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.
