and political power. The only "true recovery" can only be accomplished by purging our Congress and our politicians of these thoroughly CORRUPT individuals. Just look at what THEY have done to our nation . . . to the MILLIONS of Americans who are becoming unemployed and in danger of losing their homes, etc.
As long as the American people continue to elect the likes of Barney Frank, Ms Pelosi, Mr. Reid, Mel Martinez, Mr. Dodd, etc., NOTHING WILL CHANGE SIGNIFICANTLY. Both the RNC and DNC are controlled behind the scenes by the special interests groups. As long as this exists, then we will not be able to have good reform politicians. Currently all we have are "front men" for the special interests.
Nothing is going to change significantly UNTIL the American people STOP listening to the "30 second sound bytes" of propaganda and start demanding full disclosure and voting for "good men" (if they can run for office). Everything is too corrupted and too controlled by the special interests groups.
The political parties pervert the American people's votes with things like the "hanging chad issue", "super delegates" to the nomination/electoral college groups . . . they appear to be attempting to "build in 'flaws' in the voting system to provide them with means for manipulating the outcome of elections to suit THEIR PURPOSES.
Meanwhile the apathetic, and duped American citizens do nothing . . . except experience the fallout from all of this corruption. Why would ANYONE vote for ANY incumbent politician who has not done an exception job in office. The media's scurrilous personal attacks against almost any candidate makes it almost impossible for any "good person" to run for political office.
"The people" keep re-electing the likes of Barney Frank, Ms Pelosi, etc. . . . are these people TOTAL FOOLS or what?
1-30-2009 @ 12:48AM
ctamta said...
bharrison
you might want to add W and Chaney to your fools list -
and add yourself while you are at it