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    Highlights—October 14, 2006

  • Austin Chronicle: The Ungodly Pensions of CEOs. By Jim Hightower. Full excerpt: Corporate America is fast implementing a two-tiered retirement system: a platinum-level plan for the top executives – and a dirt-level plan for all of you riffraff below.
    There's even a term for the platinum pensions reserved for the corporate elite: "Top Hat" plans, they're called. But while the CEOs are feathering their own nests with multimillion-dollar annual pension payments, they're working double-time to destroy the retirement nest eggs of millions of their rank-and-file workers.
    Leading this pension-busting movement is the Business Roundtable, a lobbying front made up of the CEOs of America's 400 largest and richest corporations. The Roundtable wails that its members simply can no longer be expected to pay the middle-class pensions that they negotiated – supposedly in good faith – with workers. Roundtable members say workers must "take responsibility" for their own retirement accounts, rather than expecting the corporation to come through for them.
    The Business Roundtable is also leading another mingy effort to downsize the "golden years" of America's working class. It has been an enthusiastic backer of George W.'s push to privatize our Social Security program. The top honcho of the Roundtable has grandly declared that its members will spend "what it takes" to switch Social Security to private pension accounts.
    The CEOs want everyone's retirement to be at the mercy of the market … except theirs, of course. Consider such Roundtable members as Home Depot, IBM, Exxon Mobil, Pfizer, Coca-Cola, Prudential, and GE – the CEOs of these giants are to get corporate-guaranteed pension payments of more than $2 million a year.
    The attitude of these CEOs is summed up by Exxon Mobil. Its executive suite at corporate headquarters is known as the "God Pod." To keep track of the hypocrisy of these false gods – and to help bring them down to Earth – go to www.paywatch.org.
  • Utica Observer-Dispatch: Remington freezing pensions. By Bryon Ackerman. Excerpts: A corporate-wide freeze on pension plans is in store for Remington Arms Co. workers, the company and union members said Wednesday. The freeze for all workers will begin Jan. 1, 2008, and is a way to save money for the company, said Stu Kennedy, president of the United Mine Workers of America Local 716.
    Pensions would no longer increase based on salary increases. The action will affect management, and will only affect union members if that is what is determined in negotiations that begin in June 2007, union international representative Dan Bass said.
  • Information Week: IBM Cuts 400 Engineering Jobs At U.S. Development Centers. The affected engineers are developing components for IBM's line of BladeCenter servers--one of the company's best-selling hardware products. By Paul McDougall. Excerpts: IBM is quietly laying off about 400 U.S.-based engineers who have been working on the development of components for one of the technology giant's most important hardware products, according to sources familiar with the company's plans. The cuts are taking place at IBM engineering facilities around the country, including sites located in Austin, Texas; Burlington, Vt.; San Jose, Calif.; Raleigh, N.C.; and Rochester, Minn. The cuts have also touched IBM locations in Poughkeepsie and Fishkill, N.Y. [...]
    A memo issued to IBM managers to help them explain the cuts to affected workers says those engineers that received layoff notices were given 30 days to find a new position within IBM or face termination. The memo, obtained by InformationWeek, is dated Oct. 5--the day on which employees were notified of the job cuts. According to the memo, IBM believes the layoffs are necessary in order for the company "to continue to lead in what is a very dynamic marketplace."
  • Poughkeepsie Journal: 94 IBM jobs on cut list. Technical staffers look for new spot. By Craig Wolf. Excerpts: The "redeployment" of some technical staff in IBM Corp.'s Systems and Technology Group has proved to be a game of musical chairs, but nobody's singing. Monday, the company confirmed reports 400 of that group had been told their jobs would end in 30 days unless a last-chance search wins them another slot. After that, they go off the payroll and collect a severance payment.
    Of the 400 nationwide, nearly a quarter work in Dutchess county: 71 in Poughkeepsie and 23 in East Fishkill. Most of the employees work in developing products. More than 11,000 IBMers work in Dutchess. County. Other IBM sites affected would be in Austin, Texas; Raleigh, N.C.; Rochester, Minn.; San Jose, Calif.; Tucson, Ariz. and Burlington, Vt. [...]
    Several hundred staffers were redeployed and now have other jobs, he said. Some of the 400 others may find them, too.
    But Ralph Montefusco of Burlington, an organizer for the Alliance@IBM, an employee group that is part of the Communications Workers of America union, said, "I don't know how much of it is false hope and how much of it is real, as far as getting jobs in IBM." The industry trend is for jobs to be outsourced to other companies or sent overseas, "and people are left to find whatever they can within the corporation," he said. Even those who succeed often face lower-paying work, relocation far afield and lack of moving-cost reimbursement, he said.
  • Forbes: IBM Moves Global Procurement To China. By Robert Malone. Excerpt: IBM is moving its global procurement headquarters to Shenzhen, China. It will be the first time the headquarters of a corporate-wide IBM division has been moved outside the U.S. The company's chief procurement officer, John Paterson, will move from Somers, N.Y., to Shenzhen. IBM already has 1,850 employees in the area and manufactures there for the Asian/Pacific market products and systems including servers, retail store systems, storage devices and computer printers. The company originally manufactured PCs there but sold off that business to a Chinese-owned firm.
  • Computerworld: IBM to add 15,000 jobs in the Philippines. By Lawrence D. Casiraya. Excerpt: IBM plans to add 15,000 jobs across its four subsidiaries in the Philippines, including its business transformation outsourcing (BTO) and call center units. Anna Roqueza, IBM Philippines human resources country manager, however, said in an interview that this projected total number of additional jobs is “speculative” and based on the exponential growth shown by the company’s businesses in the country. She also declined to give a specific timeframe for the workforce expansion.
  • The Register (United Kingdom): Catholic Church bemoans call centre Bacchanalia. By Lester Haines. Excerpts: The Catholic Church in India has decided the time has come to address the problem of call centre promiscuity which, as we previously reported, has pretty well reduced the local outsourcing industry to something resembling a scene from Bob Guccione's Caligula. Back in June 2005, the India Times described the steamy case of 24-year-old "senior process associate" Mandakini Sandhu and squeeze Ashish Gupta.
    It explained: "For many BPO [business process outsourcing] employees like Sandhu and Gupta, the office space is not just a professional domain. Instead, it symbolises one's personal space, thanks to long hours being spent in office. From making friends to cultivating relationships, BPO units are slowly becoming hubs where inter-personal bonding takes place. And it comes as little surprise that many also give vent to their sexual urges in the office space."
  • Yahoo! message board post: "Please settle a disagreement" by "ibmaccountant". Full excerpt: I agree with the other folks that there have been no announcements stating that the pension ends or you are going to be converted in 2008 to a CB or hybrid plan.
    On the other hand, the Republicans introduced a new bill which they forced through Congress which allows an employer to make the conversion at any time. Fortunately (probably for executives use) the Republicans forgot to take out the 30 day required advanced notification.
    Up to December 1, IBM could announce a change which could come into effect on January 1.
    Wouldn't surprise me, since the current financials appear to be...let us say..."touch and go" or "sensitive" according to some. Playing around with pension would cause a massive departure by many and would help the financials but hurt the stock since investors are keenly aware of IBM financial issues.
    If you want to keep your IBM DB retirement and you are eligible to retire, you are essentially on a 30 day "redeploy to retirement" status.
    The best way to get an official answer is to write to the plan administrator. Unfortunately, by the time you get an answer it'll be 2008 at the known speed of their responses to written mail queries.
    You could ask for a "verification" of the public and thus potentially legally binding (but not from an ERISA point of view - maybe from a contract or investing point of view) statements from a corporate officer that the DB pension would not change again.
  • Yahoo! message board post by "ibmaccountant". Full excerpt: Took a friend quite knowledgeable of the status of the inside of IBM out to lunch today to verify your story.
    Indeed, there's a lot of folks leaving before the end of the year. IGS is particularly hard hit with departures of many with key skills in demand and profitable like MVS and iSeries skills. Maybe they've got 2008 confused with 2007, but many think that Randy is going to break his word and do another change in early 2007. Many also worry that the policy and process for retirement may be extended in 2007 so that people announcing retirement and starting the process late in 2007 will not be able to leave prior to 2008.
    I was also told that headhunters are spreading this word in hopes of snagging good people with skills as well. There is one headhunter that's looking for skills but will only consider IBMers with over 15 years of service, which is kind of unusual.
  • The Register: Dunn editorial officially ends the 'HP Way'. Dysfunctional and proud of it. By Ashlee Vance. Excerpt: Former HP chairman Patricia Dunn has displayed remarkable courage during the unravelling of the company's spy scandal. Where others might hide behind humility and full disclosure, Dunn has bravely moved to rewrite history and fashion her image in something approaching a decent light.
    Those wondering about the source for such audacity need not look far. Dunn learned how to shun responsibility – and for that matter reality – while serving at the pleasure of HP's inglorious board.
    Dunn – or some underling pretending to be Dunn – penned a recent editorial for the Wall Street Journal dubbed simply "The HP Way". How fitting that Dunn would pick the very publication she blames for making HP's internal discord public as the vehicle for her most up-to-date absolution of any sins. Never shy from seizing on an opportunity, right?
    "Throughout the (investigation) process, I asked and was assured – by both HP's internal security department and the company's top lawyers, both verbally and in writing – that the work being undertaken to investigate and discover these leaks was legal, proper, and consistent with the HP way of performing investigations," Dunn writes.
    Those who have read Dave Packard's book The HP Way will note that the chapter dealing with spying on directors and reporters is thin. It's, in fact, so thin that you're likely to miss it no matter how many times you read the book. Perhaps an HP insider like Dunn has a secret unedited version of Packard's book that includes the spy bits and other chapters on shirking responsibility. The rest of Dunn's editorial borrows heavily from the works of Disney and the Brothers Grimm.
  • The Register: HCL squeezes Indian software engineers. Unions helpless but hopeful. By Mark Ballard. Excerpts: Indian outsourcing giant HCL Technologies has told its software engineers they have to work longer days without any extra pay for the greater good of the company. The firm will now be working its Indian software engineers at the same rate as employees in its call centres, and systems integration and technical support divisions.
    HCL denied it was making people work longer hours when The Register asked about it a week ago. A spokeswoman for the firm said: "There's absolutely no truth in this whatsoever".
    Then, the funniest thing happened. We sent HCL a copy of the email they had sent to their software engineers, which said they'd have to work longer hours for the same pay. Then, lo and behold, HCL remembered they had changed their working hours policy after all.
    Employees were told about the new regime in an email at the end of September, according to a source close to the firm. "We have changed the working hour policy to 9.5 office hours per day from October 1 2006," said the email. "As they say, 'the difference between ordinary and extra-ordinary is that little extra! - Let's put in a little extra and show our mettle to the world...!" it added.
  • Thomas Palley, Economics for Democratic and Open Societies: Globalization and IT: Setting the Record Straight. Excerpts: Recently, the world renowned Washington DC based Institute for International Economics (IIE) released a study praising the benefits of off-shoring the information technology (IT) industry, titled “Accelerating the Globalization of America: The Role for Information Technology.” The study argues that IT is good for the economy, and globalization is good for IT. Ergo, globalization is good for the economy. The only problem is that the argument does not stack up. [...]
    With regard to jobs, there has also been a clear contraction in the level of U.S. IT employment. In 1999 there were 4.9 million technology-related jobs, but this had fallen to 4.6 million in May 2005 – a loss of 300,000 jobs. The bulk of these job losses were for workers earning less than $30,000 per year, but there was also significant job loss of 140,000 among computer programmers who made an average of $67,400 per year.
    With regard to wages, the average real wage for lower paid technology related jobs was essentially stagnant between 1999 and May 2005. For mid-level computer support specialists whose annual pay averaged $43,380 in 2005, real wages actually fell 1.3 percent annually over this six-year period. However, the real pay of higher skill tech workers rose 1.6 percent per year. The bottom line is that global outsourcing of the U.S. IT industry has not been good for workers in the bottom half of the wage distribution. The IT sector therefore appears to be following a similar path to manufacturing, confirming the fears of working families about outsourcing. [...]
    A final generic lesson for policymakers concerns numbers and public debate. The enormous resources of the business community means that it can commission studies, launch them with fanfare, and then broadcast their findings. In this way controversial calculations can quickly become received fact. That is a problem for which there is no easy solution. However, it does suggest that policymakers and journalists be skeptical of studies about trade and globalization promising four course free lunches.
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Washington Post Writer's Guild: It's Time to Talk Health Care. By Marie Cocco. Excerpts: If -- and the word should be capitalized, italicized, printed in boldface and underlined -- the political civil war raging over the Bush administration's war on terror ever ends, then we will, at some point, have to return the civil war over health care. Except it seems that the American people have put down their arms.
    More than a dozen years after Hillary Rodham Clinton's grand experiment in reshaping the health insurance system died in a pyre of overheated political argument and hysterical claims, it turns out the public wants pretty much what Clinton tried to deliver: Coverage for all Americans. A nationally mandated, guaranteed set of core benefits to replace the current patchwork that leaves even many people who have insurance with inadequate coverage for some illnesses and treatments. A national policy that refuses to let a family be crushed financially if someone becomes very ill.
    All this would, naturally, be financed in a way the body politic considers "fair" -- without creating an undue burden on sick people and in a way that's related to a family's ability to pay. The most popular means of raising additional funds is through "some form of progressive, or 'sliding scale' income or payroll tax (like the Medicare payroll tax) specifically dedicated to supporting health care for all."
    No, this isn't a script for a Democratic candidate's campaign commercial. And they're not talking points for an interest group pushing this health care solution or that.
    These are the conclusions of an official, nonpartisan government commission set up by Congress as part of the Medicare prescription-drug legislation. What the commission now tells us -- after taking soundings in 37 states, collecting tens of thousands of responses to polls and written questionnaires and listening at 98 community meetings -- is that Americans see clearly what is wrong with the health care system, and have on their own achieved a remarkable degree of consensus on how to fix it.
  • Physicians for a National Health Program: Health Reform: Reinventing The Wheel. By Alan Maynard. Excerpt: The American health care systems perform impressively, producing what they are designed to deliver: cost inflation, inefficiency, and inequity. At regular intervals, local pundits declare that the outcomes of the incentive structures in the constituent parts of the systems are unacceptable, usually emphasising that “the nation cannot afford to spend 16 percent of GDP on health care.” Such “insights” ignore the fact that inflation is a consequence of the systems’ perverse incentives and that improved control of expenditure inflation would oblige physicians, nurses, hospitals, and the pharmaceutical industry to moderate their lifestyles.
  • Economic Policy Institute: Consumer-driven health care is a false promise. By Elise Gould. Excerpts: Health costs are reducing the ability of American business to compete internationally. At the same time, companies that do provide health insurance to their workers are finding it harder to compete with domestic companies that do not. Premium costs have increased on average 11.4 percent over each of the last five years, while overall inflation grew by just 2.5 percent and real GDP grew by 2.6 percent. Add to that the cost of retiree coverage, and it’s clear that high health care costs have become an albatross for many American companies.
    Top policymakers have suggested the answer to this problem is “consumer-driven health care,” with its requisite high deductibles and health savings accounts. There are two main reasons why this isn’t the answer.
    First, workers don’t want these plans. According to a Kaiser Family Foundation’s survey of employers, only 15 percent of employees who were offered health savings account qualified high-deductible health plans decided to enroll. Furthermore, a study by the Commonwealth Fund shows lower satisfaction in these types of plans. It finds that 63 percent of individuals with comprehensive health insurance were extremely or very satisfied with their health plan, compared with 42 percent of consumer-driven health plan enrollees and 33 percent of high-deductible health plan participants. Granted, the status quo isn’t the best option, but low take-up and low user-satisfaction should give employers pause before they decide to rearrange their benefits to offer these types of plans.
    At the same time, compelling evidence suggests these consumer-driven health plans will be ineffective in restraining health costs. The ideology behind consumer-driven health care is the belief that Americans over-consume health care. Labeling this a “moral hazard” problem, proponents push for high-deductible health plans that make consumers spend out-of-pocket for the first dollar of coverage up to the plan deductible.
New on the Alliance@IBM Site:
  • From the Job Cuts Status & Comments page
    • Comments 10/09/06: Want to let you know that IBM is moving people from the Poughkeepsie site to the Fishkill site in order to meet an employment level at that site. This entitles them to some tax savings from NYS. I'm sure that the spirit of this agreement with the state was that there would be new employment in the Hudson valley, not a shift from Poughkeepsie to Fishkill. In my case the move to Fishkill is mandatory yet there is no efficiency to be gained. -Anonymous-
    • Comments 10/08/06: We have a team from China studying our product's test processes right now. I just left an organization that brought in a team from India a year ago, so I expect all of our testers will be offshored next year in a 3Q07 resource action. Turnover in India for the test group was running 70%. They all leave for better pay and benefits. At some point the turnover rate and rapidly increasing employee costs will make outsourcing unprofitable. Let's hope Sam sees this before no one wants to return to IBM in the future. -IBMersDozen-
    • Comments 10/08/06: For the second time since I was laid off from IBM last year, I have been contacted, unsolicited, about an opening in IBM that exactly matched my then "lacking" skills. I don't even have my name activity posted anywhere. Both IBMers and Contract companies are wanting me to interview for this job, and they are having trouble filling it. I had 28 years with the company, and this is advertised as a "multi-year" job. What does that say?! I have no intention of working for IBM again in any capacity after the way I was treated. My advise to the people who are in constant angst over their jobs at IBM -- Join the Union. Stand Together. Now. Don't wait until its you're turn to go. I can't see a company this messed up in its management and HR practices getting any better soon. My sympathies for the people currently let go. I wish you good luck in finding an alternate job within or better yet a comparable job outside. -Anonymous-
    • Comments 10/08/06: There are a lot of managers and manager's sidekids (aka close friends) that have their spouses working at IBM Tucson. Has IBM let go these top manager's spouses? I think our VP's husband still has his nice cushy job. But she is telling all of us that sacrifices have to be made to keep IBM afloat in this competitive market. Ms. VP please remember Charity begins at home. -anonymous in Rita Road-
    • Comments 10/09/06: I work in Rochester. I was notified of 'redeployment' and also notified of the resource action. About 80 employees were affected in Rochester. A significant number of those fit the 25 - 50 profile: 25 years of service and 50 years of age. Anecdotal info supports my conclusion that about 35% have found other jobs, leaving 52 without work as of 10/06/06. -Anonymous-
    • Comments 10/10/06: What the heck is IBM doing laying off SOA strategy people for? Are they surrendering to BEA and Oracle or did JBoss kick their rear? -Open Sourcer-
    • Comments 10/13/06: "I was RA'd on 10/6, got 30 days notice and offered normal severance, along with an email that I will be training someone in Bangalore India to do my job." What a crap company IBM has become. They have lost total respect for the individual. They said you have 30 days before you are laid off and you have to train an Indian in Bangalore? I'd give Sammy the middle finger salute and tell him to kiss my ass.-Keep IBM in the USA-
  • From the General Visitor's Comment page:
    • Comment 10/08/06: I suggest a mass boycott of the US annual ECCC campaign. There are numerous alternative channels for your charitable contributions, which do not flow thru IBM's hands and which do not bolster IBM's external image. -JohnQSmith-
    • Comment 10/08/06: Take a wild guess...Sam, in the 5 years he's been CEO, has not brought growth to IBM. CEOs, like at a startup company, are given 5 years to make their mark. What is Sam's report card at the 5 year mark? He has bought new companies rather than innovate in house; he has outsourced jobs to cut wages; he has not had growth in 5 years, selling off the PC division as an indication of lack of growth. Despite Sam's labor cost savings programs, he still lays off each month. Where is the money going? How come IBM can't get it right? They resemble the Investment Banking industry in the 90s..hire...fire...hire...fire. Why is Sam still in charge?--take a wild guess... He's got a pal named Lou Gerstner hanging out on the Board of Directors, covering Sam's ass. Isn't it time we got rid of BOTH of them? -Take A Wild Guess-
    • Comment 10/13/06: Do not contribute one penny to the ECCC charity this year. IBM uses it as a ploy to show how wonderful a company it is in the community. I received an email plea from Diane Diggleman who is actually one of the VP culprits responsible for offshoring our jobs. Hey Diane why don't you ask for some rupees from all your indian employees. -Anonymous-
    • Comment 10/13/06: Yup, there is a war out there. Not the one in the Middle East though, that one is just a smoke screen. The real war is happening, here, in Western countries. There is an all out attack against our middle class. I think things will get a lot worse before most people will wake up and understand what's going on. There is no third alternative yet. The middle class badly needs its own political party and a charismatic leader. But then again... for an action there is an equal reaction. As the oppression grows, the resistance grows with it. -iknowitsucks-
  • Pension Comments page
  • IBM employees on employee raises

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. A sample post follows:
  • "Another end run?" by "wonderaboutibm". Excerpts: And now for the latest turn of the wheel ... services automation! The pigs of Animal Farm are now bleating its wonders, just as they once said two legs good, four legs better. So this is how we are to get around high American labor costs .. we'll just reduce the labor content of our projects through the wonders of standardization, componentization, and asset reuse. My, my.
    Now,folks, I have nothing against building up solid assets for reuse. I have two problems with the approach: first, IBM mgmt has to now paid only lip service to real asset reuse, and the jury is out on whether that mindset has changed. But more fundamentally, the implicit assumption that labor is really minimized somehow is mistaken at best and misleading at worst. Yes, let's not reinvent the wheel every time, but let's give extensive customization its due. Our customers are looking after their own special needs and their own competitive advantage. We cannot standardize that set of customer needs.
  • "What I won't miss (after leaving IBM)" by "bcg13". Full excerpt:
    • Going on a project where the client acts like you're Foley and Junior High Track Meet.
    • Interesting hotels, when posted in remote locations. I once packed my own sheets.
    • Looking at people who had been with the company for 5+ yrs and wondering what have you done in the past 5 yrs? Then realizing they came in with some talent, and in the past 5 yrs have wasted away. Worse was realizing that could be me in 5 yrs!
    • The Monday morning project terrors. Being assigned to a project as an "expert", when it has nothing to do with your education, training, job experience. Reading the PowerPoint slides, and realizing this is not going to cut it, and worse realizing that the client was sent to a comprehensive IBM training class, and you are expected to lead them.
    • Bribing clients to get their IBM training material, so that you can catch up.
    • Booking travel online, and getting the worst seats on a flight.
    • Cross-country engagements, with stop-over flights. Another form of torture that I feel violates the Geneva convention.
    • Going into an engagement, and client has been swindled by 2 groups in SWG, and they are mad at you. Especially nice, when there is nothing you can do about it.
    • Going into a client where 2 rival groups of SWG, are trying to sell overlapping products, and are duking it out.
    • Escalating issues about potential project failure, and instead leading to fault finding. (I learned my lesson... it is not a failure if nobody says it is, or was). This is the worst, ruining unsuspecting careers at client.
  • "Congratulations" by "greenbean07". Full excerpt: Congratulations on taking a step towards a better career. I couldn't help wondering though, and this is a open thought to everyone on the board, is our hatred towards our work directed at IBM or the consulting life in general?
    There are so many of bcg13's points that could be non-IBM specific, but relate to the consulting genre at large. The travelling aspect,jumping through the client relations hoopla.
    I mean apart from the big 3 (McK/B/B), are there any companies (ACN, Del, Cap, BP) that are NOT facing this? Granted that IBM with its product placements adds an extra dimension of complexity, but maybe we oughta reconsider what exactly is it that causes all the sarcasm/spite/hatred. IBM or 2nd tier consulting in general?
    To bcg13: What are you moving forward onto? Another consulting gig (and if its bcg according to your screen-name, then another congratulations)?
  • "Second that" by "Dose of reality". Full excerpt: Congratulations on your move! As liberating as it is to leave an oppressive environment, it amazes me how much inertia there is around here. I don't know if it is fear of the unknown, brainwashing, or just plain low expectations that keeps people from putting themselves in position to be happy.
    With regard to the question about IBM vs the industry, there is no question that there are industry forces in place that can lead a company to implement these exploitative policies. However, there are plenty of companies that realize the downside to them, and manage to a standard that limits the impact.
    What sets IBM apart (in a negative way) is a few things:
    1. There is a hyper-bureaucratic culture, so the flexibility that most companies have in day to day operational decisions just isn't there. We manage to the policy, regardless if it makes sense in a particular situation.
    2. HR is an extension of finance. Employees have no ombudsman to mitigate against the cost control mindset. That plays out in resource assignments, compensation policies, and travel, etc.
    3. We are mired in the products culture of the rest of IBM. ACN et al don't have that problem.
    4. A legalistic approach to contracts. We sell aggressively, and plan to contend/litigate on the quality of delivery. A customer-service oriented company will prefer to maintain goodwill.
    5. Bundling. We don’t mind screwing over the traveling consulting staff, since we use them as a “loss leader” to get the HW, SW, and SO sales. We may not lose money, but we are content to lose resources, because the total payoff when you consider the HW, SW, SO sales is disproportionate to the cost of high turnover in consulting.
    So don’t make the mistake of believing that IBM is just like everybody else, we aren’t. That is precisely what IBM would want you to believe to keep you in the fold.
  • "Start Date" by "question_mark". Full excerpt: I got an offer letter from IBM with no start date on it. Apparently is is yet to be determined!! What kind of an offer letter is that!! My recruiter says that I will get a start date in the next quarter!! Can I really expect anything from them??
  • "Common question" by "Dose of reality". Full excerpt: This question is asked even more frequently than "which is better Accenture or IBM".
    At IBM, we do virtual recruiting. We will conduct initial interviews with many candidates, and then wait until we have an imminent project need for someone in your area with your skills. If you happen to be in the pipeline, and are graded out near the top, then and only then, will you get called for a second round. If the project hits, and you make the cut, you will be hired.
    It's all part of the "On Demand" strategy. It's cheaper to have CANDIDATES on your "roster" than employees. We don't want to hire you to sit on the bench. Of course, with this approach, we generally don't get the best candidates, since we take best available today as opposed to taking candidates that meet a set of rigid criteria on an ongoing basis. Then again, IBM isn't interested in getting the best candidates, all we want is warm bodies that will work at our rates and our unfriendly HR practices.
    Do yourself a favor and read through this forum, and you'll have a lot more than offer letter dynamics to ask about. Take some of that outrage you expressed in your post and extrapolate. If they treat you with this much disdain when they should be trying to coddle you and make you want to join the company, how do you think you will be treated after you come in?! This place is career purgatory - avoid it if you can!
  • "That's a novel approach - that is where IBM innovates" by "civilliberty". Full excerpt: Yes, IBM does innovate - but it innovates through redefining the meaning of words. It also has innovative HR policies that work in their favour. If you're relatively green behind the ears I can understand this question, but if you're more experienced you should be able to read between the lines and understand the company you are thinking of joining is not going to be your best friend. It won't reward you for doing well or achieving though they will cajole into doing that, it's just that you won't have the career or remuneration you desire. They are without the doubt the absolute worst company I have ever had the misfortune of working for.
    My main consolation has been that I came across from the PWC takeover and ultimately got a retrenchment package.
    Life outside of IBM is infinitely more rewarding in a multitude of ways that you perhaps would never expect unless you worked at such an inept company staffed by seriously self-serving individuals at all levels and without the management and operational capability that exists in virtually any other line of business or industry.
  • "The face of IBM" by "Dose of reality". Full excerpt: Here's what they are going to do. You will have a nice chat with someone in HR that has no clue about what kind of skills you need to be an SAP consultant. They just want to make sure that you don't have two heads, or any other physical defects that would make a client hesitate to pay us over $200 an hour for your services. My apologies to the THSOA (Two Headed Society of America) - I am sure you are all very fine people. However, at IBM, two heads are NOT better than one!
    Then you will have a nice chat with someone that works in your practice, perhaps one or two bands above where you are applying. Depending on how high up they are, they may also be clueless about what kind of skills you need to be an SAP consultant, though they will pretend that they do know. They will be looking to see if you have the skills to cover their @$$, and whether they think that you will be willing to work like a dog for a few years before you realize you are not getting ANYTHING for all your hard work. Now they wouldn’t even notice if you had two heads – that’s what the HR rep is for.
    The bottom line is, if you are at least borderline presentable as a person, and can spell SAP, we will hire you, as long as we have a project to assign you to. We are taking anyone with a pulse, since anyone that has marketable skills looks to get out of here as soon as they find out what we are all about. If you want a reminder, just look back at the image posted above. If you are a “words guy”:
    • Across the board salary cuts two years running
    • Raises in the 0 – 3% range with most closer to 0
    • Bonuses TARGETS at 10 – 15%, but never paid out since they are contingent on practices meeting their overall profit targets which are always inflated well beyond what is realistically achievable. But somehow, the front office always gets their bonuses, since they always sandbag their targets
    • Promotions are rare, and the thresholds are set artificially high so as to keep staff running on a treadmill in futile hopes of getting one. Then again, there is no material bump in salary with a change in title
    • Utilization targets (the % of your working capacity that you are expected to be chargeable to a client) are set so high so as to leave no time for you to be trained, take vacation, do practice development, administrative tasks etc.
    • A philosophy of putting you on any project where we may need you, regardless of career fit or geographic location
    • Restrictive travel policies that mean you may have long layovers, multiple connections and cheap hotels.
    • A bureaucracy that would put the government to shame.
    • Oversold projects that put undue stress on staff. Many project managers that can do nothing more than blame staff for failure.
    If you want more details, read back in the history of this forum. Any questions?
  • "The IBM Results?" by "ancientblueconsultant". Full excerpt: The Blue Pig has an outstanding record of taking simple ideas and destroying them with complexity, introspection ignoring client needs, talking technology without solving anything and just plain arrogance. The result is a diarrhea of useless innovation talk followed up with a lack of solutions client delivery because of process binding constipation.
  • "The pregnancy analogy" by "Dose of reality". Full excerpt: As most of us know, you can't be 90% pregnant. The same is true for effective consulting. It was never a secret that a client was getting the benefit of prior deliverables when they hired a consulting firm. There is no way that they will pay 300% premiums to internal hiring costs just to have surge resources that have 20 points higher IQs than their own resources. They expect to pay for us having done it before, and get prior outputs as a relevant baseline.
    However, it is the 10-15% of on-site expertise that makes the difference between fertilization or just another high priced romp in the hay (or screwing depending on the team we fielded). That's what we have to deliver to make the client happy, and when the team is comprised of 80% clueless tech-heads from India, we can't do it effectively. We compromise our way down to just delivering the baseline 90%, which is even less than the client needs to even receive the same service levels as your previous clients, since every client's needs are different.
    The days of touting methodology, solutions, or citations as the reason to hire us went out in the early 2000's, when public domain knowledge became available, the industry started hiring ex-consultants on staff, and the capacity constraints of the 1990's were eliminated. This is back to being a people and talent business, and that is where IBM is failing miserably with our current HR strategy.


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