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    Highlights—May 7, 2005
  • Alliance@IBM: Attention IBM employees: IBM is blocking e-mail to and from the Alliance@IBM e-mail address endicottalliance@stny.rr.com from inside the company. Please send your job cut information and other correspondence from your home e-mail. You can also contact us the following ways: Phone 607 658 9285 or Fax 607 658 9283.
  • Wall Street Journal: IBM Plans Restructuring, Job Cuts. By Charles Forelle. Excerpts: IBM's last restructuring came in 2002, when it took a pretax charge of $2.1 billion to exit from the business of making computer disk drives and laid off workers in its chip-making unit. Yesterday's action is indicative of the rough time IBM is having with its services-oriented model -- selling its experience designing technology systems and business operations, not just its namesake machines -- in Western Europe, where labor costs remain high and economies are slow-growing. [...] Yesterday's restructuring was aimed at doing just that, IBM said. The company said it expected layoffs of between 10,000 and 13,000 people. IBM said most of the cuts would fall in Europe and would include both "voluntary and involuntary work-force reductions." The restructuring eliminates a layer of pan-European management, and associated support staff, that oversaw operations on the entire continent.
  • IBM Press Release: IBM Plans Restructuring Actions to Accelerate Global Integration of Operations, Company Will Take Second-Quarter Charge. Excerpt: IBM today announced it plans to implement a series of restructuring actions designed to improve the company's efficiencies, strengthen its client-facing operations and capture opportunities in high-growth markets. The actions will accelerate progress toward more globally integrated operations, while addressing profitability in slower-growth regions, primarily in Europe. These actions will also allow IBM to shift resources to higher-growth markets and opportunities such as Business Performance Transformation Services.
    • Satirical version of this press release by "blue_and_bitter". Full excerpt: IBM Plans Ad-Hoc Cost Cutting to Continue to Try to Make Something of a Behemoth Organization, Company Will Take It In the Shorts Next Quarter Too. ARMONK, N.Y. -- May 4, 2005 -- IBM today sheepishly announced it continues to plan to implement a series of cost cutting actions designed to improve the perception of the company's efficiencies, pretend to strengthen its "client-facing" operations and dream about capturing opportunities in high-growth markets. The actions will accelerate progress toward more corporate jobs in India, while cutting costs in Europe and the U.S. These actions will also allow IBM to try to please the stock market analysts in hopes of moving the stock price above 80 before the end of 2006. As a result, IBM estimates that it will be spanked something on the order of 1.3 billion to $1.7 billion in the second quarter. The company expects to show how dramatically lower costs with a decrease in sales and revenue will realize benefits starting in the second half of the year.
      The company plans to layoff a bunch of legacy personnel in its operations and organizational structure in Europe to increase the workload of those left behind while still underperforming for its clients. The perceived success of this strategy will depend on scaring away legacy IBMers and manufacturing more infrastructure in China and creating teams that can work across country borders, shifting more clueless employees into direct client roles that pretend to support the company's plans to deliver higher-value services and products. This eliminates the need for a traditional pan-European management layer to coordinate activity such as occurs in the US. As a result, IBM will create a number of smaller, more flexible local operating units in Europe (also known as Boots) to increase direct client contact. On a worldwide basis, IBM plans to spread the love as well by pretending to improve the efficiency of its services operations by consolidating much of the service delivery workload into fewer locations by using cheaper, less-experienced labor forces.
      IBM's restructuring actions include scaring, intimidating and layoff workforce reductions of between 10,000 and 13,000 employees worldwide. The majority of the overall workforce reductions are not expected to be noticed by anyone besides those leaving, since their work was redundant or not effective. Additional details about the actions will be provided during a crystal ball reading, seance and Webcast hosted by the former IBM Senior Vice President and Chief Financial Officer on Thursday, May 5, beginning at 8 a.m. EDT. Competition and Vault members may view the Webcast at http://www.ibm.com/investor/events/ir0505/. Replays, in Hindu, will be available shortly after the original Webcast.
  • BusinessWeek: IBM's Restructuring Blues. By Steve Hamm. The tech giant's overhaul of its workforce contributed to disappointing first-quarter results. Now, analysts are expecting a further shakeup. Excerpts: IBM started off the year with a strategy aimed at "lowering the center of gravity." The idea consisted of revamping a 330,000-person workforce to reduce expenses, shift work to lower-cost countries, and strip out bureaucracy. So far, the program has mainly lowered Big Blue's stock price and employee morale. Workers in Western Europe, in particular, are up in arms over the staff cuts. More than 2,000 positions are likely to be eliminated in France, Germany, and Sweden. Word is hundreds of tech-services jobs will shift from Western Europe to Hungary. HUGE CHARGE? On Apr. 26 some 600 unionized employees rallied outside IBM's German headquarters in Stuttgart, and similar protests are planned in France. "People are angry about how this is being done," says Gerhard Rohde, a director at Switzerland's Union Network International, a labor coordinating group. [...]
    Before the first-quarter miss, IBM said it expected to hire tens of thousands of employees this year, even while pruning the workforce of thousands with less-needed skills. It was all part of Big Blue's strategy to add staff with a combination of consulting, business, and technology skills, as the company continues its effort to boost the value of the work it does for clients. It's unclear now if that planned hiring will go ahead. During last year's analyst briefing, Palmisano was flying high, buoyed by a series of strong earnings reports. This year, he has a lot of explaining to do.
  • iSeries Network: Big Blue Ax to Fall on IBM Employees. By Cheryl D. Ross. Excerpts: IBM employees are bracing themselves for a dreaded round of layoffs, expected to hit in the next one or two weeks, according to reports gathered by the IBM workers union, Alliance@IBM. [...] "When IBM starts panicking about a drop in the stock price, they start throwing the crew off the ship," Conrad says. "The long hours everyone's working mean nothing when the ax starts falling." IBM is closing its subsidiaries in Hanover and Schweinfurt, Germany, leading to about 600 layoffs. French workers in Marseille and Toulouse went on strike last week, protesting impending layoffs.
    IBM did make one concession at last week's IBM annual stockholders meeting, says Janet Krueger, a former Rochester IBMer and still an advocate for the iSeries. When Alliance members voiced their concerns that it seemed wrong to lay off people on the bottom rungs of IBM's employee infrastructure, CEO Sam Palmisano said that he and 50 others at the executive level had agreed to forego their raises until things improve. Krueger applauds the gesture, but she also notes wryly that "I could easily forego my 12 percent increase if I knew I could still get the 300 percent bonus I've grown accustomed to. When you're at the salary level of Palmisano, a 12 percent raise is like me picking up a dime on the sidewalk."
  • iSeries Network: IBM Cuts Thousands of Jobs, Mostly in Europe. By Cheryl D. Ross. Excerpts: Yesterday, IBM announced that its much-dreaded layoffs are now underway and will claim 10,000 to 13,000 jobs. For now, it appears that the layoffs won't have a major impact on IBM's iSeries operations. Big Blue is still working through the details of the layoffs and restructuring, the company said, but they will most deeply impact services and IBM's European operations, specifically in France, Germany, Italy, and the U.K. [...]
    IBM's plans also call for providing more services through Integrated Delivery Centers stationed around the globe where there's an abundance of "lower-cost, highly qualified skills." It's unclear from IBM's press conference this morning whether those lower-cost skills are to be provided by offshore contractors or simply low-paid IBMers. At last week's stockholders meeting, shareholders resoundingly defeated a stockholder resolution calling for an independent committee to investigate the potential damage to IBM's brand and reputation as a result of its outsourcing initiatives. Former IBMer Janet Krueger, who attended the meeting, said that IBM didn't say much about offshoring. "It didn't seem like an issue they're willing to talk about," Krueger said.
    The layoffs and restructuring will cost IBM an estimated $1.3 billion to $1.7 billion in the second quarter, and should start saving the company money in the second half of the year. For the latest IBMer reports on who's getting laid off, check out the Alliance@IBM at http://www.allianceibm.org/jobcutstatusandcomments.htm.
  • Evening Times (United Kingdom): Job fears at IBM as hi-tech giant plans to cut staff. Excerpts: IBM workers at Greenock were today bracing themselves for a jobs purge as part of a major shake-up of European operations. The American hi-tech conglomerate is thought to be about to axe 15,000 workers in an attempt to drive down overheads and raise profits. Staff in the UK are expected to suffer most and the jobs cull has fuelled speculation that hundreds of workers at Greenock will be targeted. [...] However, a jobs cull in Greenock will cost IBM dearly. Last year senior managers in the Clyde town were given £5m in grants from the Scottish Executive after promising to create 800 jobs. Any swingeing job cuts are likely to trigger immediate pay-back calls from the unions and government ministers.
  • Associated Press: IBM Shares Fall on Job Cut Announcement. IBM Shares Dip As Co. Announces It Will Cut Up to 13,000 Jobs, Mostly in Europe. By Ellen Simon. Excerpts: IBM spokesman Fred McNeese in Paris said most of the cuts in Europe will involve workers voluntarily leaving their jobs, but declined to give a breakdown of how many jobs would be lost in each country. "We're still working with work councils and consulting with employee organizations," he said. Under the law in parts of Europe, councils of employee representatives must be consulted on many workplace issues at larger companies. Layoffs must first be agreed with them. IBM said the changes will be implemented by July 4, subject to the completion of the consultation process. The company began eliminating jobs in Europe even before it announced its disappointing first-quarter earnings last month. In March, IBM laid off 500 Swedish workers, 9 percent of its work force there, and shut down most operations in five cities. [...]
    The company will also cut jobs in the United States. Those cuts will be involuntary. In continental Europe, however, IBM will have to deal with European Works Councils, which provide a forum for unions to meet with managers and be consulted on changes that affect a company's operations. European Works Councils cover 1,400 companies throughout the European Union. Linda Yueh, a former lawyer and an economics fellow at the London School of Economics, said the job cuts in Europe will be more involved because of the required negotiations. "In Europe, people have rights to continue working -- in other words, they are more protected and they can't be fired without a just cause," she said. Lorenzo Codogno, co-head of European economics at Bank of America in London, said any company planning major job losses in Europe needs to be prepared for the process to take some time and be more costly than layoffs in the United States. "Clearly labor unions are still very important in these countries," he said. "It's not like in the U.S. where if you decide to do that -- the day after, you are done."
  • New York Post: IBM Deletes Up To 13,000 Managers In Europe. Excerpts: The computer giant yesterday said its layoffs would be mostly in Europe, which it calls a "slow-growth area " where pension contributions mandated by European laws have seriously dragged down earnings per share, as much as 20 percent by some accounts. As a result, IBM wants to unload what it labels as a "bureaucracy" heavily laden with management across Germany, France and Italy. The company said that eliminating 13,000 from payrolls and ending high-benefits contributions "will allow IBM to shift resources to higher-growth markets and opportunities such as Business Performance Transformation Services." That lengthy-sounding unit is being built to help corporations make seamless interactions among all corporate components, from research and development to marketing and human-resources layoffs. [...] It would be the second biggest layoff at IBM since CEO Sam Palmisano fired 15,600 in 2002 following five straight quarterly sales losses.
  • CNET News: IBM retools Global Services. By Martin LaMonica. Excerpt: Rocky transition? But, as the company's planned restructuring illustrates, reforming its massive services division will be a complex, and sometimes painful, process. The areas that are expected to feel the brunt of layoffs are traditional "break-fix" computing services, an IBM insider said last month. The anticipated changes have already drawn protests by IBM workers in Germany and France, where IBM reported poor results last quarter.
  • Forbes: IBM's Growth Engine Sputters. By Dan Lyons. Excerpts: Earlier that month IBM had paid $3.5 billion to acquire PricewaterhouseCoopers Consulting to help the new push. As for the rest of the $10 billion, Palmisano vowed to acquire the necessary companies, develop the software and build new data centers across the world, all to make On Demand a reality. Onstage with him that day were representatives of two big customers embracing the pitch: DaimlerChrysler and the University of Pennsylvania hospital system. "It's a big bet, a bold bet, no doubt about it,"Palmisano told the crowd. "But a risky bet?I don't think so." Maybe it wasn't a risky move, but it turned out disappointing results. DaimlerChrysler, whose chief technology officer spoke at the 2002 event, outsourced its North American data center operations in 2004--not to IBM, but to Electronic Data Systems. And while a Penn professor onstage had described an IBM-based system he had developed for sharing medical images, the hospital system's technology chief says he isn't interested in it; he has begun unplugging his last remaining IBM mainframe. Some big customers--J.P. Morgan Chase, Cable & Wireless, Invensys--are pulling the plug on billion-dollar contracts with IBM, giving rise to a new buzzword: insourcing. [...]
    There was a time, decades ago, when IBM's commanding presence in computer hardware made it a growth company like Dell. The coda to that bygone era came late last year, when IBM abandoned the PC market and agreed to sell its ailing, $9 billion-a-year PC unit to Chinese maker Lenovo Group (otc: LNVGY - news - people ). That followed a retreat in disk drives (IBM sold its business to Hitachi (nyse: HIT - news - people ) in 2002) and, a few years earlier, in network switches and memory chips. At $31 billion last year, revenue in IBM's hardware business today is 12% lower than it was a decade ago. Software revenue at IBM has grown 19% since 1995, while the entire software market more than doubled in the same period. Now the last growth engine IBM has left--Global Services--is showing signs of sputtering. "For years all they've talked about is services, but now services isn't growing. There's no ‘there' there,"contends William Fleckenstein, president of Fleckenstein Capital, a Seattle hedge fund, which has been short-selling IBM shares. "This is a company that has been deteriorating for some time." [...]
    Palmisano's PwC Consulting acquisition was supposed to help IBM gain a foothold in this new area, since PwC's 30,000 consultants had experience doing high-end strategy consulting and running business processes like finance and personnel. Instead, former PwCers have been bailing out, complaining that customers don't want to buy strategy advice from a company that pushes its own hardware and software. (IBM says its turnover in consulting is lower than that of competitors like Accenture.) In an awkward move for a company trying to establish its skills in managing human resources, IBM has found itself chasing down defectors to retrieve advances on bonuses (see box). [...]
    On top of all this, IBM has had to contend with a litany of legal troubles of the sort that corporate giants are prey to, including an investigation by the U.S. Securities & Exchange Commission, the indictment of executives in South Korea for bribery and bid-rigging, lawsuits from two software makers (Compuware and SCO) claiming IBM stole their code and lawsuits from angry pensioners. Gerstner was fortunate enough to preside over IBM during a golden era for tech stocks. Palmisano is going to be hard-pressed to win the same kind of adulation from Wall Street.
  • ZD-Net UK: Union fears IBM job cuts could hit UK first. 'Slash-and-burn reaction' causes alarm at Amicus, while analysts predict job losses in France, Germany and Sweden. By Dan Ilett and Graeme Wearden. Excerpts: Britain's second-largest trade union fears that UK workers at IBM will be the first to be axed as the IT giant gears up to cut up to 13,000 jobs, mostly in Europe. Amicus, which has more than one million members, said that it is cheaper and easier for IBM to make redundancies in the UK than anywhere else in Europe. "We've called it a slash-and-burn reaction to poor first quarter results," said a spokesman for Amicus on Thursday morning. "We fear the worst as it's considerably easier to get rid of workers in the UK than in the rest of Europe."
  • The Financial Express (Bombay, India): More than 30% job cuts in IBM outside Europe. Excerpts: RALEIGH, NC: Though IBM plans to do most of its retooling in Europe as it streamlines its operations, as many as 4,500 job cuts could happen elsewhere. [...] However, 30% to 35% of the planned personnel cuts will take place outside the continent, said Mark Loughridge, IBM’s chief financial officer, in a conference call with analysts and investors. That equates to between 3,000 and 4,500 jobs. "The United States will also participate in these plans,” Loughridge said during the call, “on an involuntary basis.” That helps frame the effect the restructuring could have in the Raleigh area, where IBM employs 11,000. The operation is IBM’s biggest in the world, and though IBM officials won’t say how it will be affected, there is a chance that some cuts will happen there.
  • Yahoo! message board: "Southbury hit today 5/5" by "ibmgrunt". Full excerpt: Layoffs happening in IGS Southbury. Two IBM'ers from my team, others within the building. The Lotus Notes team lost 8 of 13 people. Getting hit pretty hard for what they said would be mostly in Europe.
  • Yahoo! Hot Jobs: IBM Jobs and Profile. (Editor's note: As of the date of this posting, IBM has 13,171 job listings with Yahoo! Hot Jobs).
  • National Retiree Legislative Network (NRLN): IBM Retirees Gain Bernie Sanders Co-Sponsorship of HR1322. Excerpt: I was proud to meet with over 200 IBM retirees and employees who expressed their concerns about letters they received from IBM informing them of cutbacks IBM was making to their health benefits. Specifically, one IBM retiree told me that on their monthly health care premiums were going to skyrocket from $116 per month to $410 per month. Others told me that they were facing significant increases in their health care premiums as well.
    Under current law, companies that offer health benefits to employees and retirees can cutback or even eliminate these benefits for whatever reason at anytime - a policy which I think is unacceptable. That is why I am a proud co-sponsor of H.R. 1322 to prohibit companies from reneging on the promises they made regarding earned health care benefits. Specifically, this bill, in most instances would prohibit companies from cutting back or eliminating retiree health benefits and to require companies to restore any health benefits they took away from retirees. This legislation currently has 95 co-sponsors. [...]
    As you know, IBM used to provide free health insurance for their retirees for life. Now, IBM has turned their retiree health benefits program into a "cash balance" health benefits plan in which retirees are responsible for paying more and more of their health care costs. Many of you know full well what happened when IBM slashed the pension benefits of workers by as much as 50% through an age discriminatory cash balance pension plan. Vermont IBMers, and IBMers throughout the country fought back, forcing IBM to change its cash balance pension plan and increasing the retirement benefits of some 35,000 employees in the process. [...]
    Unfortunately, Tom Watson's IBM is not Lou Gerstner's or Sam Palmisano's IBM. At the same time IBM was reneging on the promises on pension and retiree health benefits, at the same time IBM was laying off thousands of IBMers in Essex Junction and throughout this country, while agreeing to train 100,000 software specialists in China over the next 3 years, it helped one man become one of the richest people in the U.S. worth $600 million, according to Forbes Magazine. And, that person is the former CEO of IBM, Lou Gerstner. Even though, IBM gave Mr. Gerstner over $260 million in stock options, and annual bonuses of$8 million during his final years as IBM's CEO, apparently they were so concerned about his financial well-being during his retirement years, that IBM made sure that Gerstner will be receiving an annual pension benefit worth over $1 million for the rest of his life.
  • Yahoo! message board: "annual ibm shareholders meeting...2005" by "democratizeibm". Excerpts: For those who weren't there, here's a brief rundown of the IBM annual shareholders meeting in Charleston S.C.. This location appears to have been carefully chosen as it was a large complex removed from public access by acres of parking lots: i.e. "protesting by permit only" and that means no Alliance IBM/CWA people could plan on getting a permit. [...]
    The actual event was fairly low key, the `jumbotron' TV's were not used at all, I guess all those close-ups of the CEO biting his tongue during previous agm's killed that particular feature. After Sam's overview (things didn't go right and we're going to fix them!), and everyone was done yawning, came the proxy part of the meeting. Jimmy Leas went early and did a rather scathing review making the point that not only were IBM's action's immoral but as a result of the class action law suit were also illegal! He also stressed that it was clear IBM knew this ahead of time which put the company in an "at risk" position, maybe we need a proxy along the lines of "IBM should stop obvious violations of the law!!!". Jimmy also said it was obvious employees needed a union to protect their rights. Sam ignored all these points in his response saying in effect only that IBM was concerned about retirees and funding of the pension; you would think he wasn't even in the room listening but then what could he say other than something like, "yeah we're guilty and it's gonna' put a hurtin' on us stupid crooks when we settle". [...]
    This was followed by a question and answer period, using wireless microphones and Sam picking questioners from the audience and also reading questions from the internet. The internet questions were pathetically screened questions and canned answers from Sam designed to avoid and real questions from the audience. One Alliance supporter was given a microphone and had it removed as Sam realized who would be speaking and quickly changed to another person. They had a larger than usual number of fawners asking question and only Linda Guyer of the Alliance got to ask a question from our group, suggesting Sam give back some of his bonus in light of the company performance. Sammy made the supposedly on the spot announcement that future bonuses would be held pending company performance improvement for certain executives, whoop dee doo… [...]
    A good joke that came out of the meeting… What's the difference between a profession thief and a crook? If crook robs you and gets caught, he gets arrested and goes to jail, if a professional thief robs you and gets caught, you go to court, he keeps some of what he took and votes himself and the rest of those that planned the crime a big fat raise.
  • Yahoo! message board: "annual ibm shareholders meeting...2005 (part 2) " by "democratizeibm". Full excerpt: And in other news, Sam said share buybacks had reached 63 Billion and the board announced another 5 billion for this year. He didn't mention that the board of directors had voted themselves an over 40% pay raise, I guess partaking in the illegal pension theft was so anxiety producing they needed tens of thousands of more dollars to salve their consciences. I wonder if you look in the dictionary under greed if you'll find the ibm BOD listed?
  • Yahoo! message board: Mike Saville's Speech about his shareholder resolution on off-shoring jobs. Full excerpt: Good Morning I worked at IBM for 32 years in various capacities including management. I consider myself a long term shareholder as I purchased my first IBM stock in 1968 and I still have that stock. Offshoring jobs will hurt the $51 Billion IBM Brand name and Reputation in countries and communities where IBM does business. Tom Lynch, IBM's former Director of Global Employee Relations told an internal meeting that "offshoring" is going to destroy morale as IBMers are forced to train someone from China, Brazil, India or Russia to do their job.
    The Employee and all those working with the employee will be outraged because of the indignity, unjustness, and unfairness knowing that their job will not be theirs at the end of a fixed period of time. IBM Human Resource Partner Christoph Grandpierre described how European IBMers have greater protection because of their Unions and Work Councils. As American IBMers lose their jobs to Offshoring and European IBMers fight back through their Unions as demonstrated this week in France and Germany, American IBMers will learn the value of Unions as Mr. Grandpierre suggested.
    Mr Palmisano, Offshoring is short term, short sighted, immoral and counter-productive. There is nothing wrong with IBM hiring people from all over the world. IBM has long done that and it is good business to do so. The Problem is eliminating jobs here in the United States and Europe and transferring those same jobs to low wage countries. The real loser will be IBM. Instead IBM should Re-train and retain its loyal American and European employees while the workforce in other countries expands. IBMers should be treated as Assets and not Commodities. I urge you to vote for this proposal - Thank You.
  • Communications Workers of America (CWA): IBMers Stress Accountability at Annual Meeting. Excerpts: Members of CWA Local 1701, Alliance@IBM, voiced the concerns of thousands of workers and shareholders at the IBM Corp., annual meeting in Charleston, S.C. About a dozen Alliance members attended the meeting, seeking shareholder support on resolutions to improve corporate governance and accountability. [...] IBM employees continue to face many critical issues, including the loss of jobs due to the company's increased focus on offshoring. Alliance@IBM has been fighting to improve accountability at the company and to keep quality jobs, said Lee Conrad, national coordinator for Alliance. Alliance members also spoke in support of several shareholder resolutions. A resolution directing that senior executives be compensated based on their actual performance, not additional earnings generated by "pension income," gained 38.1 percent of voted shares.
  • iSeries Network: IBM Annual Meeting Overlooks iSeries. By Cheryl D. Ross. Full excerpt: Former IBMer and longtime iSeries advocate Janet Krueger was disappointed at IBM's annual shareholder meeting last week that the IBM brass never made any mention of the iSeries. At one point during the meeting, she says, someone asked CEO Sam Palmisano about IBM's commitment to innovation, and he mentioned how the POWER5 processor in the pSeries is a great example of that innovation and is very well received by its audience. He specifically mentioned the pSeries, Krueger says, not the iSeries and the pSeries. In fact, she says, no one from IBM discussed the iSeries at all in any of the talks about strategy. "I wanted to ask if the iSeries is really part of IBM's long-term strategy," she says, "or whether this latest marketing effort is just a last-ditch effort to milk the install base. ... Unfortunately, I never got the mic after I presented my stockholder resolution, and Sam never called on me."
  • Additional coverage of the 2005 annual shareholder meeting is available in last week's edition of these highlights.
  • KTTC-TV (Rochester, MN): Age discrimination lawsuit. Excerpts: A new court ruling gives a former IBM employee the okay to move forward with a lawsuit. The rural Rochester man is suing Big Blue for age discrimination after being let go nearly four years ago. NewsCenter's Asia Zmuda filed this report.This latest court ruling from the U-S Court of Appeals re-instates a lawsuit that was originally dismissed.53-year old Dale Thomforde is suing IBM for lost wages and benefits. Thomforde and others were let go from the Rochester plant in 2001 as part of a reduction in force. Thomforde worked for the company for some 28-years with his last position as an advisory engineer. The pink slip included an agreement not to sue, which Thomforde's lawyer says has caused some confusion and even caused a federal judge to dismiss the case when it was first filed. But lawyer Bill Egan says that agreement did not include suing for age-discrimination, which Thomforde believes did happen.
    "When Dale took a look at the statistical evidence given to him by IBM he noticed first that the average age of persons laid off in his job group was 52 and the average age of employees not being laid off was 42," said Egan.
  • Yahoo! message board: "Homforde wins on appeal!!!" by Janet Krueger. Full excerpt: Laid off IBMer Dale Thomforde won his appeal of dismissal of his age discrimination in layoff case at the 8th circuit court of appeals. The district court had dismissed his case based on IBM's motion for summary judgment because he signed the waiver. The appeals court today reversed and declared the waiver illegal as a matter of law. The 8 page decision was just uploaded to the FILES area of this board as ThomfordevIBM.pdf. This is excellent news!
  • New York Times: Drug Makers Reap Benefits of Tax Break. By Alex Berenson. Excerpts: A new tax break for corporations is allowing the biggest American drug makers to return as much as $75 billion in profits from international havens to the United States while paying a fraction of the normal tax rate. The break is part of the American Jobs Creation Act, signed into law by President Bush in October, which allows companies a one-year window to return foreign profits to the United States at a 5.25 percent tax rate, compared with the standard 35 percent rate. [...] Already, four of the six drug makers have collectively announced plans to return $56 billion in profits to the United States. Two others say they are still considering but could repatriate an additional $18 billion. Had the six companies faced standard federal taxes on those profits, they would have paid $26 billion to the United States. Instead, they will pay less than $4 billion. Chris Senyek, an accounting analyst at Bear Stearns, said drug companies would probably make up about half of all the money repatriated by publicly traded companies.
    During this window, returning money to the United States is to the advantage of the companies because they can spend the cash here rather than having to use it overseas as tax laws generally require. Lawmakers have said their main intention for the law was to encourage American companies to build new operations and hire workers. Congress passed the law in response to pressure from the European Union to resolve a long-running trade dispute.
    Although the act is intended to create jobs, Pfizer said last month that it would cut its annual costs by $4 billion over the next three years. Pfizer, which will repatriate at least $28 billion under the act, did not say how many jobs it planned to eliminate, but analysts expect the company to shrink its work force by thousands of people. Mr. Senyek said the law would create an insignificant number of jobs because companies can easily work around provisions in the law meant to stop them from using the money for dividends to shareholders rather than new hiring. After the break expires, companies will probably go back to stockpiling profits overseas as they wait for another tax holiday in a few years, tax lawyers say.
  • IBM/Lenovo Employee Purchase Program. Discounted pricing for IBM U.S. and Lenovo U.S. employees, their family and friends.

Coverage on H1-B and L1 Visa and Off-Shoring Issues
  • WashTech: WA State Passes Offshore-Outsourcing Study Bill. Excerpt: Washington State has become one of only five states to pass legislation on the politically explosive issue of offshore outsourcing. [...] Earlier in the year, several bills in the Legislature dealing with offshore outsourcing died after intense lobbying by the business community. In the end, legislators realized that the issue of job losses due to outsourcing is such a hot topic that they had to do something. A coalition of labor unions comprised of the Boeing engineers, the Society of Professional Engineering Employees in Aerospace, and the Communications Workers of America, including WashTech, did intensive lobbying during the entire legislative session to remind law makers that workers in the state of Washington want action on the issue.
  • Yahoo! News: Upstate New York Man Gets the Poop on Outsourcing. Excerpts: Computer programmer Steve Relles has the poop on what to do when your job is outsourced to India. Relles, one of a rising number of Americans seeking new opportunities as their work shifts to countries with cheaper labor, has spent the past year making his living scooping up dog droppings as the "Delmar Dog Butler." "My parents paid for me to get a (degree) in math and now I am a pooper scooper," Relles, a 42-year-old married father of two told Reuters. "I can clean four to five yards in a hour if they are close together." Relles, who lost his computer programming job about three years ago, got the idea of cleaning dog dirt from people's back yards from Mark Booth, a friend in Buffalo, New York. Ralles has over 100 clients who pay $10 each for a once-a-week cleaning of their yard.
  • Computerworld: Q&A: Information Builders CEO blasts Gates' H-1B stand. 'He can find all the engineers he wants in this country,' says Gerald Cohen. Excerpts: Gerald Cohen, the outspoken founder and CEO of New York-based business intelligence software vendor Information Builders Inc., spoke with Computerworld on Friday about the controversy surrounding offshore outsourcing and the H-1B visa cap. Excerpts from that interview follow. Q: A lot of CEOs of companies like yours are saying they just can't find the people, so they're lobbying Congress to get rid of the H-1B visa cap. A: That's bulls---. A couple years ago that was true, and that's when the cap was raised. You know who wants [to get rid of the cap]? The Indian companies. The way the Indian companies work is they have to have a certain number of people here, and a lot more people back there -- so they're the ones who want to get all these people in. And they don't even pay them American wages -- they just pay them as cheaply as they can.
  • Minnesota Public Radio: Thomas Friedman Speech. New York Times columnist, Pulitzer Prize winner and Minnesota native Thomas Friedman discusses globalization, and his latest book, The World is Flat: A Brief History of the 21st Century. (Editor's note: We highly recommend listening to Mr. Friedman's talk. Links to both the audio and video versions of his talk are available at the linked Web page.)
  • IEEE: U.S. Government Agency's Approval of Unauthorized Visas Cuts U.S. Jobs. Excerpt: IEEE-USA "is extremely discouraged to learn that the United States Citizenship and Immigration Services (USCIS) in the U.S. Department of Homeland Security has accepted and approved more than 75,000 H-1B visa petitions for Fiscal Year 2005 even though they were capped at 65,000," said IEEE-USA Career Activities Vice President Ron Hira, an assistant professor of public policy at the Rochester, NY, Institute of Technology. The IEEE-USA Vice President stressed: "We're not sure just how or why this excess in authorized visas occurred. But this certainly isn't the first time that the Federal agency charged with responsibility for administering the nation's immigrant and non-immigrant admissions programs has failed to enforce a very plain and straightforward law. How hard can it be to count to 65,000 and stop issuing visas?"
    Dr. Hira continued: "This excess in approved visas defeats the purpose of one of the most important safeguards for American workers. By increasing the number of visas issued, the USCIS has unilaterally reduced job opportunities for American workers at a critical time, when the job market is still very soft." He also noted: "Several years ago, the USCIS predecessor agency — the Immigration and Naturalization Service (INS) — issued 20,000 more H-1B visas than it was supposed to have approved, and added this additional number into the following year's total." IEEE-USA's Hira also applauded Senator Charles Grassley (R-IA) and others in Congress "for moving quickly to hold the USCIS accountable for its actions."
  • Jim Hightower: Offshoring Is "Psychologically Disturbing". Excerpts: An Indian trade group says there are 350,000 people there working in such back-office service jobs for U.S. corporations, and the number is expected to grow by 40 percent this year alone. The corporations are tapping India's vast pool of workers who are English-speaking, tech-savvy... and cheap. But these workers are also nervous wrecks, for they know that Americans are very angry about the offshoring of middle-class jobs – and American callers often take out their anger on them, using creative combinations of four-letter words. The Indian call centers try deception to deflect this anger. Rahail Manzoor, for example, is told to call himself "Jim" on the phone, and he has undergone lessons in how to speak "American." Some call centers have giant TV screens showing the current weather in U.S. cities, the latest sports scores, and such, so workers can make small talk and pretend to be in the U.S.
    But many callers know better and berate the poor operators, who are under such stress that they suffer all sorts of debilitating illnesses. It's "psychologically disturbing," says Manzoor. It's also psychologically disturbing for Americans to see our middle-class future exported, while CEOs calmly count the billions of dollars that they rake in by pitting us against the Indians. To help unite workers here and there, call the AFL-CIO's international department: 202-637-5050.

Vault Message Board Posts
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Some of this week's posts follow.
  • "Blood from a stone" by "MythAndMeaning". Excerpt: You have to kinda wonder when someone on Wall Street is going to look critically at what IBM is doing and begin questioning SP. Problem: didn't meet growth projections: Ostensible solution: cut cost. What? Everyone in my practice area has been flat out for years, and we're making great money. Just not enough money. Any cutting just eliminates staff who are on sold work. Which won't stop them, of course. You can't grow a business by cutting costs. You can't compete and charge a premium if you haven't invested to create that market differentiator. SP and his minions need a refresher in business basics.
  • "CEO's and PAT answers" by "Dose of reality". Full excerpt: M&M - I’m glad I am not the only one who noticed the irony in our new growth strategy. There are a number of reflex actions that overmatched CEOs take when things get tough. Most of the time, the action plans have nothing to do with the official company line. Here’s SP’s pat answer du jour, in the style of that old SNL skit: “We need to get closer to the customer. We have to cut out layers to get closer to the market”
    What he really meant to say was: We need to indiscriminately cut out large components of the organization that are run by folks that have never really supported me. All of my loyal supporters will be protected, and I won’t really reorganize or streamline the functions that should be, since then we really would have to reinvent ourselves, and I don’t have the foggiest idea how to structure this company any other way than the way it has been structured since I left history class back in 197x. I will shift costs to low cost jurisdictions and quality be damned. There’s no way I am going to admit that the organization is sick, or that my stewardship over the last few years has been an abysmal failure. I am just hoping I can hang on for another year or so of zero strike price options. Do you think anyone will notice if I re-price the other options I have now?
    Business is really not that difficult. Some never-has-been companies fail due to a lack of management talent. However, it is the presence of unfettered, self-serving leaders that is at the core of most failures of previously successful companies. We are witnessing a colossal example of this. For the last ten years, IBM has existed for the enrichment of the top few hundred leaders (ABC – feel free to refine the numbers), and it has been on borrowed time ever since.
  • "Denial" by "Dose of reality". Excerpts: The impression SP is trying to leave is that we have an acute problem in Europe, and by implication that we don't have any problems in the U.S. He is still in denial about the fundamental organizational and strategic weaknesses, like a lack of pay for performance, excessive overhead, stifling bureaucracy, pervasive infighting, business unit favoritism, hyper-political culture, etc. If we just get rid of those 13,000 deadweight troublemakers, all of our problems will be solved. Now shifting resources to higher growth markets is a code word for offshoring, at least in services. China, Brazil, India, Eastern Europe are growth markets from a supply standpoint, but they are still not high growth from a demand or a profitability standpoint. This will do nothing to improve profitability, other than to shift to a lower cost jurisdiction. But I thought we had a problem in closing deals and were too distant from the market??! This is just another move into the commodity services market - part of the death spiral that put us in this situation to begin with. It's like drugs - the more you take them, the more you need them until you are too far gone to help yourself.
    Then we have the amount of the restructuring charge - $1.7 billion. That's $130k per person net of the favorable impact of reduced pension liability! Two things driving this - first we are not finished yet. Second, the standard play is to take a much higher restructuring charge up front so that you can use the release of the excess to cover operating earnings shortfalls later on. It is a common game. We in BCS have to love that phrase "consolidating much of the service delivery workload into fewer locations by using standard job roles, processes and tools". CRM technical architect and ERP application configuration - we can combine those right? Specialization is what we sell. Bureaucratic standardization is the reason we can't sell work. I expect a little bounce over the next year or so, and then we will be back on that secular downtrend, unless something is done to really cure what ails us.
  • "A Shaky Foundation" by "Dose of reality". Full excerpt: When times are tough, the absence of fundamental management tools and the drain of having a political self-serving culture really rear their ugly heads. They are rocks being uncovered by an ebb tide. I wouldn’t be surprised if we had enough warm bodies to fill project needs, but many of the people on the bench have the wrong skills, or do not have the experience or talent needed for critical roles. If we had a robust and accurate staff evaluation process, and a culture of merit instead of one of nepotism and socialism, we would at least be capable of making the right hard choices about staff.
    What is more likely to happen is that those that are connected will remain, and those that aren’t connected will be RIF’ed, regardless of performance, potential, or skill set. There is a strong negative correlation between how connected people are and how much value they have – hmm… wonder why that is?! Mark my words – we will be throwing out a lot more babies than bath water.
    The other problem in the background is the excessive utilization targets. When utilization targets are 90%, that means that at any given time, the “expectation” is that only 10% of staff will be on the bench. Factor that down by >5% for the “useless” class, which is always a fixture in the roster, and you are left with <5% of staff to choose from. What are the odds that you will find the right group of consultants with the right tool, industry, functional knowledge, experience, and geography to staff a project when it is sold? Even with the most sophisticated pipeline management system in the world, it is impossible to manage resource capacity and field an “A” team.
  • "Do you really believe that?!" by "Dose of reality". Excerpt: Your skills and value increase over time, and the cost of living goes up over time. Your performance will be better or worse than your colleagues, and the company should prefer that it is better. Those are the reasons why companies give raises, not because they promised you, or are contracted to do so. When bonus targets are given as ranges from upper single digits to mid-teens, and your performance targets are established and you comfortably beat them, there is a more than reasonable expectation that bonuses should be paid. Again, there is a contractual “out” that IBM as a whole did not meet its targets. But when that happens year after year, the targets keep increasing, and the feasibility of achieving them keeps dropping, something has to give. If we don’t reward better performance, we won’t get it.
  • "It Doesn't Pass the Smell Test" by "Dose of reality". Excerpts: Unable to maintain a workforce of desperate internal slave labor due to the availability of other opportunities and the annihilation of employee goodwill that was built up over decades, we are now looking to create a workforce of desperate external slave labor that are unable to find suitable employment elsewhere, or in some cases will be exploited by a different middleman. It is all about pension and health care disintermediation. Candor had it right when she said that the employment market is efficient. An employee will find their worth in the market. If there is less all-in compensation earmarked for service providers, you will get less service, whether your paycheck says IBM, or Sweatshops-R-Us. It truly is a shell game.
    Now the theory is that we would no longer have to carry idle resources as a fixed cost. But we do have to carry sourcing overhead, and we will double the amount of complexity in contracts, since we now have to manage external relationships on both sides – supply and demand. In addition, how can we possibly ensure adequate resource quality when projects are sold? How will this make us “more responsive to the market”. How are we going to develop capabilities in our new core competency of contract broker if we don’t have people who are immersed in the services we are selling? Who is going to be walking the halls of clients and beating the carpet for more opportunities? A tangential relationship manager isn’t going to be able to do this effectively!

Coverage on Social Security Privatization
  • New York Times: A Gut Punch to the Middle. By Paul Krugman. Excerpts: By now, every journalist should know that you have to carefully check out any scheme coming from the White House. You can't just accept the administration's version of what it's doing. Remember, these are the people who named a big giveaway to logging interests "Healthy Forests." Sure enough, a close look at President Bush's proposal for "progressive price indexing" of Social Security puts the lie to claims that it's a plan to increase benefits for the poor and cut them for the wealthy. In fact, it's a plan to slash middle-class benefits; the wealthy would barely feel a thing. [...]
    I asked Jason Furman of the Center on Budget and Policy Priorities to calculate the benefit cuts under the Bush scheme as a percentage of pre-retirement income. That's a way to see who would really bear the burden of the proposed cuts. It turns out that the middle class would face severe cuts, but the wealthy would not. The average worker - average pay now is $37,000 - retiring in 2075 would face a cut equal to 10 percent of pre-retirement income. Workers earning 60 percent more than average, the equivalent of $58,000 today, would see benefit cuts equal to almost 13 percent of their income before retirement. But above that level, the cuts would become less and less significant. Workers earning three times the average wage would face cuts equal to only 9 percent of their income before retirement. Someone earning the equivalent of $1 million today would see benefit cuts equal to only 1 percent of pre-retirement income. In short, this would be a gut punch to the middle class, but a fleabite for the truly wealthy.
  • New York Times: Hitting the Middle Class, Again. Excerpts: As he moved into the home stretch of his 60-day Social Security road show last week, it became clear that President Bush had saved the worst for last. Mr. Bush endorsed a proposal that would take a huge bite out of the Social Security retirement benefits for the middle class, claiming that would close some 70 percent of the system's financing gap. That figure is almost certainly overstated. Under the proposed reductions, young workers who now earn about $36,000 would face a 16 percent cut; those earning about $58,000 would face a cut of 25 percent, and those earning $90,000, 29 percent. People not yet in the work force would face even larger reductions. [...]
    Worse, if Mr. Bush succeeded in creating private accounts, these newly proposed cuts would be only the first whack at retirement benefits. Workers who opened private accounts would also see their government benefits reduced by one dollar for every dollar invested - plus interest, computed at 3 percentage points above inflation. That would occur even if a private account performed miserably. In the end, the Social Security checks would be minimal - or nonexistent - for millions of Americans. [...]
    Politicians also have to face the hard truth about taxes. Raising the payroll tax by a mere three-tenths of a percentage point - starting 10 years from now and adding tiny increments over the succeeding 20 years - would be fair and lucrative, without being too steep or too sudden. It would also be fair to raise the cap on wages subject to the Social Security tax to about $150,000 from the current $90,000.
  • TomPaine.common sense: Stuck In The Spin Cycle. By Robert L. Borosage. Excerpt: On Social Security, the president offered a warmed-over stew of distortions and dodges. With the retirement of the baby boomers, America faces a serious, long-term fiscal challenge. But Social Security isn't the problem. Even if nothing is done, Social Security will meet the president's standard of paying out higher benefits in the future than are received today. Soaring Medicare and Medicaid costs are the major problem, an expression of our broken health care system. The president's only significant initiative in regard to this 'right now' crisis has been to make it worse— passing a prescription drug bill that prohibited Medicare from negotiating a lower price for drugs, a multi-billion dollar payoff to drug companies and HMOs.
    While Social Security isn't in crisis, the president's plan would create one. He disparages the Treasury bonds held by the Social Security Trust Fund as simply "file cabinets full of IOUs." Then he proposes issuing another $15 trillion of those IOUs over 40 years—effectively tripling the national debt—to pay for private accounts. The president describes this as a boon to younger workers. But they will end up paying the interest on that debt, while suffering deep cuts in their guaranteed benefits. The only certain results of the president's plan are more seniors in poverty and more debt for the nation.
  • Washington Post: Social Security, Day by Day. By Richard Cohen. Excerpts: This column is about Day Two. Day One is the first day of the work year. On that day, the average American worker earns about $142.31 and, of course, has a piece of that withheld for Social Security. Since the cap on such payments is $90,000 a year and the average American earns only $37,000, he or she pays Social Security tax all year long. Now we come to Day Two. For some people, it's not like Day One at all.
    A couple of those people happen to be Tom Freston and Les Moonves. They are co-presidents of Viacom, the entertainment conglomerate that owns CBS and Paramount Studios. Last year they each took home more than $50 million. Of that, about $20 million was in salary and bonuses (I'm rounding like crazy here), which means that if they get paid for 52 weeks a year and work a five-day week, they earned about $77,000 on Day One. By, say, 10:15 in the morning of Day Two, their Social Security obligation was behind them.
    I give you these data so you will see what suckers we Americans are. Here is the president of the United States, a certain Mr. Bush, attempting to sell us a revision of the hallowed Social Security program -- FDR, Warm Springs and all that -- that would reduce benefits for many of us while at the same time ruling out any increase in the cap. The cap would stay where it is, about $90,000, because to raise it would mean a tax increase, and it is dogma in the Republican Party and the White House that such a thing must not be done. Instead, taxes must only be reduced, which they have been under George W. Bush. To refer back to Freston and Moonves, had they been in the money back in, say, the 1980s, their marginal tax rate -- the rate paid on anything over the first couple of hundred thousand dollars -- would have been 50 percent. (It's been as high as 94 percent.) It is now around 35 percent. Not bad. Not bad at all.
  • Center for Economic and Policy Research: The Regressive Impact of the Progressive Indexation of Social Security Benefits [PDF, 14 pages]. By Dean Baker. Excerpts: President Bush’s proposal for progressive indexation would put in place a structure of benefit cuts that would have the greatest impact on middle--income retirees. While the plan calls for protecting the lowest wage workers, middle wage earners would see cuts that grow through time, eventually reaching a level that is more than 35 percent of the scheduled benefit by the end of Social Security’s planning period in 2080. Although the cuts projected for higher income wage earners will be a larger share of their projected benefits, this is likely to be of much less consequence to these workers, because Social Security is a much smaller share of their retirement income.
    When progressive indexation is coupled with the system of private accounts proposed by President Bush, the system appears even more regressive. President Bush’s proposal treats the money in the private accounts as a loan that will be paid back from the guaranteed Social Security benefit. However, with progressive indexation, the guaranteed Social Security benefit will not be large enough to repay the money owed by the highest income earners. In effect, by cutting the benefit for the highest income earners with private accounts, progressive indexation simply cuts the amount of money that Social Security is repaid. In this case, middle and high wage earners will not only lose a much larger share of their retirement income with progressive indexation than the highest income workers, they will also lose a much larger share of their Social Security benefit.
    In short, progressive indexation is a regressive way to cut Social Security benefits, if the criterion is the percentage reduction in retirement income. While the lowest wage earners would be protected, middle--income earners would see by far the largest reduction in their retirement income under this plan. If progressive indexation is accompanied by a system of private accounts comparable to that proposed by President Bush, then it is even more regressive. Under this system, middle--income workers would not only lose a larger share of their retirement income than the highest income workers, they would also lose a larger share of their Social Security benefits.
  • United States Senate Republican Policy Committee (RPC): A Broader Perspective on Social Security Reform. Retirement-Income Security: The Status of Hybrid-Pension Plans. [PDF, 10 pages]. Excerpts:
    • In the end, Congress must clarify the status of hybrid-pension plans as soon as possible to remove the threat to the retirement-income security of millions of participants affected by the current legal uncertainty. Moreover, Congress should make such clarification apply to all hybrid plans – new and existing ones. A prospective solution only prolongs the uncertainty for more than 7 million participants of existing hybrid plans.
    • With Social Security reform as a national priority, Congress has an important opportunity to take a broader view. By addressing the issue of retirement-income security for Americans, Congress can provide comprehensive solutions, including steps to enable employers to strengthen and expand the private-pension system in this country. The absence of clear legal standards concerning hybrid-pension plans places the retirement income of millions of Americans at a greater risk. Left unresolved, the likely upshot will be an acceleration of companies eliminating their defined-benefit pensions, not to mention the collateral effect it will have on the PBGC – fewer defined-benefit plans contributing to the agency's insurance fund, which already faces financial strains.48 To avoid these outcomes and help Americans secure their retirement income, Congress should act this year to address the myriad pension issues facing the nation, including the legal status of hybrid-pension plans.
  • "fhawontcutit" comments on the RPC report. Full excerpt: They don't want prospective legislation -- they want legislation to cover plans already in place. Gee, I didn't know that Cooper V. IBM was a "threat to the retirement-income security of millions of participants affected by the current legal uncertainty".
  • Janet Krueger comments on the RPC report and the status of the Cooper v. IBM pension lawsuit. Excerpts: The legal teams have a hearing scheduled with Judge Murphy on May 9 to request the final order for distributing settlement notices. Assuming that takes place, final settlement details should be posted on the web and settlement notices should be mailed within two weeks. Please continue waiting patiently; it shouldn't take much longer! [...]
    The current administration's tort reform is targeted at torts, not employment litigation, and should have no impact on the IBM lawsuit. What *should* scare you is some of the administration's proposals on retirement reform -- there a number of Republicans who are claiming business cannot stay 'competitive' unless they make it easier for them to default on both health care and pension promises -- and they are proposing these reforms be done retroactively, not just prospectively! It is time to once again remind our senators and representatives in Congress that employees and retirees VOTE!!! (I posted a link last night to a policy paper from the Republican Policy Committee, that shows they are directly targeting Cooper v IBM for retroactive relief, just to show I'm not making things up...)
  • Janet Krueger responds to a defender of the Bush administration. Question: Who wants Cooper dismantled? Who has it in their political platform? uhhh...1995 and 1999, when this all happened, Clinton was in. And no one made a peep. Both parties are drawn to money and power, and by the holders of both. In 20+ years I've seen party power switch back and forth...and it never made a difference. Every so often I would see my benefits reduced or negated.
    Janet responds: Apparently, you haven't been paying attention over the last 6 years. In 1999, the IRS under Clinton put a complete hold on putting out any more Treasury approval letters for hybrid plans, pending resolution of court cases and the outcome of an EEOC/Treasury/DOL task force that was put in place to study the issues, several senate hearings were held, and multiple bills were introduced to address the issue. If that had not happened, several million more American workers would have suffered under cash balance conversions.
    Since the Bush administration stepped in, the task force was disbanded, the IRS is back to business as usual relative to issuing letters, the DOL now has blessings for cash balance plans on their web site, and multiple bills and treasury regulations have been introduced to retroactively legalize what IBM did. Responsibility for those actions needs to be placed squarely on the shoulders of the politicians taking the actions!
    On *THIS* issue the Republicans have clearly taken a stand that people reading this board need to understand. It is NOT a stand shared by ALL politicians. Perhaps this issue isn't important enough to impact your feelings about your political allegiances, but PLEASE don't pretend the stand has not been taken or ignore what is happening right under our noses!
    Everyone needs to work on educating their representatives and senators -- that will be tough to do if their heads are buried in the sand... THIS BOARD does not condone political bashing, but it absolutely requires informed analysis of political bills, policy papers being circulated on Capitol Hill, and government agency actions and regulations that WILL impact middle class retirement.

New on the Alliance@IBM Site:
  • Job Cuts Status & Comments Page. Excerpts: Job cuts are coming. Information needed: What is Your location? How many job cuts at your location? What locations are cutting jobs? Name of Division and Business Unit?
    • 50+ people in the IBMGS Strategic Outsourcing Groupware tower were cut last Thursday. Roughly 10% of the organization.
    • IBM currently is laying off people in Belgium, at the same time it is denying in the press there is a restructuring going on. My own internal sources indicated at least 30 people were affected, but when I handed in my company car (most senior consultants and managers have company cars in Belgium as a tax friendly form of compensation), the person at the garage told me 53 IBM cars were brought back during the last weeks... I have also heard more layoffs will be implemented during the next months. There clearly is a difference in what IBM says and reality.
    • Integrated Supply Chain Layoff, ISC, 10% Indirects and 5% directs. Employees will be notified on 5/26 with the earliest departure date of 6/27/05
    • IGS: All Deskside support contractors in Dallas, Texas have been laid off
    • Here in the UK: according to a reliable manager (one who is also volunteering to go) the original target for the number of employees to leave Global Services was ~ 650. So far over 1900 expressions of interest in the voluntary package have been received (cutoff is the weekend). On May 17 the company will confirm back to the employees who will be permitted to go, and people will be expected to work their last day on June 16th. The Manager also confirmed that it is customary for about 50% of offers to be taken up, so they expect that over 900 people will go. The plan apparently is to accept all volunteers (hence the amount put aside for the one-time charge is on the high side), and to backfill the excess with staff from low-cost countries (for the UK, that means workers in South Africa and India). I hope they accept my volunteering to leave. I can't stand to see the company I loved once tear itself apart like this. Its almost worse than watching a loved one die.
  • Scotsman.com: Fears for Scots jobs as IBM set to axe 15,000 in European shake-up.
  • Silicon.com: Leader: Why would IBM make layoffs?
  • An employee of IT company IBM is seen in front of the closed main gate of the German IBM headquarters wearing a shirt that says 'IBM - 9 billion $ profit are not enough to preserve my job' during a protest demonstration in Stuttgart-Vaihingen, southern Germany, Tuesday, April 26, 2005. The US company announced some closures of German IBM branches with a possible cut of around 600 jobs. (AP Photo/Daniel Maurer).

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