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Highlights—May 8, 2004
- Linda Guyer reports on her impressions of the
2004 IBM Shareholder Meeting in Providence. Excerpt: Sam was trying to be pre-emptive
on the globalization issue and mentioned how much money IBM spends on educating
employees and the $25M "Human Capital Alliance" that was recently announced
at the PartnerWorld conference. At this point I completely canned my prepared speech
(I was speaking on behalf of Jim Mangi's resolution). I started writing something
completely different, including the fact that the "Human Capital Alliance" has
two problems: (1) the program is barely started, and virtually undefined, and will
not be ready for people losing their jobs in the near future; and (2) $25M is a
drop in the bucket for IBM. In fact I told one reporter I thought it was a PR stunt,
in my opinion. I also said I wish IBM would step up to telling the truth and to
do more to help employees who will be affected by offshoring. No one I know who
is training their replacement has been offered any training, nor any other job.
Where is the investment in future technology? Why can't IBM employees get internships
in the research labs to learn the new stuff? IBM could be leaders in invention,
instead of leaders in cost-cutting and dodgy accounting. Read
Ms. Guyer's full report...
- "ibmoptioneer" comments
on how IBM's poor treatment of its employees may backfire. Excerpt: One of
the interesting trends that Armonk must be worried about now is the fact that many
of the employees they have treated badly are now client decision makers or influencers.
This trend came home to me when a once loyal customer stopped buying IBM and moved
to HP. When I went to find out why, I found out the CIO was ex-IBM, had been screwed
on the pension and was bent on revenge. He wasn't dumb and just chose HP, he partnered
with HP and got good deals, ever forcing IBM margins on installed equipment downward.
He pointed out to me that in South Carolina, the son of a laid off IBMer had convinced
an entire senior class going to various colleges to not buy IBM notebooks and get
Dell instead. The fact that they are trying to muzzle the IBM dissent in the Annual
Shareholder's Meeting by creating another meeting for retirees and active employees
away from the press is a clear sign that our image as a brand is in jeopardy.
- "ibmaccountant" describes
what typically happens to the employees acquired by IBM Global Services as part
of an outsourcing agreement. Excerpt: Your management is considering outsourcing
its IT group to IBM. The group IBM uses to handle most of its outsourcing business
is called Strategic Outsourcing (SO)with sales people under the industry units
of BCS (Business Consulting Services). Both units operate under IGS, but the outsourcing
units usually deal with a third organization for the delivery of services to the
client. ... The first thing to consider is what they will outsource. It may be
just operations, the network, the data center, call centers or application development.
The data center may be outsourced in place (rare) or the equipment and function
moved to one of IBM's service delivery Centers (SDC's). Any one or all of the above
can be the case. If they announce the outsource, pay close attention to what they
have decided to outsource. It may be that your area is not in the contract and
therefore will not be touched for another year or so when IBM will try to grow
the services revenue base at that client. Read
- In a post similar to "ibmaccountant's", "madinpok" provides a detailed,
balanced description of the IBM environment that new IBM Global Services employees
will encounter. Excerpt: Overall, my opinion is that IBM tries to be right in the
middle as far as what you can get in salary and benefits elsewhere.
Where IBM used to be a leader in offering a good overall
package, that is no longer true. The usual excuse from IBM HR
over the last few years has been "we are doing this in order
to bring ourselves in line with the rest of the industry."
When you hear
that, you should expect that they just reduced one benefit or another. I think that
over the long term, IBM will offshore just about
every job they can. This includes Global Services, hardware
development, software development, manufacturing... you name it.
It won't happen overnight, but will probably take 10 years or
more for it all to happen. There will still be some IBM
employees in the US in the end, but many, many fewer than there
If someone were to ask me if they should accept a job with IBM,
I would tell them that it is not a terrible place to work, but
they can probably do better elsewhere. I don't agree with a lot of what IBM is doing,
but I understand
why it is happening. We have an environment that places personal
and corporate profit above all else. Unfortunately, the employees
are on the very bottom of this priority list. That leads many
to believe that a union is needed to give the employees at least
some level of protection. Although a lot of people don't care
much for unions, there aren't many other options. (Editor's note: This is a "must
read"). Read full posting...
- "ibmaccountant" comments
on IBM Global Service's oursourcing business. Full excerpt: It appears the
IGS outsourcing business to India is going South quickly when compared to the corporate
expectations. This is primarily due to over inflated internal business plans and
the sudden tepid/negative reaction of many SO customers to an India outsource.
IGS SO is also having big project management and technical integration/availability
issues in large deals. All this means is that IBM must cover up its ill-fated investments
over there that were brought forth by the wildly speculative business plans of
folks yearning for the "D" (director) level slots and make the resulting
flawed executive decision making look acceptable to shareholders in the short term.
I hear all managers in various sites are being forced to move any work they can
to IBM India and lay off anyone they can to make the 2Q numbers look better. New
hire actions are being slowed and deferred to verify why the work to be done by
the new hires couldn't be done in India. This affects SWG, IGS (AMS and ITS), Server
Group and TG. Managers have been told they must deal with India "opportunity" or
its a "career limiting" move that will cost them their jobs. Numbers
of "affected" I heard today for just IGS are in the 3K range. Happy International
- Vault's IBM
Business Consulting Services message board is a popular hangout for IBM
BCS employees, including many employees acquired from PwC. Some sample posts follow:
expense policy is terrible" by "BigBlueBeast". Full excerpt: I'm
really angry about the new BCS expense policy. For those who have not seen it,
the policy states that many items that were previously reimbursable are now not eligible
to be expensed. My specific concerns are (1) high speed data lines will not be
reimbursable to client facing staff; and (2) cell phone reimbursement has a cap based
on bands (band 7 = $25, band 8/9 = $50, band 10 = $100, executives = $150). I don't
understand how IBM can justify eliminating broadband usage, when they just advised
us last week that we were going to all be considered home employees going forward,
not mobile employees. Most BCSers I know work from home when possible. At a minimum,
on 5-4-3 projects (which is still a policy the last time I checked) most work from
home on Fridays. High speed capabilities allow BCSers to be more widely available
at different times of the day, which is especially beneficial when working remotely
with people from around the world. I think it’s tremendously valuable
to our clients, and a lot cheaper that paying for us to have hoteling cubicles
available. Regarding cell phones, it's ridiculous to think that $25 or $50 is going
to cover a cellular plan that consultants would need in order to conduct their
jobs while on the road. Beyond the time just spent in transit, I have often been
assigned space in client offices with either no phone access, or a shared phone
in a conference room full of consultants. Why does IBM even care to institute these
policies when cell expenses are most likely going to the client? Why is that lower
bands have higher utilization targets, and therefore must be at a client site more
often, yet they are reimbursed less than higher bands with lower utilization targets?
This new policy is crap, and completely takes away any monetary increases from
anyone that actually got a modest pay raise. I would go so far as to view it as
another pay cut for most of us.
for Boiling a Frog" by "Dose of reality". Full excerpt: 1. Fill
pot with water.
2. Drop in frog.
3. Continue to pass propaganda to frog telling him how great things are in the
4. Turn up heat slowly – tell him to swim faster to stay cool.
5. Convince frog that it is even hotter outside the pot.
6. Cook until lifeless; then eat or discard. Anger is the appropriate response.
This is yet another pitiful attempt at indiscriminate cost side income management
engineered by bean counters and HR to score points. Any pretense of decision makers
setting policy with even a remote consideration of trying to maintain staff morale
was obliterated a long time ago. Decisions are constantly being made in a vacuum,
assuming that there will be no fallout from staff or clients. There is no incremental
downside to them of piling more discomfort on staff. If you haven’t left already
with the pay cuts, meager bonuses etc., you aren’t going anywhere. My advice – PROVE
Answer is Very Simple" by Joe Dirt. Full excerpt: Had a long talk about a
month ago with my PA who told me the following: "BCS is looking to cut costs
so they are going to classify everyone as a home employee". He went further to
state why! In IBM, our IT support (e-mail and great applications like the on-line
travel tool, BAT, PD Tool…the list goes on) is paid for by your BU to corporate
and here are the costs: 1) Local Employee $15,000 a year;
2) Mobile Employee $9000 a year;
3) Home employee $2000 a year. He also stated that they were looking at cutting
support for cable modem/cell/etc. I asked how can I be at home without cable modem
as I had downloaded over 100 meg that very day? His comment was: “I hear you”.
Bottom line is that cash is king and people are last in BCS. No other way to explain
it! I just charge it off to the client (in disguise). Not much surprises me about
the new BCS and I miss the old BIS more and more! I don’t know what group you
work in but the only time I heard of the 3-4-5 was during the recruiting process…it
is more like the 4-5-7 plan. I have not gotten the note yet but I will keep an
eye open (in between my other job interviews)
Krueger explains IBM's Future Health Account. Full excerpt: FHA = Future Health
Account. It is a replacement to the promise of
retirement health care benefits for those who were not within 5
years of retirement eligibility on July 1, 1999, but who were hired
at IBM before Jan 1, 2003. (Those hired since then are promised
nothing at all related to retiree medical care.) For each year of
employment between age 40 and age 49, a virtual account is credited
with some money on their behalf (I think it is $10,000, although my
memory could be faulty), and relatively low interest credits are
added to the virtual account each year. *IF* the virtual account is
still in place when the employee reaches full retirement eligibility,
then the retiree can use money in the virtual account to buy health
insurance from IBM at whatever price IBM chooses to charge, for as
long as the account lasts. Estimates have shown that in most cases
the virtual account will be depleted after 3 or 4 years of
retirement, at which point the retiree may continue to purchase
health care insurance from IBM with real dollars.
All of the documentation clearly states that employees never get a
vested interest in the virtual accounts, and IBM can wave their wand
and make them vanish at any time. Their is no trust account set up
to accumulate money to back up these virtual accounts. The sad thing is, while employees
covered by the FHA jealously look
over the fence for greener grass, believing that current IBM
retirees have it made, current IBM retirees are also being ripped
off, as IBM has been doubling their co-pays each year since they
started charging in January, 2000. Way too many IBM retirees now
get a bill from IBM in place of their pension checks...
- Reuters: IBM saw net
15 pct lower if it expensed options. Excerpt: International Business
Machines Corp.'s (NYSE:IBM - News) first-quarter net profit would have been 15 percent
lower if it had accounted for stock options as an expense, according to regulatory
filings made on Friday. IBM's net income would have been $1.36 billion, or 79 cents
a share, had it expensed options, according to a quarterly filing with the U.S. Securities
and Exchange Commission (News - Websites) . As reported last month, IBM had net income
of $1.60 billion, or 93 cents a share. At the company's annual meeting last month,
shareholders of Armonk, New York-based IBM backed a nonbinding proposal urging the
company to treat stock options as an expense. The vast majority of technology companies
have argued and lobbied aggressively against such a move.
- Washington Post: Benefits
Bust. No Job-Paid Health, No Pension and More Time to Miss Them. Excerpt: The
Equal Employment Opportunity Commission isn't always called upon to be so publicly
Solomonic. ... But there it was, caught in the middle. The fact that the EEOC has
been dragged into disputes regarding pensions and other retirement benefits --
deciding whether certain changes are evidence of age discrimination -- shows how
inventive, or desperate, aging workers have become about hanging on to whatever
benefits they can. After all, companies, at least those without unions, make unilateral
decisions about compensation and benefits, reserving the right to make changes
at will. And they have been making changes. ... What we're seeing is nothing less
than "a redefinition or change in the whole social contract between employers
and workers," said John Rother, director of policy and strategy at AARP. And "we
are almost at a tipping point where enough employers are changing behavior that
it becomes the norm." This is a fundamental departure from the worker-employer
relationship standard in this country since World War II. The boom of the 1990s,
and the consequent demand for labor, masked the pattern for a decade or so, and
even made 401(k) plans look like the path to riches. But the economic slump that
began in 2000 and the accompanying market plunge made the change starkly visible.
And it comes just as the giant baby boom generation starts to retire. Driven by
global competition and, of course, their desire for survival and profit, corporations
are looking harder at their relationships with workers. If link is broken, view
Adobe Acrobat version [PDF--36 KB].
- Washington Post: SBC
Withdraws Retiree Health Care Proposal. Excerpt: SBC International
Inc., which is negotiating with its union, dropped a proposal late Thursday that
would have required union retirees to pay partial health insurance premiums. Ninety
percent of the union's members voted Thursday to authorize a strike as early as
May 8 if a contract agreement isn't reached. SBC has 100,000 Communication Workers
of America employees in 13 states who have been working without a contract since
April 3. At the company's annual meeting in Columbus on Friday hundreds of workers
marched with picket signs. "You're leading the fight for middle-class people
and working-class people in America," talk show host Jerry Springer said at a
- Managed Care Magazine: Do
We Really Have Best Health Care in the World? Experts, including many
health plan medical directors, agree: We have a long way to go. Excerpt: It's
essential rhetoric for both political parties that America has the best health
care in the world. Bill Clinton said so when he was president and George W. Bush
says so today. Republican Senate Majority Leader Bill Frist says we do, and Louisiana
Democrat Sen. John Breaux, ranking member of the Special Committee on Aging,
agrees. But do we? Like most tenets and all rhetoric, truth relies on definition. "It
depends on what we mean by best," says W. Allen Schaffer, MD, senior
vice president and chief medical officer of Cigna Healthcare. "If a person
is fortunate enough to be part of an employer-sponsored health plan, he or
she may have access to the best health care technology in the world. But the
fact that we have so many uninsured in this country is a national disgrace." Indeed
so, says Robert Brook, MD, director of Rand Health. "I don't see how
we can say we have the best health care in the world when we have nearly 44
million people uninsured," he says. "Those people are dying from lack
of health care." ...
Collating that data, the WHO rated the United States 37th in overall performance,
defined as "the best that could be achieved with [available] resources." We
ranked first among surveyed nations in cost, both per capita and as a percentage of
our gross national product. ... A more recent study was done by the Commonwealth Fund.
Published in January 2004 and titled Mirror, Mirror on the Wall: Looking at the Quality
of American Health Care Through the Patient's Lens, it compares our system with health
care in four other English-speaking industrialized nations: Australia, Canada, New
Zealand, and the United Kingdom. It used the quality criteria developed by the Institute
of Medicine's 2001 report Crossing the Quality Chasm: A New Health System for the 21st
Century: safety, effectiveness, patient-centeredness, timeliness, efficiency, and equity.
All four countries scored better than the U.S. in every category, and the U.S. ranked
second-to-last on measures of "patient-centered" care. We did, however, have
the shortest waits for hospitalization and elective surgery, and placed second
(to New Zealand) on prompt access to primary care physicians and specialists.
- Workforce Management: Google
Promises Richer Employee Benefits as the Company Goes Public.
In an unusual "letter from the founders," Google's presidents talk about the
value of their employees. Excerpt: At a time when many companies are looking for
ways to peel back benefits to make their companies more profitable, Google founders
and presidents, Sergey Brin and Larry Page, announced their intention to maintain
and even enrich their unusual benefits program as they take the company public. "Our
employees, who have named themselves Googlers, are everything," the
two wrote in a letter that accompanied the company's IPO, filed Thursday with
the Securities and Exchange Commission. "We hope to recruit many more in the future.
We will reward and treat them well." Google, which won the Optimas Award for
general excellence from Workforce Management in 2003, is well known for its generous
employee benefits. In the founders' letter, Page and Brin told potential investors
that those perks are here to stay.
- Ceridian Connection newsletter: The "flip
side" of productivity.
Excerpt: Soaring productivity means employees are working longer and harder with
higher levels of stress and burnout. This has significant consequences for employers.
It's estimated that worker stress and burnout now costs the U.S. economy $344 billion
a year. (2) Tired and overworked employees have trouble balancing the demands of work
and family. Stressed and distracted workers have more unscheduled absences and higher
medical expenses. They file more workers' compensation claims, make more mistakes
and create more waste. A 2003 Harris Poll found that 27 percent of employees say their
morale is lower than it was the year before.
- Jim Hightower: Greenspan's
Social-Security Quackery. Excerpt: Greenspan's trail of quackery begins back in
1983, when he chaired a commission that persuaded congress to raise the Social
Security taxes of working folks. This radical surgery was necessary, Alan said, to create
a surplus to assure that future retirees would get the benefits they're due. Quaaaack.
But instead of locking these surpluses away for future retirees, Greenspan left
them open to raids by any president needing a quick pile of cash for a pet political
project. The latest to make the raid is George W, who dove head-first into our Social
Security surplus to pull out the billions he needed to pay for his tax giveaways to the
rich. Greenspan himself told congress that such tax cuts were necessary to – believe
it or not – prevent the buildup of government surpluses. Even though the bulk
of the tax giveaways went to people making $300,000 or more a year, Greenspan promised
that this would not harm working families counting on their Social Security benefits
for their retirement. Quack-Quaaaaacck.
Just recently, the quack was back, urgently telling congress that, because of out-of-control
budget deficits, congress now must slash Social Security payouts "as soon as
possible." He urged that every retiree's benefits be cut and that the retirement
age be raised. Quack-quack-quaaaacck. In his 20 years of practicing economic voodoo,
here's what the mad doctor has achieved: Working people had their Social Security
taxes raised so rich people could have their income taxes slashed, which, he now
says, means that working people must have their Social Security payments cut.
- Jim Hightower: Subsidizing
Drug-Company Gouging. Excerpt: As you know, the drug companies have been ripping
off us consumers, charging exorbitant prices in the U.S. for medicines they sell
elsewhere for half or even a third as much. Because of public outrage over this
gouging, Bush and his congress had to look like they were doing something, so last year
they rammed into law the "Medicare-drug discount program" for senior citizens.
The program, which starts in June, is a bedazzling, convoluted, privatized shell
game rigged with enough trickery to make a county fair flim-flammer blush. Start with
the fact that, rather than simply stopping the price gouging, as other countries have
done, Bush's program subsidizes it, putting some $139 billion of our tax money into the
pockets of the drug giants each year.
- Human Resource Executive: Executive
Bounty. Outsized retirement packages and lavish perks may be losing favor, replaced
by stress counseling and lifestyle coaching as companies retool their executive-benefit
offerings for a new era.
on the Alliance@IBM Site:
- Alliance@IBM has heard of job cuts in the IGS group at IBM, on May 3rd 2004.
This affects regular employees and contractors. Contractors have faced numerous
pay cuts over the past few years. For many contractors, pay has been cut 20%
in the last two years. Please send any information to: email@example.com
- IBM Global Services Service Delivery Resource
Action as of May 3rd, 2004, 224 employees
cut from: Alpharetta, GA,
Sterling Forest, NY,
SSR's in NY State,
SSR's in Tampa, FL,
SSR's in Orlando, FL. (This list is incomplete).
|Coverage on H1-B and L1 Visa and Off-Shoring
- PC Magazine editorial by John C. Dvorak: Scams,
Lies, Deceit, and Offshoring. Excerpt: Someone has to take the jobs that,
as President Bush and others say, "Americans don't want." There
appear to be a large number of these jobs. In fact, it seems that our fastest-growing
business segment is the creation of more and more jobs that Americans don't
want. Often, American companies will lay people off, only to train newcomers
to replace them. Here is how the real scam works. You are a programmer at
one of the big IT or computer companies. You're 55 and nearing a retirement
plateau; in fact, you're a liability. You're making, say, $80,000 as a program
designer. You have various responsibilities. The company eliminates your
position in the process of downsizing.
To be fair to you, it creates a new position, Associate Program Designer,
that pays $35,000 a year. Its responsibilities coincidentally match those
of your old job. You can take this job, doing what you did before but at
a huge cut in pay, or look elsewhere. If the latter, it's apparent that this
new job is one that "Americans don't want." The company can then
hire a "body shop" to drop in a foreign H-1B or L1 visa holder,
who will not be quite as good but will work for a lot less. This is a bait-and-switch
scheme that is designed to screw older and more experienced workers out of
their retirement benefits, plain and simple. This sort of thing, unfortunately,
is nothing new to corporate America: Every time I write about it, I get hundreds
of e-mails from people who have been abused by such practices.
nature of offshoring jobs has corrupted the highest levels of our nation.
Hillary Rodham Clinton, for example, is directly involved with one of
the big body shops, Mumbai-based Tata Consultancy Services. Bush is actively
promoting the replacement of American workers. Colin Powell recently
promised India that the administration would continue to promote offshoring.
Which country does he represent, anyway?
- WashTech: Indian Business Lobby Fetes Congressional Delegation.
Democrats take outsourcing tour to India. Excerpt: In January, two of the most
influential Indian trade lobbies subsidized a nine-day, five-city trip for a
United States Congressional Delegation to discuss political, defense, health
and economic ties between India and the United States. One of the main topics
of discussion for the 11-member Delegation was India’s
booming high-tech business and job outsourcing industry. The Delegation, comprised
of 10 Democratic Congress members and one Republican Senator, was sponsored
by the Confederation of Indian Industry (CII) and India’s National Association
of Software and Services Companies (NASSCOM), groups which lobby on behalf
of outsourcing work to India. For the entire story, visit http://www.washtech.org/wt/news/industry/display.php?ID_Content=4663.
To view what the Indian Lobby spent on this junket, visit
- www.h1b.info: The H-1B visa program allows American companies and universities to
import foreign scientists, engineers and programmers. Unfortunately, it has
no serious safeguards to protect American workers from being replaced and is
abused to provide cheap foreign labor. Moreover, H-1B workers continue to flood
a terrible job market. During 2001 and 2002, 799,100 H-1B visas were issued
and renewed despite a 6 percent national unemployment and 8 percent in Silicon Valley.
The H-1B visa limits were set during more prosperous economic times but now
can't be justified when so many highly trained Americans remain unemployed. Congress
needs to increase domestic worker safeguards, significantly reduce the number of H-1B
visas issued, and crackdown on visa violations and fraud.
LCAs filed by IBM Global Services India PVT. LTD. during FY 2003. (Job titles,
number of workers, wages, begin dates, and locations for 1,325 workers
are shown. Wages range from $39,805 to $57,700 per year).
LCAs filed by IBM Corporation during FY 2003. (Job titles,
number of workers, wages, begin dates, and locations for 1,325 workers
are shown. Wages range from $49,839 to $400,000 per year).
- CNET News: Shell
taps IBM and Wipro in India. Excerpt: In another case of offshore outsourcing,
oil company Shell has signed pacts with IBM and Wipro Technologies for information
technology services to be delivered from India. The Royal Dutch/Shell Group of
Companies made separate agreements with the two technology service providers
in February, Shell representatives said Thursday.
- Computerworld: Proposed
bill seeks stronger privacy protection for offshore work. Consumer consent
and corporate liability are key provisions. Excerpt: SAFE-ID proposes a set
of privacy-related conditions that U.S. companies must meet when transmitting personally
identifiable information to a foreign affiliate or subcontractor. Under the proposed
act, companies could transmit such information to any country deemed by the Federal
Trade Commission as having a legal system that provides for "adequate privacy
But companies will need to get specific consent from individual U.S. citizens
when transmitting personally identifiable data to any country that does
not have such privacy protections. The company will also need to disclose
to the individual that the data is being sent to a country judged to be
without adequate privacy protections. The proposed bill will hold enterprises
liable for damages that result from "improper storage, duplication,
sharing, or other misuse of personally identifiable information," by
the foreign affiliate or partner.