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    Highlights for week ending July 7, 2001
  • Wall Street Journal: IBM to Lay Off 1,000 Workers In Its Global Services Division

  • CNET News.com: IBM to shed 1,000 consulting jobs. "IBM on Monday notified more than 1,000 workers in its consulting and services business that their jobs are being eliminated as part of an effort to make sure worker skills match with customer needs."

  • The Business Journal (Raleigh/Durham): Blue notes at IBM. Job-cut rumbles pervade campus. Excerpts: "For weeks, Big Blue quietly has been drastically cutting contract workers at its RTP facility – the company's largest U.S. location outside its home state of New York – and alerting others of contractions to come." "The moves have sparked much talk and speculation that cost-saving moves may soon begin slicing into the facility's 15,000-person, full-time work force possibly as early as July – and also may prompt the relocation of IBM's server assembly operation to Guadalajara, Mexico. Thinkpad assembly made the same trip south in the late 1990s."

    "A new group, Alliance@IBM, formed in 1999 to square off with the company over pension plan changes, has teamed up with CWA to set up a chapter in the Triangle. Representatives from the group were in Raleigh the week of May 22 to meet with some IBM employees, but alliance director Lee Conrad declined to say how many had turned out."

  • What is happening in your area? Have you or a friend been laid off, asked to retire early, or forced to quit? Send your feedback to the Alliance@IBM...

  • "bear_gypsy" from Austin comments on the IGS layoff. Excerpt: "What kills me is that we're told these firings are because there weren't enough volunteers for the March buyout. What a joke -- huge blocks of people in IGS were excluded from the buyouts, even if they were told at appraisal time shortly before or salary increase time shortly after that their skills were terrible."

  • "loufood" asserts that the IGS layoffs were primarily in Business Integration Services (BIS). Extract: "There about 1500--2000 positions in BIS being eliminated. This represents about 10% of the 'Business Innovation Services' practitioners. Cuts were felt hardest in the Innovation Centers, where the creative services/visual people were concentrated. This is almost 100% due to the fact that the work on large, complex web sites that IBM was hoping to win has evaporated. No fault of the practitioners. Virtually NO CUTS were made in the hierarchy of BIS. In other words the 'brain trust' has decided to put the blame on a) the underlings and b) factors beyond 'their control'..."

  • "madinpok" comments on rumors of layoffs in Poughkeepsie and why IBM is still hiring college graduates while letting older workers go.

  • IBM Hungary unit cuts staff by 500 to 5,500.

  • The "General Release and Covenant not to Sue" required for receiving severance in the most recent IBM Global Services US BIS Resource Transition Program (GSBT) contains new wording requiring participants to give up their right to sue IBM under provisions of the Age Discrimination in Employment Act of 1967. Read more...
  • Retirees, employees, and vacationers in the Washington, D.C. area should consider attending scheduled extended hearings on July 17 and 18 of the Advisory Council on Employee Welfare and Pension Benefit Plans. The hearings will be held in Conference Room N-5437 A-C at the U.S. Department of Labor, 200 Constitution Ave. NW, Washington, DC 20210. See more information...

  • A former AT&T employee who came to IBM Global Services as part of an acquisition deal comments on how the the former AT&T employees' jobs were outsourced to India by IBM. Excerpts: "Last year several thousand AT&T employees (software developers) were outsourced to IGS. Before the deal was signed we were told how much IGS needed our skills. Yeah right, it turns out we were only needed until our jobs could be offshored. A months after the deal was signed the first wave of offshoring of work to India was announced. By August of 2002, almost all development work that was outsourced from AT&T will be offshored to India."

  • "mrs_adm" tells us what she's heard the answer is to the question "Would be interesting to know if they (IBM) really are letting people (laid off IBM employees) continue to have access to IBM facilities."

  • Barron's: Danger Ahead? Eroding equity-assets ratios point to trouble for some companies. Excerpts: "By any measure, 1996-2000 was a period of unprecedented corporate prosperity." ... "With profits at a peak and dividend payouts sliding, investors should reasonably have expected stockholders' equity—the value of funds invested by the shareholders, plus retained earnings or losses—of major public companies to have ended 2000 at record levels." ... "A closer look at the Dow, however, reveals a disturbing trend. While the yearend equity book value of the index rose from $1,337 in 1995 to an estimated $1,800 in 2000, the ratio of total equity to total assets slid at 13 of the DJIA's 30 members. Three of the 13—Boeing, Kodak and IBM—even saw their stockholder-equity accounts decline in absolute terms from 1996 to 2000." ... "A look at IBM is instructive..." If link is broken, view Adobe Acrobat version [PDF--46 KB].

  • Barron's: Red Handed? Analysts worry that pension gains smack of cookie-jar accounting. Excerpts: "Indeed, pension accounting is beginning to raise a lot of eyebrows on Wall Street. For example, a June report from Credit Suisse First Boston entitled "A Pension Accounting Primer" noted that pension income contributed about 12% to the pretax profits of the 30% of companies in the S&P 500 that report pension income." ... "Jack Ciesielski, publisher of the Analyst's Accounting Observer, notes that 'the easiest and most direct way for a company to boost the current year's reported earnings is to raise the expected rate of return on pension assets.' If you do that, during the year, 'it will go right to the operating line,' he says."

    "While overfunded pension plans can make a company's earnings look good, it is very difficult for a company to actually tap into the funds and use them for operations without paying big tax penalties. 'When you see pension income, it doesn't hold the promise of having the cash go back to the company and the shareholders,' Ciesielski says. 'But if companies can't tap pension funds for general corporate purposes, executives whose compensation is tied to earnings performance can benefit from overfunded plans' contribution to the bottom line.'" If link is broken, view Adobe Acrobat version [PDF--55 KB].

  • Boston Globe: Hancock revamps pension. Quietly changes it from defined-benefit to cash-balance plan. Excerpts: "By converting its pension into a so-called cash balance plan, Hancock unwittingly thrust itself into a growing debate about corporate America's responsibility to its aging workers. Lawsuits and worker protests have followed similar announcements at AT&T and IBM, among other companies." ''These kind of conversions can disappoint expectations of employees who have spent most of their careers with one company,'' said Karen Ferguson, director of the Pension Rights Center in Washington, D.C. ''We hear horror stories about people who have been switched late in their career and then get a tiny fraction of the benefits they had reasonably expected.''

    "Paul Edwards, chairman of the Springfield-based Coalition for Retirement Security, said he wasn't familiar with the details of Hancock's plan. But he said most employees, even younger ones, end up losing in the majority of plan conversions. And the reason most companies make the switch has nothing to do with employee retention, he said, but with using pension plan surpluses built up in recent years to boost corporate earnings." If link is broken, view Adobe Acrobat version [PDF--79 KB].

  • American Medical Student Association (AMSA): Med Students Applaud Maine Efforts Towards Universal Health Care for All. Excerpt: "In Maine, due to quickly rising premiums, both individuals and small employers are being crunched out of the health insurance market; consequently, one in three Mainers are either uninsured or underinsured. Governor Angus King and the state legislature recently created a commission charged with developing a plan for the implementation of a single-payer, universal health care system in Maine for presentation to the legislature in March 2002."

  • Boston Phoenix: Losing the American dream. As US companies save millions by moving manufacturing jobs to developing countries, it’s America’s unskilled workers who pay the price. The latest victims: immigrant electronics workers in Allston.
    • IBM_WARRIOR comments. Excerpt: "Here is a ironic story. Immigrant workers from China take $7-$10 per hour jobs in the USA and today business find them to expensive! Plants where these Chinese immigrants work are being closed and new plants built in China because labor is dirt cheap, about $1 per day!"

  • Stop Fast Track—Don't Export More Jobs! Read action alert...

  • har_philby calls on IBM 1st and 2nd line managers to "rebel against the regime by not doing their dirty work in the next few weeks."


"The test of our progress is not whether we add more to the abundance of those who have too much; it is whether we provide enough for those who have too little." — Franklin D. Roosevelt
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