When IBM "Managers Have to Mark 15% of Their Teams as Low Performers" a PIP Means Likely Layoffs (Disguised as a Performance Issue)

posted by Roy Schestowitz on Jul 27, 2026

For the many people out there who have never heard of "PIPs" before, let's quickly explain that their main aim is to hide layoffs and to avoid paying dismissed staff severance (which they're otherwise legally entitled to). In the UK, the term "gross incompetence" is commonly used to achieve this. "PIP" sounds better. Sometimes it also is a bit better, depending on the company and other contextual details. The term "PIP" is not always used; in the EPO, the term "PIP" gets used. The letters in the acronym are not always the same, just similar. As noted last night, IBM insiders report that PIPs have been taken up another notch after IBM's stock cratered. It cratered due to the company's performance issues (i.e. the management being shoddy), not due to any employer's individual performance.

As somebody put it some hours ago: "This is how it works in software: Managers have to mark 15% of their teams as low performers, with an exit target of 5%, this means that 67% will pass the pip and 33 will fail. This is simply a way to layoff 5% of the workforce disguised as performance management. Most ppl end unfairly on these list because the percentages are not negotiable, the ones to be saved will pass the pip, the ones to be sacked will be terminated regardless of the actual outcome (managers can use any excuse to fail them), so the 73% is simply by design not a proof that PIPs work."

We covered that "15%" figure; it's not made up, this is what happens at IBM. Someone then decided to go for a little poetry with "The Automated Exit":

The Ghost in the Machine *

The ledger bleeds in massive bytes,
Through failed Q2 tech-panic nights.
A twenty-five percent collapse,
While Arvind redraws funding maps.
"We faltered," sighs the titan’s head,
While sending thousands out to shred.

The Thirty-Eight Million Dollar Man *

For thirty-eight million in the bag,
He flies a shredded, sinking flag.
A fifty-one percent reward
Approved by an obedient board,
To watch the legacy decay
And blame the market's shifting play.
The core consulting practice stalls,
The mainframes rust inside the walls.
But executive options still vest fine,
Safe from the plummeting design.
The top tier drinks its silver wine,
While common shares fall past the line.

The Automated Exit *

The pink slips fly to cut the weight,
An artificial, automated fate.
"Resource Action" is the slick term used
For loyal veterans abused.
They purge the senior engineering crews
To pay for bad strategic views.
Then triple junior hiring slots
To manage underperforming bots.
The code is broken, servers slow,
But the golden parachute will grow.
A tech empire turned into dust,
Managed by hollow, greedy trust.

There was more poetry in the former thread, speaking of "notice of low performer" (prelude to a pink slip):

The corporate offices of Albany shook,
They hired a clever Piper to take a look

He piped a tune of success and growth,
To end the spiral down the hillock.

The Piper then cut the bell curve,
Asking to serve, serve and serve.

The staff went down the river of grind,
And left their morale far behind.

Next came the notice of low performer,
The Piper cashed out to be a reformer

We're also seeing some replies to the IBM puff pieces that try to externalise the blame and protect IBM's CEO.

"Nothing to do with AI or any of the other excuses," somebody wrote. "Arvind sold Wall St the "we're a Big Tech company like the Mag 7 and should be valued like them" narrative. That narrative demands real growth. Reality is IBM is the same old mainframe and consulting company it's been for the last 25 years. The growth of the last year or so was just from the Z17 cycle, same as it ever was. Z cycle is winding down, growth evaporates, and with it the "value us like Google or Amazon" story."

"A company doesn't become a tech powerhouse by preparing powerpoint slides," another person argued. "IBM should stop claiming to be a tech company and identify itself more like a Private Equity firm - There is no real development, ask anybody who has tried to get the budget for product development, it is one acquisition after the other, and chocking any R&D spend to accelerate the talent into oblivion. Whenever there is a news like IBM is going to invest billions in a new technology, it is a given that money will be spent in acquisition. The decision to buy rather than build always prevails." The latest comment said: "IBM is a Law firm with an I/T department."

We heard this from the late Dan (famous journalist) who argued that IBM is (or was at the time) just a giant platoon of lawyers that can also produce some computer stuff (or services).

IBM is notorious for its legal team in the context of patents, sometimes copyrights and trademarks as well. █