IBM to sell off managed infrastructure services and reduce revenue and headcount by 1/3
In a move straight from the HP playbook... 90k employees and $20B in business being spin off in 2021. This accounts for 1/3 of IBM’s headcount and revenue. RIP. https://newsroom.ibm.com/2020-10-08-IBM-To-Accelerate-Hybrid-Cloud-Growth-Strategy-And-Execute-Spin-Off-Of-Market-Leading-Managed-Infrastructure-Services-Unit
IBM News Room
What about GBS? Will it remain part of IBM?
It’s not mentioned. This only impacts GTS IS division.
Time to finally cut the fat
This is a really smart move
People in ibm garage focusing on cloud will have somewhat of advantage with this move.
GBS will be sold to HCL or Wipro..
It’s 1/4th rev and headcount not 1/3rd - 19B spun off, 2019 rev was 77B - which aligns with 1/4th employee count: 90K spun off, ~350K total. Or what did I miss? Edit: 1/4th seems aligned with what’s being reported in media too - https://www.cnn.com/2020/10/08/tech/ibm-hybrid-cloud/index.html
Which is why I specially asked what did I miss. Your response made no sense, rephrase or let someone else respond. Thanks.
From what I've heard: if GTS is within IBM, then revenue of a client by a mainframe with GTS is only recognized once. If it's sold to a separate company, and the company sells it to the client, revenue gets recognized by both IBM and NewCo. So IBM doesn't necessarily lose 1/4 revenue, and combined revenue will definitely go up... (Business tricks...
They do have a lot of boomers and fat to trim. Good move
I honestly don’t know what IBM does anymore. They haven’t been relevant in a long time.
They cut R&D and focused on services/consulting instead. It did wonders to their balance sheet but the lack of innovation has caught up with them.
Why RIP?
RIP to IBM. This is the first action in the playbook from the Bain report in 2018. GBS and Systems are next.
Thanks! I’ll check that out. Good to be in the know.