Churn, Baby, Churn: IBM Added 70,000 Employees in 2015 - And Lost That Many, Too

Shareholders - and surviving employees - can only hope that all this activity and resource expenditure actually leads to value creation. JL

Julie Bort reports in Business Insider:

IBM has spent more on acquisitions in the last 12 months than it has at any other 12-month period in its history. IBM bought 14 companies in 2015, and already bought three more in 2016. IBM is still also cutting. It only talks only about "resource actions" or "workforce rebalancing" in terms of the amount of money it spends on them: $587 million on such things in 2015 (and nearly $1.5 billion in 2014).
IBM CEO Ginni Rometty wants you to know that IBM is hiring. And not just anybody, Rometty told attendees of IBM's annual shareholders meeting on Thursday.
IBM is very particular in hiring for the hot new skills where IBM is expanding like machine learning, big data, mobile, and security.
"When you look at the number of applicants, we're more selective than MIT," she joked.
All told, IBM added 70,000 IBMers to its payroll in 2015, she said, albeit many of them came in through acquisitions.
IBM has spent more on acquisitions in the last 12 months than it has at any other 12-month period in its history, she said. IBM bought 14 companies in 2015, and she's already bought three more in 2016.
What she didn't mention is that IBM is still also cutting.
Even with adding 70,000 people to IBM's payroll in 2015, IBM actually ended the year with slightly lower headcount than when it started, according to an SEC filing.
IBM's global headcount ended 2015 at 377,757 full time employees, vs. 379,592 in 2014 (down less than 1%). Headcount grew a little over 1% in IBM's less-than-wholly owned subsidiaries to 9,577 people. And it's contract work force stayed virtually the same, at 24,464 people.
In other words, since IBM added 70,000 people, it also has lost about that many. Some of that was attrition, people who quit. And several thousand were dropped from the sale of businesses. For instance, IBM divested its microchip business, and shed over 5,000 employees that way.
But big, rolling layoffs have happened over the past two years, particularly in IBM's consulting unit, Global Business Services, CFO Martin Schroeter said.
GBS hired 30,000 people in the last two years, Schroeter said. As its headcount stayed fairly stable, that means it also lost 30,000 workers, again, some through attrition, some by selling off a big business unit, some by shifting to more contract workers. IBM also moved 6% of its consultants offshore in the past two years. It's hard to know what that total number is but IBM said it has about 120,000+ employees in GBS.
Business InsiderIBM CFO Martin Schroeter and CEO Ginni Rometty
IBM is always very careful when talking about its global headcount, which has been going through major shifts for years.
It won't say many people it lays off each year, or how old they are or in what areas they work. It only talks only about "resource actions" or "workforce rebalancing" in terms of the total amount of money it spends on them. It spent $587 million on such things in 2015 (and nearly $1.5 billion in 2014), it said.
And CFO Martin Schroeter says that such shifts (including hiring people, retraining existing employees, and laying them off), isn't over yet.
"We've been shifting resources aggressively," Schroeter said at the investor meeting. "and we'd like to shift them more aggressively."
What holds IBM back, particularly in the consulting unit, is that some of these people are on long-term contracts serving customers, he said.
So, as Rometty evangelizes her vision for turning IBM into a cloud computing, big data/machine-learning giant, underlying it all, are these ongoing changes to its workforce.