299,000 job cuts at IBM not as outrageous as it sounds?

I wrote a story last year following comments made by a senior IBM HR executive.

Tim Ringo head of IBM Human Capital Management, said that in the future IBM might have 299,000 less staff than it has now (399,000), but will still be able to do the same amount of business. He said the company would reduce permanent employees and use freelancers on a project by project basis.

This is a form of crowdsourcing.

It reduces the overheads related to in-house staff. Pensions and office space for example.
Two stories I have written this week made me think of this story.

The first story was about KPMG acquiring sourcing consultant Equaterra. In that article one of my contacts describes how consultancy on outsourcing contracts is increasingly being provided by independent consultants. If these independent consultants get a big job they can just bring in lots of consultants for that project. These solo consultants are able to compete with large consultancies.

Bindi Bhullar, director at Indian IT supplier HCL, says that individuals with the right contacts can set up consultancies. “One you have the methodology and processes there is nothing stopping individuals doing this.”

“It is about who you know.”

The second story is about the surging demand for certain IT skills in the UK SME is actually forcing freelance IT workers to recruit other freelancers to help them on projects.

So the advantage to these solo IT workers and outsourcing consultants is that they don’t have huge overheads and by working together can take on big projects and even compete with big suppliers.

Perhaps IBM’s plan is not as shocking as it seems. Maybe this is how the market is changing and IBM will be the first big supplier to get there.

This could benefit both the suppliers and the freelancers.


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If the next big thing is private companies doing away with permanent staff then it will be interesting to see how it plays out during a period when the UK government want to reduce costs by transitioning hundreds of thousands from the public sector to the private sector.

Who is going to employ poeple in western countries? Anyone? Or are we going to become the new third world? I think employers need to collectively understand that it is their own employees that buy each others goods and services. If they are put out to grass "to reduce costs" then they'll have no spending power and the consequence of that is that western companies will simply spiral into decline. I personally believe this process has already started.