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Highlights—June 2, 2007

  • Seeking Alpha, courtesy of Yahoo! Finance: IBM: Playing a Shell Game. By George Gutowski. Full Excerpt: IBM has raised the share repurchase technique to a high level art form. By the way, kudos on the tax aspect. If the IRS was not this foolish, would IBM have done this? Now back to our main story.

    IBM is using three large investment banks to create the illusion of repurchasing approximately 8% of their shares. The transaction is valued at $12.5 billion of shareholder money. 118.8 million shares have been taken off the table.

    The result will be an illusion of accelerated earnings per share. What the magic trick does not do is accelerate enterprise earnings by any metric.

    The new wrinkle is actually buying shares from those that do not own them, with the very important added nuance of massive scale. Because of this nuance, the investment banks can send a bill to IBM if they start to lose money. There probably will be an adjustment at some point in the future. Watch for paragraph three comments at some point in the future when IBM needs to skate back on side with its publicly disclosed costs.

    The disturbing aspect is this. Are the shares truly off the market? How long will it take to actually cover what I think is a modified short position? Will IBM be paying dividends on shares that do or do not exist?

    Watch for an SEC investigation. I know IBM and associated parties probably have good advice or at least advice that was more expensive than good. The transaction begs the question that is fundamental in the stock market: How many shares are there? Boiler room operators used to issue tons of shares. This may skirt the issue much too closely.

  • BusinessWeek: Big Blue Wields the Knife Again. To wrest profits from its ailing IT-services business, IBM is slashing its North American workforce and finding efficiencies overseas. By Steve Hamm. Excerpts: On the surface, IBM seems to be cruising. Its stock is trading near a six-year high, at almost $106, and its overall financial performance has been improving steadily for more than a year. On May 29, the company raised this year's per-share earnings forecast after stepping up a stock repurchase plan.

    Yet the company is battling a bugbear that keeps it from breaking out and prevents the stock from really soaring. Ironically, its problem is with the $48 billion-a-year business that saved it from ruin in the 1990s: IT services. What was once IBM's growth engine seems to be turning into a chronically slow-growing, low-margin drag on the rest of the company.

    Fresh evidence of IBM's trouble with services came May 30, when the company revealed that it had just eliminated 1,573 services jobs, mostly in North America, bringing to 3,023 the total jobs cut in the high-cost region this quarter alone. That's a small percentage of the company's total workforce of more than 355,000. Yet when weighed against rapid growth in low-cost India, where the staff topped 53,000 at the beginning of the year, the cuts underscore the biggest challenge facing Big Blue: the Indian tech industry. [...]

    To improve its efficiency, IBM has adopted the so-called Lean Operations discipline developed by Toyota Motor (TM) for manufacturing cars. It's adapting Lean so it applies to a global service organization, something the top Indian companies began two years ago. The basic principle of Lean Operations is that a company should be making continuous, incremental improvements in its business processes. That's one of the ways IBM figures out where it can eliminate work. The company also keeps a master database, nicknamed "Blue Monster," of all of its services employees. Supervisors use the information to track who is working on what project and when they'll be available for another assignment. In this way, the company hopes to minimize the amount of time people are between assignments.

    All of this cost-cutting is the task of Robert Moffat, senior vice-president for integrated operations. His goal is to make the Global Technology Services workforce 10% to 15% more efficient each year. The key for him is to take costs out of the equation through a combination of workforce globalization, process improvements, and replacing manual labor with software. In a little more than six months, Moffat said at the May 17 analysts' meeting, he has rolled out the new formula for 22 of IBM's largest clients in seven countries. In some cases, he said, the clients have seen up to a 50% improvement in productivity. Now, Moffat is extending the new system to 600 more accounts.

    All of this huffing and puffing over efficiency won't calm the frazzled nerves of IBM's 155,000-strong services workforce. True, there are still abundant employment opportunities in the company. About 30% of the people whose jobs are eliminated find other jobs within the behemoth, and, in the first four months of this year alone, IBM hired more than 19,000 people. But a lot of those hires were made in India. For the U.S. workforce, there is always fear that jobs will be lost to foreigners.

  • Yahoo! message board post: "Re: Big Blue Wields the Knife Again" by "Mike". Full excerpt: Thanks, suckarama, - for posting this article. Although I subscribe to BW, I missed this one.

    Back in 2000 and 2001, there was a large number of posts on this board and the pension board that described Gerstner's gutting of the real assets of the business, in order to build high-profit, low-capital lines of business.

    Bottom line, IBM went into the body-shop business. We then referred to the new model as the renaming of IBM into "JAFCO". It appears that IBM stayed in that line of business a bit too long, - and now the Indians and Chinese are taking big bites of IBM. And, as its gross revenues shrink, stock buy backs appear to be a desperation move, - in order to keep the books looking good while Palmisano looks to buy real winners, shrink the cost structure and liquidate the frozen pension trust funds through attrition and mortality.

    If I were an IBM employee in the USA (and soon, - in India), I'd be looking elsewhere for employment right now. For the past four years, IBM's firings have had nothing to do with performance or morale. They've been desperation moves designed to shrink the corporation down to the quality of its executives and managers.

  • Associated Press, courtesy of Yahoo! Finance: IBM Lays Off Another 1,500, Bringing Yearly Total to 3,700. By Brian Bergstein. Excerpts: IBM Corp. laid off 1,570 people Wednesday, primarily from an ongoing overhaul of operations in its giant technology services unit. The Armonk, N.Y.-based company carried out a similar level of job cuts at the beginning of the month, for a total of 3,023 in this quarter and 3,720 for the year, according to IBM spokesman Edward Barbini. [...]

    That's because IBM's services overhaul not only involves cheaper labor -- IBM's work force in India rose from 9,000 in 2003 to 52,000 last year -- but also a quest to use less labor. That means rethinking and sometimes automating the ways that services contracts are carried out. Last year, IBM adopted a business-retooling system known as Lean to find such opportunities.

  • The Register (United Kingdom): IBM whacks 1,600 more services jobs. Only 147,000 to go. By Ashlee Vance. Excerpts: The layoffs, mostly in the US, follow a similar round of 1,300 cuts performed earlier this month. IBM described the firings as "business as usual" and noted that it hired 14,000 people worldwide during the first four months of this year. IBM closed 2006 with 355,000 staff - its highest total in 15 years.
  • Forbes: IBM Workers Need New Jobs. By Joshua Lipton. Excerpts: IBM executives might call it "rebalancing" but the worker-bees at Big Blue have another name for it: unemployment.
  • Boulder Daily Camera: IBM lays off another 45 in Boulder, 1,570 company wide. Excerpts: IBM Corp. laid off 1,570 people Wednesday -- 45 of whom worked at its Boulder campus -- primarily from an ongoing overhaul of operations in its giant technology services unit.

    The company carried out a similar level of job cuts at the beginning of the month, for a total of 3,023 in this quarter and 3,720 for the year, according to IBM spokesman Edward Barbini. One-hundred employees in Boulder were affected as a result of the early May cuts, bringing the total to 145 for the quarter.

  • Forbes: Fitch Downgrades IBM Ratings. Excerpt: Fitch Ratings on Wednesday downgraded IBM Corp.'s debt ratings after the technology company announced a $12.5 billion stock repurchase program that's mostly financed by debt. The agency lowered the following ratings on the Armonk, N. Y. company: issuer default rating to "A+" from "AA-;" senior unsecured credit facility to "A+" from "AA-;" and senior unsecured debt to "A+" from "AA-." All of the ratings remain investment-grade.
  • Forbes: IBM Talks Of Buybacks But Traders Are Underwhelmed. By Joshua Lipton. Excerpts: It's reasonable to think that IBM's news about reduced headcount and an aggressive buyback program would get traders to push money into the company. But on Wednesday afternoon investors seemed unfazed by the headlines. [...]

    On Wednesday, the Armonk, New York-based company said it had contracts with three banks to buy back $12.5 billion worth of its own stock, totaling 8% of all outstanding IBM shares. In a statement IBM said the shares were purchased from the three banks under accelerated share repurchase agreements, which provided IBM with immediate delivery of the shares. IBM added that the banks are expected to purchase an equivalent number of additional shares in the open market during the next nine months. IBM did not disclose which banks were involved in the buybacks.

  • SnipTools: IBM and the Tricky Edges of Outsourcing. Excerpts: What a Technology Manager Should Think Before Outsourcing, What a Technology Manager Should Think Before Outsourcing. Let’s say you’ve got small project. This project has 5 or 6 guys working on it. They’ve been at it for years, have written a good bit of the core underlying platform, and as such, know everything about it and can generally tell you exactly where the problem is if you call them with a problem.

    Now you fire all those guys and hire a bunch of guys from some Balakambastan at 1/6 the original team’s salary. Even if the original team hangs around to train the new guys, the new guys have to ramp up from scratch. And you can rest assured, these kinds of handovers are seldom whole-hearted. Even if this new breed of cheap programmers is excellent, it’s going to take the team a good 6 months to a year to get comfortable with any decent sized code, regardless of how stunning the documentation is. During that time the overall application design will get slightly worse as they try to implement new features in ways that don’t fit in with the original application design.

    In the mean time you’ve got 150 other tech companies realizing that people in the rapidly growing market of Balakambastan will work for peanuts and they’ll all move in to the country. Now your new team of programmers are realizing that they can get more peanuts if they do the same sort of job hopping that was prevalent in the 90s dotcom heydays to get more peanuts. So over the course of the next year your new team is replaced by even newer people, whom you have to pay a lot more money, and who are completely unfamiliar with your code base again.

    So now you’re paying your latest bunch of Balakambastanis as much as you were paying your original programming team, but these new guys have little to no experience with your code base. Well done!

    The truth is — you can only save money in this manner if you buy into the delusion that people are pluggable resources, or that experience counts for nothing (yes, I have also seen people with 30 years of useless experience, but I speak of actual, good quality experience here). To people who believe that in theory you can get as much done with a summer intern as you can with someone with 20 years of technical experience, my simple advice: give it a shot. One of my favorite quotes: If you think education is expensive, try ignorance. - Derek Bok

    Outsourcing is great and all, but done en masse, and with such stupor, it only reflects the senseless mismanagement of a giant corporation. Stop by ibmemployee and you will see wherein lies the real malaise of a giant blunder of this nature.

  • Yahoo! message board post: "Conversation of interest with Settlement desk - current employee" by "GMan". Full excerpt: I am an active employee. On June 1, I will leave IBM to become part of a joint venture between Ricoh and IBM, since the sold the Printing Division to the Japanese. I am part of subclass 2. I was told that I will not receive my letter until I become retirement eligible and notify IBM that I wish to draw from my PPA balance. I was told that there is not a way to know what my settlement balance is. It will not earn interest and not found in NetBenefits or anywhere else for that matter. It sounds like, for current employees, or employees sold to the Japanese in my case, I won't know anything until I become retirement eligible. Does this sound correct to the people out there in the same boat? Thank you.
  • "Re: [IBM Pension] Conversation of interest with Settlement desk - current employee" by Janet Krueger. Full excerpt: That is a ridiculous answer! Did you try asking for a supervisor?

    It is correct that you cannot collect your share of the Cooper settlement until you being collecting your base retirement benefit.

    It is not correct that your share of the settlement cannot be calculated and will be losing value because you cannot collect it now; it is an age 65 annuity that could be calculated now, and that will be the same when you reach age 65; it will not lose value, and your share will not change because you are not able to collect it now.

    I would suggest you write a letter to: IBM Pension Administrator, IBM Employee Services Center, 3808 Six Forks Road, Raleigh, NC 27609

    Ask for a complete estimate of what your retirement benefits would be if you left IBM and asked to start your pension on June 1, 2007, including your share of the Cooper Settlement. Include your full name, your IBM employee number, and a mailing address. You should get a full estimate within 30 days; if you do not you can complain to the Department of Labor and IBM can be fined. Keep a copy of the letter!

    Once you get the response, file it in a safe place -- even though IBM sold you to another company, they are required by federal law to honor your vested pension benefits, including the Cooper settlement.

    Hope that helps; let us know if you are successful!

  • New York Times: Justices’ Ruling Limits Suits on Pay Disparity. By Linda Greenhouse. Excerpts: The Supreme Court on Tuesday made it harder for many workers to sue their employers for discrimination in pay, insisting in a 5-to-4 decision on a tight time frame to file such cases. The dissenters said the ruling ignored workplace realities.

    The decision came in a case involving a supervisor at a Goodyear Tire plant in Gadsden, Ala., the only woman among 16 men at the same management level, who was paid less than any of her colleagues, including those with less seniority. She learned that fact late in a career of nearly 20 years — too late, according to the Supreme Court’s majority.

    The court held on Tuesday that employees may not bring suit under the principal federal anti-discrimination law unless they have filed a formal complaint with a federal agency within 180 days after their pay was set. The timeline applies, according to the decision, even if the effects of the initial discriminatory act were not immediately apparent to the worker and even if they continue to the present day. [...]

    In a vigorous dissenting opinion that she read from the bench, Justice Ruth Bader Ginsburg said the majority opinion “overlooks common characteristics of pay discrimination.” She said that given the secrecy in most workplaces about salaries, many employees would have no idea within 180 days that they had received a lower raise than others.

    An initial disparity, even if known to the employee, might be small, Justice Ginsburg said, leading an employee, particularly a woman or a member of a minority group “trying to succeed in a nontraditional environment” to avoid “making waves.” Justice Ginsburg noted that even a small differential “will expand exponentially over an employee’s working life if raises are set as a percentage of prior pay.” [...]

    As with an abortion ruling last month, this decision showed the impact of Justice Alito’s presence on the court. Justice Sandra Day O’Connor, whom he succeeded, would almost certainly have voted the other way, bringing the opposite outcome.

  • New York Times: Out of Retirement and Into Uncertainty. By Kelley Holland. Excerpts: THINK of retirement and a picture emerges of a grand send-off at the office, followed by travel, hobbies, grandchildren, and a pension and a Social Security check to pay for it all. But after awhile, the retirement fund may start to feel a little skimpy, or the golf course a little dull — or both — and the concept of returning to work becomes, well, more than a concept.

    But there’s a catch. When older workers look for jobs, they may get as much respect as Rodney Dangerfield.

    It often takes many weeks, or even months, for older workers to find jobs, distinctly longer than their younger counterparts. In 2006, for instance, workers age 55 or older spent an average of 22 weeks looking for work. That was down from 24 in 2005, but still far longer than the 16-week job hunts of workers under 55, according to the Bureau of Labor Statistics.

    In the same vein, a study by the Center for Retirement Research at Boston College, sampling employers in Massachusetts and Florida, found that younger workers were about 40 percent more likely to be called in for job interviews than were candidates 50 or older.

  • New York Times: A Say on Executive Pay. Excerpts: Executives have always been paid at the top of the corporate scale, but as the gap between them and average workers widens into a chasm, more people have begun to ask how much is too much.

    Shareholders of Verizon Communications recently passed a measure that would give them an advisory vote on compensation packages for top executives. Shareholders at roughly 20 companies have pushed such say-on-pay proposals. And Congress appears ready to act if companies don’t. The House of Representatives has passed a bill that would give nonbinding votes on pay to all shareholders, like those that Britain and Australia already have. [...]

    The post-Enron reforms forced boards to eliminate conflicts of interest among auditors, investment bankers and others. But little was done to address conflicts of interest among pay consultants who may have other lucrative contracts with the same companies — and strong incentives to please the top executives. Those conflicts of interest fuel the irrational rise in compensation — and the growing discontent among investors.

  • Los Angeles Times, courtesy of Charlotte News & Observer: Taking sick days often discouraged. Merrill Lynch threatens punitive action. By Molly Selvin. Excerpts: Most U.S. workers don't use up all their sick days. Merrill Lynch & Co. seems bent on making sure its workers don't.

    A new corporate policy has employees at the largest U.S. stock brokerage possibly facing punitive action -- including the loss of pay -- if they take more than three sick days without valid excuses. Termination could result after eight sick days. [...]

    Efforts to reach employees in various Merrill Lynch offices around the country were unsuccessful as company officials directed them not to talk to reporters.

  • New York Times: Injustice 5, Justice 4. Excerpts: The Supreme Court struck a blow for discrimination this week by stripping a key civil rights law of much of its potency. The majority opinion, by Justice Samuel Alito, forced an unreasonable reading on the law, and tossed aside longstanding precedents to rule in favor of an Alabama employer that had underpaid a female employee for years. The ruling is the latest indication that a court that once proudly stood up for the disadvantaged is increasingly protective of the powerful. [...]

    In addition to interpreting the statute unreasonably and ignoring the relevant precedents, the majority blinded itself to the realities of the workplace. Employees generally do not know enough about what their co-workers earn, or how pay decisions are made, to file a complaint precisely when discrimination occurs. At Goodyear, as at many companies, salaries were confidential. The court’s new rules will make it extraordinarily difficult for victims of pay discrimination to sue under Title VII. That is not how Congress intended the law to be enforced, merely how five justices would like it to be.

  • Wall Street Journal: Pension Crash Landing. Excerpts: When Congress passed a broad pension reform last year prodding companies to get their retirement programs in order, it seemed too good to be true. Now we know it was.

    That's the lesson of an amazing bit of corporate welfare the Senate tucked into the Iraq war supplemental last week. Last year's bill included a hard-fought political compromise: Carriers that agreed to a "hard freeze" of their pension plans would be allowed to use a higher interest rate in calculating their plans -- which would reduce their net liabilities. The idea was to discourage airlines from buying union peace by running up their pension tabs, which they might later dump on taxpayers. A few airlines, such as Northwest and Delta, took this medicine.

  • wikiHow: How to Look Busy at Work Without Really Working (Humor). Excerpt: Recent gains in US worker productivity haven’t been met by gains in real wages. In fact, for all but the highest-income workers, real wages have fallen slightly while productivity has risen. This is, of course, a troubling economic development, but the problem can be solved. The solution? Slack off at work. If workers everywhere don’t get as much work done, they’ll bring their productivity back into line with their wages—it’s the only fair and reasonable thing to do. Unfortunately, employers tend to see the problem differently, however, so you’ve got to take some precautions if you’re going to turn some of your work time into leisure time. Here’s how to look busy so “the man” stays off your back.
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
Minimize
  • CBS News: When Health Coverage Doesn't Hold Up. CBS News Investigates How Individual Health Insurance Providers Can Deny Big Claims. Excerpts: A two-month CBS News investigation of the individual insurance market found that Smith's experience was far from unique. Because it was expensive, his claim was investigated for fraud by Assurant Health, his insurance company. After examining his medical records, the company refused to pay based on a 3-year old-reference to an "angina episode." Assurant said those words proved his condition was pre-existing, despite the fact that follow-up tests in the same file diagnose his "episode" as a case of acid reflux and ruled out a heart condition.

    "The claim about these pre-existing conditions was absolutely preposterous," Connecticut Attorney General Richard Blumenthal said. [...]

    "What this company did was create the illusion of coverage, when in reality, it would challenge almost any expensive procedure as a pre-existing condition," he said. CBS' investigation of Assurant found a pattern of questionably denied claims and cancelled policies — and what a South Carolina judge called a culture of "secrecy, concealment … and shredded documents."

  • BlueCross/BlueShield Association: A healthcare idea's second life. By Ronald Brownstein. Excerpts: SOONER OR LATER, the political argument about expanding access to healthcare always returns to the same intractable question: Who pays the bill? The healthcare proposal that Democratic presidential hopeful Barack Obama released Tuesday, though vague on many details, will sharpen that debate in illuminating ways.
  • New York Times: The Obama Health Plan. By Atul Gawande. Excerpts: As a surgeon, I’ve worked with the veterans’ health system, Medicare, Medicaid and private insurance companies. I’ve seen health care in Canada, Britain, Switzerland and the Netherlands. And I was in the Clinton administration when our plan for universal coverage failed. So, with a new health reform debate under way, what I want to tell you in my last guest column is this:

    First, there is not a place in this world that is not struggling to control health costs while providing high-quality, easily accessible care. No one — no one — has a great solution.

    But second, whether as a doctor or as a citizen, I would take almost any system — from Medicare-for-all to a private insurance voucher system — over the one we now have. Job-based insurance is bleeding away the viability of American businesses — even doctors complain about the cost of insuring employees. And it has left large numbers of patients without adequate coverage when they need it. In the last two years, for example, 51 percent of Americans surveyed did not fill a prescription or visit a doctor for a known medical issue because of cost.

  • The Huffington Post: How the "New Naders" and the Right Could Kill Health Reform. By R.J. Eskow. Excerpts: The three leading Democratic candidates for president have now offered some information on how they would change our broken health system, and their plans are alike in many ways. There's some consensus on the issue at the top, so there's bound to be some substantive reform after the 2008 election, right? Not necessarily. Between the New Naders on the left and the snipers on the right, reform will be imperiled even if Democrats sweep the 2008 elections. [...[

    The candidates' plans aren't ideal, even from my perspective, but each would be a significant improvement over today's situation. Sen. Clinton's Best Practices Institute could save lives and money. Better technology could save lives and reduce cost while making the experience of being a patient more bearable. America's children would be fully insured and more Americans would have coverage under each of these plans. [...]

    Here's how health reform could die: The Republican presidential candidates have remained silent on the topic for the most part. Come election season, the Democrats will have offered detailed plans that the GOP can then fire shots at each proposal in a leisurely manner. (They, of course, will offer no competing plans of their own. That gives them the luxury of criticizing the solution without addressing the problem.) Meanwhile the New Naders will be blasting the same plans from the right, which could rob them of much-needed support from the Democratic base.

    Two possible scenarios could result: In the first scenario GOP campaign donors, 527s, and insurance companies, coordinate a campaign that paints the Democratic nominee's plan a disaster for small employers, the self-employed, and the middle class. Outcome: The Democrats lose the White House and suffer setbacks in Congress.

  • Wall Street Journal: Why Health Care No Longer Makes Politicians Leery. Shift in Public Attitudes Since '94 Clinton Fiasco Emboldens Candidates. By Jackie Calmes. Excerpts: During the 13 years since President Bill Clinton lost his bid to remake the U.S. health-care system, and helped cost his party control of Congress in the bargain, politicians have shied from changing it more than one step at a time even as costs and the ranks of uninsured have ballooned.

    Now, the growing list of Democratic presidential candidates calling for universal, cheaper coverage -- Illinois Sen. Barack Obama yesterday became the latest -- suggests the days of health-care incrementalism are over. Nor are these Democrats alone in embracing the once-toxic political cause of universal care: The best-known state models have been championed by Republican governors, including Mitt Romney of Massachusetts, who is now running for president.

    This shift reflects rising and inflation-topping out-of-pocket costs for health care and insurance premiums, co-payments and deductibles. Also, the number of uninsured has spiked to about 45 million, from 37 million when Mr. Clinton was president. Business leaders increasingly are seeking a government-imposed solution, saying employee health costs put them at a disadvantage with foreign competitors.

    Those forces, in turn, have combined to embolden politicians in both parties to once again propose universal health care that inevitably would mean a big role for government -- and possibly upend the powerful insurance, medical and pharmaceutical industries.

  • "Annual Increases" by "somesuch". Excerpts: It sure has been very quite about the annual increases. Has anyone heard anything? Will we be notified? When do they take effect? Supposedly there is very little money due to all the recent acquisitions. With record profits you would think the pig would share a few crumbs to the piglets.
New on the Alliance@IBM Site:
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  • 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 05/27/07: To sore sphincter - I was RA's on Oct 25, 2006. I used Monster to find a job at EdwardJones. I had been looking since Oct. 2005. I had 6 interviews and no offers. After RA I had 2 interviews and was offered a Windows Admin onsite press the server button job. I was a Unix Admin. The whole thing was a joke. I turned it down and left in December. I gave a week notice and was asked why I didn't give more notice. I advised since I was an Admin I was not sure they would let me serve a full notice. The brought in Brazilians to train less than 2 weeks into my 90 day RA. They did not and do not know the systems. All poor planning. This was while LEAN determined that only 3 people were needed on our shift to monitor 10,000 servers. Typical crap. I am glad I left and am much happier. There is life after IBM and I had lots of phone interviews outside of IBM. Good luck and good hunting. -HappyinPhx-
    • Comment 05/28/07: If you are RA'ed a 2nd time after posting out I expect you are eligible for package. Just don't fall for the scam where your new manager says you should receive a 3 cause you are new. Many get suckered and think this sounds reasonable and set themselves for ISP with less or no severance instead of RA package six months down the road. Happened to someone I know -Anony-
    • Comment 05/28/07: I am just sick. Everyone of my friends has been RA-ed -including my manager. They were all good workers, no one was lax in any way. Thursday is their last day. Out of 10 folks who were my close friends at work only 1 has found another job in IBM. (And that was because they knew someone who knew the hiring mgr). Trying to find another job once you're RA-ed is like trying to find a needle in the haystack. -just-sick-
    • Comment 05/28/07: IBM is taking no prisoners this time around. They used to protect the folks in the management circle, but not anymore. If you're a mature employee over 50 and on the old pension plan - you are fair game for the ax this year. My manager is 52, and was RA-ed at the beginning of the month. He has been looking for another job inside IBM. As soon as he gets to the point where a new hiring manager is interested, there is a sudden 'lack' of interest, and the deal falls thru. I can only assume the hiring mgr has viewed his jacket and realized he is black-balled. Funny thing is, that this mgr has been a mgr for years, and has been part of the layoff fiascos of past years. Part of me is sad he is leaving as he was one of the better mgrs in IBM. The other part of me is gloating because now he knows what it is like to be on the receiving end of an RA. -once-me-once-again-
    • Comment 05/28/07: Looking for others who are in the throws of LEAN. Has anything good come from it yet? All I have seen is an increase in the workload. I used to work 50 - 60 hour workweeks, and now my work week is over 75 hours. At this point, I am looking forward to being layed off. How do others feel about LEAN? -middleware-LEANer-
    • Comment 05/28/07: I work in one of the groups that sets up userids for IGS on the e-biz customer servers. We just had a request for over 42 userid creation requests. GUESS WHAT? The userids are for a new DBA group in Brazil. HMM...any one want to guess which group is going to loose their jobs next. If you're a DBA - get your resume updated. QUICKLY. You're in the limelight now. -one of the sheep
    • Comment 05/28/07: I am a first line mgr, and basically I am fed up with the tactics this company employs to debase and demean the employee base. Folks, the rumors you are hearing are true. The times are altered as needed by mgmt, however the results will be the same. -1st line going thru hell-
    • Comment 05/28/07: 1st line mgrs should be delivering information on raises for the year soon. Very few folks are going to be rewarded for their hard work. The raises are going to be timed to soften the blows of the layoffs. Folks around the RA-ed won't care so much when they find out they're getting a .50 cent an hour increase. HA! -raises coming ~ NOT~-
    • Comment 05/28/07: I've landed myself another job. I can't take LEAN anymore. Save your dignity and get out before you loose all vestiges of your self respect. The offer I got is for one of IBM's competitors, and let me tell you how happy they were to hire me. I've received a 19% increase too ! Let me tell you one thing. I will be in a position to buy new hardware for this company, and I WILL NOT be promoting any of IBM's products. IBM YOU SUCK ! Watson is turning over in his grave at what you have done to this once magnificent company. -Riding into the Sunset-
    • Comment 05/28/07: I'm leaving on Thursday - been RA-ed. Tried to find something, but no luck. The best of luck to all the folks I've managed. Best wishes for a happy life and career, I will miss working with everyone. I'll stop by here every now and then to see what is going on. Until then, I will be trying to pick up the pieces and try to move on. -ex-manager in washington state-
    • Comment 05/29/07: It's been a long month, but in the end I've been hired on at a great company at a much better salary than IBM. To those laid off, I know it can seem desperate at first, but looking back I can honestly say I should have done this years ago. My advice would be to look for smaller companies as they tend to be more personable and caring about the individual. Leverage the skills you learned that you gained under pressure and duress at IBM towards your new company and I think they will be amazed at the results. Just think about how well you can do when applying yourself towards a company that cares about you. IBM will be a distant footnote before you know it. Good luck and hang in there. -Anonymous-
    • Comment 05/29/07: To WTF_? You cannot hide from this by taking 6 months off.. they are RA'ing folks on disability.. the kind family oriented IBM is gone.. stick a fork in it... As far as getting in the list.. the criteria before was that they usually hit the PBC 3 then 2's then 2+ then 1's.. I was a 1 and got tagged.. they are not going by the rating system.. its the ol' school system if you are connected... you'll be fine. Its actually nice to see management feeling the pain...they get to feel the stress we feel.

      Everyone needs to realize that if you are an IBM'er in North America.. you have a target on your back. Quality is not the answer anymore, if you work on an outsourcing contract, you know this all too well. IBM is over as far as the outsourcing (SO & ITD) goes...get prepared so when you are ra'd, you're expecting it, unlike me who wasn't.

      If you're prepared, it will be a nice reward as you will cash out versus leaving without getting paid. Make this work for you. Take the culture that WAS IBM to your new company, start it there. The best part is IBM is shooting itself in the foot. All of these folks that IBM is screwing over are going into roles with competitors and in position to cost IBM money...remember what they have done to you and your fellow ibm'er...always remember -Sore Sphincter-

    • Comment 05/29/07: RA's in the past would not net the number of FTE reductions needed, due to people finding jobs in other areas of the company. RA's became a big shell game of moving people around. Executive management caught on to this and at least when I was at IBM, managers needed 3 VP's signatures (HR, Finance, and Division) to hire someone who was on the RA list. It was a rare instance that a manager would go after the signatures needed to save an employee. Even when they did, the bureaucracy slowed things down to the point it was almost impossible to get it done within the 30 days that an employee had remaining. From my experience once you are on the RA list, your days are numbered at the company, which may not be a bad thing these days. -Moved On-
    • Comment 05/30/07: Well Folks, IBM Canada is about to get hit by the LEAN machine, a few reps in STG was told by their managers that they cannot afford to have so many headcounts at the same customer, so most likely they will be gone, after doing some research it’s seems at ever IBM account two thirds or maybe half of the employees will have to do the work while the rest will be cut... Will have to wait until after July to see how this LEAN phase is implemented… -Lionheart-
    • Comment 05/30/07: Curious, I was a PM .. Band 8 High PBC's for 8 plus years.. Customer Facing.. got whacked. Seems like the pitch to get more PM's was a joke. From what I hear, ITD and SSO will get gutted over the next 6 months If you are in SSO managing servers remotely.. polish up the resume.. they can get 4 workers in Brazil from what they pay you...there is no more loyalty.

      Just look at what they are doing to the IBM'ers with the pensions.. These folks have given their lives to IBM only to be screwed over.. I don't want to work for a company like that...that alone sealed my choice.. Its over.

      Our IBM'er culture will need to be taken to another company. I wish all of those affected in the last few days the best of luck.. Please remember that you are not alone.. this is like a death in the family.. first its the shock and fear, then grief, anger.. Then the clouds start to part.. you have a whole new opportunity to work for someone else doing the same or something else.. we are not valued.. no raises why we have had record profits .. sam getting millions in bonuses.. I feel for those left..

      60 to 70 hours will now be the minimum.. sweating over the fear of losing your job.. target on your back. YOU DESERVE BETTER. F sam and the upper management back stabbers. Its nice to see managers and 2nd line affected now.. there is zero loyalty from IBM management now.. think of how that will affect morale.. Get ready for some paltry raise and news that's its over.. that's BS. Read the proposals from the last stock holders meeting.. something big is up -Sore Sphincter-

    • Comment 05/30/07: Band 8 Pre-sales tech support IBM ebusiness Hosting Several people cut in our group today. We are all work-at-home people. Seems we are excess surplus resources in line with the 25% ongoing cuts in CES. 30 days to find a new job inside IBM, 1 week pay for every 6 months of service. Next day shipment will show up tomorrow with the details. Not really sure I want to look for another IBM job. We just are not doing good work anymore for our customers. We treat our teammates at IBM even worse. Man this sucks, just fired the maid too ;-).... C_ya_later_IBM -Just been fired-
    • Comment 05/30/07: 1500 is the number laid off and (hopefully) given packages. This does not include the number fired for trumped up 'performance issues' or forced out. I wouldn't be critical of the union here for scaring people! The number of 12,000 for 2007 is a reasonable one. And that number would be 8% of the US workforce (since most of these cuts are coming in the US). With force outs and bogus firings the number could be as high as 1 person in 10 in the US. (The definition of 'decimated') -ExRochBeamer-
    • Comment 05/30/07: Well, I tried all month and could not get accepted to any of the job postings. Even after hearing several time - "you're a perfect match - let me get approval and you're in". Then BAM - they see the RA blacklist and I am history. I heard the real meaning of LEAN is "Less Employees are Needed". God Bless you all and stay strong. We will be okay outside IBM. -Kicked to the Curb-
    • Comment 05/30/07: Layoffs today of developers in the Rational brand. Lexington site was hit. Unclear how many; numbers were not given. Hall-talk guesses a dozen at least. Sounds like all were offered a package; details not given to the rest of us. At least one 1st line and at least one 2nd line manager were hit as well as us monkeys in the trenches. -Anonymous in Lex-
    • Comment 05/31/07: Let's make sure the news media understand. First, 3500 may only be one percent of IBM's total headcount but it is more than one percent in the countries where the cuts are taking place. Second, IBM may be hiring 12,000, but they are not in the same countries where the cuts are. Newspapers, radio, and TV in Raleigh, Rochester, and so on, need to be alerted to this and ask more probing questions. -IASSOS-
    • Comment 05/31/07: It's really bad over here. IGS is hitting EVERY dept, with a few more layoffs here and there. This is worse than the layoff rounds in the 90s. These layoffs are more 'stealthy' this time around. Mgmt has been telling people that they cannot divulge to others if they have been RA-ed. Presumably, this is so that the remaining workers aren't demoralized any further. Some people can't do it. They are packing up and leaving. Shaking others hands thanking them for the honor of working with them. -the titanic-
    • Comment 05/31/07: Layoffs are happening big time over here in NY . We're part of IGS ITD/SSO. Mgmt has told those affected by the RA, to keep quiet. Seems the DPEs, FAMs and PEs are getting hit this time around. -ibm suxs swamp water-
    • Comment 05/31/07: For I have been placed in the firing off list... I was given a long list of all divisions in software group listing all jobs, organized by age, and number of people affected in that range. Tivoli has 34 on the list. I haven't had patience to come up with the totals but it's a 45-pages long list.. each page about 22 jobs... each job about, say 10 people... approximately 10,000 cuts ... -All-
    • Comment 05/31/07: Don't believe for a minute that RA's for the Quarter are done. I heard from a manager and a team lead that RAs are not over. I know our team will be hit. Don't know how many, don't know when. But we will be hit before the Quarter is up. -Anony Mouse-
    • Comment 05/31/07: RA 5-30 7 yrs - 5 overachieved quota. Band 9, age 49 single Mom STG got word yesterday. Will see package when my manager gets back from vacation. -sad to go-
    • Comment 06/01/07: Southbury got hit today 6/1. IBM layed off several contractors. One of my friends just called me to tell me his job was eliminated and the work was being sent to Poughkeepsie. The Southbury, CT site is slated to be closed down. -waiting for the ax-
    • Comment 06/01/07: Significant job cuts in the Transition organization within ITD this week. Cuts included 2nd and 3rd line mgrs, but also many valuable technical folks. It is clear that there are more holes in the dyke than we have fingers remaining already. The business is already beginning to break measurably. One wonders how long this can continue before we begin to see a mass exodus of customers. -HangingOnInBoulder-
    • Comment 06/01/07: Well I made it through another one. I figure in my job I have another year at the tops. I really feel for all of the IBMers that have been let go. I went though the same thing with my last employer but they gave us 8 weeks notice and we were not expected to even show up for work during that time. I was lucky enough to find a job in 4 weeks. Well maybe not lucky; it was with IBM. All of you people that did get let go maybe the lucky ones. If you look closely at the news this is a company that is circling the bowl.

      I am bailing as soon as I find something. Active job search starts next week. I am not waiting for the severance. I figure it will get reduced soon anyway. In the meantime, I plan on putting in the bare minimum in OT. I think that everyone of us that is left needs to do this. The only thing that has been keeping this company floating is the sheer effort of the employees on the front lines. Let the process fall apart. No more 60 to 70 hour weeks.

      Apply Lean to your own life. Cut out the excess work. Your customer, IBM, is only paying you for 40 hours a week. So, if you follow the Lean principles then they should only get 40 hours worth of work. Not 41 hours. Definitely not 50 plus hours. I am not saying to do anything unethical such as walk out of Sev1\'s or ignore your pager while on duty. But you sure can bail out of work at the end of the day, leave your pager at home while you are not on duty, and turn off Sametime and not answer your phone 30 minutes before you leave.

      Anyone hassles you then use Work/Life Balance as an excuse. Let us face it. They have been out of legitimate PBC 3's and 4's for some time. They are creating them now for an excuse to let someone go. It is only a matter of time. Save your strength for your next employer who will hopefully appreciate it. To everyone that has been laid off I wish you the best. Hope to see you in the next company I work for. -Missed again-

    • Comment 06/01/07: Entire dept whacked. Mostly contractors, but some IBM'ers and mgr. SWG. -John Doe-
    • Comment 06/02/07: Yesterday afternoon the JOBS application transfer tool was SHUTDOWN. I have this from a reliable source. This is why folks are not able to be hired into a new job. The hiring mgr wants you, but the IBM process is stopping it. The hiring mgr doesn't know it until he works thru the process to get you on-board. The lying louts in upper mgmt are even lying to their 1st line mgrs. The information is given to them on a need to know basis. Folks - the purpose of layoffs is to thin the ranks. It defeats the purpose, if folks are allowed to find other employment inside IBM. -forget about it-
    • Comment 06/02/07: To Curious: Yes - this is confirmed by 2 upper level sources that IBM is getting out of the Southbury site. LEAN is part of the process to get them out. The medium term plan is to move the work to Pok, then after it is there, off-shore a good portion of it to Brazil. The timeframe to do this will be influenced by several factors, including 1/2 half results. Get out now while you have the chance. -waiting for the ax-
    • Comment 06/02/07: Many of the supporting DPEs and FAMs got hit this time around. No one is around to interface with the customers. It is now apparent to me that IBM/IGS wants to 'clean the slate' by dumping customers as well as employees. The company must have been bleeding red for sometime now. Someone in the Ivory Tower finally woke up and realized all the money that was being lost. Guess it doesn't pay anymore to keep their current customer base. It will be interesting to see how many 'breach of contract' cases will be brought against IBM/IGS when the customers finally realize the extent of the cutbacks. Once again, the bureaucracy within IBM is their own downfall. They created such huge support structures that nothing can possibly sustain it. What is amazing to me is that they are dumping management. No one is safe anymore. Get out now while you have the chance. -let the games begin-
    • Comment 06/02/07: if you still work for IBM and are riding this out..... you are a fool. anyone not looking elsewhere is blind..... there are gonna be ten's of thousands of people..... its better to find a new job when there are 40,000 people looking at the same time.... give up on this quest, ibm gave up on you. -LEAN Coordinator-
  • From the General Visitor's Comment page:
    • Comment 05/28/07: I am one of the IBMers who lost his job this Month. May 31st is my last day. I started as a contractor working on the Y2K project in 1999. My team managed to finish way ahead of schedule. After the project, I was "secretly nudged" into applying to become a regular. (even though IBM managers are not supposed to actively recruit contractors.) I went for it and got hired. My hiring manager took another job 2 months after I was hired 8 years ago. He brought me in, made me feel like he cared about me and then "poof" gone. I have had 6-7 different managers since then.

      Mostly feeling like a step-child because they gravitated toward the people they knew and had under them already. No leadership, no information, everything always hush hush and US vs THEM atmosphere. There was some help along the way with the diamonds in the rough managers, but all in all, the ones who tried to be helpful had to put up with a lot of pushback from 2nd and 3rd line mgrs. WHY? because they didn't know any of us or what we did day to day AND didn't care. They just look at spreadsheets and have teleconferences. I have a lot of anxiety and stress right now. BUT, please don't feel sorry for me. I have been miserable at IBM for years now. Always hoping things might get better, but they just kept getting worse. The scientists in IBM research are the only reason IBM still exists. and I don't want to hear. "Well that stuff had to get marketed and sold blah blah blah." Unscrupulous salesman and marketing people are a dime a dozen. Brilliant scientists are rare and IBM has plenty of them.

      Quick story: About 1 or 2 years into my employment at IBM, I had a blind date. She was an office manager of a big electrical supplier in the Bronx. When I told her I worked for IBM, she started blasting me and IBM. I mean, she was foaming at the mouth. People started to look over at us. IBM was their IT company, completely dropping the ball, giving her and the company the run around. Needless to say, there was no second date.

      I'm not upset because I got laid off. In fact, I'm kinda elated to get a package and unemployment and try to start my own business. What I am upset about is the way I have been treated overall during my years at IBM as I mentioned above. The arrogance and ego's floating around IBM is sickening. Hypocrisy and mean spirits. I was often spoken down to and insulted by many fellow employees I was trying to service. Those same people always abusing and trying to work around the system. Working around the system skews numbers and alters reality. Especially when our head count depended on the "numbers". BUT, I did make some friends and there are many nice people at IBM.

      We would watch the IBM helicopter land at our site with Lou, or Sam or whoever and reasonably estimated the cost at thousands of dollars for that trip, when it was only a 10-15 minute car drive from Armonk. Heck, take a limo. It would still be much cheaper. But I guess toolin around in a chopper makes y'all feel way more important doesnt it? And my manager can't get reimbursed to buy us pizza once a year. I wish all my friends still working at IBM the best of luck. AND yes, I wish IBM research the best of luck because they do some incredible things in this world.

      Well, I said my peace. I got it off my chest. Now I have to go work on my new journey in life. And in the end, life/happiness is a journey, not a destination. -Itrainedpradeepgupta-

    • Comment 05/29/07: To 1Question 5/25/07: Repent and sell every share you've got. The WSJ just came out with an article that points out the primary reason IBM did the accelerated stock buy backs was for tax avoidance reasons, not because management thinks it's a good investment. As a matter of fact, the WSJ article says that they are counting on that the shares will fall in price so when they buy the borrowed shares back on the open market with an overseas subsidiary they will make even more money. You can sell everything that you bought in any previous offering period without penalty. Consider even selling what you\'ve bought in the current period as well, since the market is at an all-time high and many are doubting it will stay that way for long. Diversify! Don't let what happened to those who didn't diversify away from their employer happen to you when IBM (and you and I know why) share prices collapses. Terra in firma? Good analogy for the water soaked foundation of a house of lies. -GTS Slave-
  • Pension Comments page
  • Raise and Salary Comments
    • Comment 05/28/07: Salary = 40,000 yr; Band Level = 2; Job Title = Production Specialist; Years Service = 10; Hours/Week = 40; Location = East Fishkill; Message = Very low salary. No hope for advancement. PBC is a joke. Computers taking over human responsibilities. Enough said! -Current IBM er-
    • Comment 05/29/07: Any news of the Salary raises for this year ? When is it due ? Do you know why the PBC goals are not approved yet for year 2007 ? Has anybody tried to "convert" from IBM Employee to independent Contractor ? If so, please post on how to do it ? What things should be considered ? -Try_To_Stick-
    • Comment 05/29/07: Band Level = 8; Job Title = Unix SA; Years Service = 9; Hours/Week = 50 - 70; Div Name = SSO; Location = work@home; Message = I point blank asked my manager why we haven't heard anything - she provided no response. I told her "silence is golden and understood".. she then stated she would communicate to the team via a meeting. That hasn't occurred. This is the most unprofessional I have seen IBM in a long time. We are all professionals.. treat us as such.. if there are no raises.. that is fine - just explain that and lets all move on. -beyond_frustrated-
    • Comment 05/29/07: When the frig are IBM managers gonna have the GUTS TO TELL US whether we got a 0% raise or not????? The paperwork has to be in by now, right? So what's the WAIT????? Or are they so friggin busy COVERING and LOOKING AFTER THEIR OWN DIRTY BOTTOMS or doing the LEAN RA's to give a friggin damn? -Anonymous-
    • Comment 05/30/07: I was told that raises have to be in the system by June 1st and they have until June 12th to inform each employee. -ibmer-
    • Comment 05/31/07: I just emailed my manager asking about raises & he said he'd probably be discussing it next week. PBC = 2 Did anyone get a 2+ or a 1 PBC rating this year? -troubled in Tulsa-
    • Comment 05/31/07: Years Service = 20+; Hours/Week = 40; Message = I'm a 2+, but think I'm above the salary midpoint (no doubt it will move this year). So, I probably don't qualify for Top Performer or any other bump. Plus, mgr said pay plan wasn't very good this year. Yessir, that'll really motivate me to volunteer for stuff. -underwhelmed by ibm leadership-
    • Comment 06/01/07: Salary = $110k; Band Level = 8; Job Title = IT Architect Years; Service = 9; Hours/Week = 50-60; Div Name = 07; Location = Boulder, CO; Message = No raise for the past 3 yrs. Bonuses are pathetic in spite of 2+ PBC ratings. Happy to still have a job, but angry at the FUD being created. Definitely looking around for other opportunities. I bet I'm not the only one! -IBMer for now-
    • Comment 06/01/07: Salary = 50k; Band Level = 5; Job Title = ssr; Years Service = 8.5; Hours/Week = 40/base + OT; Div Name = ITS; Message = Pay increase? Makes no difference to me. I'm hourly. If I need an extra 5% this week, I work it. If I need an extra 10% this week, I work it. My manager was telling me a couple of years ago that there just wasn't any money for a raise. I told him that was OK, I'll just get mine in OT on Friday. He wasn't happy, said I should be fired for saying such a thing. I told him that my pager goes off around the clock, I'm on standby around the clock, and all I have to do to collect the money is respond to the page. IBM has set the rules of the game, and I just follow them. So management, keep the raises, I'll get mine on Friday.... -gadfly-
    • Comment 06/02/07: Salary = 48K; Band Level = 5; Job Title = Test Engineering Specialist; Years Service = 28.5; Hours/Week = 48-50; Div Name = Micro; Location = Endicott; Message = I left IBM in 02. While I was there, I too, had a pager 24/7. I also worked from home as line support.. no matter what time of day.. I got phone calls at home during 3rd shift. They even called me on my wedding anniversary just when I was about to...well anyway. My point is, that I got paid OT for that. I made sure of it. At the time, IBM honored the policy of 'coming in off-shift for support, paid 4 hours', regardless of my actual time spent there. I also charged them for the time when I was called at home and had to turn on my desktop and do remote fixes.. All the managers I had; never got upset at what I was doing. They knew it because I had to fill in a time card and they signed it. So Gadfly, I agree with your practice; However, you should remember that the whole reason IBM is firing people is because US employee labor COSTS TOO MUCH. Be aware that you could be next. -Hans Solo-
  • PBC Comments
    • Comment 05/29/07: It's really bizarre what happens to a large company. The lower level grunts work really hard to get the actual work done, while upper levels create fancy presentations and attend meetings to figure out what, and who they are going to delegate. All the while holding up the image to the lower level that they are "making it happen" so they look important and the grunts keep working as hard as ever. Then the upper levels get to hire who they please, and protect who they please, all the while carefully orchestrating the illusion that they know what they are doing. -CompanyJive-
    • Comment 05/30/07: Prior Yr PBC = 2+; This Yr PBC = 2; This Yr Bonus = 0; Prior Yr Bonus = 2k; Message = pbcs do not add value to IBM. I think that there is a mandate to cut a certain percentage of employees in the USA. So pbcs are a cowards way of doing this. Managers fool themselves and are able to sleep at night because they did not really do the cuts themselves. They believe that the pbcs did it. They think actually that the pbcs reflect performance and therefore it is not their responsibility nor their fault if a person gets themselves into the state of having a bad pbc rating. What they fail to realize is that unless they want to move out of the usa pretty soon they won't have anyone to manage. And by the way, US employees regularly work overtime especially band 6 through 10s and take less holidays then non-US employees. How will the number crunchers account for this loss? They won't. -Anonymous-
    • Comment 06/02/07: Prior Yr PBC = 2; This Yr PBC = 2; This Yr Bonus = 0; Prior Yr Bonus = 2k; Message = Took on a LOT more responsibility last year than in prev years. Got my max # of Thanks Awards all from people outside my org to show how diverse my skills were. Still got a "2". So why even try harder? I understood we were supposed to be rated against others in your SAME BAND level, but obviously not. The same people get the promotions, bonuses, etc., every year no matter what, and unless you walk on water (or are good at kissin' mgmnt's behind), expect to be passed up. -John Doe-
Vault Message Board Posts:
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Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. A few sample posts follow:

  • "Right again, Dr. ABC" by "wonderaboutibm". Full excerpt: Your basic point that failures within the IBM management are the proximate cause for so much anti-India venom on this board is right on the money. We have also been subjected to an equally overdone reaction from certain Indian posters.

    Americans SHOULD generally be pleased that the rest of the world -- especially the "emerging markets" -- are starting to catch up. We are the deliberate creators of some of the mechanisms that the emerging countries are now latching onto to pull themselves up.

    The problem is in the smoothness of any required labor and capital rearrangements. And here IBM has been spectacularly inept. No one can argue that instead of true global labor integration, we have a mad and unseemly scramble for the ephemeral benefits of labor arbitrage.

    What with all the harrumping about "IBM Values," I would expect a little more straightforward and honest communication with IBMers in the US (and anywhere else) about what is going to change. But there is no communication -- not even in reaction to almost hysterical commentary by industry observers like Cringely.

    If you read my previous posts concerning Indians, I do hope you find no racism -- but just deep skepticism that IBM's global resourcing strategy is sound. IBM's employees, customers, and business will be harmed along the way.

  • "Too Simple..." by "Dose of Reality". Excerpts: We agree with the broadest conclusion, and the one which is the most relevant for those that use these boards, in that IBM is a lousy place to start, progress, or complete a career in this industry. They did screw up in deciding to try to assimilate PwC, and as a result screwed up the integration. They are trying to move their labor pool to Asia, without having any semblance of a change management plan, nor a valid business rationale, other than lowering labor costs. Anyone in this country that is interested in making a career in IT services would be a fool to come here. The compensation and reward plan will be anchored in Indian wage rates for the foreseeable future. IBM has set up both its Indian and U.S. labor forces up for failure. [...]

    I don't pick on Indians - I denigrate IBM for building the offshore model. If we were offshoring to some other country where the resources were ignorant about business, challenged with communication, and culturally unable to provide customer service naturally and as a matter of course, I would be talking about them instead. The ire is completely directed at IBM for abandoning the blue chip functionally literate resource model in its g-B-s staffing strategy. [...]

    So you can continue to think that I am part of the problem, but history will look back and say that those that pointed the finger at IBM's leadership and HR decisions over the last decade or more have been much more a part of the solution. The opportunity for offshore labor to cash in on this labor arbitrage is only a small component of a much larger picture. It doesn’t deserve much of my attention, nor yours, and only gets my attention when I read something stupid here that challenges the reality of the situation.

  • "Resource Action being announced today" by "LivingWithThePig". Full excerpt: About 1500 people are being RA'd today with a 30 day package in which IBM will help them look for jobs within IBM. The interesting thing is that "adverse reactions" are a deal breaker and will put the package "at risk". In other words, be nice and grateful for being laid off or risk losing whatever little IBM is willing to do for you.
  • "Some Options" (for trying to get a buyout offer from IBM) by "Dose of reality". Full excerpt: Conventional road:
    • Work nine to five - no exceptions. You can't be forced to work overtime
    • If you are not staffed, resist strongly any opportunities that come your way - be professional but tenacious in your resistance, make sure all of your communications are in writing and keep good records
    • Cut your productivity by 30% - you may have to ease into this one over 3-4 weeks so it is not prosecutable
    • If you go on client interviews be resourceful about finding out what they are looking for and be something else.
    • Refuse to travel - cite family reasons, again be firm

    Unconventional Road - need a combination of these to be effective:

    • Don't shower for a month
    • Wear tie-dye shirts and jeans to the client
    • Format the hard drive on your laptop every other day
    • Send a blast E-Mail to everyone in BCS complaining about the excessive emphasis on diversity
    • Put Accenture logos on all of your client deliverables
    • Imitate Austin Powers whenever you are on site
    • If a client asks your opinion, tell them that you first have to check with your mommy - this won't be too much of a stretch for some of the current troops
    • Spend at least an hour a day on Monster.com - be conspicuous
    • Load a Sponge Bob screensaver on your laptop
    • .Send love notes to our fearless leader and propose marriage - in today's world this is a gender neutral suggestion!

Modern-Day Robber Baron Corner:
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Today's highly compensated executives face many difficulties, including figuring out how they can possibly spend all of the rich rewards they've earned on the backs of ordinary workers. Take a look at the insider trading of many of our IBM executives—spending the cash from all that stock "acquired at $0 per share" must be a real challenge! Or, imagine the difficulty IBM CEO Sam Palmisano will face spending his $10,000 to $20,000 a day pension when he retires!

As a way of helping out our beleaguered, modern-day robber barons this site will periodically feature "spending opportunities" that the "upper crust" of our society may want to take advantage of!

  • Forbes: What Worries the Rich. By Louis Hau. Excerpts: Having real money doesn't mean you stop worrying. No, really. Sure, you don't have to think about whether you'll be able to pay your electric bill or balance your checkbook. But the rich do fear being cheated by an unscrupulous financial adviser, being a victim of some other financial fraud, having their identity stolen, being unjustly sued or violence against themselves or their families. [...]

    During the course of 19 surveys conducted in 2005, 2006 and 2007, his Redding, Conn., firm, Prince & Associates, asked about 2,500 high net worth individuals what issues were of the greatest concern to them. Survey participants earned their own fortunes, which totaled at least $500,000, with most participants being millionaires many times over. Heirs and heiresses weren't included. [...]

    Managing a large fortune composed of liquid and physical assets, scattered in various geographic locations, can be a time-consuming task that's separate from the job of running the business that generated the wealth in the first place, says Amy Braden, head of the Family Wealth Center at J.P. Morgan Private Bank in New York, which serves clients who've amassed fortunes worth more than $25 million.

    "There actually is work in overseeing that,'' she says. "People might be surprised about the extent to which wealth can be a burden. It doesn't take care of itself and those who are wealthy and have a sense of responsibility about that wealth, take that responsibility very seriously.'' [...]

    Strikingly, what most concerned those polled was not being able to maintain and improve their current status and get ahead. This might come as a surprise because, well, they already are ahead. Overall, 91% call "the luxury lifestyle" a key issue, 94% say the same was true of "the lifestyles of the exceptionally wealthy." These exceed the 81% who say "not being able to meaningfully enhance" their current lifestyle is important, which is about the same level as "making sure your heirs are taken care of."

    As Russ Prince describes it, it's the mind set of "I have the $5 million jet. I want the $10 million jet." But he doesn't see it as greed. Rather, he says, it's simply a reflection of what everyone at every income level wants: something more.

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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