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Highlights—May 15, 2010

  • Financial Times: IBM. Excerpts: Every good consultant knows that the trick is to never quite solve all of a customer’s problems. So it would be reasonable to expect IBM to have a few rabbits in hats when it presents to investors on Wednesday in New York. However, the long job of self-improvement by the world largest consulting group (and third-largest software company) leaves it with few obvious ways to further propel a share price approaching a decade high. ...

    Big Blue has become the model of how to sell integrated hardware, software and IT services, with the latter two contributing four-fifths of sales, from less than half in 1997. Much of the past decade was spent dealing with the consequences of buying PwC’s consulting arm in 2002 – a culture clash and staff departures coincided with a price war in IT services and the rise of Indian outsourcers. But a mixture of integration, moving staff offshore and improving technology over the past five years has seen real transformation, with gross margins rising by almost 6 percentage points.

    The question, however, is how much further profitability can be improved for a company unlikely to grow sales rapidly. IBM can tout the benefits of automating processes that currently require human interaction, and an improving economic environment should also help to improve consulting margins for the next two years. But operating margins of 15 per cent in outsourcing and consulting are already better than its US and European competitors. ...

    IBM is counting on acquisitions to drive more of its growth. Mr. Palmisano said IBM would be a more aggressive buyer, spending $20 billion on deals between 2011 and 2015. Recently, IBM had been spending about $3 billion a year on acquisitions. "In five years we will spend more on acquisitions than the previous ten years," the chief executive said. IBM said its acquisition strategy would remain focused on scooping up software companies. Since 2003, IBM said it has acquired 57 software companies for around $13 billion.

  • Associated Press, courtesy of Forbes: IBM expects earnings of $20 per share in 2015.
  • Wall Street Journal: IBM Turns to Software. By Spencer E. Ante. Excerpts: International Business Machines Corp. is trying to transform itself again, as Chief Executive Samuel J. Palmisano races to stay ahead of the technology industry's fast-changing profit curve. The top priority this time for Big Blue—which famously dumped its personal computer business in 2004 to focus on consulting and services—is software. Mr. Palmisano wants that high-margin business to account for about half of the company's pretax profit by 2015, up from just over a third in 2003. ...

    The transformation—fueled by an increasingly aggressive streak of small acquisitions—is shaping up to be as significant as the shift from hardware into services engineered by Mr. Palmisano's predecessor, Louis V. Gerstner Jr. "If you think about IBM in 2015, it will be as dramatically different as IBM is today versus 2003," said Mr. Palmisano, who became CEO of IBM in 2002. "More and more of our profit will come out of these higher value segments." ...

    IBM has spent the past decade shifting out of crowded technology businesses where companies compete mainly on price. The company sold its PC unit to China's Lenovo Group and moved aggressively into services like building information technology systems. Fast-growing Indian companies such as Wipro Ltd. and Infosys Technologies Ltd., however, have cut into the growth potential of that business.

  • Wall Street Journal: Reader comments concerning the above article. Selected comments follow:
    • IBM profits are due to reduction of operating cost and increase licensing revenue. This company is a champion for outsourcing. 75% of 450K work force is outside of US. EPS growth is a no brainer with a favorable exchange rate of the USD versus other low wage currencies.
    • Service is a labor intensive game so the service company that can reduce labor the most wins. IBM has and continues to be the poster boy of cheap labor arbitrage in the world. Their strategy is to reduce all high wage countries to only face to face sales and service headcount and perform all back office tasking in the lowest wage country they can exploit.
    • That's right. And then the executives scratch their heads about how to drum up new revenue. Having helped reduce demand in the US, they are now going to pursue "emerging market" revenue. But why won't emerging-market clients simply turn to India and China for cheaper goods and services, now that those countries have been positioned to deliver them? Who needs IBM at this point? Why not cut out the middle man?
    • Call me naive, but I think by chasing after service contract or so called "solutions" that could be lost overnight isn't the best or most profitable strategy for an ambitious technology company. I don't know, the most profitable company whose profit center is most stable are often those with dominant position in highly profitable product categories, like MS in PC market, Google in search, Apple in smart phone and MP3 player, etc. Beside mainframe and Super computing which are areas that are unlikely to offer much growth, what product or service category does IBM dominate? I can't think of any. The whole MBA talk of reorganization/transformation thing might sound palatable to Wall Street's taste, it's still pale in comparison with the kind of money deliverable by companies like MS and Google that possess essential monopolies.
    • No way this elephant is going to dance. Just because IBM has a big checkbook & can buy anything with a pulse, does NOT say they actually know what they're doing. Make the numbers look nice in Excel/PowerPoint, sure... make all these disparate bits & pieces work together without giving you a headache?... not a chance. OG
    • There are a couple strategic risks in new IBM`s vision: 1. "wants to sell programs" - rather than provide service. 2. "competition in the market " - rather than building new market. 3. "spending $20 billion on deals"- rather than invest in developing. 4. "selling to emerging nations" - rather than assist in achieving the economy goals. 5. "in many smaller markets" - rather than markets with potential. 6. "expects to generate 25% of its revenue" - rather than build long-term relationship. Make your conclusions.
  • The Register: IBM: 'We'll double profits by 2015.' By Timothy Prickett Morgan. Excerpts: As the economy recovered from the dot-com and Y2K crashes and IBM cut employees and divested of low-profit or unprofitable commodity businesses, the company has been able to accelerate its EPS numbers, breaking through to $10.01 per share in earnings in 2009 when sales were actually down 5 per cent from the prior year to $95.8bn. That's a factor of 2.7 increase in EPS against a 7.5 per cent increase in sales.

    This would seem to suggest that Big Blue could be infinitely profitable if it would fire everyone. But pushing up to at least $20 in earnings per share is probably as close to infinite profitability as IBM can hope for. ...

    Just like IBM changed a lot between 2003 and 2009, Palmisano said that the company would continue to change in the next five years. Software will contribute more than half of IBM's profits, and IBM's growth initiatives - smart infrastructure, analytics, and business optimization, and cloudy infrastructure - will deliver $20bn in revenue growth, and growth markets - such as China, India, and Brazil - will account for a quarter of IBM's sales by 2015 (up from 19 per cent in 2009 from these areas).

    Tweaking the company's own structure - meaning offshoring, layoffs, and other changes - will cut out $8bn in costs in the next five years. And when you add it all up, that is $100bn in free cash flow, of which about 70 per cent will be returned to shareholders through share buybacks and dividends. ...

    Wall Street is a tough audience, apparently. Maybe they will need to see infinite profitability before they push the stock to $200 a share so Palmisano can do a stock split ahead of his presumed retirement next year, IBM's 100th birthday.

  • The Register: Reader comments concerning the above article. Selected comments follow:
    • IBM likes to throw its money around... ...but not on it's employees who it shafts left, right and centre...
    • Shafting employees. I'm an ex-IBM employee, and this is absolutely true. The way IBM gets away with it (in the past at least) is that they hire people very young who have no experience, give them all sorts of IBM brainwashing, er I mean training, and they don't realise that life is SO MUCH BETTER outside the walls of that prison and they stay for life.

      I joined mid career, and me and others like me had the same horrible experience working there. They pay people crap (unless you were lucky like me and negotiated a good starting wage, which they "normalised" over the course of my time there), treat them like shite and make them think they're working at the best company in the world.

      It's a company full of bullies (the number of bullying cases they are fighting at any one time is staggering) looking to do nothing but claim other people's work as their own as they climb the ladder and build their little kingdoms or fiefdoms.

      There's a lot of cache with IBM, but working there was the worst experience of my work life. Great on the CV, but so effing glad it's over.

    • So true. I joined IBM as a grad 10 years ago, on what was a very generous starting salary at the time but once I left the grad scheme and despite being a top or above average performer each year find myself fighting for even a small payrise every 2 years... it's so ridiculous that myself and some of my peers find ourselves earning less than the current grad intake as grad salaries have steadily risen over time, greater than that of many workers. It's such a shame as IBM is one of those companies that gives you huge potential to do lots of interesting stuff, but unfortunately the business model is not set up to reward the hard workers, just let them build up something good, then pack the work offshore.
    • Call me a cynic... "Wall Street is a tough audience, apparently. Maybe they will need to see infinite profitability before they push the stock to $200 a share so Palmisano can do a stock split ahead of his presumed retirement next year, IBM's 100th birthday." Yeah... kind of sums up the push. If IBM were to do this, they would be cutting costs to the bone, moving as much work offshore to lowest cost labor. (Gee, does the expression... 'you get what you pay for?' mean anything?) They day Sam announces his retirement, start shorting the stock.
    • Yeah IBM. FAIL IBM; which stands for I've Been Mislead - favorite saying of all lower level employees who are repeatedly buttsext by the company.
    • Um, ...... yeah. Can't see how their inept marketeers and sleazy weasel service managers can pump the public sector more, & private sector prospects are pretty tight these days and for the foreseeable future. Baghdad Bob award?
    • Just look at how the balance sheet is weakening. Look at the shift from tangible to intangible assets over the last 3 years. Nearly 20% of the assets are now "Goodwill" ... i.e.... "this is how much we have overpaid for our acquisitions"
    • Double dingo. Grenade Lies to both shareholders and employees in one breath! Sometimes I wish IBM would just finally go into the hole and bury itself rather than shamble around like the brain dead zombie services-like firm that the string of grifters have made it into.
  • Datamation: Is IBM's Foundry Business Next to Go? By Andy Patrizio. Excerpts: Under the leadership of CEO Sam Palmisano, IBM has pared down many segments it considered to be commodity businesses, including printers, hard drives and—most famously—its PC business. Yet IBM remains a chipmaker, albeit a small one, and one analyst thinks it's time for that business to go as well.
  • IT News (Australia): IBM negotiates with union after failed appeal. By Liz Tay. Excerpt: By Liz Tay May 13, 2010 11:03 AM Tags: union | asu | ibm | offshore Workplace tribunal rules against Big Blue. IBM has begun bargaining with the Australian Services Union following a failed attempt to overturn orders to negotiate. On April 23, national workplace tribunal Fair Work Australia ordered IBM to bargain with the union for a workplace agreement for infrastructure operators at its Baulkham Hills facility. IBM appealed the decision and filed a stay application last Wednesday, arguing that the union may not be eligible to represent its employees. But the tribunal declined to issue the stay in a hearing on Monday, when senior deputy president Alan Boulton determined that IBM "did not have an arguable case with a reasonable chance of success", the union said.
  • Yahoo! IBM Employee Issues message board: "Applied for Jobs at IBM I am Well Qualified For, But Get Rejected" by "tennie_olson". Full excerpt: I am a 53 year ex-IBMer RA'ed from last year in April. I was outsourced to IBM from another company outsourcing their IT. I have applied for a couple of jobs at IBM that I am well qualified for, but I get rejected stating I do not meet the current positions requirements. I know the IBM HR lady stated she will flag me as a rehire, which I thought was a strange thing to say, near the end of my 30 day job search within IBM last year. Is it my age or did she lie to me about flagging me as a rehire. Does anyone else have a similar experience in trying to get rehired at IBM?
  • Yahoo! IBM Employee Issues message board: "Re: Applied for Jobs at IBM I am Well Qualified For, But Get Rejected" by "ibmretiree2006". Full excerpt: You were told what you wanted to hear. Once you are RA'd, for the most part you are no longer a viable candidate for employment by IBM except in rare cases. I would not waste my time.
  • Yahoo! IBM Employee Issues message board: "Re: Applied for Jobs at IBM I am Well Qualified For, But Get Rejected" by "alwaysontheroad4bigblue". Full excerpt: In addition, IBM rarely hires North American employees with experience. Projects are largely staffed now with either "kids" right out of college (low band levels) or "landed" L1 visa employees from India or sometimes China. Experience is not valued. Quality is not valued. It's all about doing things (or at least trying to do things because many projects are "troubled") as cheaply as possible.
  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Anonymous: (Current Employee) “This ain't your grandfather's IBM.” Pros: The people at the worker-bee level are usually great to work with. IBMers share a lot with each other, and at this level do respect each other. Cons: For those of us who have worked for IBM for many years, and remember how it used to be, this ain't your grandfather's IBM. In the 1980s and prior, people were put first. Nowadays, IBM couldn't care less about retaining good people. It's all profits that counts. Your job at IBM doesn't matter. You could be doing outstanding work, and if you just happen to be in a targeted department, goodbye. You're out on your keester. Hello, Europe, Middle East, and South America. Oh, if you are "resourced" (a PC term for fired), you have 30 days to find another job within IBM...an almost impossibility with the current environment. You can elect to transfer to India, Brazil, who knows maybe even Bosnia, and do your job there for a lot less salary. Advice to Senior Management: Restore your employees back to the "respect" they deserve. Treat them as people and not as a number in a large organization which cares only about profits.
    • IBM Senior PM: (Current Employee) “IBM review.” Pros: Better benefits package compared to other companies in the industry. Cons: Very-Low salaries compared to competitors like Accenture. Poor focus on career growth of the employees. Little flexibility in choosing the career with in the organization. Poor review process. No reason will be provided for bad ratings. lots of bureaucracy to move from one group to another. No concern or value for the employee's career aspirations. low pay hikes. Be aware to negotiate a better salary in the beginning else you will be doomed and get on 1 to 2% hikes. Merciless and ruthless when they lay off employees. They lay off employees who are on the projects. Their HR managers are overhead to the company as they do not assist the employees in getting the next client when their projects are over. Employee has to apply thru their job site and no response will be provided to the employees even after years (literally) of their job submission to the position. It is easy to find a job outside rather finding with in the IBM due to bureaucracy and partailism. Advice to Senior Management: focus on customers. Without their satisfaction your business will doom. Focus on employee satisfaction..with out their commitment and happiness, your customer can not be served properly...IBM services has bleak future..
    • IBM Manager: (Past Employee - 2009) “Mixed review.” Pros: Certainly IBM can bring much to bear in terms of resources when it needs to react, and through management escalation, this was often the only way to operate. Cons: In the past 4 or 5 years there was no investment in education, skills development, or personal growth. Micro-management of small expenditures such as thanks awards and ink cartridges did more to hurt morale than the money it saved. I think IBM's plan is to cut the US based workforce as much as possible with the goal to eliminate the more seasoned and higher salaried people. This was particularly stressful given that the stock and financial conditions of the company were very solid, so it was obvious this was more about labor arbitrage than taking drastic steps to help the company's balance sheet. Advice to Senior Management: Treat your US based employees with respect, they deserve to share in the financial gains as much as you do.
    • IBM Manager in Armonk, NY: (Current Employee) “The shell of a former great company.” Pros: Name recognition. IBM still has the name brand recognition and cachet cachet that goes with a technology company which certainly helps with resumes. The majority of the people working at the company are intelligent, trustworthy and competent. Cons: There is too much focus on expenses, awards are nonexistent, salary increases are a joke, and even performance pay is taking a hit to where you are slowly being trained to not expect any at all no matter how good of a job to do. Advice to Senior Management: IBM management needs to listen to its people. Any short-term gain now is going to adversely impact the company and the long-term. Stop being so narrowly focused.
    • IBM Investor: (Current Employee) “Leadership.” Pros: There are excellent technical folks within the corporation. These individuals are the "Real" drivers behind some of the new and innovative opportunities. IBM financial group knows/understands how to manipulate the stock buyback process, during a downturn in the economic times, to keep the stock artificially inflated. Great place to get experience out of college for only the first 2 years. Cons: Currently there is no direction or guidance from the Senior Leadership positions. The Senior management level is so removed from the customers and work being provided, that the company no longer has/or is following their own guidelines. Outsourcing is the greatest buzz word with senior management, which is viewed as the "Magic Bullet" for their success. Over the past 15 years, IBM has slowly been loosing market share. In order to keep the balance sheet positive, they have had to sell off some of the most lucrative business tower(s): (PC Division and Federal Services Division). Advice to Senior Management: Stop promoting HR and Finance Senior Leadership into the overall Leadership of the Company. To remain competitive and successful, you need "Leadership" that know your customers and understand your business/products as the company leaders/spokeswomen or spokesmen.
    • IBM Anonymous: (Past Employee - 2009) “All about the bottom line.” Pros: There are not many pros to working here. Maybe that other companies you apply to will be impressed by the name and it pays the bills. Cons: They are continuously laying people off and assuming the remaining people will pick up the work but without any plan or training to make that happen. Advice to Senior Management: You have succeeded at creating a culture of apathy and resentment at a company that people were once proud to work for. Good job!
    • IBM Above Region Sales Specialist: (Current Employee) “Was great place to work, now less great.” Pros: Ability to do work remotely allows for some measure of work/life flexibility You'll work with some of the most interesting and smart people Benefits Package is Good. Cons: No salary increases - or if you do get one it's paltry. Especially painful for college hires, who get hired under a much lower base to start with. Hard to find a clear path. You must build your own career path, the company's line on this is purely lip service and happens once a year. There's simply no time spent on this, everyone is busy chasing this quarter's business. Company is betting on their being able to treat their employees as a cost center as opposed to an asset that makes them money. Advice to Senior Management: Overall, I think that you're making some good moves (still investing heavily in R&D for both IBM and the world) and the rank-and-file are some of the finest people I've had the pleasure of meeting. But what I can't understand as a shareholder is the disregard of the employee, assuming they will keep driving forward. We're losing great people, and its largely over policies that in my view rid the company of great people. What will happen to IBM in the next few years? Hard to say, but if the current path is continued, we'll fall hard - too much emphasis on this year and bleeding the stone as much as possible. Whoever takes over from SJP will be in for a disaster.
    • IBM Anonymous in Markham, ON (Canada): (Current Employee) “Good environment to work in.” Pros: Nice building, spacious campus. Good facilities, including Gym, Oasis area, lounges, sofas. Large campus so lots of different positions with potential to move around between roles and products. Cons: network and connection essential for consideration in promotion internal transfer from role to role is hard, managers are not willing to let their employee goes for new opportunities for fear of no backfill pay is reasonable but not the best, especially compared to some other US companies in GTA area. Advice to Senior Management: Better morale is needed, bring back small programs like Thanks Award, team dinner, yearly kick off meeting, etc it's hard enough to survive the current economic downturn but it's tougher when the team is not really motivated because the lack of recognition programs.
    • IBM Anonymous: (Current Employee) “Measures in IBM don't Drive the Behaviors towards IBM Values.” Pros: Brand name and IBM Values. Cons: Measurement drive behaviors. The measurement set by IBM Senior Management don't drive Employee towards IBM Values. Most of the time against it. To much focus on Sales instead of Delivery which is critical for IBM Values. Advice to Senior Management: They need to re-look at the current culture which are too driven by Sales instead of growing the required Technical skill to ensure delivery or Client Success which is the First IBM Values.
    • IBM Program Manager in Chicago, IL: (Past Employee - 2010) “Great salary & benefits - terrible environment.” Pros: Wide breadth and reach of the company. Better than average salary and excellent benefits. Amazing networking opportunities It's THE IT outsourcing firm .Cons: No investment in tools. Annual layoffs of 2 - 4 % of the U.S. workforce, so either you will be hit or your co-worker will, in which case you will have to do their work as well as your own. No investment in training. Advice to Senior Management: Continual layoffs may temporarily look good on the income statement, but they weaken IBM in the long run. The costs are not avoided, just driven underground and will surface sooner rather than later. Yes, our customers may like the price of Indian labour but they will hate the service.
    • IBM Senior Software Engineer: (Current Employee) “Good place for freshers.” Pros: Good work life balance with flexible work hours and locations. Immense opportunities and resources to learn and advance skill sets. Cons: There is a lot of office politics. Remuneration is sometimes not reflective of experience or ability but rather bargaining abilities. Advice to Senior Management: It is important to retain current employees rather than hire from outside. The management needs to be more pro-active in this.
    • IBM Business Development Executive in Somers, NY: (Current Employee) “Great benefits, competent leaders, development opps for some, but too much focus on short-term.” Pros - Strong leadership and good management development programs - Great benefits ($0 premium healthcare option, good 401k match) - People are generally nice, down to earth, intelligent and hard working - Lots of opportunity if you have a diverse technical/business background. Cons - Promotional opportunities are not transparent; there seem to be people behind the curtains plotting your career for you and exec level positions are sometimes bestowed on those who put in the most face time and make the right connections while there are some very very hard working people who go nowhere - Company is super stingy -- we don't have kitchens or water coolers (basic necessities!), printers always seem to be broken and company outings are non-existent - Development opportunities may be limited if you do not have a technical background. Advice to Senior Management - Give us just a few perks, please!
    • IBM Senior Consultant in Atlanta, GA: (Past Employee - 2008) “Consultant at IBM Global Business Services.” Pros: Access to blue chip clients, good benefit and work life balance, easy to move around different cities within the company. Cons: Projects are very poorly managed. Every level of management are encouraged/forced to give work out to IBM Global resources (READ resources from India who are neither experienced nor motivated to work for a faceless client 12 time zones away.) Advice to Senior Management: Consulting business is different from software or hardware business. It's about having the best people. If the consultants are treated the same way as the assembly line workers, they will become assembly line workers.
    • IBM Systems Engineer in Gurgaon, Haryana (India): (Current Employee) “Just an average IT company.” Pros: Good Trainings. Work from home facilities interchange of BU. Cons: Salary structure is bad. Management is not good. Performance feedback style is also not refined. Advice to Senior Management: They need to throw out all new TCS hires from top management who have adviced the policy to remove free tea and coffees. This a cheap mentality. The performance appraisal process needs to changed
  • Yahoo! IBM Employee Issues message board: "Here comes the next step" by "madinpok". Excerpts: Computer Weekly: IBM HR shake-up could see 299,000 permanent staff jobs axed. IBM is considering cutting three-quarters of its 399,000 permanent staff in the next seven years and re-hiring them for projects as part of an HR strategy due to end in 2017. IBM told Computer Weekly's sister publication Personnel Today that it could reduce its workforce from 399,000 today to 100,000 in 2017. Tim Ringo, head of IBM human capital management, said IBM would re-hire the workers as contractors for specific projects and, when necessary, use crowd sourcing. He said it was only being considered at present. "There would be no buildings costs, no pensions and no healthcare costs, making huge savings," he said.
  • Yahoo! IBM Employee Issues message board: "Re: Here comes the next step" by "big.bertha92". Full excerpt: IBM is a LONG LONG way to becoming 'employee friendly' again (if ever), it's a very toxic environment for the average U.S. employee. With off-shoring moving forward at a manic speed and U.S. employees having to train their replacements, I would say morale is at an all time low (and nobody cares). All areas have it bad, but US Administration is really the saddest place to be, as every employee knows they will be cut sooner or later.

    The executives should be ashamed of themselves, but they're not. Shame on You, Sam!!! I have a feeling Bob Moffat was the tip of the iceberg in regards to under-handed actions.

    The only place it hurts is in billable/customer arena, where valuable resources are leaving and IBM has a hard time finding qualified replacements (the only ones they get are IBM India resources 'transferring over' and a sprinkling of professional hires (University graduates want NOTHING to do with this company and who can blame them). Execs are finally realizing it pays to 'retrain' current employees in the hot areas and assign them to understaffed customer accounts. Finding Global Resources is becoming difficult too to staff these projects. The poor Resource Deployment Mgrs. are getting beat up daily because they can't staff project (and WHY is it there fault?)

    We need a clean sweep of the top layer of execs - a total restaffing or we will continue to see the horrible death spasms of the U.S. IBM Corporation. Another Resource Action in June? Sure, bring it on, bitches!!!!! Tom Watson is truly rolling over in his grave.

  • Yahoo! IBM Employee Issues message board: "Re: Here comes the next step" by "scall0way". Full excerpt: Yeah, sounds like my department - some of us got the axe on March 31, some on April 30, and the rest of us are gone May 31. We have been "training" our Indian replacements. I put it in quotes as the Indians are brought over here for a *month* - to learn the jobs it took us all years to master - and they mostly just sit at their desks and ignore us.

    I do CICS and MQSeries systems programming on a z/OS platform, but in India those are two separate functions in two different places in the country, the CICS group in Bangalore and the MQ group in Chennai. My CICS replacement is 25 years old and only started with IBM this January! The MQ is about the same age and flatly says he knows nothing about the mainframe environment, and has only ever worked on linux and unix.

    These folks come over here and we have the TEACH them how to logon to TSO? And yet they are learning enough in a month to replace us? The MQ guy tells me IBM India is absolutely desperate to find people with MQ mainframe skills and can't find them anywhere, even though they are willing to pay just about anything. But clearly not enough to continue to pay my salary. :-)

  • Yahoo! IBM Employee Issues message board: "Re: Here comes the next step" by "big.bertha92". Full excerpt: It's obvious. I'll paraphrase Kayne West: IBM doesn't like U.S. Employees! The quicker they are all fired, managed out with unfair low performance ratings, laid off, forced to retire and their jobs off shored to India/Argentina, etc., the happier the (top) executives will be.
  • Wall Street Journal: More Workers Quit Than Were Laid Off in March. By Sara Murray. Excerpt: The Labor Department noted that, "The quits rate can serve as a measure of workers' willingness or ability to change jobs." In deep recessions, when work is tough to find, the number of those quitting declines as employees grow less willingly to risk trying to switch jobs. Meanwhile, layoffs rise as employers cut back their workforce. As hiring starts to improve, people become more confident about their ability to leave their current job and find another and layoffs begin to decline.
New on the Alliance@IBM Site
  • To Alliance@IBM supporters: The Alliance is the only organization that advocates and supports IBM employees and ex-employees. In fact, there are few like it in the Information Technology field. It is always difficult to keep an organization like this alive, but as a supporter you know how important it is that we exist. We are calling on you today to help keep us alive another year by joining as a member or associate member. See our online forms below. As our membership has dropped, it is imperative that we gain new members or this organization and web site will cease to exist. Help us keep our organizing and advocacy work alive!
  • General Visitor Comments: Due to a lack of membership growth the comment sections will be closed until we see sufficient growth in full membership, associate membership or donations. Many of you that visit our site have not yet joined, but seem to value its existence. The only comment section that will remain open will be Job Cuts Reports. If you have information that you want the Alliance to know about please send to ibmunionalliance@gmail.com. Information of importance will be put on the front page of this web site. To join go here: Join The Alliance! or here: Join The Alliance!
  • Tell-A-Friend! Take action! IBM must employ US workers on ALL Government contracts! Pass your message on to your friends and colleagues, and invite them to sign up for Alliance@IBM.
  • Job Cut Reports
    • Comment 5/10/10: More RA's coming. 18 year employee in Calgary, AB RA'd effective May 31, 2010 -Avenger-
    • Comment 5/12/10: So, Sam P. just announced that IBM will double its earnings per share by 2015. The only way that they can guarantee that is for the weird and aggressive rumors of cost cutting at the expense of anyone and anything to be true (or just the tip of the iceberg for what is really being considered). Things are only going to get worse. Can people learn from what has happened to IBM employees already, or will they keep taking what IBM dishes out? -SickOfItAll-
    • Comment 5/13/10: I have been identified for RA from June 30th.If I apply for any job within IBM, and otherwise qualify, will I still be selected or rejected because of my being identified for RA.How does HR treat my candidacy? -Anonymous-
    • Comment 5/13/10: Anonymous - don't get your hopes up to find a new job within IBM. It really does not happen, so begin the process to find your next step outside IBM. The many, many thousands before you have learned to move on. The soon you do the better off you will be. It is a great time to take the severance and unemployment compensation and take some time to be nice to yourself and think what you really want to do. You'll get $2500 for retraining and it may be a time to follow a dream. Maybe the money is less, but you may find more family and "me" time and be happier. -anonymous-
    • Comment 5/13/10: To the person asking about getting hired internal... once you are marked RA the chances are slim to none... I personally had a Sr. VP of a division go to bat for me and he was told no... also most managers were and have been told that internal hiring and external hiring have been frozen... -Chris-
    • Comment 5/13/10: Answer to question posted on 5-13-10 ....I have been identified for RA from June 30th. How does HR treat my candidacy? Many years ago I worked on a database which contained the names of possible RA employees. It also contained salary and number of years with the company along with other info. This was so management could instantly predict how much money the company could save by RAing 10%, 20% to 100% and to make sure they maintained a certain % of older and newer employees so not to get accused of age discrimination. If an employee was on the list as RA then he/she was not to be considered for any job inside IBM unless there was a strong business need. This business need had to be approved by a VP level. So basically you have 2 chances .... slim and none. -Anonymous-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • New York Times editorial: The Anthem Saga. Excerpts:Health insurers in many states have been seeking double-digit premium increases from people who buy their own policies directly from the companies rather than obtaining group coverage at work. In states where regulators have the power to curb excessive rate hikes, the increases are often rejected or negotiated down. In those where the regulatory laws are weak not much can be done beyond jawboning. ...

    Anthem could have spread its losses more broadly to protect its individual buyers. The only reason the company lost money on the individual market is that it lost heavily on policies issued to participants in two state programs that required Anthem to cover people with pre-existing conditions and capped the premiums it could charge. It chose to offset further losses by imposing big hikes on other individual purchasers. For competitive reasons, it is unwilling to pass the costs on to employer-based group plans.

News and Opinion Concerning the U.S. Financial Crisis
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

"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.

  • New York Times editorial: They Have to Do Better. Excerpts: Banks ahead, American taxpayers lagging behind. That’s the disappointing reality here after the first week of Senate action on the financial reform bill. Senators overwhelmingly rejected an important provision that would have required large financial firms to pay $50 billion up front to create a so-called resolution fund, which would have been used to dismantle big banks at risk of failure. Instead, the bill now authorizes regulators to borrow the needed cash from the Treasury to be paid back later, mainly by selling off assets of the failed firm. ...

    The banks are also eager to preserve their ability to take huge risks. They are making an especially intense push to strike a provision that could force big banks to spin off the lucrative business of derivatives trading. That provision is necessary, in no small part because incremental efforts in the bill to regulate derivatives are in grave danger of being watered down. ...

    Banks and their Senate supporters also want federal backing — such as access to lending from the Federal Reserve — for exchanges and clearinghouses that would take on derivatives trades in a reformed system. If investors knew that the federal government stood behind the transactions, it would be easier for banks to enter into highly risky transactions. That ultimately could put taxpayers back on the hook.

  • Jim Hightower: Scolding Wall Street Won't Stop the Greed. Excerpt: President Obama marched boldly up to Wall Street and scolded those narcissistic banksters who crashed our economy and looted our public treasury. And what did the banksters do? They applauded! Were they acknowledging their naughtiness and promising to play nice? Of course not! Theirs was the applause of relief, for the President of the United States – who really could punish these thieves and rein them in – had merely chastised them. Can you imagine how Wall Street bankers respond to being scolded? Right, they shrug and go right back to their profiteering.

    Obama declared that his proposed financial reforms are "in the best interest of the financial sector." Honchos of Goldman Sachs, JPMorgan Chase and the other giants broke out in big grins at this, because they knew it meant that Obama was merely going to "regulate" excess, not restructure the financial oligopolies that inevitably produce the excesses. Bankers hire scads of lawyers and lobbyists so they can easily slip out of regulations, but restructuring actually limits the harm they can do to us.

    Not that Obama's regulatory steps are bad – most are obviously needed and long overdue. But the reform that really matters is to cut these behemoths down to size. Banks should not also be in the casino gambling business, houses of global speculation should not be in insurance, and insurance giants should not be tied to banks. More fundamentally, financial outfits that are too big to fail are too big. Period. They should be broken up so they don't threaten our economy, and their assets should be decentralized into community banks, credit unions, and other lending institutions that actually serve our economy.

  • Jim Hightower: Tax Dodging for Fun and Profit. Excerpt: I look at GE, and I think, gee, how does it get away with that? Then I remember, oh yeah – it has a horde of Washington lobbyists and it hands out bales of campaign cash to key congress critters. That's how General Electric and other multinational conglomerates get our tax laws rigged so the rates they pay are a fraction of what you and I have to pay.

    Actually GE paid less than a fraction. Even though the corporation had income totaling more than $10 billion, it paid nothing into our national treasury on April 15. Indeed, it paid less than zero, for it is getting a billion dollar tax rebate!

    This is due to a loophole called "transfer pricing" – a bit of accounting hocus pocus that transfers corporate profits to subsidiaries in low-tax countries abroad, while ascribing GE's expenses to operations here. Incredibly, one General Electric subsidiary posted a $6.5 billion loss in the U.S. last year but showed a $4.3 billion profit overseas. Overall, GE has $84 billion parked indefinitely in offshore accounts, thus dodging its fair share of taxes needed for the upkeep of our nation.

    President Obama is calling for repeal of this overseas tax dodge, and of course the tax dodgers are howling. One corporate-funded front group, The Tax Foundation, even claims that, "The average Joe should be in favor of lower corporate taxes." Why? Because, says a spokesman, by avoiding taxes, outfits like GE can raise wages and lower consumer prices.

    Huh? Is he stupid enough to think we're that stupid? Corporate chieftains are slashing wages, moving our jobs to cheap-labor countries, and raising consumer prices as fast as they can – while pocketing outrageous salaries and fat profits. Let's at least make them pay their tax bills, like the rest of us Americans do.

  • Jim Hightower: Goldman Sachs Shows Us Its Abacus. Excerpt: Doing a public service was the very last thing on the minds of the geniuses at Goldman Sachs who created Abacus 2007-ACI, but I for one am grateful to them. Abacus is the name of the investment package that has caused mighty Goldman to get its tail caught in a crack at the Securities and Exchange Commission. According to the federal fraud cops, Abacus is nothing but a scam. Yet, I find it enormously useful, because it reveals two dirty little secrets that Wall Street does not want us outsiders catching onto.

    Secret #1 is that Wall Street has radically and abruptly shifted its function. Rather than being the financier of productive business enterprises, it is now a global gambling house for the superrich, as Abacus proves.

    A hedge fund huckster named John Paulson had scoured mortgage records to find home loans that he was sure would be foreclosed. He then got Goldman to pool these shaky mortgages into Abacus and sell the package on the premise that it would actually increase in value. Paulson paid $15 million to Goldman to market Abacus.

    Investors were not told that Paulson had hand-selected these doomed mortgages and had made a side bet that they would fail. Investors lost $1 billion, Paulson made a billion, and Goldman cashed in, too.

    Abacus was a casino game, pure and simple – and that's what Wall Street has become.

    Secret # 2: The media reported that Paulson "earned" a billion bucks in this deal. But he did not. He grabbed, snookered, absconded with, and otherwise hauled off a billion – but "earned" implies meriting something. For example, America's teacher-of-the-year certainly earns a paycheck of $40,000, but Paulson is a snake who did nothing to deserve his billion-dollar haul.

  • Jim Hightower: Who Would Want This Job? Excerpt: Yes, jobs are hard to come by these days, but don't despair, for here's a company that's hiring – if you can stomach the work. It's the Talx Corporation, and what it does is to help major outfits (from AT&T to Walmart) prevent their fired employees from getting unemployment benefits. Sound like fun?

    You see, when a corporation's former workers are denied jobless benefits, the corporation pays less in taxes to our nation's unemployment fund. However, denying benefits is a messy process, and it's not a plus for the corporate image. So – voila! – Talx comes in to do the dirty chore.

    Talx has become notorious in state unemployment offices across the country, for it routinely flings tons of paper at the process in order to clog it and game it, thus denying or stalling benefits that laid-off people are due. Stalling a case is often enough, for many jobless folks don't have the resources or time to battle a deep-pocket opponent like Talx, so they give up.

    Lying seems to be another Talx weapon. A recent New York Times report cites several examples, including the case of a mentally-disabled man fired from his job as a night janitor in a New Hampshire Walmart. Talx stalled for three months before the fellow could even get a hearing. The hearing officer granted benefits to the jobless janitor, but Talx appealed, claiming that Walmart had requested to testify by phone but was not allowed to. There was, however, no such request. Finally, the janitor won the appeal – but, thanks to the Talx long stall, he had no money for rent and lost his apartment. "That was a nightmare," he says of his experience.

    Talx officials say the company improves the "efficiency" of the unemployment system. Actually, it doesn't – but worse, Talx strips human decency from the system.

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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