And many of those layoffs were done without the 60 day's public notice required by the Worker Adjustment Retraining and Notification Act, because the number of affected employees didn't exceed the reporting thresholds. Known as the WARN Act, the federal notification law kicks in when there is a plant closing or a mass layoff of 50 or more employees -- if that number represents one-third of the workforce at a specific site -- or lays off 500 or more employees at a single worksite.
IBM, based in Armonk, N.Y., has not divulged the number of terminated employees at its various sites, and a company spokesman refers to any specific numbers of job losses as mere "speculation by either the media or organizations with interests on this topic," an apparent reference to a workers' group called Alliance@IBM, which doesn't have official union status at IBM, but is connected to the Communications Workers of America. ...
Critics -- especially Alliance@IBM, which is seeking to organize IBM's workers and claims the company has fired about 10,000 workers since January -- have hammered the company for the layoffs, even as Big Blue's earnings remain up. On April 20, IBM announced net income of $2.3 billion for the first quarter of 2009. ...
In IBM's case, the outcry is sparked not so much by what some are calling stealth layoffs -- because the number of affected employees is apparently below the WARN Act's notification requirements -- but because the layoffs are in combination with the company's Project Match, in which American workers whose jobs are vanishing can apply for open positions in foreign countries. If the employee meets performance criteria, and is "willing to work on local terms and conditions," according to an internal company document about the program, there might be a spot open.
According to an IBM document forwarded by the Alliance@IBM, the reasons for the cuts was stated as: "In an effort to rebalance skills, eliminate redundancies, and deliver greater economic efficiencies, IBM Integrated Supply Chain is announcing a resource action affecting its employees." The notice said the affected people would be terminated beginning June 1.
In response, an IBM spokesman took issue with this article and the charges conveyed by the union. In a telephone message after the article appeared on Tuesday, the spokesman took offense at the term ''greed'' or ''greedy'' and insisted that shareholders are pleased with performance and direction of the company. ...
''IBM's model of profitable growth and strong cash flow enables the company to continue to deliver value to our shareholders. We demonstrated this commitment by returning $2.5 billion in the first quarter through dividends and share repurchase, and our continued solid performance allows us to increase shareholder return, as we are doing today,'' Samuel J. Palmisano, IBM chairman, president and chief executive officer, said in a statement.
Since I use an HMO, I have co-payments of $20 per doctor's visit and typically $10 per prescription. I have exercised regularly for the last 30 years and am lucky enough to be reasonably healthy. My total medical, dental, and vision costs for 2008 were about $2150.00, which for me is very manageable. My 2009 costs are even less because I only enroll in the vision plan every other year.
Obviously this is not free medical coverage for life, but the cost is much less expensive than what I would need to pay when just purchasing similar coverage in the open market.
Isn't it sadder still that only NOW (it's been ten years, fhawontcutit), repeat only NOW, are people FINALLY waking up to the horror that is the FHA.
And don't forget our brethren who have NOTHING at all in the way of medical.
But by all means, Mel, enjoy your medical coverage (especially the worth-its-weight-in-gold prescription coverage). It is what we who were promised the same cannot do.
I do not really understand the FHA plan and cannot comment on it, but I do know that there is not a single one of us who, upon retiring form IBM, received the retiree benefits that we were promised over the years. In my opinion, this is one of the key reasons that IBM no longer makes the Fortune 500 list of "100 Best Companies to Work For".
Because IBM is at its 'disbursement phase' of managing post-retirement benefits. (that means they dish out more money than they take in because of the baby-boomer-bubble-crest).
Also, because of the accounting changes that require IBM to disclose more information about the future of retiree medical. (that means their balance sheet will be subject to volatility and they don't like that).
With all their firings (er, I mean layoffs), I bet they micro-manage their disbursements quite well. I'm pretty certain they prefer exits choosing an annuity (smoothing) as opposed to lump sum payments (ouch!).
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.
They are offering salaries that are at least a 50% increase over what some were getting at IBM (following years of no pay raises, the reclassification and 15% reduction, etc.). Other companies are offering regular training, comparable or better health insurance, and an ear to the suggestions that you make for changes that could improve their business. It is a different world out there, and other employers are going to value the knowledge and skills that you have. Do not despair.
To those that remain in IBM, I have to say that even a small amount of investigation into the workings of other companies has shown me that this is NOT the way that the industry is headed. Regardless of what the corporate shills may post, we do not need to accept this treatment. This is not the new world order. These are your choices: Accept the crap that the executives dump upon you; Organize and collectively have a voice as an organization of professionals; or leave IBM and find something in greener pastures.
As workers in this industry, we have to accept that our skills are no longer valued, our knowledge is no longer considered to be something requiring education or experience. To those who make the decisions, you are easily replaced and only a burden on their bottom line. Your pension, your reimbursement for network access, your salary, and everything else is just a drain on the profits that they can present in their quarterly report. If you are not angry, then you are not paying attention. -1 2 X U-
Is absolutely 100% correct. I too had a job that was done by no one else, unique responsibilities, and I was let go. For those who are confused about how people are selected for cuts, it is simple. It is all about costs. IBM will maximize cost savings. Therefore, they select people for cuts based on salary. The higher your salary, the more likely you are to be cut. IBM does have a goal off offshoring employees, and have accelerated the transfer rate this year, but always remember, the final goal is to reduce employment costs. The average IBM'er in the US make about $70K per year. IBM will not stop taking action to reduce that number. My question is: at what point does "wage discrimination" become "age discrimination" ? Remember, the higher wages are typically earned by older employees. -RA'd in East Fishkill-
We have to look at health IT the way other successful institutions have--as a means to an end, not an end unto itself. Within industry today, there are many organizations--the Marshfield Clinic, Kaiser Permanente, the Department of Veterans Affairs and others--that have been successful in using technology to achieve specific goals. The real lesson of implementing health IT successfully is to focus on the goals first and foremost, and pick the right technology investments to accomplish them.
As a result, the notion of feeding electronic medical records to thousands of doctors through the stimulus package does not seem like it will engender the change we all need--improving patient health.
Given that 75% of health care costs stem from six chronic diseases, I'd argue that we should focus on preventing and managing these conditions, and then figure out the right technologies to support those goals. This type of focus on specific goals will enable us to deliver better care at lower costs to the whole system and get a real return on investment for health IT.
That rare agreement, however, is obscuring the checkered history of computerized medical files and drowning out legitimate questions about their effectiveness. Cerner, based in Kansas City, Mo., and other industry leaders are pushing expensive systems with serious shortcomings, some doctors say. The high cost and questionable quality of products currently on the market are important reasons why barely 1 in 50 hospitals has a comprehensive electronic records system, according to a study published in March in the New England Journal of Medicine. Only 17% of physicians use any type of electronic records. Hospitals and medical practices that plugged in early have experienced pricey setbacks and serious computer errors.
Suddenly dumping more money on hospitals, which will then funnel the cash to tech vendors, won't necessarily improve the situation, say many doctors and administrators. ...
Part of the problem stems from a fundamental tension. Info tech companies want to sell mass-produced software. But officials at large hospitals say such systems, once installed, require time-consuming and costly customization. The alterations often make it difficult for different hospitals and medical offices to share data—a key goal. Meantime, the health IT industry has successfully lobbied against government oversight.
According to NPR.org, the finding highlights the "difficult issue" of whether middle-class U.S. residents, whose employers do not pay a large percentage of their premiums, will need subsidies to pay for health coverage in order to achieve universal coverage. Kaiser Family Foundation President and CEO Drew Altman said that the Massachusetts health insurance law is the first real test of how U.S. residents respond to individual health coverage requirements.
"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.
Even as the industry’s compensation has been put in the spotlight for being so high at a time when many banks have received taxpayer help, six of the biggest banks set aside over $36 billion in the first quarter to pay their employees, according to a review of financial statements. ...
“I just haven’t seen huge changes in the way people are talking about compensation,” said Sandy Gross, managing partner of Pinetum Partners, a financial recruiting firm. “Wall Street is being realistic. You have to retain your human capital.” Brad Hintz, an analyst at Sanford C. Bernstein, was more critical. “Like everything on Wall Street, they’re starting to sin again,” he said. “As you see a recovery, you’ll see everybody’s compensation beginning to rise.” ...
Of the large banks receiving federal help, Goldman Sachs stands out for setting aside the most per person for compensation. The bank, which nearly halved its compensation last year, set aside $4.7 billion for worker pay in the quarter. If that level continues all year, it would add up to average pay of $569,220 per worker — almost as much as the pay in 2007, a record year. “We need to be able to pay our people,” said Lucas van Praag, a spokesman for Goldman, adding that the rest of the year might not prove as profitable, and so the first-quarter reserves might simply be “sensible husbandry.”
Soon after that article was printed, the financial edifice Mr. Weill took credit for helping to build collapsed, inflicting immense collateral damage in the process. Even if we manage to avoid a repeat of the Great Depression, the world economy will take years to recover from this crisis.
All of which explains why we should be disturbed by an article in Sunday’s Times reporting that pay at investment banks, after dipping last year, is soaring again — right back up to 2007 levels. Why is this disturbing? Let me count the ways.
First, there’s no longer any reason to believe that the wizards of Wall Street actually contribute anything positive to society, let alone enough to justify those humongous paychecks. Remember that the gilded Wall Street of 2007 was a fairly new phenomenon. From the 1930s until around 1980 banking was a staid, rather boring business that paid no better, on average, than other industries, yet kept the economy’s wheels turning.
So why did some bankers suddenly begin making vast fortunes? It was, we were told, a reward for their creativity — for financial innovation. At this point, however, it’s hard to think of any major recent financial innovations that actually aided society, as opposed to being new, improved ways to blow bubbles, evade regulations and implement de facto Ponzi schemes.
Consider a recent speech by Ben Bernanke, the Federal Reserve chairman, in which he tried to defend financial innovation. His examples of “good” financial innovations were (1) credit cards — not exactly a new idea; (2) overdraft protection; and (3) subprime mortgages. (I am not making this up.) These were the things for which bankers got paid the big bucks? ...
One can argue that it’s necessary to rescue Wall Street to protect the economy as a whole — and in fact I agree. But given all that taxpayer money on the line, financial firms should be acting like public utilities, not returning to the practices and paychecks of 2007. Furthermore, paying vast sums to wheeler-dealers isn’t just outrageous; it’s dangerous. Why, after all, did bankers take such huge risks? Because success — or even the temporary appearance of success — offered such gigantic rewards: even executives who blew up their companies could and did walk away with hundreds of millions. Now we’re seeing similar rewards offered to people who can play their risky games with federal backing.
This, of course, will not come as news to anyone who has paid even the briefest attention to Washington over the last 30 years. Indeed, I've been writing about it for over a decade. But despite all that I know about the reform-killing power unleashed by the nexus of lobbying, campaign cash, and legislation, I have been flabbergasted by the amount of behind-the-scenes influence recently being wielded by the banking lobby.
Just this week, the bankers and their lobbyists -- who you might have reasonably thought would be the political equivalent of lepers in the halls of power these days -- have kneecapped substantive bankruptcy reform in the Senate, helped pull the plug on a government-brokered deal with Chrysler, and tried feverishly to throw up a roadblock in the way of credit card reform in the House. You heard me right. America's bankers -- those wonderful folks who brought us the economic meltdown -- are still being treated as Beltway royalty by those in Congress.
According to Sen. Dick Durbin, the banks "are still the most powerful lobby on Capitol Hill. And they frankly own the place." When it comes to reforming our financial system, we are truly through the looking glass. I mean, since when did it become "to the vanquished go the spoils"? How do the same banks that have repeatedly come to Washington over the last eight months with their hats in their hands, asking for billions to rescue them from their catastrophic mistakes, somehow still "own the place"? But the banks continue to be rewarded for their many failures.
Other protesters contended that the tax system already strains the vital connection between individual effort and reward and warned that further tax increases might destroy it.
But these accusations don’t withstand scrutiny. The current system is much fairer than many people believe, and the president’s proposal will make it both fairer and more efficient.
Contrary to what many parents tell their children, talent and hard work are neither necessary nor sufficient for economic success. It helps to be talented and hard-working, of course, yet some people enjoy spectacular success despite having neither attribute. (Lip-synching members of boy bands? Money managers who bet clients’ retirement savings on subprime-mortgage-backed securities?)
Far more numerous are talented people who work very hard, only to achieve modest earnings. There are hundreds of them for every skilled, perseverant person who strikes it rich — disparities that often stem from random events. ...
Although people are often quick to ascribe their own success to skill and hard work, even those qualities entail heavy elements of luck. Debate continues about the degree to which personal traits are attributable to environmental and genetic factors. But whatever the true weights of each, these factors in combination explain nearly everything. People born with good genes and raised in nurturing families can claim little moral credit for their talent and industriousness. They were just lucky. And they are vastly more likely to succeed than people born without talent and raised in unsupportive environments. ...
Financially successful tax protesters seem blissfully unaware of how incredibly fortunate they are. To borrow from the late Ann Richards and her description of the first President Bush, they were born on third base and thought they’d hit a triple.
Which is too bad. Yes, he stole $65 billion from some already quite wealthy people. I know that's upsetting to them because rich guys like Bernie are not supposed to be stealing from their own kind. Crime, thievery, looting — that's what happens on the other side of town. The rules of the money game on Park Avenue and Wall Street are comprised of things like charging the public 29% credit card interest, tricking people into taking out a second mortgage they can't afford, and concocting a student loan system that has graduates in hock for the next 20 years. Now that's smart business! And it's legal. That's where Bernie went wrong — his scheming, his trickery was an outrage both because it was illegal and because he preyed on his side of the tracks.
Had Mr. Madoff just followed the example of his fellow top one-percenters, there were many ways he could have legally multiplied his wealth many times over. Here's how it's done. First, threaten your workers that you'll move their jobs offshore if they don't agree to reduce their pay and benefits. Then move those jobs offshore. Then place that income on the shores of the Cayman Islands and pay no taxes. Don't put the money back into your company. Put it into your pocket and the pockets of your shareholders. There! Done! Legal! ...
It would be too easy — and the wrong lesson learned — to put Bernie on TIME's list all by himself. If Ponzi schemes are such a bad thing, then why have we allowed all of our top banks to deal in credit default swaps and other make-believe rackets? Why did we allow those same banks to create the scam of a sub-prime mortgage? And instead of putting the people responsible in the cell block in Lower Manhattan, where Bernie now resides, why did we give them huge sums of our hard-earned tax dollars to bail them out of their self-inflicted troubles? Bernard Madoff is nothing more than the scab on the wound. He's also a most-needed and convenient distraction. Where's the photo on this list of the ex-chairmen of AIG, Merrill Lynch and Citigroup? Where's the mug shot of Phil Gramm, the senator who wrote the bill to strip the system of its regulations, or of the President who signed that bill? And how 'bout those who ran the fake numbers at the ratings agencies, the lobbyists who succeeded in making sleazy accounting a lawful practice, or the stock market itself — an institution that's treated like the Holy Sepulchre instead of the casino that it is (and, like all other casinos, the house eventually wins).
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Some sample posts follow:
You are spot on to note that IBM management is either ignorant of, or does not care about, any cost analysis beyond "cheap is best." They seem to have forgotten the readings from their own hymnal.
So we have two hypotheses to consider for IBM management: the ignorance and the arrogance. The first one is easy to argue -- with IBM Finance running the show, there is no operational perspective at all on how IBM should run. IBM is a money machine to be stoked by whatever bean-counting methods produce the short-term results, rather than mid- to longer-term corporate viability. The evidence of this managerial mindset is everywhere around us.
But then there is the arrogance. We all are merely slaves to the plantation owners in Armonk. I really doubt Sam would know how to relate to most IBMers -- he once tried, but has long since given up. And besides, Sam is only 2 years from retirement, and as long as there is enough of a financial shell to provide his 4 million/year pension after that ((I would think with annual cost-of-feasting increases) -- he's covered. Charity does begin at home. I'm all right, Jack. This goes for the whole motley crew.
But forget ignorance, forget arrogance, forget even greed. The worst part of this sad story is that IBM has give up on the developed markets. They have given up on Americans and Europeans. It's one thing to globalize and add new friends and new markets -- we're all for that. It's quite another to renounce your home and run elsewhere for the tinsel.
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