IBM is one such company. It reported surprisingly strong quarterly profits earlier this year, and in an e-mail message to employees, CEO Samuel Palmisano said that although other companies were cutting back, his would not. "Most importantly, we will invest in our people," he wrote.
But the next day, more than 1,400 employees in IBM's sales and distribution division in the United States and Canada were told their jobs would be eliminated in a month. More cuts followed, and overall, IBM has told about 4,600 North American employees in recent weeks that their jobs are vanishing.
J. Randall MacDonald, IBM's senior vice president for human resources, said it was routine for the company to lay off some employees while hiring elsewhere. "This business is in a constant state of transformation," he said. "I think of this as business as usual for us." ...
In interviews, IBM workers whose jobs are being eliminated were mainly chagrined that the undisclosed cuts, and the timing, seemed to contradict the company's public statements. Rick Clark, 50, an engineer in East Fishkill, N.Y., had worked for IBM for 11 years. He said he was disappointed in IBM this time because the job cuts were deep and spread across so many businesses and came at a time when IBM has been proclaiming its success. "I do think IBM, like other companies, has used this recession as an excuse to lay people off," he said.
Chief Financial Officer Mark Loughridge told analysts Monday that IBM had spent $265 million out of a year's planned total of $300 million to $400 million for "workforce rebalancing," which is mostly severance payments for terminated workers. That reduces overhead. "This lower level of fixed costs improves our balance point," and means most of the financial benefit of it lies ahead, he said.
"In this paper, we simply sought to dispel the myth that globalization generates no losers," wrote Prasanna Tambe, an assistant professor of information, operations and management sciences at the Stern School, and Lorin Hitt, a professor of operations and information management at Wharton. The authors said that it's important that policy-makers understand the wage impact of the H-1B visa program.
Teaneck, N.J.-based Cognizant is one of the largest H-1B users, having received approval for 467 visas during the federal government's current fiscal year. That put Cognizant, which has more than 60,000 employees worldwide, in seventh place on the list of H-1B recipients for fiscal 2008. The Labor Department, in a statement released this week, said that the company had violated federal law by failing to pay "proper wages" to H-1B tech workers. Cognizant also "failed to offer all H-1B workers equal benefits or eligibility for equal benefits, and failed to maintain required records," the agency said. A Cognizant spokesman said that the company isn't commenting on the settlement
I decided to use my FHA bucks up as soon as possible after I retired. I've left a little bit in there as an assurance that I'm still able to use their health insurance later on, even if it costs me a thousand a month. I have since found my dream job as an accountant at a little community bank. I'm up front with everyone and tell them I'm working for health insurance. It's a very good match.
If the Democrats get their campaign promise granted, we should be able to get health insurance from a common health insurance pool, made available for those that don't have it otherwise (if your still out of work and the FHA is gone after those 4 years). That would be a good thing for many of us as I'm certain some of us will need it.
|Aetna Open Choice PPO:||$659.10|
|Health Net NY:||$847.67|
|IBM EPO - MVP:||$704.62|
|IBM Hi Ded PPO w/ HSA - MVP:||$593.54|
|High Ded PPO - MVP:||$514.21|
|Med Ded PPO - MVP:||$614.97|
|Low Ded PPO - MVP:||$773.97|
|Aetna Open Choice PPO:||$1319.20|
|Health Net NY:||$1695.70|
|IBM EPO - MVP:||$1409.23|
|IBM Hi Ded PPO w/ HSA - MVP:||$1187.09|
|High Ded PPO - MVP:||$1028.43|
|Med Ded PPO - MVP:||$1229.93|
|Low Ded PPO - MVP:||$1547.95|
I, like many others, believed what IBM told us. For those promises, we worked all kinds of long hours, gave up vacations, and missed many family gatherings. Now, many retirees are at the point they can barely pay for their medical bills, having little or nothing left to enjoy retirement.
For those still working, be careful how you plan your future. Don't hang your hat on what IBM tells you. Those days are gone. Once you retire, you become just an expense, instead of an asset. Needless to say, IBM is always looking for ways to cut expenses.
The qualms kicked in later, when Turetsky, still eight years away from qualifying for Medicare, looked into buying new health coverage. His insurer told him that now that he was buying on the so-called individual market instead of through his company, the annual cost of covering himself, his wife Stephanie and son Jacob would more than double, to $27,600, or the price of a Honda Accord. And when Turetsky shopped for a better deal, things got Kafkaesque. The local Blue Shield affiliate told him it didn’t cover anyone in Greenfield Park, N.Y., the rural township where he lives, because the area is “riskier than average.” The AARP’s “young retiree” health plans, he learned, aren’t even offered in his state. Turetsky joked with Stephanie that he’d become a greeter at Wal-Mart if it would keep his medical costs down. Ultimately, he bought the only policy he could find, which doesn’t cover some routine doctor visits—and still costs him almost $13,000 a year. Suffice it to say, this wasn’t part of Turetsky’s script for retiring young. “This whole insurance thing,” he says, “entirely blindsided us.”
Almost everyone fantasizes about swapping the cubicle and BlackBerry for a life of permanent leisure while they’re young enough to enjoy it. Untold millions put in long hours to make the fantasy a reality, and in these rough economic times, others have taken buyouts or been laid off. Unfortunately, America’s patchwork health care system is making those transitions much harder. Too young to qualify for Medicare and rarely covered by their employers, early retirees can face premiums they neither dreamed of nor planned for—often three or more times what they paid while they were working. And that’s for the healthy ones; others, who suffer from ordinary middle-age ailments—arthritis, elevated blood pressure, even back trouble—wind up paying far more or are simply rejected. Caught in this ugly collision of costs and restrictions, the only answer for some is to go without coverage. The public-policy research group The Commonwealth Fund found that in 2007 about 35 percent of people between the ages of 50 and 64 were uninsured or underinsured—up from 26 percent five years ago.
That means cuts, big cuts. "Do they scale back the server business? Do they move away from SPARC [microprocessor] business?" Del Prete said. "Maybe they spin off the tape business ... to IBM?"
The "restructuring" has gone down like a a tonne of bricks with les workers, and during a meeting about the process yesterday, they decided it was time for some actione direct. "Judging the (redundancy) measures insufficient, around 125 workers decided to apply pressure," said Bruno Damien of the CFE-CGC trade union to the AFP. The five execs were barricaded into the conference room. The workers freed a female member of the team and planned to hold the male bosses over night.
The McKinsey study, “Clearing the Air on Cloud Computing,” concludes that outsourcing a typical corporate data center to a cloud service would more than double the cost. Its study uses Amazon.com’s Web service offering as the price of outsourced cloud computing, since its service is the best-known and it publishes its costs. On that basis, according to McKinsey, the total cost of the data center functions would be $366 a month per unit of computing output, compared with $150 a month for the conventional data center. “The industry has assumed the financial benefits of cloud computing and, in our view, that’s a faulty assumption,” said Will Forrest, a principal at McKinsey, who led the study.
Revenue and dividends are going only to the investors, and year after year more bonuses are going to IBM managers. This is having a negative affect on the morale of IBM employees. Bonuses to corporate management are under scrutiny by President Barack Obama’s administration. Management bonuses are also under the control of Sam Palmisano, our CEO and Corporate Social Responsibility offices. We will no longer accept these excessive benefits to IBM managers. We ask IBM to reinvest money in the direction of IBM workers (main stakeholders of this company), and especially to the employees that have not received salary increases for 7 or 10 years. On top of this many education course are cut due to low funds.
When I talked to the ESC on 4/1, they had said to pay the bill in full for March/April, and then the May bill would be reduced by the 65% gov't subsidy, and I would receive a refund for the 65% I had overpaid for March/April. Well, I have received no refund, and now am being billed in full again. So I called the ESC.... was told that the info packets were being mailed out TODAY - 2 days after the gov't deadline to have the info in employees hands. Then I was told that even though they understand that at this point they owe me money, I need to go ahead and pay the bill I just received. That they will be sending out corrected bills in a few weeks, but to avoid cancellation of my benefits, I should go ahead and pay it to be safe (I'm scheduled for surgery - they've got me right where I have no choice).
So I called the hotline for the Dept of Labor, and told them the story. They checked their system and said IBM has already received the gov't funds to cover the 65% of the cobra payments. IBM has already gotten the money, now they've collected more money than they should from me for over 3 months, and keep telling me to just kept paying I'll be refunded eventually. The DOL woman said if they get enough instances of this, IBM can be fined, and if there are enough instances of former employees not receiving the info by the deadline, there will be repercussions for that as well. Her words were that if other companies were able to meet the deadlines and have the info out to people over a week ago, there is no excuse for IBM, and there is no excuse for them to be telling me to pay more than I owe when the subsidy money is in their pocket already. The # for the DOL hotline is 866-444-3272. You may have to have a benefits advisor call you back. -TiredofIBM-
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"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.
How did we even come to have 401(k)'s in the first place? Why didn't we just keep company pensions, which worked fine for most people for years? The questions get even more interesting (and "60 Minutes" didn't address this big one): Why and how was much of the cost of employee retirement savings dumped on individual workers - and then taken off companies' books -- in the 1980's? And finally: Why would anyone assume that most people have the time, inclination or talent to be savvy investors?
The answers can be found in an absorbing report called "Can You Afford to Retire?" It originally aired on PBS's estimable "Frontline" investigative series in May, 2006, and the reporter was veteran New York Times journalist Hedrick Smith. (Smith's new "Frontline" report this week, on widespread and dangerous PCB pollution of the Chesapeake Bay and Puget Sound, "Poisoned Waters," as usual, got strong reviews).
Anyone with a 401(k) -- cratered-out or otherwise -- or a pension plan, or anyone whose company may go bankrupt, should try to watch Smith's piece, which is still there in its entirety at "Frontline's" web site. Caveat: Be prepared to shake your head in amazement and swear a lot. ...
But, explained Smith, "what got lost in all the euphoria" about "empowering" the small investor was "the enormous shift in who was now paying for retirement." That's the biggest story here. Corporations, said Smith, quickly realized that 401(k)'s would save them a shitload of money (here I employ an obscure accounting term). It would only cost them 50% of what pensions had cost before. ...
In 1978, Smith reported, workers put in only 11 percent of total contributions to retirement plans while corporations put in 89 percent. By 2000, the employee share had jumped way up to 51 percent - and the company share had fallen to 49 percent. That's a tidy cost savings of 40%. for companies. So who needed pensions? They were so...outdated.
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC.
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