Layoffs--Possibly Including Frank Soltis--at IBM Rochester

Published: November 17, 2008

by Timothy Prickett Morgan

According to a posting on the Midrange-L mailing list, where a lot of the AS/400 intelligentsia hang out to talk and gripe, IBM apparently had some layoffs at the Rochester, Minnesota, home of the AS/400 and its successors. And, if what long-time and staunch AS/400 enthusiast Neil Palmer said in the post is true, the chief architect of what used to be called the System i until last year is getting ready to leave the building.

I have tried repeatedly this week to get some kind details on the layoffs that Palmer refers to in one post, but thus far IBM has neither confirmed or denied the layoffs. Palmer says that employees at the Rochester facility were given pink slips on November 10, and that they have 30 days to find another job within Big Blue or they will be shown the door. He did not know numbers, but given the state of the economy, I would not be surprised to see a fairly large number let go. Particularly if IBM is going to start moving more and more server manufacturing to China, as I have suspected it would for quite some time.

More ominously, in a second posting at Midrange-L, Palmer says that one of the people who IBM will let go is none other than Frank Soltis, the architect of the System/38 and AS/400 and the man who was given the title of chief architect of its successor platforms but with not much more than a mandate to move to converged hardware, middleware, and now virtualization layers. IBM spokespeople were unable to confirm this as we went to press on Friday, but the departure of Soltis would not be much of a surprise. Money is power in this world, and in a decade the AS/400 has shrunk from a $4 billion or so systems business to maybe a little over $1 billion, not including tools and services. And while a lot of that $1 billion is still profit, and there are lots of services and other products that go into i shops, with the economy in the tank, IBM may very quickly have a lot of layoffs, not just in Rochester.

When the AS/400 celebrated its 20th birthday in June, Soltis was trotted out in a Webcast to fire up the troops, but as he reminded everyone, it is 30 years since the launch of the System/38, and that is a long time to do anything--even if you like doing it. And let's face it. Neither Soltis nor a slew of experts from Rochester have had much of a say in the architecture of the Power platform for the past several years, even if the resulting machinery is made in Rochester. And a lot of the bigwigs in the former AS/400, iSeries, and System i division now work for different parts of IBM (either Business Systems, Enterprise Systems, or Power Systems) and they are usually in cross-platform roles. There is not much of a place for an AS/400 advocate inside IBM. There is, however, lots of room outside of IBM for such a role. To what effect, it is hard to say. We all do our part in this AS/400 ecosystem. That's all I know for sure.

If there were layoffs on November 10, this is not the first ones IBM has had in Rochester this year. It would make it the fourth round of layoffs, if my reading of the Rochester Post-Bulletin is correct. Back on October 31, according to the paper, IBM let 10 full-time employees in Rochester and 35 contractors go, and an earlier report in the paper during the summer said that IBM had two earlier layoffs, which it called "micro-layoffs," back in July and June. IBM never did say how many full-time jobs were cut, but did say the June one involved a "handful" and the July one involved "less than a handful" according to the Post-Bulletin.

The Alliance IBM union-building effort at Big Blue based up in the Endicott, New York, factory where IBM was founded nine decades ago, hasn't heard of any layoffs yet, but did note that IBM cut 100 temporary employees from its Burlington, Vermont, chip plant in early November.

As 2008 started, IBM had approximately 4,400 full-time employees in the Rochester facility, more than 120,000 people across the United States, and well over 400,000 people globally.

These rumors don't always pan out, of course. In the late summer of 2007, I heard rumors that anywhere from 1,000 to 1,500 people had been let go in Rochester, something that IBM eventually and adamantly denied once it became clear that a lot of people were talking about it. The story I did last year went through the history of employment at IBM Rochester, as best as I could piece it together, so hit that link above if you want to see that. Suffice it to say that Rochester used to do a lot more and used to have a lot more employees, too. Then again, so did all of the server makers, most of whom contract out a lot of design, metal bending, and such these days.

No matter who wins the senate race in Minnesota, be it the upstart Democrat, Al Franken, or the incumbent Republican, Norm Coleman, you can bet there is going to be tremendous political pressure on Big Blue to keep jobs in the land of a thousand lakes. But IBM is under pressures that are far larger, and more global, and perhaps more significantly, is less interested in being known as a great employer than in making its profit targets by 2010. Targets that I think are utterly stupid it if means losing talent and markets. But what do I know? I've just been watching the computer biz for a mere 19 years--a punk by System/38 standards.

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