I am pleased to announce that we will not only be paying bonuses to IBMers worldwide, based on individual performance, but that they'll be funded from a pool of money nearly the same size as last year's. That's significant in this economy -- and especially so, given the size of the 2007 pool. Further, our salary increase plan will continue, covering about 60 percent of our workforce. As always, increases will go to our highest performers and contributors. We should all feel good about the company's ability to invest in people in these very concrete ways.
The IBM spokesperson won't says how many layoffs are coming: "We are not communicating that information." Full text of Palmisano's letter:
We have just issued our financial results for the fourth quarter and full year 2008. You can read them on w3.
Under extremely challenging economic circumstances, we had a strong fourth quarter and a great 2008. I want to thank you for everything you have done to help achieve this impressive performance.
Our 2008 results set several records: record revenue of $103.6 billion -- the first time IBM has passed the $100 billion mark; record pre-tax earnings of $16.7 billion, up 15 percent from 2007; record earnings per share of $8.93; and record free cash flow of $14.3 billion.
These results are testament to superior execution by almost 400,000 IBMers and to the strategic transformation of our company over the past several years -- our shift to higher-value businesses, our investment in growth markets, our integrated solutions that address clients' needs and our improved efficiency -- all of which generate higher profit margins.
With our strong financial position, solid recurring revenue, profit streams and global reach, we are confident about 2009 and are well positioned to achieve our 2010 earnings-per-share goals. We entered this difficult environment strong, and we expect to exit it stronger.
In the fourth quarter we had particularly strong contributions from our services and software businesses and from growth markets. Our two Global Services segments together delivered pre-tax profit growth of 32 percent and margin growth of 4 points on lower revenues compared to 2007. We signed 24 deals larger than $100 million -- the highest we've seen in quite some time. Software revenue was up 9 percent at constant currency, driven by growth in mission-critical production software. And although growth in emerging markets has slowed, it continues to be very attractive relative to the rest of the world. These markets comprised 18 percent of IBM's geographic revenue in the quarter and the year.
As always, some parts of the business did not perform as well. Systems & Technology revenue declined 16 percent at constant currency this quarter with shortfalls in our x86 and storage products offsetting gains in high-end servers. In part, this was due to clients being focused on reducing the cost of running their existing IT infrastructure. But it also reflected execution issues that we must acknowledge and address. The current global economy clearly presents a challenge. But even more, for those with vision and boldness, it represents a once-in-a-lifetime opportunity. And it is one uniquely suited to IBM's capabilities, legacy and way of thinking.
Those capabilities and that thinking have taken new form in our Smarter Planet strategy. It is resonating with people and businesses around the world who are ready and eager for fundamental change. It has already captured the interest of numerous governments actively planning to stimulate their economies. They are looking not just to repair what's broken, but to prepare for a new century. More than $2 trillion in proposed investments have been announced to transform national infrastructures. If we hadn't already been developing the Smarter Planet strategy -- which is in many ways the culmination of everything we have done over the past decade in technology, business and global integration -- we would probably be creating something very much like it right now, in order to capture this enormous opportunity.
I will discuss Smarter Planet, our results for the quarter and the full year and our plans for 2009 in my broadcast on w3 tomorrow. I urge you to listen in.
Let me close with a word about IBM's basic approach to the complex, difficult and exciting era in which we find ourselves. As we know, many companies today are curtailing or drastically cutting spending and investment, even in areas that are important to their future. We are taking a different approach, not only because we have the financial strength to do so, but because we choose to manage IBM for long-term success. Of course, we must continue to improve our competitiveness, drive productivity, replenish skills and eliminate redundancies where they exist. At the same time, we will continue to invest -- in R&D, strategic acquisitions, growth initiatives and in taking our Smarter Planet initiative to the world.
Most importantly, we will invest in our people through our continued support for learning and skill development, through programs like the Global Citizen's Portfolio and through competitive salary and incentive programs
In that connection, I am pleased to announce that we will not only be paying bonuses to IBMers worldwide, based on individual performance, but that they'll be funded from a pool of money nearly the same size as last year's. That's significant in this economy -- and especially so, given the size of the 2007 pool. Further, our salary increase plan will continue, covering about 60 percent of our workforce. As always, increases will go to our highest performers and contributors. We should all feel good about the company's ability to invest in people in these very concrete ways.
We stand at a unique moment in the course of modern history, and in the nearly 100-year story of IBM. More than at any time since I joined the company 35 years ago, I see the chance to align those two trajectories in powerful ways. I hope and trust that you share my sense of this moment. I believe it is a call for greatness, and I believe IBMers are ready to answer that call.
This promises to be an exciting and important year.
Sam Palmisano Chairman, President and Chief Executive Officer
The secrecy of the offshoring is the most surprising aspect. There's nothing in the news; it's as if it hasn't happened. I suppose they can't announce the offshoring when they're taking hand-outs from the tax payors. Planet Money - THANK YOU for reporting on this. I for one, would like to know how many US positions were cut, how many were opened abroad and how many US employees have agreed to move abroad.
Why the secrecy? One bitter IBM employee tells SAI:
The next bag of tricks up IBM's sleeve is to make offers to some current employees to move to newly-formed Global Delivery Centers (Boulder, Colorado, Fishkill, NY and soon to be Dubuque, IA in the US). This is in stark contrast to IBM's liberal work from home policy. The rub is, IBM is not offering any kind of relocation package. If you want to move, it's on your dime, but no guarantees of a job in writing, but yet they are asking you to stay for a minimum of one year. And if you don't want to move, you train your replacement, but they are considering it a voluntary quit, so no severance to be paid. People have kids in school, houses that they can't sell, spouses that are employed and can't relocate, etc, etc and IBM is using this as an excuse to strongarm folks into "quitting" so they don't have to pay them any severance.
Though IBM's official spokesmen would only confirm a "resource action" in the group, they weren't revealing numbers or locations. A cut of more than 500 would apparently have triggered a notice under the WARN Act, for federal Worker Adjustment Retraining and Notification, which requires a company the size of IBM that cuts 500 or more jobs at a site during a 30-day period must give notice. IBM hasn't given any notice, according to the New York state Department of Labor, which receives federal WARN notices. ...
New York is also interested because it made a deal in July to give IBM $140 million in return for IBM's investment of $1.5 billion in three New York state projects, one of which involves $65 million to improve the East Fishkill operation. Gov. David Paterson and state legislators got a pledge from IBM to not lay off anyone at East Fishkill during 2008 and to keep at least 1,400 semiconductor jobs there for the duration of the deal through Dec. 31, 2011. The total jobs at the site was 6,569 at the end of 2007, according to the state's Empire State Development Corp. incentive proposal document. ...
Doug Shelton, director of media relations for IBM, wouldn't comment on numbers, sites or locations. "We just decided because it is an ongoing part of our business that it is not something we've chosen to release," he said Tuesday. "We notified some last week on the 21st and notified some more today. I can't speculate on what the future will hold." ...
While most companies like IBM reveal the number of jobs cut, IBM has changed and isn't being specific. It says it doesn't have to. IBM told The Associated Press the rules of the federal Securities and Exchange Commission require companies to disclose only "material" events. IBM considers its job cuts a regular part of the company's business model, since thousands of jobs are cut every year but are usually added back in other places. Because of that, IBM contends it doesn't have to break out its layoffs in regulatory filings unless it suddenly changes course and makes substantially more or fewer job cuts.
The state's new law sets tighter standards than a similar, existing federal law called the WARN Act, for Worker Adjustment , Retraining And Notification. One provision is that 90 days' notice must be given if applicable. It's 90 days until April 27. New York's law takes effect Feb. 1, but the state is encouraging employers with layoffs in the works to implement it early. ...
Job cuts continue Up to 900 people may have lost their jobs at the two IBM Corp. plants in Dutchess County Tuesday, part of a nationwide cut of about 1,200 people in the company's Systems and Technology group. The exact local number could not be learned for sure, because IBM was not releasing numbers.
#2 Finding a job in IBM - there were virtually none when I was looking, I was not allowed to apply for a job that was not 'permanent'. Out of a spreadsheet I received with 6000 jobs on it, < 250 were permanent, the nearest one was in Nashville. I hear the job databases were locked up this week, so people looking for jobs had nowhere to go.
1st line managers do not want to do layoffs, upper management sees numbers not people.
IBM Corp. said it doesn't have to reveal the number of jobs it is cutting, since the Securities and Exchange Commission requires companies to disclose only "material" events. And IBM considers its job cuts a regular part of the company's business model, since thousands of jobs are cut every year but are usually added back in other places, The Associated Press reported. Consequently, IBM believes it isn't required to list layoffs in regulatory filings unless it suddenly changes course and makes substantially more or fewer job cuts.
"They say it's part of doing their regular business," Lee Conrad, the national coordinator of the Alliance@IBM, said of the layoffs. "Try telling that to the employees who just lost their jobs. ...
Conrad contacted Rep. Maurice Hinchey, D-N.Y., on Wednesday and plans to contact Sen. Bernie Sanders, I-Vt., among other elected officials. "We are trying to find out how IBM is using the SEC to keep IBM job cuts a secret," Conrad said. Jeff Lieberson, Hinchey's spokesman, confirmed the congressman's office is exploring the matter. "We got a call and are looking into why IBM is not publicly stating all of these cuts," he said.
IBM spokesman Doug Shelton said on Tuesday, "it just doesn't lend itself to always make an announcement about it."...
IBM's silence comes as other tech companies such as Intel Corp., Microsoft Corp., Texas Instruments Inc., Sprint Nextel Corp. and Google Inc. have publicly disclosed job cuts. More than 20,000 jobs will be lost from those companies, according to an AP tally. Hewlett-Packard Co. is also laying off 24,600 people, nearly 8 percent of its 320,000-employee work force, after acquiring Electronic Data Systems Corp.
IBM just buys small companies (several 100 companies the last few years) to gain the companies products so IBM can market and sell them while IBM slashes development staffs so they can barely provide adequate product support. IBM milks these products until they become obsolete then dumps them and replace them with products from newly acquired companies.
Pre-2002 IBM had 200-250,000 USA employee's of the 350-400,000 total world wide. IBM will have much less than 100,000 US folks by year end with a goal to reduce US population to 20,000 ASAP.
IBM acknowledged Wednesday that a “resource action” – RA, read "find a new job within IBM or be terminated" – was under way in its North America operations. The Skinny, noting that Big Blue made no announcement about layoffs in its earnings call on Tuesday, said it appeared that perhaps a reprieve was at hand – even if temporarily.
As the day passed Wednesday, the e-mail starting coming to WRAL.com and Local Tech Wire about the layoffs. Many notices also began showing up on the Alliance@IBM union Web site, with the Software Group (SWG) suffering the most damage.
There have been rumors of layoffs hitting as many as 16,000 – a number predicted by one Wall Street analyst, the union and some IBM employees – but John Buscemi of IBM corporate media relations said that number was much too high. “IBM manages its workload and its talent on a global basis,” Buscemi said. “However, today's announcement affects North America.” ...
Alliance@IBM, the union that is seeking to represent IBM workers, said 1,400 or more people were affected by the resource action in the software group alone. The cuts aren’t over, warned IBM Alliance Coordinator Lee Conrad. “I wouldn’t be surprised if Global Services was affected,” Conrad said. “We hear that on the 27th, the technology group will be hit.” ...
Buscemi linked the resource action to an IBM earnings conference call with financial analysts on Wednesday. Mark Loughridge, IBM’s chief financial officer, was asked about work force reductions. Loughridge said IBM planned “some acceleration” in what he called “work force rebalancing” in 2009. By rebalancing, Loughridge referred to IBM’s practice of reassigning workers or hiring workers in other locations, such as overseas, while displacing current employees.
IBM Spokesman Doug Shelton says IBM is notifying employees who are being laid off. He says, "we have notified some employees in the U.S. that this process is happening." Shelton says laying off workers is something IBM has to do adapt their staffing to adjust on the fly to what their clients need. He says that flexibility is even more important in today's economy.
IBM current and former employees posting to a Web site called Alliance@IBM have sounded off about a recent round of layoffs that hit primarily on Jan. 21, but do not appear to be over. The divisions most affected, according to the posts, have been IBM Software Group and IBM Sales and Distribution. But it is possible job cuts could soon hit other parts of the company, according to posts on the Alliance@IBM site.
"The only ones that know (the exact number of layoffs) are the executives," said Earl Mongeon, vice president of Alliance@IBM, a group affiliated with the Communication Workers of America union. "Good luck trying to get that information. I wish they were more transparent. They should be more up-front. Other companies are." Mongeon, a manufacturing employee in the company's Systems and Technology Group, said he had worked the overnight shift that ended Tuesday morning, and had witnessed some of the layoffs. He said employees began getting the word at about 4 a.m. "You get called into the manager's office. ... They were given their packages and escorted to the door." Mongeon said individual employees were not told how many of their colleagues were affected by the job cuts. ...
The company recently had employed 5,300 at its plant in Essex Junction, down from 8,500 in 2001.
IBM says it doesn't have to reveal the number of jobs it is cutting, since the Securities and Exchange Commission requires companies to disclose only "material" events. And IBM considers its job cuts a regular part of the company's business model, since thousands of jobs are cut every year but are usually added back in other places. Because of that, IBM contends it doesn't have to break out its layoffs in regulatory filings unless it suddenly changes course and makes substantially more or fewer job cuts. ...
IBM's ongoing labor adjustments have led the company to add bodies in cheaper and higher-growth parts of the world, like India.
In 2007, the last full year for which detailed employment numbers are available, 121,000 of IBM's 387,000 workers were in the U.S., down slightly from the year before. Meanwhile, staffing in India has jumped from just 9,000 workers in 2003 to 74,000 workers in 2007.
“They’re using MIS – managment-initiated separations – where they lower people’s work evaluations to force them out the door,” Conrad said. “That’s not the same as resource action. There’s less severance, less notice, and it’s not reported like a resource action.” ...
Yet another worker said that while IBM shows stunning profits, “none of that money trickles down to the employees.” IBM spokesmen have said the company will not comment on rumors or speculation. “That’s how IBM does it,” Conrad said. “They don’t announce it. They just start cutting and let everyone scramble and guess how many are cut and where.”
The issue is what is fairplay? There was a time when companies took pride in that they never laid off any employees because they planned for downturns.
IBM senior management has been doing this only for the past 7 years. It’s shortsighted and will be reflected when not only investors, but in the end - customers - finally catch on. IBM is a gerbil running in a wheel.
I’d like to see a company like IBM succeed, but not when the stock price is being propped up at the cost of employees to feed a CEO’s bonus. When a CEO makes more than my family and I will ever see in a lifetime, and I see my friends and former customers losing their jobs, yeah, I have a problem.
Age discrimination laws have been ignored by the Dept. of Labor over the last 8 years, it is something that needs to be looked at again.
You want to know why we have housing defaults in nice areas?
Cannot fault IBM, if their competitors are allowed to do it, then they must compete. As for the India part of the equaision, yopu get what you paid for. The top Indians are over here, I am not impressed with the quality lately, they have no loyalty and chase the dollar or rupie like everyone else (“software engineer“‘s seems to think we owe something to employers). However the pool over there has been drained, the quality is low and they do not try to see the big picture, they do exactly as told, no more.
The great Indian workers are the ones who came to the US in the 90’s before the boom.
If you have any information to share or have been impacted by these cuts yourself, please leave a comment or send an e-mail to jjedras at itworldcanada.com. Confidentiality will be respected.
IBM Global Business Services — Hiring Alert!
IBM has been at the forefront of business consulting services for decades. IBM Public Sector is a provider of innovative solutions and we never rest. Join us as we help Federal/State and Local agencies accomplish their missions.
IBM Global Business Services, Public Sector, ERP, will be holding a PeopleSoft Interview Invitational to be held on Wednesday, February 11, 2009, from 3:00 PM to 8:00 PM in Albany, New York. The goal of the Invitational is to screen candidates that fit our advertised needs, build a pipeline of PeopleSoft professionals and hold an informational/networking event. Qualified candidates will meet with project leads, proceed with interviews and learn about upcoming PeopleSoft opportunities.
· This event will be held by invitation only · Local candidates desired, travel expenses will not be available · Please follow the directions below
Apply on-line at http://www-03.ibm.com/employment. You can search for these positions using the requisition numbers, GBS-0140404 and GBS-0188857. You can also send your resume directly to us at ibmhire@....
I came back to IBM a few years later. This time alas, I am on the other side of the table: I refused to give out an unfair appraisal, but my current boss doesn't have the same scruples. So I am on the RA list. That's ok, karma will take care of things.
Their behavior is somewhat analogous to some kind of secret police forces of past history but I don't want to exaggerate either but it is a perfect example of "divide and conquer" striking fear in the survivors to spur then on to further effort and sacrifices as they cower in the cubicles "thinking it will be the other guy".
We all understand IBM does not want the general population of employees (especially the US ones) to know what their strategic HR plans are but by implementing it this way in they are actually attracting more attention than if they simply stated them in public.
It is equally obvious that one of those goals is arbitraging cheap labor employees at the expense of higher wage workers. At one time IBM had over 250,000 US employees (peak global employment of 412,000 in the late 1980s); after this last round of layoffs it will soon cross the 100,000 mark.
At the same time they have now hired over 80,000 in India; most since 2001 and therefore its logical to expect its headcount to cross the US by 2010. At the same time revenues from US operations are 1/3 of the IBM total yet IBM India is only a small fraction of the global total.
Because IBM is at the cutting edge of globalism (a code word for bypassing global labor and environmental standards) the Alliance is also thrown into that role from a labor standpoint.
Transnational corporations like IBM are now in many ways more powerful than many countries instead of being the creation of the state they control the laws and policies of the state and play one country against the other just like they did with states in the USA.
I would suggest that this trend is a key one relative to the future of America and many other EU countries as this process reaches its logical conclusion with only a skeleton crew of face to face sales and service employees remaining in high wage countries.
I would also suggest that one way to view this in a balanced and equitably way is that corporations like IBM owe the countries they do business in a reciprocal investment of jobs and capital investments in proportions to the country's contribution to IBM revenue and profits for only this will allow the citizens of that country to maintain their purchases of IBM goods and services over the long term.
From this viewpoint IBM has long ago reduced its jobs and investments in the US under its relative global contribution to IBM's economic success.
By advocating (and influencing the political system) such national solutions the Alliance can finally gain critical mass in its efforts to recruit IBM employees and gain support of the political system which is has and will remain critical to labor movement.
Moreover, in an interview with eWEEK on Jan. 27, Conrad said his organization had heard from employees in IBM's Systems and Technology Group—which manufactures the company's hardware systems—that they had been laid off. Conrad said people from IBM's STG facilities in Burlington, Vt.; Rochester, Minn.; East Fishkill, N.Y.; and Research Triangle Park, N.C., contacted Alliance@IBM. Alliance@IBM, which is working to organize IBM employees into a union, expects at least "400 to 500" jobs to be eliminated at each of the four STG sites listed, he said.
"We expect further cuts over the next couple of days in other IBM divisions,” Conrad said. “We expect this to keep going right through the month. It's really unacceptable to us that IBM is not releasing the numbers or locations on these cuts. ... It's up to IBM to come clean on this." ...
However, an executive at a software company that competes with IBM told eWEEK that he recently hired what he referred to as "one of the IBM layoff-ees." The executive, who asked not to be identified, added that although the economy is reeling, now is a time for software companies like his to find some seasoned talent with experience working on and selling big projects—like the folks at IBM.
"My point is that during a layoff, companies should not be retaining H-1B or other work visa program employees over qualified American workers," Grassley wrote on Friday after Microsoft announced its first across-the-board layoffs. "Our immigration policy is not intended to harm the American work force. I encourage Microsoft to ensure that Americans are given priority in job retention. Microsoft has a moral obligation to protect these American workers by putting them first during these difficult economic times."
Microsoft said Monday it had no plans to change its position on H-1Bs. ...
Among the charges is the claim that technology companies are less keen on hiring hard-to-fill spots than on creating a cyber lumpenproletariat willing to work for cheaper wages. The critics have also seized on instances where U.S. firms fired Americans while continuing to employ foreigners who held H-1B visas.
With the new political constellation in Washington, it's unclear what, if anything, will happen to the program. But Les French, the director of the tech labor group WashTech, said he hoped Grassley's move was a harbinger. "We can only hope the general public is outraged that companies continue to apply for visas while Americans get laid off," said French. "We're going to try and get a grassroots effort going on our part to target senators who haven't been friendly on this question to step up and correct the problem. It's not only Microsoft. It's a growing list. My guess is that it's going to be business as usual and that the visas will be gone in the first few months of the fiscal year."
Captive organisations of large enterprises in the US and the UK are seeking to increase their offshore teams in order to lower their operational costs. Tesco, the world’s second-biggest retailer, plans to add a few hundreds more professionals to its existing team of around 3,000 employees at the Bangalore centre.
It wasn’t supposed to be this way. Over the last several decades, businesses and government used matching contributions and tax breaks to encourage the proliferation of 401(k)’s. They lauded them as a way to harness the market to create wealth and increasingly viewed them as replacements for traditional corporate pensions.
In 1983, 62 percent of workers with retirement coverage had a traditional pension only, while a mere 12 percent had 401(k)’s. Today, approximately 20 percent have a traditional pension and about two-thirds have only 401(k)’s. The shift to 401(k)’s also shifted investing risks and responsibilities from employers to employees, but as long as participants generally made money and recovered losses quickly, the risks seemed reasonable. Now many Americans are inevitably having second thoughts.
So far, the cumulative wipe-out of household retirement savings totals about $2 trillion, and no one believes that the downturn is anywhere near over. As a result, participants in 401(k)’s are in greater danger than ever of coming up short in retirement. ...
The wipeout in 401(k)’s has made it clear that it is not enough to get more people to save more. There needs to be a better way to reasonably ensure that a lifetime of savings can’t be undone by forces beyond one’s control. The Center for Retirement Research at Boston College, a leader in retirement policy, is advocating a new savings account — in addition to Social Security and 401(k)’s — that would enable risks to be shared among workers, retirees and the government. After decades of promoting and improving 401(k)’s, in which employees bear substantial risk, that’s a new and difficult reality for policy makers to grapple with. The sooner Mr. Obama puts his team on the issue — his budget director, Peter Orszag, is one of the nation’s top retirement experts — the better.
Ledbetter, a former supervisor at a Goodyear Tire & Rubber plant in Alabama, sued the company for paying her less than her male counterparts for 20 years. The Supreme Court held, 5-4, that Ledbetter should have filed her claim within 180 days of the initial discriminatory decision rather than nearly two decades later. She said she didn’t realize the pay discrepancy existed until a colleague placed an anonymous note in her mailbox many years later.
Workers are guaranteed the right to extend their medical benefits for a limited period under a federal law called Cobra, short for the Consolidated Omnibus Budget Reconciliation Act. The law generally covers group health plans of private and government employers with 20 or more workers, according to the Labor Department.
The Commonwealth Fund analysis, based on 2007 health-insurance survey data, found that most workers can't afford to pay for Cobra coverage. It costs an average $13,000 a year for a family, compared with the average annual worker contribution of $3,200 for family coverage while employed.
Insurers want to run the show: Charge what they want, avoid covering key services, change plans and prices every year. Health reformers, including President Obama, want to also offer a public plan that people can count on to cover what they need, when they need it, at more affordable rates. The insurance giants fear competition. They want to be in charge while blocking options to give us better choices. Let’s give change a chance. Tell Congress and the President you elected them to support real health care choices. Sent this message...
Schakowsky said, "Under our bill, seniors and people with disabilities would finally be able to select a Medicare-operated drug plan that provides a guaranteed benefit without having to worry that their premiums will drastically increase or their access to needed drugs will drastically decrease each year." According to Berry, the plans established by Medicare would have the ability to obtain discounts on medications that private plans could not match. "If this works as we think it will, most of the private plans would drop out" of the Medicare prescription drug benefit, he said. Supporters of the bill include the American Public Health Association, the Center for Medicare Advocacy and the Medicare Rights Center.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
The problem, according to the two FBI retirees and several other current and former bureau colleagues, is that the bureau was stretched so thin that no one noticed when those lenders began packaging bad mortgages into bad securities ."We knew that the mortgage-brokerage industry was corrupt," the first of the retired FBI officials told the Seattle P-I. "Where we would have gotten a sense of what was really going on was the point where the mortgage was sold knowing that it was a piece of dung and it would be turned into a security. But the agents with the expertise had been diverted to counterterrorism." ...
And Falvey said that financial executives who deliberately chose not to learn the facts about dicey mortgage-lending practices in their companies -- who chose to be "willfully blind" to such practices and the subsequent securitization of those mortgages -- could be vulnerable to prosecution for securities fraud.
Both retired FBI officials asserted that the Bush administration was thoroughly briefed on the mortgage fraud crisis and its potential to cascade out of control with devastating financial consequences, but made the decision not to give back to the FBI the agents it needed to address the problem. After the terrorist attacks of 2001, about 2,400 agents were reassigned to counterterrorism duties.
Merrill Lynch is not the only irresponsible institution out there. Despite a year of record losses, despite all the taxpayer money being injected into our financial institutions, bonuses for 2008 were, in some cases, down less than 50 percent from those the previous year.
This is shocking, of course, but what’s been missed in these discussions is how completely the culture of executive compensation has permeated the financial industry. One need not even be an executive to receive a bonus far in excess of the yearly salary of people in most other professions. Bonuses, which typically consist of some multiple of an employee’s base salary, are doled out to everyone from the 22-year-olds just out of college (these are called analysts) to managing directors (banker parlance for the most senior rank attainable).
But we’ve come to the end of outsized paper profits generated from proprietary trading operations and 30-to-1 leverage. So too has the war for talent waned. Firms are disappearing or laying off thousands. In this environment of bleak job prospects, investment bankers who got a smaller bonus in 2008 than they did in 2007 won’t be running for the exits and the greener pastures of Lehman or Bear Stearns.
Yet some institutions that begged for taxpayer aid to stave off bankruptcy — simply to stay alive — made 2008 compensation packages their first order of business after receiving their bailouts. This speaks to how completely foolhardy behavior has overtaken our industry. It certainly defies logic and sensible business practice. After all, it’s one thing to reap great rewards when creditors are being repaid and shareholders are earning a return; it’s quite another to reward failure almost as well.
Now that we’re nationalizing, couldn’t we fire any obtuse bankers and auto executives who cling to perks and bonuses even as the economy is following John Thain down his antique commode?
How could Citigroup be so dumb as to go ahead with plans to get a new $50 million corporate jet, the exclusive Dassault Falcon 7X seating 12, after losing $28.5 billion in the past 15 months and receiving $345 billion in government investments and guarantees? ...
The former masters of the universe don’t seem to fully comprehend that their universe has crumbled and, thanks to them, so has ours. Real people are losing real jobs at Caterpillar, Home Depot and Sprint Nextel; these and other companies announced on Monday that they would cut more than 75,000 jobs in the U.S. and around the world, as consumer confidence and home prices swan-dived. ...
Senator Levin said that the financiers will not be able to change their warped mentality, but will have to be reined in by Geithner’s new leashes. “I have no confidence that they intend or desire to change,” Levin told me. “These bankers got away with murder, and it’s obscene that close to nothing is being asked of financial institutions. I get incensed at the thought that a bank that’s getting billions of dollars in taxpayer money is out there buying fancy new airplanes.” ...
In an interview with Maria Bartiromo on CNBC, Thain used the specious, contemptible reasoning that other executives use to rationalize why they’re keeping their bonuses as profits are plunging. “If you don’t pay your best people, you will destroy your franchise” and they’ll go elsewhere, he said. Hello? They destroyed the franchise. Let’s call their bluff. Let’s see what a great job market it is for the geniuses of capitalism who lost $15 billion in three months and helped usher in socialism.
Bartiromo also asked Thain to explain, when jobs and salaries were being cut at his firm, how he could justify spending $1 million to renovate his office. As The Daily Beast and CNBC reported, big-ticket items included curtains for $28,000, a pair of chairs for $87,000, fabric for a “Roman Shade” for $11,000, Regency chairs for $24,000, six wall sconces for $2,700, a $13,000 chandelier in the private dining room and six dining chairs for $37,000, a “custom coffee table” for $16,000, an antique commode “on legs” for $35,000, and a $1,400 “parchment waste can.”
That was the sixth-largest haul on record, according to a report released Wednesday by the New York State comptroller.
While the payouts paled next to the riches of recent years, Wall Street workers still took home about as much as they did in 2004, when the Dow Jones industrial average was flying above 10,000, on its way to a record high. ...
Lucian A. Bebchuk, a professor at Harvard Law School and expert on executive compensation, called the 2008 bonus figure “disconcerting.” Bonuses, he said, are meant to reward good performance and retain employees. But Wall Street disbursed billions despite staggering losses and a shrinking job market. “This was neither the sixth-best year in terms of aggregate profits, nor was it the sixth-most-difficult year in terms of retaining employees,” Professor Bebchuk said.
The protests are against the worsening economic climate in France and at what people believe to be the government's poor handling of the crisis. Opposition Socialist Party leader Martine Aubry said people were out in the streets "to express what worries them: the fact that they work and yet cannot make ends meet, retired people who just can't make it [financially], the fear of redundancies, and a president of the Republic and a government that just don't want to change policy". ...
Many people are furious that Mr Sarkozy said there was no money left to raise wages and consumer spending power, but nonetheless managed to find billions of euros to bail out floundering French banks, says the BBC's Emma-Jane Kirby in Paris.
Alliance@IBM CWA Local 1701 outlined several steps IBM should take to maintain quality jobs and service and address the company's financial picture:
"There is a growing concern among employees that IBM will accelerate the off-shoring of our jobs. To offshore U.S. jobs in the middle of an economic crisis and rising unemployment is simply unacceptable," said Tom Midgley, Alliance president. "We will work with our elected representatives to push for legislation that protects U.S. jobs and calls for the full disclosure of IBM's offshoring and outsourcing of American jobs."
To help break the secrecy of the IBM job cuts, the Alliance has a section on its web page called Job Cut Comments. Go to http://www.allianceibm.org/jobcutstatusandcomments.php for news, information and stories from IBM employees swept up in job cuts.
If we can't find other work we will be let go in such a way as to ensure we can't file unemployement and we won't be given anys severance packages. Others on sister teams have already been told if they want to keep their jobs they have to move to the GDF in Boulder and report to work by March 9th. They are getting no packages to help them move. Also, they are being told that the positions in Boulder are Bands 4 & 5 which would be almost a 50% paycut for most of these people. They are being told if they go to Boulder, they can't look for other jobs within IBM for 12 months. However, they are not being guaranteed 12 months of employment after they move.
They could be "let go" in as little as 3 or 4 months. I am over 40 and it sounds very much like I will be replaced by college students. I know several others on my team that are over 40 as well. I have checked the IBM job ads for Dubuque and all are listed as low level with minimal (as little as 6 months experience) required. Is there anything already been set into motion on this such as some kind of class action lawsuit? Is there anything I can do other than keep copies of emails and ST chats? In today's economy, even if I could move, I can't sell my house and relocate in 30 days which is all they have given my sister team. -InTrouble-
Even when I start collecting my pension and SSI my income will be significantly lower than my current income. I know of many people in my age group that also have children at home or in college. This all requires a decent job with decent pay. For many of us getting a new job at similar pay would be impossible. In this industry once you have passed 45, give or take, many companies will not hire you.
As to the remark about the 79 year old who was let go. My father worked until he was pushing 76. He had to retire due to a government mandated retirement of age 75. He passed away a year and a half later. He was healthy and doing well while he worked but went down hill quickly after he retired. I feel the lack of a job was a major contributor as it gave him purpose and a sense of accomplishment. There have also been numerous studies to back this up. To sum things up. None of really know what the situation is with any of the folks being let go or those being left behind. Unless we know this it is best to leave derogatory statements out of the conversation. -Anonymous-
Since 1990 I've worked for a Fortune 500 company in an I.T. role. In 2004 some outsourcing was done of commodity services: Network, Desktop, DBA and SA tasks. The DBA and SA tasks went to IBM. We used to laugh that the "A" was for Apprentice, because we certainly never had any administrators. We took the DBA work back before the end of the contract and continue to pay IBM for it. That's how poor the service was, we were willing to pay twice for it. The DBA's were mostly foreign with accents so thick it was almost impossible to communicate with them. As well, they were all poorly trained and had no real experience, likely they were fresh out of school working for a minimum I.T. wage. As sad as it was, we had to laugh about it.
Oh, and then there was the SAP upgrade that was to take a week and actually took over two months to accomplish. No, this is surely not the IBM I knew. The quality is still there in the employee's, but obviously the bean counters run the whole company now. Thomas J. must be rolling in his grave. Good luck to you all, I hope you land on your feet as I suspect you will. My thoughts and prayers are with you all. -WorriedAboutMyFriends-
The PBC process we all know is a scam. This year’s mgr excuse was that "in comparison with my peers, my performance was not taken to the next level". I thought it was funny that a second line mgr, who made this decision, does not see any of the day to day work, but still made this “executive decision”. I must say I lost a lot of respect for the people I worked with and the company as a whole.
The company has done nothing put taken away from their employees whether it be the pension fiasco, the convoluted yearly bonus process, 2% merit pay, etc, etc. Luckily I read Who Moved my Cheese” 2 years ago and was preparing for this. I will not lose one once of sleep about this. What goes around comes around. To all those who have been RA’d, keep your heads up as the truth will come out about this. -Didnt_Drink_the_Kool_Aid-
These layoffs are not designed to keep IBM afloat, rather for the sake of earning more profits and pumping up the stock. Whatever happend to thinking big picture and not about the present? Is saving 770million in payroll worth the risk of losing potential employees and customers? Looks like someone failed in the art of Zoo Tycoon or Business 101. If IBM was in the red and about to fold as a company, these layoffs would make sense, but that is far from the truth. Record profits and numbers and you stick it to the hand that feeds you. Shame on you for tossing out loyal, hardworking employees you once called ibmers out in the cold. -shameonyouibm-
"When the Nazis came for the communists, I remained silent; I was not a communist. When they locked up the social democrats, I remained silent; I was not a social democrat. When they came for the trade unionists, I did not speak out; I was not a trade unionist. When they came for the Jews, I did not speak out; I was not a Jew. When they came for me, there was no one left to speak out."
Bottom line is that Performane/PBC numbers don't matter anymore. If you don't have a seat when the music stops you are shit out of luck. The Alliance is your ONLY hope if you wish to stay out of the unemployment line. If we don't unionize and stick together we will all be gone, Find your nut sack and $10 and join the Alliance before it's too late... You gotta realize that this isn't your Daddys IBM. -Tom Watson III-
Start looking for something else. Please realize that you have no choice. I worked for this sorry outfit for six years after an outsourcing deal and spent the last year looking for a way to get back on with the client. Fortunately for me, I was able to do that. It became clear in 2006 that IBM's direction was to eliminate as many high paying US jobs as possible and move the work to offshore locations. Clients hate it, the resulting work is poor, and the remaining employees have so little motivation that customer sat is not even a consideration anymore. They'll screw you and then expect a thank you.
Decent technical jobs with any ype of future are no longer possible with IBM if you live in this country. In all probability, even a union will not change this fact. IBM has made the strategic decision to impose a salary scale based upon the type of work that they have classified into some very rigid categories. If you are not willing to work for what they have already decided these positions are worth, then get the hell out. Some dothead will do it somewhere.
Most accounts have people that cross over into different responsibilites, just because they understand the environment and are able and willing to perform a variety of technical tasks. IBM does not have a job classification that takes into account that people with 20 plus years of experience just might be able to do more than churn out progress reports three times a day. Look in the mirror and remind yoursleves that you are smart motivated people. Make your plans now and follow through. To all of you that have been layed off (I refuse to use acronyms), my heart goes out to you. To those that remain, please admit to yourselves that you no longer have a future with IBM. Take your skills, protect your family, restore your sanity, and find a real job. Start today. Please. -Macabby-
Now I'm pretty confident that I'm more productive than one BRIC replacement, but even if I think I'm twice as productive, 3 BRIC country replacements are still 50% more productive than I. If I then consider that my BRIC country counterpart makes 1/4 of my wages, then IBM has gained 50% productivity for 75% of my wages. What company is not going to choose that outcome?
The H1B visa system was designed to prevent this from happening -- employers are required to pay the prevailing wage (i.e., no huge cost savings); plus only a limited number of H1B visas are available each year. The advent of broadband and the growth of BRIC-based technical talent have allowed US companies to essentially circumvent the H1B visa system since the foreign talent no longer needs to be brought on-site. Obama and his administration needs to plug this loop hole. Until/unless that happens, the current trend will continue. -IBM Mathematician-
The fact that IBM won't ease up on this while the US economy is suffering and our unemployment is skyrocketing just proves that IBM is indeed NOT an American company, and it doesn't care about its American employees nor the anxiety its causing us by not being truthful about its plans to terminate as many of us as possible and replace us with 3rd world labor. Currently, IBM has 120K employees in the US and 400K worldwide. My prediction is that this won't be over until the numbers are 20K in the US and 500K worldwide. Those who remain here will be VPs, execs, and a few sales folks. Good luck, everyone. -IBM_please_be_honest-
I remember when we were consistently in the top 10, It is shameful. Sammy the Bull has the nerve to stand in front of Obama and profess to know one thing about helping the US economy. Sending jobs overseas and keeping it quiet will come back to bite him right in the you know what. So long fellow IBMers. It was a good run while it lasted. Only those of you that have been around a while, know what I mean. -Efffed-
I plan to keep up the pressure on our newly elected President as well as my congressman and senators. Perhaps President Obama is blindsided by SJP, but I don't think so. I think he is well aware that it is VERY unlikely he got a vote from Sam or most of the other IBM execs (not to mention the execs in other companies!). I don't know about anyone else but I think it is well worth posting on http://www.whitehouse.gov/contact/ and letting our new administration know how everyone feels.
I've been gone a few years now and am doing fine, but still remember the hell I went through knowing I lost almost all of my pension after 25 years of service as a '1' or '2' employee, numerous awards, etc. If President Obama is disgusted with Citibank for their plane (which they are returning) and the other financial companies who have paid out huge bonuses, then he needs to know that his buddy Sam is no better and is, in fact, probably worse since he doesn't even have the guts to be straight with the media. Why can't he admit what he and his fabulous Finance and HR department are doing? Does he have any idea that the goal is to have only 30K employees in the US and send everything else overseas? This is disgusting and atrocious and as far as I am concerned, SJP--and the other IBM execs are COWARDS. I have no use for cowards.
Even during my last days when they 'tried' to torture me and demean me I had no hesitation in letting them know what I thought of them as well. My immediate manager wasn't even close in the way of educational background and general knowledge--but she was a young 'executive resource' who was up and coming and could not stand it when she tried to put me down that I gave it right back. I am so glad I am out and am okay now, but I feel for everyone who is going through the layoff process. However, if you don't pressure the government, if you don't join the union, you are pretty much saying that what they do to you is okay. Let's toughen up, please. If the colonialists acted as scared as most people are acting know, we'd all still be walking around with British accents and bowing down to the monarchy. JOIN THE UNION. -Sick of Sam-
Dear Mr. President.
I have to say I was horrified to see your picture in the New York Times on in the news next to the Sam Palmisano the CEO if IBM. I had to train my replacement over seas twice at IBM before getting laid off and then once at GSK. It is totally degrading and it is still happening. Please tell me that you gave Mr. Palmisano a good chewing-out about off shoring jobs. -PW-
The totality was a sham where IBM pretended that I wasn't their employee in order to pay me less and not have me on their headcount, while at the same time maintaining day to day operational management of me. I felt that this was a violation of the concept(but not law) of equal pay for equal work and approached a Labor attorney with about 6 of my fellow contractors. We were told that Permatemping was not illegal since we agreed to it when we went to work for IBM...I mean the Contract Company.
Before working there, I had never seen anything like this, such a thinly veiled sham and pretense for IBM to maintain a large contingent of disposable labor. I have nothing against being let go if I don't perform, but I will never again demean myself by working in such a situation. Will the Ledbetter Fair Pay Act prevent this kind of thing in the future? There is not question but that Contracting, as I saw it practiced at IBM in Fishkill was nothing more than cheaper pay for contractors over IBMers for exactly the same work. -Mike-
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:
In a much earlier life, I was at GE when Welch was really pushing "work-out" hard. A benefit was it increased the span of control of managers. This made a lot of sense. We got to the point where there were 5 levels from an engineer designing power plant parts to the CEO. It made communications a lot clearer, and managers didn't spend as much time on political games - less people to fight with.
In my little part of GBS, we are at 9 levels from client-facing consultant to Sam. Strange part is that in general only the first level both manages people AND works for customers. The levels above all "manage the business." This generally means playing political games, tracking stupid metrics like completion of mandatory "how to flush a toilet" training, and fighting with other managers with no project responsibility over who gets to have their people work on a project. Usually this is all done by a mass of redundant spreadsheet files prepared by a whole other overworked staff of non-client facing support.
I would love to see 3-4 levels just eliminated. In consulting, you could take out levels 2-6 of 9 and most customers would never know. Most customers have no idea who these line management leaches are. They just wonder why our rates are so #$(&^% high compared to the competition.
Eliminating these non-work layers would align our structure with our more nimble competition. No idea if IBM could even begin to conceive of this, but it could be fun to watch if they do. The political battles over who stays and goes would be legendary.
Since accountants run the place, the one thing that could drive this would be the need to keep increasing margin to meet the "IBM model" touted on every earnings call. Once you've moved a huge portion of the client work to low-cost providers offshore, the proportion of management costs gets way big - blows your leverage model. Even a first year accountant realizes that capping growth on an already low Tech Services salary doesn't deliver nearly the savings as axing one or two executive layers who have very few reports anyways.
This site is designed to allow IBM Employees to communicate and share methods of protecting their rights through the establishment of an IBM Employees Labor Union. Section 8(a)(1) of the National Labor Relations Act states it is a violation for Employers to spy on union gatherings, or pretend to spy. For the purpose of the National Labor Relations Act, notice is given that this site and all of its content, messages, communications, or other content is considered to be a union gathering.