Summer Layoffs and 'Redundancies' (Cost-Cutting) at Microsoft and IBM
As a quick roundup, there are silent layoffs happening at Microsoft and IBM. Some of them come about in the form of a PIP with NDA, Microsoft has LITE. The media shies away from it, WARN notices capture none of that, but it's clear that Microsoft still has layoffs this month and in some cases entire operations get scuttled.
At IBM, more buildings will be shut down, many people are discarded (15% are already marked as "low performers" awaiting a PIP), and hours ago someone asked: "What after PIP"?
He or she said: "I wanted to know this from people who worked for IBM India. What happens when you pip ends? I was put in pip few days back and I know for me there was no way to clear the pip. As it was already communicated to me. So I wanted to understand when my 3 months pip ends what will happen then? Will I be asked to immediately submit my resignation or there is something else. If i will be asked to immediately submit the resignation so what about the notice of 3 months that they ask us to serve when in normal circumstances we want to leave. Shouldn’t that also be in the case of PIP? If they ask me to resign immediately shall I ask for 3 months of pay?
The consensus among the responses (or insiders/respondents) is that PIP alone is a death knell, it is hardly survivable at IBM in 2026:
"At the end of the day," somebody wrote elsewhere, "these decisions aren’t improving IBM’s products they’re actively making them worse. And whoever even suggests they are is a mo--n, Albany leadership continues to prove, time and time again, that they’re completely out of their depth, making decisions that expose just how little they understand the business, the technology, logistics or what it actually takes to deliver. They talk a huge game but when rubber hits the road they pull sh-t like this. They have grossly lost the plot line for sometime now."
"They should seriously just consider shutting down this monumentally expensive site," someone responded. "The place has evolved into an extraordinarily expensive resource sink with increasingly questionable returns. Calling it a “cost center” almost feels charitable and it is not delivering enough value to justify its existence."
"If you exclude recent acquisitions like Red Hat, Hashi, Apptio and Confluent," someone said, "then 90% of that SW is mainframe software. There really hasn't been any organic SW development at IBM since the late 1990s."
There's expectation of a possible shuffle at the top: "Executive management needs to be looking over their shoulder. I’m sure RT [Rob Thomas] has blown his chance at CEO due to the 2nd q miss and the CFO and CEO are skating on some pretty thin ice. What makes me say this? The sales re-org. You don’t re-org a sales team 1/2 way thru a year especially when the sales cycles are multiple years long. A re-org implies that upper managements has zero trust in the sales teams and the relationships those sales teams have been reporting on. Remember 80% of a quarter is made day one of any quarter due to ELA’s and upgrades. To have a miss says your sales teams are not in touch with their customers and the board needs to hold the entire sales organization to the same standard. Maybe losing 70 billion in one day has gotten the boards attention to sales execution" (or pretence thereof).
Microsoft appears to be operating at a loss. IBM is merely buying its revenue - an unsustainable strategy that aims to hide the company's rapid decline and salary cuts. █
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