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IBM whacks 1,600 more services jobs

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IBM has shed another 1,573 jobs as part of an ongoing push to thin its services organization.

The layoffs, mostly in the US, follow a similar round of 1,300 cuts performed earlier this month. IBM described the firings as "business as usual" and noted that it hired 14,000 people worldwide during the first four months of this year. IBM closed 2006 with 355,000 staff - its highest total in 15 years.

Columnist Robert Cringely has put your contributions to public broadcasting to hard work over the past couple of weeks with a series of PBS columns suggesting that these services layoffs signal an armageddon scenario at IBM. According to Cringely, IBM will soon layoff its entire 130,000 person US workforce and then find another 20,000 people it doesn't even employ to layoff as well. We guess that's what the kids call "new math."

Cringely insists that the layoffs are part of an IBM covert op dubbed "LEAN." IBM, however, confirms that Lean is simply a Six Sigma business practices effort that has nothing to do with layoffs.

"Lean is a collection of Six Sigma business processes used by a number of leading companies to improve speed, quality and responsiveness to customers," IBM spokesman Ed Barbini told us.

Regular readers will know that we maintain a more than healthy amount of skepticism for company lines, but IBM Corporate has looked much closer to the reality bush of late than Cringely - a man who seems to want to scare himself into a bunker serviced by an Indian call center.

In a broader context, IBM is trying to redefine its services organization from an internal process point of view, while also changing the way outsiders see the services group.

Rivals have long poked fun at IBM for sucking money out of customers over decade-long "engagements." To counter this perception, IBM has spent the better part of 2007 discussing services efficiencies and how it plans to create better links between people and technology.

Robert Moffat, an EVP at Big Blue, described this shift during a recent investor meeting.

There’s significant and sustainable benefit from process re-design; simple, standard, global processes to improve workflows; be more responsive to clients and eliminate tasks that do not provide value.

Then you apply technology to process and infrastructure. Automate manual tasks and redeploy resources on value-add work. In the infrastructure, capitalize on virtualization or systems management from Tivioli and MRO; which lowers cost of computing, while improving resiliency and security.

Finally, with standard, global processes and a high degree of automation you have unprecedented flexibility to optimize capacity; deploy global capabilities in the most efficient and effective way.

Yeah, it sounds like a nebulous bunch of waffle to us too, but you get the sense that IBM is trying. ®

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