BREAKING: IBM CEO, Arvind Krishna, on an ALL-STAFF CALL going on the defense in response to insider tapes released by OMG. Krishna calls me a “journalist,” tells his entire staff not to react to the leaked recording, defends his discriminatory hiring practices, and defends his decision to stop advertising on X.
The CEO is telling his staff not to react — as they they leak recordings of his reactions!
On a Twitter spaces tonight half a dozen IBM insiders spoke out, and 100+ IBM employees have contacted us.
This is truly remarkable and unprecedented. “Whistleblowing in numbers” maybe the the future…
Here’s the full transcript of that recording of the CEO on his all-hands call today.
Transcript:
(This is) the last office hours of this year.
Look, I want to start by addressing something that has occupied a certain, I’ll use the word small media firestorm, maybe large media firestorm on X. And that is a piece of news by a journalist called, I think, James O’Keefe.
And he published a video of an internal town hall, I think from June of ’21, that I did at Red Hat.
And the firestorm is around a set of topics that are asserting, though the language is more, I’ll call it deterministic, but it’s asserting that what we did is illegal and we are doing discrimination.
So let me just give some context.
We, IBM, did pull advertising from X about a month ago. We have actually no position. X can do whatever it wants to do, whatever it wants to do around free speech, promoting political opinions, I think, and really fundamentally believe it is up to X and their management and their ownership.
We have no view on it, positive, negative or anything.
What we do not want is that our ads on X are next to content that we find objectionable.
By the way, we’ll do the same for any site. It’s not unique to X.(…) And we found our ads were coming up next to objectionable material and we weren’t satisfied with any answer of how that was going to be managed or controlled. And, thereby, we said we’re not going to advertise on X anymore. I think that’s a right that we have as a company. We can pick which media we decide.
Clearly, the management team and the ownership there took umbrage on that and I’ve been quite clear about that.
Mr. O’Keefe looked at this and probably got somebody internally, because it’s an internal video there. So the assertion is that we are being discriminatory in our hiring practices. So let me talk about this.
Do I believe that we should be an inclusive culture? Absolutely. I am not changing our mind on that. Do we believe that we should lean in and make sure that all communities feel welcome? Absolutely.
I did reference a 5-percent plus/minus.This, by the way, is only on the executive bonus pool for those who make improvement by 1% on certain underrepresented minorities.(…) Okay. Now I think that people misconstrue what this means. It is not a target. So if any of you hear that there is a target, you can come to me. We do not want targets. I’m quite clear about that.
Why? Let’s just look at it. So a 5-percent change: that means 95 percent of executive bonuses are driven by business performance. What drives business performance? Having the best people in the role.
So, if 95 peercent says, “Oh, go get the best person,” the 5 percent simply says, “Try to have a diverse slate and try to make sure that you’re being inclusive in all that you pick from.” So I want to be quite clear about this. We always want the best people, because that drives the bulk of our performance. It drives how our employees feel. It drives everything else. That is why 95 percent – Five. Okay.
Now as laws change, as whatever happens, we will always try to comply with the law. But we lean in. Being inclusive is a deep, deep fundamental principle we have had, I think for over 80 years.
When you think about the strides IBM has made, we were amongst the first to put women into executive management. I think that is either the1930s, I think, late ’30s. We were amongst the first to hire blacks into positions of management in IBM in the United States. I think that was in the 1940s. We have leaned in on what today is referred to as the LGBTQ, these things.
But I’ll admit, in the 1990s when we started, it was a good 15 years before it became mainstream. It was about same-sex couples. We want to be inclusive. We want our employees to feel that they can bring their whole self to work. And that is the context. Everything else is a minor tool that helps that context. And I want to be clear about that principle, and I want to be clear about that.
We do not believe we did anything illegal. Now, there is clearly a set of people who are going to make inflammatory statements, which were not things that we said, because they claim we are going to fire people. We said no such thing. We said the pool of the bonus goes 5 percent plus or minus.
By the way, the 5 percent plus or minus is nothing. If we can, by the way, do a little bit more on cash flow, the bonus will be a lot bigger. By the way, not just bonuses, but also GDP. If we can do better on revenue growth than what we have committed to the street, all of these will be much, much bigger. So they have far bigger impacts. And I hope that everybody is quite aware of that and is able to put it in that context.
Many of those attacks, by the way, are going to be about me, the individual. Look, I have a thick skin. I’ll go deal with it.
Our board is quite aware of what’s going on between the board, our shareholders, me. We’ll go deal with it. I would recommend that all of you should not respond. Anything there will just cause more of a response. So I would highly recommend: don’t feel this thing.
However, the principles are just laid out. If you get asked by friends and family, you can feel free to talk about it in that context.
Am I aware that there may be pockets inside IBM where people take these to be far more stringent, far more black and white? I think we should be careful and not make it black and white and not make it stringent. So I also want to be clear about that. All right, enough on that topic. And let’s kind of move on because we’re having a good year, people. We’re having a good year and it is based a lot on hard work.
And let’s go address some of those questions, some about you and some about our business.
