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6, 2000 April, 2000

Highlights—May 19, 2007

  • PBS's I Cringely: The Final Daze: More on IBM's global restructuring. By Robert Cringely. Excerpts: Last week's column on IBM set what must be a modern record for the number of reader comments (more than 1,000). I evidently struck a chord. And from the high emotional content of many of those comments, I can see that whatever IBM thinks it is doing is causing a great deal of pain and anxiety among IBM employees. While my words may have triggered this outpouring, there is nothing I could write that would do so in the absence of a severely dysfunctional corporate culture. IBM as an organization -- not just as a business -- is in trouble.

    This week I'll try to tie up some loose ends left from last week's column, deal with some of the issues raised by those thousand comments, and even give the last word to IBM, itself.

    The greatest single criticism I received this past week was with the number of possible layoffs I threw out, which was 150,000 -- a number that dozens and dozens of readers pointed out was greater than the total U.S. workforce for IBM. Maybe the number WAS too high. Instead of 150,000, maybe the true number is only 100,000 or 75,000 or even 50,000.

    Would 50,000 layoffs from IBM Global Services be significantly less catastrophic for the workforce than 150,000?

    And while the number of layoffs to come may indeed be less than 150,000, I'd prefer to stick with that larger number, which I feel is not far off for reasons I will now explain.

    IBM's mysterious LEAN program, which the company says I mischaracterize but then won't explain specifically what I got wrong, is global. LEAN involves the restructuring of IBM's global workforce to achieve certain unstated goals, most likely centered on profitability, with the goal of regaining that 37 percent decrease in market cap IBM has suffered since 1999. This restructuring means firing employees in some places and hiring them in others. [...]

    IBM is a true multinational company, and any program like LEAN will be applied globally. It has to be since the very essence of LEAN is foreign hiring. So that 150,000 number is a global number. At risk is every non-sales position in IBM Global Services not just in the U.S. but in any country with a cost structure more expensive than the United States, which would include most of Europe and even parts of Asia. At the same time IBM sees attrition in the U.S. and growth in China and India, there may well be significant job losses in the European Union and Japan. [...]

    Here is what's really happening. IBM's outsourcing business has been declining for the last several years. Through a succession of cost reductions they've been able to partially compensate for the lost profit. But this costing cutting has had a negative effect in that it has accelerated the loss of business. A few years ago IBM started its "On Demand" service offering, but On Demand has not been as successful as hoped. It certainly has not replaced the lost services business. So IBM needs a Plan B and that Plan B is called LEAN. [...]

    IBM management is impatient and wants to improve its financial results quickly. They have studied the company's situation and probably have come up with numeric goals for downsizing and restructuring the company. They are using LEAN as a means to get to these goals faster.

    IBM will of course respect the laws and labor agreements where it operates. However, IBM is now looking closely at the profitability of its business operations -- ALL of its business operations. If an existing business is sufficiently efficient and profitable, little will be done. However, if IBM operations are not as profitable as IBM hopes, then changes will be sought. The offshoring of some jobs is one way IBM cuts costs and improves profitability. If IBM chooses this path it will work with the leaders in the companies it serves as well as with local government. IBM will make a very strong and compelling argument to change how things are done.

    Alas, offshoring doesn't work well in practice and certainly doesn't work better than keeping the work here in the U.S. -- a fact that IBM and a lot of other companies consistently fail to see. [...]

    IBM will also argue there is a worldwide shortage of skilled IT workers and those laid off should be able to find work. What IBM fails to mention is there is high demand for ULTRA-CHEAP IT workers. Well-compensated IT workers will have a hard time finding replacement jobs with comparable pay and benefits.

    Now to the 1,000+ comments from last week, I suggest you read them -- all of them. They are among this week's links. If you care about IBM or care about what is happening in corporate America, these thousand comments write a book about what's happening from the inside. If anyone thinks I am making up this story, read the comments and you'll know that my aim here is true.

    The comments tell this story far more eloquently than I ever could. [...]

    Finally, here is IBM's internal response to last week's column: ...

  • Associated Press, courtesy of Newsday: IBM Eyes Big Profit Bump by 2010. By Brian Bergstein. Excerpts: Even with revenue chugging along only moderately, IBM Corp. expects to find enough cost cuts, acquisitions and stock-buyback opportunities that annual earnings per share could nearly double by 2010, the company's finance chief told analysts Thursday. Addressing a daylong briefing at IBM's research labs in Yorktown Heights, N.Y., Chief Financial Officer Mark Loughridge laid out what he called a "road map" for earnings per share to rise from $6.11 last year to as much as $11 in 2010. [...]

    Of the roughly $5 increase in earnings per share that IBM says is possible by 2010, 75 cents comes from the assumption that IBM's recent growth rates will continue. IBM sees another $1 coming from wide-ranging efforts already underway to cut costs and boost profit margins; $1.10 from more than $40 billion worth of stock buybacks; $1.20 from acquisitions and other future growth initiatives; and 90 cents from retirement-related savings. IBM is freezing accruals in its pension plan after this year.

  • 24/7 Wall Street: IBM: The Tragedy Of the 21st Century Company. Full excerpt: IBM has announced its plans to double earnings per share by 2010. Part of it is business as usual for a big US company. It hopes to double revenue in emerging markets to $9 billion.That would be about 10% of current annual revenue. It will also improve its mix of software versus hardware, which it has been doing for many years.

    But, the real road to better EPS for IBM is the CFO route. And, that is too bad, because it means that the company does not think much of its current businesses. No, the key to the improvement will be cost cuts, share buy-backs,chopping retirement benefits, and making acquisitions.

    Perhaps IBM should not be judged too harshly. It has underperfomed the markets for the last five years. It needs to come up with something to make Wall St. happy. But, it has no plans for an HP-stype resurrection. It wants to go the financial engineering route.

    Given what IBM stood for over many decades, this is really too bad. IBM was at the heart of US technology innovation. It filed for more patents than Thomas Edison did, year in and year out.

    But, IBM's plans reveal a sort of self-loathing. The things the company cannot do with better products and services, it will do by pushing out people, cutting their benefits, and buying in shares. It is the poor man's way to build an attractive investment.

  • Associated Press, courtesy of Yahoo! Finance: IBM Loses Retirees' Personal Info. IBM Trying to Solve a Mystery of Lost Tapes With Retirees' Personal Information. Excerpts: IBM Corp., one of the world's leading providers of encryption and other data-management technologies, is in the uncomfortable position of trying to solve its own mystery involving missing computer tapes with sensitive information about employees and records of customer transactions.

    An outside vendor was transporting the tapes from one IBM facility to another on Feb. 23 when the tapes fell out of a contractor's vehicle in Westchester County, N.Y., not far from IBM headquarters in Armonk. IBM representatives went to the scene and couldn't find the tapes, spokesman Fred McNeese said Tuesday. [...]

    McNeese said there is no indication the information on the tapes has been exploited. But as a protection, IBM has offered a year of a credit-monitoring service to the affected employees, McNeese said. As for the customer information, McNeese said it included records of business transactions between IBM and certain clients, but he called the data "inconsequential."

  • CNET News: Senators propose infinite H-1Bs for advanced degree holders. By Anne Broache. Excerpts: (update) A new U.S. Senate proposal would allow limitless H-1B visas and green cards for foreigners with master's degrees or higher in any field from an American university--or anyone with such credentials in the science, technology, engineering or math fields from abroad.

    Like other competing proposals in Congress right now, the "Skilled Worker Immigration and Fairness Act," introduced on Tuesday by Sens. Joseph Lieberman (I-Conn.) and Chuck Hagel (R-Neb.), also proposes raising the existing annual cap on the controversial H-1B visas from 65,000 to 115,000 for fiscal year 2007. That number could climb by 20 percent in each subsequent year, to as high as 180,000, if the previous year's quota was exhausted

  • Pension and Benefits Blog: Real Retirement Security – What Would it Look Like? By Frank Cummings. Excerpts: The massive PPA-2006 did a little to protect the security of one government agency. But PPA did almost nothing to protect the retirement security of those who need it the most. These are the people who are unlikely to accumulate adequate retirement security without employer-sponsored or government-sponsored assistance – the very same middle income employees (Studebaker’s “losers”) who needed it the most 40 years ago just before ERISA’s enactment (the “target group”). Studebaker’s “losers” would be adequately protected by the PBGC under today’s law IF, as they did then, they had an adequate DB plan. But they’d still be living in a dream world if, today, they thought their employer would have a DB plan much longer.

    Consider the current status quo:

    • DB Plans are freezing or dying or both.
    • Without DB Plans, “early retirement” is less and less feasible.
    • “Cash balance” hybrid plans? Perhaps a useful way for an employer to capture an actuarial surplus, but hardly a substitute for the good old fashioned lifetime annuity. Indeed, hardly even a favorable substitute for a garden variety DC plan or 401(k).
    • DC Plans are replacing DB Plans, but hardly anyone thinks that a 401(k) plan by itself will provide retirement security for the middle class. Why not? Just “follow the money” – cashout after cashout to pay for tuition, mortgage debt, credit card debt, and so on.
    • Employer-sponsored medical benefits? The tilt away from sufficient full coverage is becoming a landslide,
    • Employer-sponsored “lifetime” (vested) retirees’ medical benefits? Forget it.
    • Of course there’s Social Security, but its index is likely to be cut back.
    • And in the meantime, Medicare, or what’s left of it, will itself require greater and greater employee co–payments and premiums to control a seemingly-uncontrollable funding shortfall. Where do the increased premiums come from? They’re deducted from Social Security, which makes both of them less and less sufficient.
  • Business Week: Indian Outsourcers' Sky-High Ambitions. Companies such as Tata and Infosys are scrambling to cash in on India's soaring demand for air services—and orders from the likes of Boeing. By Nandini Lakshman. Excerpts: India's supercharged aviation industry, the fastest growing in the world, is being buoyed by huge jumps in passenger traffic and startup domestic air carriers. And though India's commercial aviation sector is not without its problems—service delays are chronic and the industry is losing a pile of rupees—its long-term growth prospects have both Boeing and Airbus stepping up their investments in India to meet what's expected to be vast demand for new passenger jets well into the next decade.

    If the current growth dynamics hold, there could be big spin-off benefits for the major outsourcing firms that can deliver quality engineering and design work, as well as other services, to big airline manufacturers. That's the hope anyway as Airbus, Boeing, and engine makers such as General Electric (GE) and Rolls Royce step up research and development work and sales in India

  • Business Week: Crackdown on Indian Outsourcing Firms. Two senators are probing how Indian outsourcing firms use U.S. work visas, with an eye on new restrictions. By Peter Elstrom. Excerpts: Concerns about foreign companies that benefit from a visa program designed to make the U.S. more competitive are taking center stage in Washington, with two senators demanding explanations from overseas users of the system. Senators Chuck Grassley (R-Iowa) and Richard Durbin (D-Ill.) on May 14 sent letters to nine foreign outsourcing companies requesting detailed information on how they use temporary work visas, known as H-1Bs, to bring foreign workers into the U.S.

    Critics say outsourcing firms, including Infosys Technologies and Wipro are using the visas to replace U.S. employees with foreign workers, often cycling overseas staff through U.S. training programs before sending them back into jobs at home. The lawmakers are intent on probing whether those allegations are accurate. "Supporters claim the goal of the H-1B program is to help the American economy by allowing U.S. companies to hire needed foreign workers," Durbin said in a statement. "The reality is that too many H-1B visas are being used to facilitate the outsourcing of American jobs to other countries."

    In outlining the investigation, Durbin and Grassley are making details of the visa program public for the first time, including the number of visas awarded to non-U.S. companies. The nine firms, led by Infosys and Wipro, use 19,512 of the H-1B visas, or 30% of the 65,000 visas allowed each year. This indicates that Indian outsourcing companies participate more actively than previously thought, garnering for themselves visas that could otherwise go to U.S. firms. "This is information that we never had before," says Ron Hira, a public policy professor at the Rochester Institute of Technology who has studied the issue closely.

  • Forbes: Taking (Very) Early Retirement. By Janet Novack. Excerpts: Meanwhile, a little-noticed debate is already taking place in Washington about another retirement age--an age that could be equally if not more important to the fifth of private-sector workers (mostly at bigger companies) lucky enough to still have traditional pension plans. It's the age at which government, through laws regulating pensions, should allow "phased retirement"--a set-up in which employees collect at least part of their pensions, while staying on a company’s payroll at least part time.
  • New York Times: Say-on-Pay Gets Support at Verizon. By Gretchen Morgenson. Excerpts: A proposal to give Verizon Communications’ shareholders a voice in its executive pay practices passed with 50.18 percent of the vote, the company said yesterday — the clearest sign yet of investor irritation over chief executive compensation. [...]

    “It was a vote whose time had come at Verizon,” said Brian Foley, an expert on executive pay in White Plains. “People were frustrated with the way management had been paid relative to performance and even though performance in the last year had been better, it was coming off a low.”

  • Janet Krueger responds to the following question posted on the Yahoo! IBM Pension and Retirement Issues message board: At what point does the cash option become better than taking the monthly checks for the rest of your life (besides short life span)? I am contemplating between the two options - is there a summary of previous discussions, pros & cons or a file posted on this board?

    Ms. Krueger's reply (excerpt): If you are talking about the Cooper settlement portion of your pension, the two options are relatively equal. The monthly annuity is taxable income. The cash settlement is also taxable income unless you have the check made out to an IRA account -- and the taxes may include an early withdrawal penalty, depending on your age.

    If you are talking about your base pension, unless you are close to age 65, the immediate annuity includes a substantial early retirement subsidy that is NOT included in the lump sum option -- make sure you do a financial analysis and look at the relative value of the various options, because they are not equivalent. Each option has tax consequences, which will vary based on your individual situation, so make sure you understand that as well. Also, IBM uses the lowest possible interest rate to calculate the lump sum amount, so as to pay you as little as possible.

    If you have a spouse, and you take the annuity, you need to decide whether to take the option for continuing all or part of the annuity for your spouse if you die first. This is actually a form of life insurance. When I did the financial analysis, I discovered I could purchase a separate life insurance policy to get an income stream for my husband much more cheaply.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Time Magazine, courtesy of Physicians for a National Health Program: Moore in The E.R. By Jeffrey Kluger. Excerpts: Here’s something that won’t surprise you: Michael Moore has some gripes about how things are going in this country — and he wants to share them with you. The filmmaker behind such blistering hits as Fahrenheit 9/11, Bowling for Columbine and Roger & Me, Moore, 53, is back with Sicko, his soon-to-be released take on the U.S. health-care industry.

    The movie, screened for TIME, is double-barreled Moore, a mix of familiar numbers (47 million uninsured Americans, the ever rising cost of care) and chilling moments (the 18-month-old baby who dies of a seizure when she’s denied emergency-room access, the husband and father with kidney cancer whose insurer won’t pay for a bone-marrow transplant). Together, they will have many moviegoers angry enough to gouge holes in their armrests.

  • New York Times: Young, Ill and Uninsured. By Bob Herbert. Excerpts: Across America children by the millions are being denied the health care they need and deserve — and some are dying — because the U.S. has no coherent system of health coverage for children.

    Stories like Devante Johnson’s are not unusual. Three months ago a homeless seventh grader in Prince George’s County, Maryland, died because his mother could not find a dentist who would do an $80 tooth extraction. Deamonte Driver, 12, eventually was given medicine at a hospital emergency room for headaches, sinusitis and a dental abscess.

    The child was sent home, but his distress only grew. It turned out that bacteria from the abscessed tooth had spread to his brain. A pair of operations and eight subsequent weeks of treatment, which cost more than a quarter of a million dollars, could not save him. He died on Feb. 25.

New on the Alliance@IBM Site:
  • From the Job Cuts Status & Comments page (Note: There were a massive number of posts to this page during the last week. The following is a sampling of the large list of posts received by the Alliance@IBM.)
    • Comment 05/11/07: Re: retirement packages... don't kid yourself, there's no way IBM would offer any kind of voluntary retirement package in today's company. It's been considered, but the problem is that too many people would take it, and there would be a brain drain the company doesn't want. Targeting specific groups to get rid off is much more effective... from IBM's viewpoint, that is. And, it's not a knee-jerk thing, either. It takes a long time to plan and execute these actions. Take a look on w3 for "self selection" to see how IBM trains managers to turn the screws on employees until they finally decide to quit. This saves IBM the effort and $$$ of having to lay off people, since they end up deciding to leave "voluntarily". Talk about newspeak! -No Way-
    • Comment 05/12/07: I received word on May 1st that I'm being RA'd on the 31st. I actually started to feel good about it because I haven't been happy here at Big Blue for quite some time... I received my package and I'm amazed at how many ways they can d!ck you around though and that you basically have to accept even a temporary assignment if it's offered or else no package. That stinks because now that I'm happy about getting away from these dopes and getting some MUCH deserved R&R time to DE-STRESS they are seriously talking about possible "exceptions" for some people who got the boot in my dept.

      I'll tell you this, if the exceptions don't go through the remaining folks in my dept truly have my sympathy because coverage will be a nightmare and it will be hell for these people. I know big business is all about the bottom line and saving money but this is ridiculous because the people who are left will have a heck of a time trying to take vacations, PC days, as well as gwtting up to go to the restrooms. I have to think that at some point IBM is bound to fail because of this type of greed and arrogance. The KARMA police will getcha if you don't watch out!!! -Laid........ off-

    • Comment 05/12/07: To all U.S. Data Center Employees (Lexington, Boulder, RTP): UNIONIZE!!! Don't take this laying down. IBM Executives have been engaged in a COVERT WAR against you for years. They have been secretly planning your demise since at least 2002 (Remember Stratification?). I think the following statement from "Insurgent" is worth repeating: Make a private and personal commitment to do IBM as much damage as possible while waiting to leave or be cut. Remember the goals of the insurgency:
      1. Cost IBM more than it ever would have spent to treat its employees fairly.
      2. Keep IBM profits low enough to eventually force the replacement of current Executives.

      We can appear to be hardworking, dedicated IBMers while constantly undermining and sabotaging the efforts of IBM to sign new business, keep existing business, or make contracts profitable. We are not helpless. We can choose to fight back. The cathartic effect of payback is highly underrated. FIGHT BACK! -Anonymous-

    • Comment 05/13/07: Does anyone know what the layoff date is for IGS Canada? I can believe that this is going to happen. IBM's lack of concern for customer service is only surpassed by the disdain and contempt they show for their employees. Things are going badly on our account now and they keep pulling people off to work on accounts that are in worse trouble. Hope I get laid off and am not one of the ones left behind after the cuts. -Current-
    • Comment 05/14/07: Re Layoff date in IGS Canada, not sure of a date but I believe it's soon, my manager will not respond to any of my notes / sametime in the last 6 weeks, absolutly no reason for him to treat me with no respect unless he knows I'm on his hit list.. Hornestly, I have not been able to fall asleep for the last 6 years because of stress from Management, I love my job but can't stand management, hope I get a package, looking forward to be able to sleep again... -HappytoGO-
    • Comment 05/13/07: In my group, IBM Laid Off 30% of our best brains. All of them, I mean all of them are over 50. Of that 30% 25% are African American. So not only did we lose the over 50's, we also lost ALL of the African Americans. Something is Rotten in Denmark. -Cant believe I work for IBM-
    • Comment 05/14/07: Thinker, Yes I pay dues. Yes , I wear an alliance lanyard on my badge ALL the time. Yes, I keep copies of Alliance hand outs at my desk. Yes I talk to anybody that will listen and ask others why they bitch but do nothing. I noticed your post did not have a real name. -Me: Mike Leifels IBM East Fishkill-
    • Comment 05/14/07: I am a first line manager and can tell you that IBM is getting ready for another round of layoffs at the end of the month. The tsunami is coming. The tsunami is coming.Good luck to all. -NG_MAN-
    • Comment 05/14/07: re: the major RAs in the past couple of years: are there any statistics published regarding how many over 40 or over 50 who were selected for layoff? Also wondering how many age-discrimination type lawsuits, class action or otherwise, there are against iBM - anyone ever do any calculating? -Steve. RTP- Alliance reply: Some stats were done, and they showed a high percentage of employees over 40 were cut. Law firm working on age discrimination in job cuts: McTeague, Higbee, Case, Cohen, Whitney & Toker, P.A. Address: PO Box 5000 4 Union Park Topsham, ME 04086-5000 Map & Directions Phone: (207) 725-5581 Fax: (207) 725-1090 E-mail: Contact Us Web site: http://www.me-law.com
    • Comment 05/15/07: I am a Manager in ITD Canada, another round of layoffs will be this week. -Canadian IBMer-
    • Comment 05/15/07: IBM'ers Be forewarned.. its a FACT that there will be a MASSIVE firing at the end of May. There is no where to hide on this one either. To the folks that have stated buckle down and make yourself stand out as a top perfomer.. LMFAO.. I did the same and I was canned. PBC's of 1 and 2+ for years. Customer facing role.

      NO ONE is safe from what will be happening for the next two years. PLEASE PLEASE PLEASE remember to be a boyscout. I wish that I would have been more of one. Be prepared for the ice cold call from your manager telling you that you have been "selected" to be laid off (its a fired) from IBM.. bust your ass and get screwed in the end anyways.. Read the book called "The World is flat" its a great roadmap to what is going on now. The continued export of high paying jobs will NOT .. I repeat NOT stop.

      Protect your family by researching career changes and other viable income paths now.. no one is safe. I wish I did more before I got whacked. Do yourself a favor.. think about how the quality of being an IBM'er has suffered in the past years. The work load has increased and the customer has become more enraged. You will now be stuck with an ever increasing work load.. 50 hour weeks will be a dream DO NOT BE AN IDIOT when management tells you that the worse is over..

      IBM management cannot be trusted anymore.. dont be an idiot. USE every resource on the global campus to your favor.. download all the classes you can. You can also order 4 cd's per year.. get the tools to increase your worth OUTSIDE of IBM.. Dont be the fool I was giving everything you can to be an IBM'er.. its dead and will not be back. Take that energy and apply it to bettering your self worth and skillset.. start preparing for a life outside IBM Research the recent proxy votes for being able to sell company assets.. Look at the other votes.. something is happening. Dont be a fool and think the next company that buys whats left of this division (If thats what is happening) to be any better.. The world of IT is flat.. and the Americans are screwed -More cuts end of may-

    • Comment 05/15/07: UNION: Are you seeing more people sign up to be members now? Tell us more info on what is happening. Now is your chance. As the layoffs increase, you'll see more folks coming here. Word is getting out where I work, and more and more people are coming here to find out what is happening, and what will happen. Use this to your advantage !! -tellmemore-

      Alliance reply: Yes we are getting more members and our web site visits are close to 60,000 for the first 2 weeks of May. We are glad the word is getting out. The next step is to ramp up the organizing. Keep watching the web site for details.

    • Comment 05/15/07: Hi all. My name is Steve, and I used to work in IBM Poughkeepsie as an AIX Sysadmin. I was a proud member of the CWA, and am now a proud member of another union. That being the case, I can relate personally the differences between my current, organized workshop and IBM:
      • 37.5 hours a week, period, vs. management mandated 10% overtime a week, unless of course you generously decide to stay longer.
      • Contract stipulated health care cost stability, vs. rising health care costs.
      • A normal employee review, as well as contract scheduled pay increases and COLAs, vs. meaningless, ever changing PBC measurements.
      • A terrific pension defined in a union contract, vs. a pension stolen.
      • Contractually guaranteed upward mobility, vs. not one band raise in 6 years.
      • Stable employment, vs. constant "Resource actions".
      • Last but not least, people are HAPPY here.

      I wish I could have said this while handing out union flyers, but nonetheless... WAKE THE **** UP, PEOPLE!!! -Steve D.-

    • Comment 05/15/07: There were a lot of Jews, Gypsies, and others all over Europe who did nothing while their friends, acquaintances, and relatives were taken away by the Nazis during the Holocaust. They thought it would never happen to them. Eventually, their own time came and they were taken away to the gas chambers – they went passively and didn’t fight back. Then there was the Warsaw ghetto. Those Jews decided to fight back and take as many of the monsters with them as possible. They still died, but their deaths meant something.

      The RAs are coming. The door figuratively kicked open, our livelihood taken way, our performance and dedication valueless, our family’s financial future and our healthcare/retirement in real jeopardy, and the executives still getting their salaries, stock options, benefits, and golden parachutes regardless of how they abuse employees or devastate the IBM company. If it’s not your time now, it may be very soon. Something of a stretch comparing the deaths of millions to the loss of some IBM jobs? Yes, and absolutely no disrespect intended, but the analogy is apparent.

      Sometimes, fighting back – even if the end result is negative and predetermined – is the only thing left to do. If some IBMers choose to think only of themselves, collect their paychecks, pay their mortgages, be 100% loyal to a company that knows nothing of loyalty, that’s their choice. Nothing could be more obvious than that IBM’s executives expect the majority of IBMers to fall into this category. Sheep watched over by wolves. Passive acceptance and hope it “will never happen to me” – until it does. Human nature. Selfish, but completely understandable. “It’s all about me.”

      If some IBMers choose to leave the company, that’s their choice. Get out while they can. Wise decision. If some IBMers choose to remain at IBM and resist what the executives are doing, in any way they can, that’s their choice. This approach will be incomprehensible to many IBMers who are myopically just“trying to make a living”. Perhaps making the company pay more for stealing pensions and jobs than for doing the right thing is motivation that many IBMers can’t appreciate. So be it.

      In any company the size of IBM, filled with extremely intelligent and aggressive people, there will be significant differences of opinion on anything. It’s good that these opinions can be viewed in this forum. Many thanks to the Alliance@IBM team! If IBM continues at present course and speed, there will be nothing recognizable as IBM in a few years. The reverse Ponzi scheme of propping up numbers via cost cutting has a finite limit. The death spiral of poor service leading to less business leading to cost cutting/GR leading to worse service leading to more lost business leading to more cost cutting/GR will eventually end in the only way it can.

      The current executives will be rich and gone, the remaining non-GR employees will be few and far between, the unsustainable house of cards built upon GR will be collapsing, and many will wonder why they were so passive while they were being mistreated and abandoned and one of the world’s great companies was being systematically plundered and destroyed. The IBM Holocaust is happening to us now. Each of us has a choice. We can passively accept it, we can leave, or we can fight back. Good luck to all of you, whichever choice you make. -Insurgent-

    • Comment 05/15/07: Hi.. I'm part of the group who will become 'between jobs' on 6/1/2007. I'm actually kind of relieved. Interviewed for a couple other positions internally and actually hope I don't get either one...I feel for the folks left holding the bag on 6/1. I checked the older posts and haven't seen anyone post the actual layoff numbers. So, here is what I was able to add up in my packet for the 5/1 ITD organization Productivity Initiative Resource Action (did this on IBM time, by the way)...
      • Total Selected ITD organization - 1,243
      • Server Systems Operations - 879
      • Global End User Services - 64
      • Technology Integration and Mgmt - 144
      • Global Infrastructure and Resource Mgmt - 11
      • Americas Delivery Engagement Support - 22
      • Cross Competency Integration- 57
      • Security, Asset and Risk - 31
      • Comm Sector Delivery - 2
      • IBM Global Account Delivery - 16
      • Global Network Services Delivery - 17

      Best of luck to all. And, thank you Alliance for posting these comments. Those affected really have no other outlet and we know the Union will eventually be heard. This is an important website and effort you are putting into getting proper representation for the employees. -Anonymous

    • Comment 05/15/07: Send us your comments on how the nationwide break went. We heard at one site lots of non-smokers went out for a "smoke" break at 3pm. -Alliance-
    • Comment 05/15/07: My manager called me in his office and tried to give me a package to voluntarily leave IBM. I refused to take it. I came in the next morning and I found it on the floor in my office. He slid it under the door after I left work. He gave it to me alright. Right in the behind. Hang on folks. I predict massive cuts are coming. I was a solid 2 performer and respected by my peers. The IBM company really sucks. Trust nobody. Best of luck to the Alliance. -Anonymous-
    • Comment 05/16/07: Hi I am a journalist with the Canadian Broadcasting Corporation (CBC) where my job is to cover the workplace. I would love to speak (hey - it's radio!) or start by email - with an IBM employee about what they know about LEAN. my email is frank_koller@cbc.ca. My phone is 613-288-6537. CBC's website is http://www.cbc.ca - you can search me there to find out about my work. thanks -Frank Koller-
    • Comment 05/16/07: LEAN to date in IGS-ITD-SSO, for the moment in large areas, has created a semi-dysfunctional organization. Server administrators, Techline quotes and documentation staff, DBA, Middleware, administrative support, business office, and change management staff have been cut. What has the effect been the past few weeks? The ability to service the customer and deliver projects has been hampered or seen huge delays

      Staff are confused about how to follow new procurement rules, projects are competing for available technical resources, and different departments are being tasked to pick up the workload for staff that have been RA’d. LEAN thas only reduced the ranks but it does not appear PROPER thinking or PLANNING by upper management ahead of time to backfill processes, maintain SLA’s, or maintain the ability to service current workload or handle new delivery business for existing customers.

      Questions for Dianne Diggelmann and her Junior Officer Crew: -Where are the process improvements from LEAN for ITD SSO? -Why are ITD-SSO staff across all matrixed departments stressed to meet the current SLA and delivery requirements for customer or internal business due to lack of resources or delays caused undefined or unclear processes? -What preplanning is being done from lessons learned on the layoofs 2 weeks ago to mitigate the additional certain fallout from the pending layoffs end of May? -Where is the upper management? .... -Semper LEAN Diems-

    • Comment 05/16/07: I dont know how to begin this posting. So I'll just plunge right in. My manager sent an e-mail to the dept stating they had been "selected" and will be leaving IBM on 5/31. While I feel for my manager, it was widely known /accepted that he/she was ineffective. So, in a certain sense, I was not surprised when I read the email. But in reality, my soon to be former manager is just another victim of IBM's viciousness.

      I know someone who has a relative that once reported directly to Palmisano. The words I was told from the relative were "Sam's completely paranoid. He's always checking behind everyone's back." And then there was this gem; "But the real scumbag is Randy McDonald, He's no good." Stolen pensions, no raises, gutted healthcare benefits, and layoffs. You execs have a lot to be proud of . What a legacy. I hate your guts, and I wish you the same fate as Enron's Ken Lay. -Anonymous-

    • Comment 05/16/07: The climate at IBM Poughkeepsie is not too good. Selfish, greed and untrushworthy are among many of us. Unlike the old IBM days, we were like the Kennedy family. -A Band 9 in Poughkeepsie-
    • Comment 05/16/07: Something rotten is up at the Essex Junction, VT plant. Rumor has it that big job cuts on the way. Cuts the size of those in 2001 and 2002. The norm with IBM seems to hire and fire. Hire and fire. Hire and fire. Gosh, I'm glad I went into engineering. .. not. Becoming an engineer and joining IBM were the two biggest mistakes of my life. Best of luck to all. -Disappointed Engineer-
    • Comment 05/17/07: I thought LEAN was supposed to be about process refinement, reduction of outdated and manual procedures, and streamlined workflow. It seems to be having the opposite effect. Whatever IBM is doing has little in common with what is called LEAN in the business world *outside* of IBM. Are they blindly hoping that if they just eliminate a huge chunk of folks the rest will automatically put these magical and undisclosed streamlining practices into place by pulling them out of our collective asses?? Has anyone been given clear directive concerning process improvements, tool reduction, etc etc??? -Don'tKnowWhat2Think-
    • Comment 05/17/07: Here's a good one: Senators propose infinite H-1Bs for advanced degree holders. While increasing or eliminating the cap on H-1Bs they want to increase the monitoring and penalty for abuse. Uhmm.. does anyone else read this as blithely handing these mega-corps an easier way to abuse the system just so the government can catch them at it and collect yet more money in fines? I'm starting to see the H-1B visa as a government scam and nothing more. And why do we need all those visas when we are outsourcing like mad anyways?? Between the visas and the offshoring, the entire world is slowly doomed to a low-paying existence, buried under bills, loans and taxes we cannot afford. I feel like the Indians, Chinese, etc. are not our enemies here: the greedy government, mega-corps and money are the enemy and we are *all* caught in this death spiral. -Don'tKnowWhat2Think-
    • Comment 05/17/07: The latest rumour is that a large part of ITD is up for sale to the Carlyle Group. A private equity company of which Gerstner is the Chairperson. Somebody working in IBM LEAN in Germany with McKinsey has heard a sell-off to Infosys once the big cuts have happened. -ANO-
    • Comment 05/17/07: I don't see that IBM is needing to cut jobs at the Tulsa, OK center - they're doing a good job at running people off. With the heavy workloads, long hours, and continual imcompetence in India (having to redo their work) - good people are leaving all the time. And with our contract, we're not too concerned with more outsourcing - the client is pulling a large part of the contract back in-house since IBM has managed it so poorly. Tulsa slaves unite! :-) -Suffering in Tulsa-
    • Comment 05/17/07: Large account. Email goes to india, monitoring and patching to brazil, and sys admin to argentina. Craziest thing is the psychotic way everyone just continues on and even ASKS and intimates that you OWE THE COMPANY MORE....not under these rules...we owe NOTHING -Remoteboy-
    • Comment 05/17/07: If there are any fellow LEANees out there looking to pursue legal action or otherwise try to extend your 5/31/ date....I have heard a few folks on the SSO side get "extensions" to their seperation date. Something like extensions to 8/31/2007 and this includes CONTRACTORS!!. The high profile customers out there are apparently pushing back on dumping folks off their accounts. I don't want to give specifics, but the accounts may rhyme with Missan and Aferiprise. ...And, to "Would you mind posting the details of the package you are being offered? It can not hurt to know what variations exist....Thanks! -Anon-" ......the package is 2 weeks severence per year of service with 24 week max ..$2500 toward education/retraining (must be within 15 months of your off payroll date). If you are offered another job in IBM and refuse it (has to be within 10% of your current salary), you lose the package....Best of luck, all. -LEANee-
    • Comment 05/17/07: I wonder how many others had their managers checking up on them during our 15 minute "break" on the 15th. Mine did, and when I responded later, she said, "never mind, I got my answer." Hmmm. -Rolly White-
  • From the General Visitor's Comment page:
    • Comment 05/14/07: My manager wasn't happy with me logging 40 hours per week. He wanted me to put down 10% overtime. He said it made him look bad to his manager and the rest of the 1st level managers. I told him my pay stub indicated 40 hrs of pay per week (exempt employee) and I was not going to lie and put down more that I was paid for. He threatened me with a poor PBC and ranking rating because I won't lie. The IBM company makes me sick. -I won't lie-
    • Comment 05/15/07: We are told to claim 10% to 20% of the 40 hour work week. I am told that the customers are paying for it in the interlock anyway. If the time goes unclaimed, interlock is cut. -Still.Here@ endicottalliance.org-
    • Comment 05/16/07: I was asked 4 years to begin claiming 10% regardless of whether worked or not and was a direct request from my first line. You better believe this is happening all over IGS. -no doubtd-
    • Comment 05/16/07: About the overtime. Our dept was told not to work any futher OT until it was approved except for 2 *special* employees that are treated with a silver spoon. -Jimbo-
    • Comment 05/16/07: To the 5/12 poster that said " Now, we're regressing back to information silos out of fear -- which is understandable since such sharing can now cost you your job. " you are right on target. I have also been seeing this phenomenon (I call it a regression). Meetings where people do not communicate (talk not listen) or they exclude the people who need to be there. Turf wars, jockeying for position over whos name goes on the list of accomplishments for projects involving more than one person. IBM likes this, they do not want us to have"alliances" (no pun intended) with one another. They DO NOT want solidarity. It is easier to manipulate us if we are scattered about, only thinking of our own skins. Rise above and maintain your own integrity. There are better places to work. -witnessingtheregression-
    • Comment 0518/07: I'm enjoying the fruits of offshoring and layoffs thanks to my stock options. Sorry to break the news, but a lot of these people being fired deserve it. Way overpaid and lazy and I'd rather see someone in India who can do their job halfass than a lazy American who thinks he deserves more. The stock price is skyrocketing and hard workers see the benefit of these. Tough shit to the weak; thats what capitalism is about. -6yr veteran-
  • Pension Comments page
  • Raise and Salary Comments
    • Comment 05/16/07: Salary = 102740.4; Band Level = 8; Job Title = IT Consultant; Years Service = 10; Hours/Week = 40; Div Name = Server Group; Location = RTP, NC; Message = Looking forward to my 0% raise.. -Eric-
    • Comment 05/17/07: Salary = 48k; Band Level = 6; PBC = 2; Job Title = professional accountant; Years Service = 1.3; Hours/Week = 42; Div Name = Global Services Location = Tulsa Message = I was wondering if I should list the hours they want me to work as opposed to what I actually work. -Suffering in Tulsa-
    • Comment 05/17/07: Salary = 75k; Band Level = 6; Job Title = SAP Consultant; Years Service = 1; Hours/Week = 40...70+ including travel; Div Name = GBS Location = Mobile; Message = Accenture bound -leavingsoon-
    • Comment 05/17/07: Salary = 90k; Band Level = 8; Job Title = Snr Tech/Sys; Admin Years Service = 16; Hours/Week = 55; Div Name = IGS; Location = Toronto, Canada; Message = No pay increase for last 5 years and am a consistent 2 performer. I'm tired of busting my balls for no paid overtime etc so some executive can reap the rewards then give us the boot and get a short term bonus for that too. I am probably the highest earner in the dept now so I am likely to get the boot next - despite the quality and quantity of work they get out of me (and my colleagues) 1st Line Managers are puppets. Morale in Toronto, IGS is extremely low and alot of us feel backstabbed. Have already started looking for jobs since the 'packages' will likely be the legal minimum. -Roller-
  • PBC Comments
    • Comment 05/14/07: How PBCs really work: A loose-lipped 1st line told me how the PBCs are really given in our organization. Our 2nd line holds regular meetings of his 1st line reports, and they collectively rank everyone within the organization from the best to the worst. The 1st lines have to duke it out until everyone in the organization has been placed in this ranking. They "calibrate" or adjust the rankings periodically, to keep it current. That way, the ranking is handy whenever it is needed. A resource action to apply to 20 people? The 20 on the bottom of the ranking go. No if's and's or but's about it - no need to decide at the time - they just use the ranking. When the PBC distribution is given ... they just apply it to the ranking. Everyone is ranked against each other. If you do above average work - and everyone else does, too - then that becomes the middle of the road. It's all about what your 1st line thinks of you - and whether your 1st line will fight for you in the ranking. -Anonymous-
    • Comment 05/14/07: How PBC's *really* really work. True there's a ranking, but it doesn't necessarily reflect who's the best. In fact, it may not even reflect who the sometimes-clueless managers *think* is best. I had a good friend who was a manager, and sometimes I hung out in his office with the door closed shootin' the sh*t. At ranking time (starting late spring) he would sometimes negotiate rankings on the phone while I was in the room, making deals to trade support for some other manager's guy in exchange for support for his in the ranking meeting. He worked very hard to advance *all* of the people in his department, and he succeeded against lazier, dumber, or, perhaps, more honest managers. Needless to say, as a lead in the area, I knew that some of his people were *not* the sharpest knives in the rack, but their manager was, and he treated the whole thing more like a commodities exchange than a competence ranking. He eventually became a VP, and one of the not-so-obviously talented folks that he negotiated "up" in the rankings (in my presence) is now a director. -alreadyGone-
    • Comment 05/15/07: "How PBCs really work" Ranking may have always been around, but it really started to be standard practice right around the time Gerstner came in. All first lines kept current rankings of their employees and they were rolled up at each level of management. The up side was that it identified the top performers across the organization. The down side was that the list of who to cut was ready for whatever actions came down the pike. Most people think it's just a top 10, bottom 10 and middle 80% ranking, but it's actually detailed right down to who is above and below you in your department and function, so your PBC is pretty much determined well before the official assessment is written. -Anonymous-
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.

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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