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IBM’s plan to replace thousands of roles with AI presently looks more like outsourcing jobs to India, at the expense of organizational competency.
That view of Big Blue was offered to The Register after our report on the IT giant’s latest layoffs, which resonated so strongly with several IBM employees that they contacted The Register with thoughts on the job cuts.
Our sources have asked not to be identified to protect their ongoing relationships with Big Blue. Suffice to say they were or are employed as senior technologists in business units that span multiple locations and were privy to company communications: These are not views from the narrow entrance to a single cubicle.
We’re going to refer to three by the pseudonyms Alex, Blake, and Casey.
“I always make this joke about IBM,” said Alex. “It is: ‘IBM doesn’t want people to work for them.’ Every six months or so they are doing rounds of [Resource Actions – IBM-speak for layoffs] or forcing folks into impossible moves, which result in separation.”
That’s consistent with CEO Arvind Krishna’s commitment last year to replace around 7,800 jobs with AI.
But our sources say Krishna’s plan is on shaky ground: IBM’s AI isn’t up to the job of replacing people, and some of the people who could fix that have been let go.
Alex observed that over the past four years, IBM management has constantly pushed for automation and the use of AI.
“With AI tools writing that code for us … why pay for senior-level staff when you can promote a youngster who doesn’t really know any better at a much lower price?” he said. “Plus, once you have a seasoned programmer write code that is by law the company’s IP and it is fed into an AI library, it basically learns it and the author is no longer needed.”
But our sources tell us that scenario has yet to be realized inside IBM.
The truth is that Watsonx isn’t even available to employees. It’s so far behind OpenAI and ChatGPT
“The whole outsourced to AI thing is a myth that somehow our upper echelon of execs believes exists right now,” Casey told The Register. “The truth is that Watsonx [IBM’s generative AI offering] isn’t even available to employees to attempt to try and help automate some meaningless task. It’s so far behind OpenAI and ChatGPT that it’s not even close.”
“A WatsonX chatbot is years behind ChatGPT,” Blake said. “Its web interface was horribly broken to the point of being unusable until July 2024, and no one in the entire organization uses it.”
“Watsonx Code Assistant technically knows PHP, but it is very inferior to GitHub Copilot,” Blake told The Register. “Still, it’s better than nothing. The CEO keeps imploring developers to use it. No one does, except maybe one or two people.”
Big Blue’s developers have little experience with other code assistants, or even ChatGPT, thanks to an internal ban on using externally sourced LLMs, Blake added. He rated IBM developers’ knowledge of LLMs as likely “substantially less than at other major tech firms.”
We’re told that in IBM Cloud Legacy (formerly SoftLayer), only around one percent of developers who work on the product deal with AI and LLMs.
Hollowed out
Yet by getting rid of experienced technical staff, IBM is making itself dependent on the very technology that eludes it.
Blake argues that IBM’s focus on cutting experienced senior staff – those who are well-paid and close to retirement – is an act of self-harm because fewer developers, in his experience, are entering the job market.
“Senior software engineers stopped being developed in the US around 2012,” Blake said. “That’s the real story. No country on Earth is producing new coders faster than old ones retire. India and Brazil were the last countries and both stopped growing new devs circa 2023. China stopped growing new devs in 2020.”
Blake pointed to Stack Overflow’s developer survey data to support the contention that the average age of software developers is rising and the proportion of those with junior-level experience (zero to four years) is shrinking. That’s a concern in the open source community too. Tech companies slowing down hiring, and laying tens of thousands off in the US, isn’t helping grow the number of coders, either.
“If it weren’t for LLMs, there would be a serious lack of programmers in the next five years as Gen Xers started retiring,” said Blake. “I had planned on coding ’til the day I died, but now I think I’ll be talking to LLMs primarily instead.”
But at IBM, he fears the LLMs aren’t ready to pick up the slack.
Casey told us that accessing automation tools is also hard. He recounted asking other teams for their scripts. Code was finally provided, but it was still necessary to open tickets manually in the workflow platform ServiceNow.
Ancient code and offshore angst
Some of IBM’s infrastructure is not in great shape, Casey told us.
“Our network firmware code is so out of date. We’re talking stuff that was [end-of-life] in 2020, that even the vendors have stopped supporting,” he said. “There were lots of meetings between the way-higher-ups and Cisco, Arista and Juniper. I don’t know what deals were made but the vendors ended up providing full support for code that was EOL. The whole network is basically hung together by duct tape and hope.”
IBM tried to keep things ticking over by hiring network engineering contractors in India, but that didn’t pan out, we’re told.
The whole network is basically hung together by duct tape and hope
The contractors were supposed to handle basic network maintenance tasks so the senior engineers would be free to work on more impactful projects like upgrading firmware across datacenters. But the contractors were bad and were let go around eighteen months back.
“Since then they have not hired anyone,” said Casey, noting that six years went by without a US-based full-time engineer being hired. “But they continued to cut staff yearly. Even as management begged them that we couldn’t lose any more people.”
We’re told US-based network engineering staff will be reduced to two or three employees per shift during US business hours, representing a 33 percent loss of staff per shift. That’s monitoring and maintaining all of IBM’s global datacenters. The EMEA and APAC teams remain at full strength – at least on the networking team – with five to eight workers on each shift.
Workers in the situations faced by Alex, Blake, and Casey are unlikely to be in the mood to offer a rosy view of their employer.
But at IBM, forming a rosy view may be even harder because Krishna’s stated plan to replace people with AI appears not to have had the desired impact.
IBM told The Register that despite taking a $400 million workforce rebalancing charge reflecting the loss of “a very low single digit percentage of IBM’s global workforce,” the company still expects to end the year “at roughly the same level of employment as we entered with.”
In the opinion of the IBMers we spoke with, it’s not AI replacing jobs but cheaper employees who join an org that can’t walk the talk and doesn’t have the tech or the plan to turn things around. ®
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