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    Highlights—July 2, 2005
  • Forbes: IBM: SEC Probes Company Disclosures. Excerpt: IBM Corp. announced Monday that the Securities and Exchange Commission is investigating how the company disclosed its methods for expensing employee stock options in the first quarter. The technology giant described the investigation as informal and said it was cooperating. When IBM released its first-quarter earnings on April 14, it said employee stock options cut into earnings by 10 cents per share. The consensus analysts' estimate was 14 cents a share. The 14-cent figure had emerged in a chart that chief financial officer Mark Loughridge put out during an April 5 conference call, when he disclosed what options costs would have been in the year-ago quarter had IBM been expensing stock compensation at the time. He indicated that the then-current quarter's results would be similar.
    Some analysts complained that IBM led them to believe the options-expensing costs would be higher so as to cushion the disappointing results IBM ended up posting. IBM's first-quarter earnings amounted to 84 cents per share in the quarter, well short of the 90 cents per share analysts had been expecting. When asked if the company had intentionally misled analysts in order to soften the impact of the relatively weak quarterly earnings, IBM spokesman Ed Barbini would not comment, other than to say that Loughridge had been clear that stock-option expenses would be lower in 2005 than in 2004.
  • Wall Street Journal: SEC Probes IBM Option Disclosure. Plan to Record the Expense Appeared to Cushion Blow Of Quarterly Profit Shortfall. By Charles Forelle. Excerpts: The Securities and Exchange Commission is investigating International Business Machines Corp.'s disclosures of its plan to expense stock options, a move that appeared to cushion the blow from a substantial earnings shortfall announced for the first quarter. The company said in a brief statement yesterday that it received notice from the SEC of an informal investigation; IBM said it was complying. [...]
    On April 5, IBM announced, with little warning, that it had decided to account for the expense of stock options and other equity-related compensation in the just-elapsed first quarter, months before the deadline to do so. But when, nine days later, IBM announced an earnings shortfall for the quarter that jolted the market and prompted a rapid selloff, the options disclosure retrospectively raised eyebrows. [...]
    Explaining the discrepancy between the suggested 14-cent adjustment and the actual impact of 10 cents, an IBM spokesman said in April that a portion of the 14 cents was attributable to higher pension costs. Some analysts disputed that notion, saying the disclosure was about options, not pensions. A chart from the April 5 presentation that illustrated the "current" and "adjusted" estimate figures makes no mention of higher pension expenses. John R. Bielema Jr., a lawyer at Powell Goldstein LLP in Atlanta, says another avenue the SEC may be examining is whether IBM had an obligation under securities regulations to give an update on its first-quarter performance at the time it made the options announcement.
  • iSeries Network: IBM Subject of SEC Probe. Excerpt: IBM on Monday disclosed that it's the target of an informal SEC investigation concerning the way it disclosed its first-quarter 2005 earnings, as well as the way it expensed equity compensation. The SEC told IBM the investigation was not an indication that IBM had broken, the company reported. IBM was unwilling to discuss the matter further, and the SEC says it doesn't discuss ongoing investigations — or even confirm whether they're ongoing — but the investigation may have something to do with a change in the way IBM reports equity compensation, or stock earned by employees, which the company announced only a week or so before its first quarter earnings announcement.
  • Yahoo! message board post by "fhawontcutit". Excerpt: Health care benefits are also valuable prior to Medicare eligibility.
    Unfortunately, too many still have their heads in the sand and pretend that they don't have a problem. For most people, the biggest takeaway in 1999 was the retiree medical benefits. For more info, see http://www.allianceibm.org/FHA.html. Even if you get the FHA, and can use it to depletion, it is doubtful that the FHA will get you to Medicare eligibility. (And if you *THINK* you are going to just go out and get an individual policy, you really need to *THINK* again. It will probably be prohibitively expensive and you may not even qualify if you have a pre-existing condition.)
  • Yahoo! message board post by "bronco325fsb". Excerpt: I would definitely like to go another 2-3 years but, as I said,
    my division is in the toilet. As a matter of fact, our direct manager just returned from a 2-week "fact-finding" trip to China, to see how many of our jobs could move to Shanghai. We have been told to expect to be midnight mentors (time difference) as things shift to China. Whoever mentioned the 'mental health' aspect of remaining at IBM has it totally right. It is the most difficult and trying of times, or 'interesting times', as the old curse goes... :-(
  • Yahoo! message board post by Janet Krueger. Excerpt: Congress also didn't fund the corporate windfall they stuck into the Medicare drug bill... Does everyone here understand that IBM now gets a huge tax benefit for continuing to provide retirees with health insurance, even if they charge retirees the full cost or more for it? Check out Ellen Schutlz's article on the subject dated 2/3/04: http://medaccessonline.com/articles/index.php?articleID=316&artcategoryID1=20
  • Computerworld: 100 Best Places to work in IT. Excerpt: In November 2004, Computerworld accepted nominations. To qualify to complete the company survey, participating companies, both public and private, had to have 2004 revenue of $250 million or greater and they had to employ a minimum of 500 people in the U.S. and have at least 100 IT employees in the U.S. Participants submitting nominations were asked to provide the name and contact information of an appropriate individual at their company who was familiar with or had access to employment statistics and financial data, as well as information about benefits policies and programs for the IT department and the company as a whole. (Editor's note: IBM did not it into the top 100).
  • Computerworld: 100 Best Places to Work in IT 2005. Excerpt: To work at one of this year's Best Places is to know the rewards of challenging projects, competitive salaries and career development. In fact, our survey of 20,435 IT workers at this year's Best Places showed higher satisfaction ratings than the 2004 Best Places employees reported in a variety of areas, including bonuses, morale, corporate culture and job security. [...]
    Great Relationships. But just as you can't force good teamwork, you also can't force fun. As Glen says, if people are worried about job security, having Friday pizza parties is like planning a beer bash on Death Row to get people's spirits up. At the same time, good relationships can make or break the quality of your corporate culture. The quality of office relationships is an important ingredient for employees at the Best Places, with 94.8% reporting that they have good relationships with co-workers.
  • The Detroit News, courtesy of the Fort Collins Coloradoan: Firms learn time off pays off. Sabbaticals, paid or not, more common. By Karen Dybis. Excerpts: Sabbaticals aren't just for college professors anymore. These days, a growing number of companies are giving their workers paid time off to volunteer, travel or reconnect with family in an effort to keep staffers happy and reduce turnover. Nationally, sabbatical rates are rising. In the 1990s, about 10 percent of companies had sabbatical programs, increasing to a high of 18 percent in 2000, according to the Society for Human Resource Management. That percentage fell during the recent recession but ticked back up in 2004, the HR group found. [...] CEO Jennifer Tallman McLean said the time away can help retain a long-term, hardworking employee and reduce turnover costs. “It’s easy to get stale,” McLean said. “Ideally, people get away from work, spend time with their families and come back refreshed.” Kevin Kennedy recently received an unexpected gift from his employer on his 20th anniversary — a monthlong paid sabbatical. Kennedy, an executive vice president at Campbell & Co., a marketing and communications company in Troy, Mich., said his mind has been churning with ideas about how to use his time since he received the award.
  • Boston Globe: Pension plans' funding shortfall exposes need for more options. By Diane Lewis. Excerpts: The last thing Terrill Fox, 60, of South Dennis, expected was that she would have to work after she retired. After all, Fox, a flight attendant for United Airlines for 34 years, had worked for a firm with a traditional defined benefit plan, a pension with a monthly payment based on her wages and tenure. But this spring, 11 months after Fox retired, the financially strapped airline ended its pension plans. The Pension Benefit Guaranty Corp., which is experiencing a shortfall of $23 billion, will pay $6.6 billion of United's $9.8 billion pension liabilities. Fox is worried that future monthly payments will be less than the $2,585 she receives because the PBGC caps distributions based on age at the time of retirement. Fox was 58 when she retired.
  • Wall Street Journal: How Retirees Are Blowing Their Nest Eggs. When it comes to IRAs, investors and financial experts alike are making plenty of mistakes. Here's why, and what to watch for. By Kelly Greene. Excerpts: Believe it or not, saving money in an individual retirement account is the easy part. Taking it out -- either from your own IRA or one you're lucky enough to inherit -- without running afoul of the Internal Revenue Service is much tougher. The federal tax regulations governing IRAs are complicated, with rules that vary for traditional accounts vs. Roth IRAs, and for distributions from your own IRA vs. one you inherit. On top of that, the rules get tweaked from time to time, with some big revisions a few years ago still roiling many IRA owners and inheritors. As a result, investors and their accountants -- along with the banks, brokerage houses and insurers holding IRAs -- are making plenty of mistakes. No matter who's at fault, individual IRA holders like Ms. Galvin and her sister usually wind up paying the price. The cost can be steep, both in lost opportunities and in big penalties if withdrawals aren't done correctly.
  • Wall Street Journal: Widows' Lament. As Companies Cut Spousal, Death Benefits for Retirees, Survivors Suffer More Loss. By Ellen E. Schultz. Excerpts: Margaret Jelly's husband, William, was dying of cancer in January 2003 when the couple received a letter telling them that the death benefit an employer promised him decades ago would be canceled -- in one month. "I guess I'm going to have to die before then," Mr. Jelly, 79, told his wife of 50 years. He wasn't joking. Both of them knew that Mrs. Jelly would need the money when her husband's leukemia overtook him. His pension would be cut in half upon his death, and six months later, Mrs. Jelly's spousal retiree health coverage would end. The Middletown, N.J., couple planned to use the death benefit of $39,000 for medical and burial costs. [...]
    But as the millions of people who entered the workforce after WWII began moving into retirement and drawing on the trillion dollars of deferred benefits, companies began looking for ways to cut benefits and hang onto the money. Meanwhile, by the early 1990s, changes in accounting rules gave employers an additional incentive to cut retiree benefits: doing so reduced liabilities they had recorded, which generated gains that boosted income.
    Many employers began cutting pensions for future retirees. AT&T, for example, converted traditional pensions to a type called a "cash-balance" plan in 1998. By calculating pensions in a different way, with the result that the pensions its employees earned in their last years didn't mount as fast as before, AT&T was able to reduce future pension payouts to retirees and their widows by more than $1 billion. [...]
    Thanks in large part to benefit cuts, Lucent's retiree benefits plans have added a net total of $1.1 billion to income since the company started, including $868 million in the fiscal year ended Sept. 30, according to its annual report filed in December. [...]
    In early January 2003, when Mr. Jelly, the Western Electric retiree with leukemia, got Lucent's letter informing him the death benefit would be paid only if the retirees died before Feb. 3, he figured the odds were good that he'd make the cut. After five years of fighting cancer, he was failing, and he went back into the hospital Jan. 14 for what he and his wife knew would be the last time. He told her sardonically, "I have a deadline." He didn't make it. He celebrated his 80th birthday in the hospital on Feb. 14, which was also his and Margaret's 50th Valentine's Day together. The nurses had a small party for him. He died on Feb. 24, 2003. Lucent saved $39,000.
  • Wall Street Journal: Lump-Sum Pensions Make Retirement Even Riskier. By Ellen E. Schultz. Excerpts: Another trend that is exposing widows to greater financial risk is the practice of cashing out pensions. Over the past two decades, employers have increasingly offered retirees the choice of either receiving their pension the old-fashioned way -- as a monthly check in retirement -- or taking a one-time chunk of cash. About half of workers with pensions now have the one-time option, and 95% of them choose it. Many retirees believe they can invest the sum and get a better return than a professional money manager, but few do. Many retirees also spend the money -- paying down debt, starting a business, making big purchases -- and leave too little money for a surviving spouse to live on.
    Early retirees may face another significant downside: The lump sum can be worth tens of thousands of dollars less than the monthly pension in retirement. That's because many employers that offer lump sums may strip out "early retirement subsidies," which are offered as incentives and bulk up the pension between 55 and 65. Taking away the subsidy can cause the pension value to fall 20% or more, with the greatest reductions beginning for retirees in their early 50s. Because many employers don't provide apples-to-apples comparisons of the actual values of the monthly pension and the lump sum, employees often don't know the lump sum is worth less. After complaints from retiree advocates, the Internal Revenue Service last fall began requiring employers to tell people if the value of the lump sum isn't equal to the monthly pension.
    Employers have many reasons to encourage retirees to take lump sums. Commonly, they offer cash payouts as a carrot to get older employees to retire early. And when lump sums cut pensions, the decline in the pension liability generates accounting gains that boost income. Companies also save on administrative costs, and they don't have to pay premiums to Pension Benefit Guaranty Corp. for the departed employees. Financial advisers, eager to invest the pension assets in insurance, annuities and other high-commission products, also commonly urge retirees to take lump sums. These days, many are using scare tactics, telling people that pensions are in peril, so they're better off taking the cash now.
  • Wall Street Journal: Journal Reporters Win Loeb Award. Excerpt: The G. and R. Loeb Foundation awarded Wall Street Journal reporters Ellen E. Schultz and Theo Francis the 2005 Gerald Loeb Award for best beat writing for "The Short Life of 'Lifetime' Health-Care Benefits," about American corporations cancelling retiree health benefits.
    (Editor's note: THANK YOU Ellen and Theo for the great work you've done through the years in exposing corporate pension and retiree medical takeaways! Readers, please use the Search box at the top of this page and search for "Ellen Scultz" or "Theo Francis" to see dozens of Ms. Schultz's and Mr. Francis's articles).
  • Reuters: House Republicans tackle portable pensions in bill. Excerpts: House Republicans have agreed on a proposal aimed at eliminating the legal limbo surrounding "cash balance" pension plans, and will include it in legislation expected to advance on Wednesday, an aide said. Cash balance plans are a portable type of traditional defined benefit pension plans, which have a fixed payout at retirement. Once considered the likely future of traditional pension plans, cash balance plans have faced legal uncertainty since a federal court ruled in 2003 against the plan of International Business Machines Corp, saying it discriminated against older workers. [...] The language will say that a cash balance plan would meet all age discrimination tests if an older participant's benefits are equal to or greater than that of any similarly situated, younger individual in the plan. A new cash balance pension plan that embraces this standard would not be considered discriminatory. The aide did not want to comment on IBM's case, which is still on appeal, but said a company that already is facing a legal challenge could amend its plan to meet this new standard and thus cap any possible damages, were a court ruling to go against it.
  • Communications Workers of America (CWA) Press Release: Alliance@IBM Presses IBM to 'Come Clean' on Job Cuts. Excerpts: The Communications Workers of America is calling on IBM Corp. to provide employees with full information about planned job cuts in the United States and Europe that the company announced several weeks ago. In May, IBM said it would cut between 10,000 and 13,000 jobs from American and European operations. In making that announcement, IBM did not indicate, as an internal company document spelled out, that the company will increase employment in India this year by 14,000 workers.
    "IBM just announced its fifth new software center in India, which will hire an additional 1,000 programmers this year," said Lee Conrad, national coordinator for the Alliance@IBM, CWA Local 1701. "It's clear that IBM is systematically eliminating good paying, skilled technical jobs in the United States in order to expand its operations in India," he said. "U.S. IT workers already have been hit hard by devastating job losses as companies offshore their work to India. IBM is among the worst offenders, pushing relentlessly to export skilled jobs overseas," he added. According to the San Jose Mercury News, IBM already employs 23,000 workers in India. [...]
    The Alliance also questioned IBM's statement that employees can seek another job within the company within 30 days. "This is a smokescreen, one that offers an illusion of hope for employees and misleads the public," Conrad said. "The fact is that very few employees who are targeted for job cuts find new jobs. IBM is intent on pushing people out the door, not keeping them employed," he added.

Speak Up!Washington Alliance of Technology Workers (WashTech): IBM Accelerates Hiring in India. Confidential document sheds light on plans. Seattle--According to internal documents, IBM has plans to hire more than 14,000 new employees in its Indian based operations in 2005 alone. An expansion that closely matches the number of announced job cuts from its U.S. and European operations.
The document titled "India 2002 to 2005," shows a rapid increase of hiring in India. In 2002, it shows 6,070 employees and 24,150 employees by 2004. Then it jumps to 38,196 employees by 2005. The document goes onto describe the "growth drivers" for the expansion. It lists areas of the company such as Application Management Services and Global Delivery Center. It also mentions its acquisition of Daksh which is an Indian based offshore-outsourcing company. To view the internal slide see http://www.washtech.org/news/documents/india/
Below is the sample letter:
Subject: Sam - we should export you!
Dear Mr. Palmisano:
I am outraged at the actions of IBM expanding its operations in India while at the same time firing thousands of U.S based employees. Your company's actions clearly demonstrate that globalization is a zero sum game for U.S. employees.
If globalization raises the tide by lifting all boats, why are we seeing job losses in the U.S. rather than hiring? The only boats globalization appears to lift is the yachts of CEO's such as yourself.
IBM is creating a race to the bottom and is threatening U.S. technology leadership with its actions. We should export your job.
Sincerely, Your name here.
Tell-A-Friend: What IBM is doing in exporting jobs impacts every worker in the economy. I think that it is very important for our future that we tell these CEOs that what they are doing is wrong. Join with me in sending this important message.
  • Economic Times (India): India demands 195K H1-B US visas. By G Ganapathy Subramaniam & MK Venu. Excerpts: In a move that has significance for Indian professionals seeking to work in the US, the government has made a formal proposal to the WTO demanding that the yearly quota of H1B visas be increased to 1,95,000 from the current ceiling of 65,000. If conceded, the move could turn out to be a boon for IT and other skilled professionals heading for the US. In the ongoing WTO talks, India has made enhancement of the H1B quota as a key bargaining chip for offering concessions on market access for industrial products and farm goods, highly-placed government officials said.
  • IDG News Service: IBM ruffles workers by expanding India staff. By Stacy Cowley. Excerpts: As one of the IT industry's largest and most storied employers, IBM Corp. faces constant scrutiny of its workforce shifts and reductions. With The New York Times reporting Friday on IBM's plans to significantly expand its staff in India while cutting jobs elsewhere, the company once again found itself balanced at the delicate intersection of global business realities and U.S. politics.
    The furor started when an anti-offshoring lobbying group, the Washington Alliance of Technology Workers (better known as WashTech), passed on to The New York Times a leaked internal document from IBM showing projected employee headcount growth in India this year of more than 14,000. The document, a real estate report, shows IBM's staff count in India ballooning from 6,000 in 2002 to 38,000 in 2005. [...]
    It's the "shifting investment" part of those remarks that causes political strife. While IBM expands staffing in India, it's cutting back elsewhere: In May, IBM announced restructuring plans that involve cutting 10,000 to 13,000 positions worldwide, mostly in Europe. The company's overall headcount rose by nearly 10,000 last year, to 329,000 employees worldwide by the end of 2004, but its headcount in the U.S. has remained flat for several years, at around 130,000.
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.
  • "Three main reasons" (why IBM Global Services has so many "troubled" projects). By "Dose of reality". Full excerpt:
    1. We over-promise what we can deliver in the time and budget allowed. In many times those most rewarded for selling are different than those that are responsible and rewarded for delivering the projects. Consequently, the sales decision makers do things like making the resource mix bottom-heavy (read relatively unskilled), cut back on time estimates and budget, and promise business benefits commensurate with a process improvement project but plan and staff it like a technology slam. Then they leave the delivery guys to have to work miracles to make it happen.
    2. We have lost most of the experienced resources and no longer have teams that are capable of delivering on last year’s commitments. We are playing reverse leap-frog – selling based on historical capabilities, cutting compensation to goose profits, and ratcheting down talent levels month after month.
    3. Because of 1 and 2, the resource continuity and dedication to client service are terrible. The projects would be challenged with a stable motivated team, but when you add in the stress of constant turnover and ambivalent staff, it is game, set, and match.
  • "Take Sprint PCS - Please" by "Old_Project_Manager". Full excerpt: An example to support the Dose: We entered into a deal with Sprint PCS at the end of 2003 (actually it was signed on Dec. 37, 2003) to improve their Call Center Customer Satisfaction and cost performances. At that time they were Number LAST in both Customer Sat and Costs vs their Industry. We entered into a contract that guarantees (sic!) that they will be Number One in Customer Sat and no worse than Number Two in costs by the end of next year. It is a BCS Process Improvement contract but how in the name of Sam Palmisano did we make such a deal, with high penalties for failure? Salesmanship.
  • "good example" by "pork". Full excerpt: I was on a project a few years back. Here is the services we were supplying to the client: PSFT Upgrade HR, Ben Payroll, New HR DW, New Payroll vendor, New Time and Attendance system, Outsourcing all HR processes to a service center, Consolidation of new company onto PSFT. To undertake all these projects simultaneously was just plain stupid. Imagine trying to identify an error during testing?!?! Was it the HR system, the new T&A system, the new payroll vendor, bad code in the interface...the possibilities are endless. When discussed with the partner off the record he was fully aware the possibility of a sucessful implementation was 0%. He just loved the fact that there were 20 of us billing 50 hours a week. Think about that, 1000 hours a week at an avg rate of $200/hr. "Ride it for as long as we can" was his motto. It lasted about 4 months until the client realized it could never work. We were all gone within the next week.
  • "Troubled project reasons..." by "howard stern". Full excerpt: Within SCM something like 100 of the 250 projects in the "portfolio" are losers. Some are big in size and hence provide a large financial drain. For example, Campbell Soup and St. Jude. Why is this?
    1. Cost pressure from the competition combined with an inflated IBM overhead structure requiring the "low balling" of estimates to complete. At IBM, a 32% "gross profit" provides 0% incremental profit to IBM. Covering this 1/3 overhead and being competitive on price encourages "low balling" of estimates. This is especially risky in fixed priced deals.
    2. Staff turnover - given the cost pressure described above IBM has not been compensating their staff. Raises and bonuses are tiny or nonexistent. This has been the case since the PwC hostile takeover. As a result experienced consultants are leaving in droves only to be replaced by off-the-boat types named Sajeev, Sameer, Ravi etc. While these new staff my be technically proficient they frequently lack the core consulting skills necessary for successful client interaction.
    3. Lack of team stability - on many projects key roles have to be filled multiple times due to retention issues. These destroy project continuity and deliverability.
    4. Clients are demanding more - and IBM's ability to deliver is getting weaker and weaker.
    5. IBM morale - Morale in BCS is simply horrible. IBM has eliminated raise and promotion opportunities - therefore why work hard? What is the incentive? Almost everyone who is any good is looking elsewhere. This is not an exaggeration! People want to leave! And the good staff, those who make a project a success, are!
  • "Onion - are you so brain washed you can't see the facts?" by "howard stern". Excerpts: Please site factual examples - not retoric!
    1. Stagnant salaries
    2. Virtually no bonuses
    3. Unsustainable utilization targets
    4. No real career development or promotion opportunities
    5. Projects that are oversold, understaffed and built for duress
    6. Lack of recognition for BCS all-in contribution to IBM profit
    7. Stifling bureaucracy
    8. Siloed divisions that are incapable of working together
    Based on my experience at BCS people are unhappy and looking elsewere. There ARE no happy people except for the scientology-like brain washed morons who have blue blood and could not get a job outside of BCS if they wanted to! Sorry - the only people I have found who like IBM, and we are talking a small minority, have been IBM drones for so long they mindlessly "follow procedure" with any creativity or initiative drummed out of them. These are not role models.. they are robots. IBM BCS is a bad place to be, there are other places to go if you are someone who is not a drone. [...]
    What exactly is IBM's "strategy" when they require extra hours to hit the 2Q numbers, cut expense reimbursements, delay start dates until 3Q, eliminate training... That is not a strategy!!! It is flailing away to hit a number with the expectation of worring about 3Q later. Purely mindless.

Coverage on Social Security Privatization
  • Christian Science Monitor: Privatized Social Security - Take 2. By David R. Francis. Excerpts: 'If you don't succeed at first, try, try again." That could well be the motto of those trying to partially privatize Social Security. It's already clear that most Americans don't back Republican efforts to divert some Social Security revenues into private accounts. And in the Senate, Democrats have enough votes to sustain a veto of any privatizing bill. So a group of influential Republican members of Congress last week announced a plan to use the system's current cash surplus - rather than future payroll tax revenues - to finance these accounts.
  • Los Angeles Times: Social Security Plan Hits Shoals. By Janet Hook. Excerpts: After six months of presidential speeches, town meetings and maneuvering over White House plans to overhaul Social Security, Republicans are coming to grips with an unpleasant reality: The central pillars of President Bush's proposal have crumbled on Capitol Hill. It has become increasingly clear that if Congress passes Social Security legislation this year — and that is a big "if" — it will be a shadow of Bush's ambitious plan to shore up the retirement program's finances and to allow younger workers to divert payroll taxes into individual investment accounts.

New on the Alliance@IBM Site:
  • 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.
  • IBM Pension Lawsuit FAQ about Cooper v IBM, Updated 6-2-05. Excerpt: Below is a list of frequently asked questions about the class action lawsuit against IBM's 1995 and 1999 pension plans. The answers are my personal opinions, have not been verified with either IBM or plaintiffs’ counsel, and should not be construed as legal advice. On July 31, 2003, a federal district court judge ruled in favor of the employees in this case. IBM will appeal portions of the ruling. On September 28, 2004, IBM and the legal team on Cooper v IBM announced that an agreement had been negotiated that settles some of the claims and set the amount of damages that IBM will pay to the class if IBM's appeal of the district court's age discrimination rulings is unsuccessful. Click on any question to jump to the answer. Or scroll down and read them all.
  • Resource Action Tool Kit. Along with the CWA Job Survival Kit, here are some resources you can use when challenging or questioning a company policy, procedure or practice.
    • Reduction in Workforce actions (RIF)...
    • Escalations, Appeals and Skip level meetings...
    • Implied contracts vs. Employees at Will...
    • In General...
  • 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? Some sample submissions follow:
    • Comment 06/26/05: In MD, can't seem to get numbers on actions taken. There are many I know of but its all been very quiet here. Not many MD. folks reading this site from what I gather. Shame. Lots of scared folks there right now and don't blame them. I am in, lets say very near ballpark of full retirement and have been rear-ended by IBM. Of the numbers I saw in the package 64% were 45 years or older. Sorry, really wish I could give accurate numbers from our area but the listing we got was AMS wide. Would really like to hear from other fellow MD folks affected. -Anonymous-
    • Comment 06/26/05: Regarding the 14k in Indian new hires this year...IBM makes me sick. They're profitable and overflowing with cash. Some people have given their lives (20+ years) to this corporation, yet IBM terminates them like they were cattle. And what about those of us that are still dependent on IBM for a paycheck. As much as I hate to admit it, I am a wage slave for the IBM corporation(5 years w/IBM and 2 kids). Maybe they'll grow a conscience before I'm put down too. -Anonymous-
    • Comment 06/26/05: I just wanted to say that I heard about IBM's plans for filling 14,000 jobs abroad in India while cutting 13,000 jobs in the US and UK. I just think that this is a real shame. All these companies care about is a profit and they really don't care about how they go about doing it. What is going to happen to all the young people going to school for technology? They are not going to have jobs because companies like IBM are exploiting the world system for their own profit. I know this is a capitalist society but this just doesn't seem right or fair. We have plenty of talent right here to fulfill any needs these companies may have. They just need to make an effort to pursue it. Thank You -Anonymous-
    • Comment 06/27/05: We can not work like this!! I think we need to walk..we need a walk out. It is time to get serious here and let IBM know we are miserable and let the world know what a scum bag, slimy company they are..We cannot live under fear of layoffs every day... -Anonymous-
    • Comment 06/27/05: So the thing really here is that this ain 't your father's (grandfather's?) IBM anymore. When I joined full time in '87, I saw people from HR, admin services, mfg, and so on being retrained for like 18 weeks of "boot camp-like" programming school. Now, I'll be the first to admit that many of them just did not have what it took, and time wore on, these folks wound up leaving, going elsewhere etc, but some turned out to be damn fine programmers. The point is, that IBM did not just jettison them as some useless appendage, and there was respect for the individual. Take your people, in whom you AND they have invested in each other, and build on it. THAT is what made IBM a great company - people cared for the company, and were made to feel like they were cared about too. Unfortunately, as (US? World? Business?) culture has changed, rather than be the shining star, IBM has been assimilated into the mentality of (borrowing a line from a movie) worrying about the next quarter, while other cultures worry about the next quarter century (which is what we SHOULD be doing).
      I fear that this shortsightedness is going to be the downfall of the company. No one feels innately compelled to go that extra mile any more, or do it because they feel pride or ownership in what IBM produces. It's turned into another paycheck. And to paraphrase from another movie - Office Space, "that will only keep people working hard enough to not get fired." IBM will never thrive that way. Perhaps survive. And who knows for how long.
      The culture that made IBM a nice place to be is gone. I can only hope someone has the guts to take over and get it back. 'Cause if not, this forum will be moot because IBM will indeed finally become the dinosaur it is threatening to be. -Anonymous-
    • Comment 06/27/05: It is a shame to see how IBM has deteriorated under the leadership of Sam Palmisano. I started at IBM in 2000 and seems like since 2003 onward I have seen the work environment and IBM's commitment to employees go down the drain, there is no loyalty on there part. I've since left IBM this year being proactive seeing how every other week i was training people from India. Even though I no longer work with IBM, I still cherish my good times at the old IBM. It saddens me to talk to my ex co-workers in RTP who are scared and worried sick about their futures and families they support. It's a shame but in the long run IBM will realize what a huge mistake it is making, because its not the management; its the little guys like us that run the profit making engine IBM is right now, but you can only treat people bad for so long. I already know of people in the IT world with talent who would think twice before joining IBM, and always ask me about what's up with them shifting all the jobs and in the long run that will hurt them in recruiting talent. -Anonymous-
    • Comment 06/27/05: I have a question for anyone out there: I was an Information Developer (aka Technical Writer) who was cut on June 10. I'm wondering if anyone has heard rumors of certain job categories being totally eliminated and contracted out. For example, I've heard that Cisco now offshores or contracts all their writing positions. I have a bad feeling that technical writers in IBM are going to be targeted as expendable. And, by the way, guess where I have an interview for a contract tech writing job this week? Back at Big Blue. -Anonymous-
    • Comment 06/29/05: Regarding the 30 days- when I was given my "30 day dance of death" in January 2004, I found several positions that I was qualified for- but as soon as the managers found out I was on the RA list, everything came to a halt. None of them would return my calls or emails anymore. I knew about 50 people in that RA, and of that 50, only 1 found another job, and she was very politically connected- and it took the action of a senior VP level person to get it done. I have not heard of anyone since actually finding a job in that 30 days. -Anonymous-
    • Comment 06/29/05: Working in IGS-NL,(Netherlands) I have (strongly) been asked to leave IBM voluntarily per Sept,1.With 30+ years and about 1 year to go before pension date, I have fair compensation for a net loss.
      Good social laws, Unions and Workers council in a country forces IBM to be reasonable, I think. -Anonymous-
    • Comment 06/29/05: There are some individuals finding new positions. Takes VP approval. -Anonymous-
    • Comment 06/29/05: To all part time workers in IGS and otherwise. I am appalled that IBM was awarded Best Companies for Working Mothers in 2004. Who is IBM surveying? Check out Working Mothers ownership and boycott their other publications, send emails or letters to their editors. BTW, IBM has an ad on Working Mothers web site, are you surprised? -Anonymous-
    • Comment 06/29/05: This note is addressed to the strong negative opinions of the Redeployment Process. I am one person who was offered a job after receiving a layoff notice. For those folks who want to discuss this with me ask the union for my name and number. -Anonymous-
    • Comment 06/29/05: We need more than new management, we need a new management culture. Gerstner?s visionless, stumbling elephant is leading us nowhere but down. -Anonymous-
    • Comment 06/29/05: We were outsourced to IBM Global Services three years ago. many of us had good technical skills and were encouraged to apply for other positions within IBM. Most who left have now been laid off. They called and warned us to stay where we are and not to accept any new position within the company. There is no morale at my job site. In fact we are all united in our hatred for IBM and the deplorable working conditions that they have created. As a group we have no faith or trust in anything management tells us. They smile in your face and stab you in the back. A special thank you to Wash tech for exposing plans to hire 13,000 more workers in India. IBM has shown that it does not care about American workers or their families. -Anonymous-
    • Comment 06/29/05: My permanent payoff that was supposed to be effective 6/31 was extended until 7/31. The reason it was extended was that there was no one to take over my project that is supposed to be completed in August. I was extended 4 weeks although really 8 weeks is needed to complete it. I doubt I will be done in 4 weeks so it will be interesting to see if they try to extend me again. If they try, I might just say no this time. I accepted the extension but was under the impression that I could have declined it because my boss asked me if I wanted to stay rather than telling me I had to stay longer. I believe I was cut to meet the numbers because the work is still here. It puts a lot of burden on those left. I was wondering whether the extension would help me as far as finding work since I heard there were division freezes and maybe after 2Q they will open up again since most of the laid of workers will be gone already. -Anonymous-
    • Comment 06/29/05: Both my husband and I were former AT&T employees forced to be outsourced to IBM GLobal Services. Once we were "In Scope" we could not look for jobs in AT&T. We both were outsourced to IBM in Feb. 1998. In May of 2002 I was let go due to my PBC rating which was lower than any rating I ever received and my manager could not give me an explanation. 1 year later my husband was also let go due to his new PBC rating. It sickens me to see how callous and deceptive this company/country has become. My husband could not find work for 9 months. Unemployment was a joke and we could not afford health insurance which for a family of 3 would cost $1200.00 per month. An average mortgage including property taxes in New Jersey $1800.00 per month. The maximum unemployment you can receive every 2 weeks $950.00. You do the math... Americans need to wake up and stand up in solidarity to this massacre of
      American jobs being outsourced to other countries. Stop buying IBM products and don't shop at WAL MART. -Anonymous-
    • Comment 06/29/05: From managers this is what I heard: If you are on the RA list you should look in a group outside yours. For example: anyone in the software group RA list should look at other groups like IGS etc. FInding something in the same group will need VP approval. -Anonymous-
    • Comment 06/29/05: There were another round of layoffs Monday the 27th. Anybody have an idea of how many? I have heard from a few of them since they knew I was laid off last month. As for the person who found a job after being laid off why don't you explain what you did and the nature of your new job without revealing to much of who you are. I had several replies of interest , but all of them were 100 % travel except for one . The reason I ask is because I had applied for a job and got past the initial screening only to be rejected soon after for something I was very qualified for , from a manager I worked for previously who always gave me glowing evaluations and promoted me as well. When asked why, I got no reply from this person whatsoever as to why I was rejected. If I had passed the screening that mgt must have looked at it initially. The only clear reason seems to be that this is getting shot down from above for having 25 + years and less then 30. -Anonymous-
    • Comment 06/29/05: Reading this thread breaks my heart. My dad was hired in the early 50s at Poughkeepsie as an engineer and made mgr in a short time. Visits by Tom Watson, Jr. were frequent and he has told me many a story of how "The Old Man" would get some idea or notion and how everyone would scramble to accommodate his request (often just some sotto voce utterance). But in exchange for such loyalty, IBMers were richly rewarded. During lean times, engineers would go out and cut the grass or perform other routine maintenance jobs (keeping their regular salary and benefits). During the time of the development of the System/360, it was the common notion that this was a "bet your badge" effort....all for one and one for all. Sadly, so much has changed. I have been laid off, as well as my brother, my sister-in-law, and her brother. All of us ran the rat race of the 30-day "dance with death" to no avail. In fact, I was inadvertently cc'd on a memo from an exec that said that it was IBM's policy NOT to rehire any RA'd employee. Seems like once you get the "S" (surplus) emblem branded on your forehead, you're as good as gone. Such a sad reflection on a once-great American corporation. All Sam P. and Co. are concerned about is short-term: the stock price and appeasing the shareholders. Why do they not see that by treating the employees so despicably they are killing the goose that lays the golden egg? IBM is well on its way to oblivion. -Anonymous-

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