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Highlights—August 21, 2010

  • RTP (North Carolina) Local Wire: India reportedly now has IBM’s largest workforce. By Rick Smith. Excerpts: If new figures reported today by The Times of India are correct, IBM (NYSE: IBM) most likely now employs more people across India than in the United States. “Wake up and smell the … Darjeeling,” the same Times of India quoted one blogger as writing about Big Blue’s U.S. workforce in 2007. Darjeeling is an exquisite black tea – from India. Now, more native-born Indians work for IBM than ever, waking to that smell.

    Unfortunately, Big Blue won’t say anything about the numbers. "IBM does not disclose head count on a geographic basis,” Doug Shelton, IBM’s corporate director of Communications, told Local Tech Wire and WRAL.com when asked about the report.

    With U.S. unemployment in near double digits (18 percent if people no longer seeking work are counted), outsourcing of jobs oversees is an even more inflammatory issue. India’s growth could ratchet upward even higher debate about issues such as U.S. visas for foreign high-tech workers.

    The newspaper did say IBM has some 153,000 workers in the U.S., but the last official numbers the company posted in annual reports before its change of policy listed far fewer. As for how many there are in the U.S. right now, Alliance@IBM, the union seeking to represent IBM workers, estimates some 102,000. ...

    The Indian newspaper estimates that IBM has some 120,000 to 130,000 workers in that country. (In January, The Economic Times of India reported that IBM planned to add 5,000 employees in India as it looks to open more “business process outsourcing” operations, or BPO centers.)

    For the record, IBM no longer reports where its some 400,000 employees are located. Big Blue also will no longer even say how many people work around RTP, which was long considered IBM’s largest campus with 10,000 or more workers. ...

    Costs in India is also sharply lower than in the U.S., according to IBM’s own figures. In a 2006 report, IBM estimated that hourly labor costs in the U.S. would be $27 an hour in 2010 vs. $6 an hour in India in 2010. According to PayScale, a senior software engineer in India makes around $11,300. The same website says an IBM senior software engineer makes just over $100,000. ...

    It’s no secret that IBM has been aggressively cutting its U.S. workforce even as it acquires other firms and launches new initiatives such as in cloud computing. Here’s the breakdown on the decline as tabulated by Alliance@IBM, the union seeking to represent U.S. workers:

    • 2009: 105,000
    • 2008: 115,000
    • 2007: 121,000
    • 2006: 127,000
    • 2005: 133,789
  • The Times of India: IBM is India's second largest pvt sector employer. By Mini Joseph Tejaswi & Sujit John. Excerpts: Tata Consultancy Services is the largest private sector employer in the country. It had 1,63,700 employees as on June 30. But guess who's number 2? The honour goes to -- surprise, surprise -- IBM. That's right. Not to any Tata or Ambani company, or to Infosys or Wipro.

    The fact that IBM has over one lakh people on its rolls in this country is one of India Inc's best-kept secrets. No one in US-headquartered IBM will admit that it employs such a large number of people in India -- for fear of a backlash at home. There's been rising anger in the US over the transfer of `American jobs' to lower cost havens, particularly India. Faced with an economic slowdown and a politically-damaging high employment rate, Barack Obama himself has begun to sound jingoistic. He has issued barely-veiled threats against US companies that ship out work and promised candies to those who stay patriotic. ...

    Since 2007, the company has stopped disclosing the geographic break-up of its employee numbers. The last time it provided figures was in 2007, when it said it had 73,000 employees in India. Since then, the company has maintained that it's a global company and geographic numbers do not have any meaning in that context.

  • Wall Street Journal: Is Big Blue India’s New Big Boss? By Devin Banerjee. Excerpts: IBM spokesman Prashanth Balarama would not comment on the story or provide India Real Time with any official number of employees in India. “The geographic distribution of highly skilled employees required to be successful in this industry is a source of competitive advantage for companies competing globally,” so IBM doesn’t make public the breakdown of how many people it has in each country, Mr. Balarama said. “Many technology companies have recognized this, and already disclose headcount only on a global basis.”

    A reader comment to the article follows:

    • IBM India’s headcount is on a trajectory to hit 150,000 employees in the next 24 month. This should not be a surprise since IBM India has been hiring approx. 25,000 to 35,000 employees in a year. IBM's game plan is simple: if a job can be done in India, they will not hire in the US. This is very good for India. But it is terrible for the United States. This is one of the reasons contributing to the high unemployment in the US.

  • The Register (United Kingdom): Big Blue blows $480m on Unica buy. Excerpts: Big Blue is to buy marketing software outfit Unica Corp for $480m, or $21 per share. The acquisition is a clear signal that IBM hopes to shoulder its way into the lucrative ad software field. In the past few months IBM has been making noises about scooping up companies that will help Big Blue slip into the software and services game. Marketing and ad buys are its current preoccupation. Unica, which produces marketing and brand campaigns for clients that include, eBay, US Cellular, Monster and Best Buy, will be folded into IBM’s software solution’s wing of the business. Recently IBM hoovered up Coremetrics and AT&T’s Sterling Commerce. ...

    IBM plans to splurge $20bn on such buyouts over the next five years.

  • Silicon Valley Business Journal: HP, IBM seen as source of new HP chief. A survey of 500 tech and finance industry executives predicts that Mark Hurd's replacement as CEO at Hewlett-Packard Co. with either be an inside candidate or one from International Business Machines Corp. ...

    The Times reported that among individuals named for the job Todd Bradley, who runs HP's PC business, and Steve Mills, who runs IBM's software business, tied as the most likely choices.

  • eWeek: IBM, Oracle End Legal Battle over Executive Hire. Excerpts: According to MarketWatch, IBM has dropped its legal challenge to Oracle’s move to hire Joanne Olsen, formerly a services manager at IBM. IBM filed suit against Olsen in June in the Supreme Court of New York in Westchester County, the home of IBM headquarters in Armonk, N.Y. IBM claimed Olsen violated a non-competition agreement she had signed with the systems maker. Oracle and Olsen then filed suit against IBM, claiming unfair competition and asking that the case be moved to California. Oracle filed its suit in a U.S. District Court in California. Olsen, who began working at IBM in 1979, was offered a position at Oracle on June 4 and left IBM on June 14. ...

    The heightened competition was blatantly displayed on Jan. 27 at the “Oracle + Sun Strategy Update” event, where Oracle President Charles Phillips put out an open call to IBM employees, particularly experienced salespeople, that Oracle would like to hire them. Phillips pledged to pay them better and treat them better than their present employer.

    In a subsequent interview with eWEEK, Steve Mills, senior vice president and group executive, IBM Software Group, said:

    “Well, I won't deny that they have the wherewithal to pay people a lot of money if they choose to. Now are you going to pay your whole sales force a lot more money? In which case your cost of goods sold is going to go up. We certainly pay our sales reps competitively. Now, I would take exception to being treated better."
  • Bloomberg: IBM’s Moffat Says Chiesi ‘Played Him’ for Inside Tips. By Bob Van Voris. Excerpts: Robert Moffat, the former International Business Machines Corp. executive who pleaded guilty in the Galleon Group LLC insider-trading scheme, said accused tipster Danielle Chiesi “played him” to obtain tips. Moffat, 54, who pleaded guilty to securities fraud and conspiracy in March, made the claim in court papers seeking leniency when he’s sentenced Sept. 13. Moffat claimed he had an “intimate relationship” with Chiesi, 44, a former executive at New York-based New Castle Funds LLC who was arrested along with Galleon Group co-founder Raj Rajaratnam. ...

    Moffat, who started at IBM as a junior programmer in 1978, admitted that he leaked Chiesi information about IBM, Lenovo Group Ltd. and Advanced Micro Devices Inc. He said he wasn’t asked to cooperate with prosecutors in the case and hasn’t done so. Prosecutors yesterday asked U.S. District Judge Deborah Batts to sentence Moffat to six months in prison. Moffat is seeking probation. ...

    Moffat met Chiesi in 2002 and the two became professional friends, according to the papers filed by Moffat today. Chiesi often told Moffat her ideas about how IBM could best present itself to investors. “Over time, Bob’s relationship with Ms. Chiesi became an intimate one,” according to the filing. “Bob’s personal relationship with Ms. Chiesi unfortunately led him to lose sight of the principles that he had lived by.” Moffat provided the tips to Chiesi in 2008, violating his duty to IBM to keep the information secret, according to the brief. ...

    Moffat said the stress of the case has exacerbated his wife’s multiple sclerosis. He said he has been ostracized by former friends and colleagues at IBM and lost $65 million in benefits he probably would have received had he stayed at the company.

  • Austin Business Journal, courtesy of Google Web Cache: State will piece off $863M IBM contract. Excerpts: Dozens of technology companies would like to participate as subcontractors with portions of the $863 million contract held by IBM Corp. Yet officials at the state Department of Information Resources, who this week said they plan rebid the contract because of IBM’s slow of progress, are going to consider only prime contractors with solid track records of managing such major jobs, said Mary Scott Napers, CEO of Austin-based Strategic Partnerships Inc. “The DIR will be looking at companies that have done this in the past,” she said. “They’re not going to take any risks.” The selected prime contractor would typically enlist 10-12 subcontractors to complete the work, Napers said. ...

    In July, DIR officials said IBM was in breach of its seven-year service contract signed for $863 million. The consolidation project was initially scheduled to be completed in December 2009. Yet, less than 12 percent of the job has been completed, officials said. In a written statement, IBM disagreed that the contract was breached or that the DIR had the ability to terminate the contract for cause. But the company declined to discuss any specifics of the consolidation project. ...

    “IBM promised an investment in people, processes, and technology to bring the benefits of data center consolidation to the State of Texas,” she said. “We have had continual problems with basic service delivery and IBM has failed to deliver on their promises.” (Editor's note: For some reason this article is no longer directly available on the Austin Business Journal's Web site, but is available through Google's cache.)

  • Yahoo! IBM Pension and Retiree Information message board: "IBM failure - State of Texas update" by "Robert". Full excerpt: The State announced today they are rebidding the failed IBM Global Services contract. They could go after IBM for contract fulfillment violations but elected to start over again with other bidders. The contact was worth over $800M to IBM. In fairness, the next bidder may not fare much better. The State employees do not favor any contractor taking over civil service jobs.

    The inside information here is that IBM wanted out of the deal owing to the fact that they were losing money on the project. Seriously underbidding the project, coupled with significant productivity errors made the job a loser for IBM... In my IBM years dating back to 1963, this is the biggest black eye IBM has received in the fertile State and Local markets.

  • InformationWeek: Carlson Ditches IBM, Sues For Fraud. TGIF and Radisson operator has torn up outsourcing agreement halfway through its ten-year term. By By Paul McDougall. Excerpts: Hospitality giant Carlson has terminated its multimillion dollar outsourcing deal with IBM and slapped Big Blue with fraud and breach of contract charges, InformationWeek has learned. The owner of Radisson Hotels, T.G.I. Fridays restaurants, and Carlson Wagonlit Travel claims IBM violated terms of the deal, signed in 2005, under which Carlson handed off IT and back office operations to the tech vendor. The agreement was originally set to run through 2015. ...

    For its part, IBM said Carlson's charges are meritless and that its former customer is simply looking to dodge rightfully owed payments. "Carlson's claims against IBM are baseless and therefore IBM will defend itself vigorously," an IBM spokesman said. "Carlson's complaint was filed in response to IBM's demand for payment owed by Carlson under the parties Master Services Agreement," the spokesman added. ...

    Carlson's 2005 decision to outsource to IBM was internally contentious. CIO Steve Brown was against the move but was overruled by then CEO Marilyn Carlson Nelson. The deal saw the company cut more than 500 IT and finance workers. Many of the positions were outsourced to IBM facilities in India, Canada, and other parts of the U.S.

    Brown, now CIO at pharmaceuticals distributor Omnicare, left Carlson shortly after the deal was signed. He did not return calls seeking comment.

  • TechEye.net: IBM accused of overworking call centre staff. Excerpts: Former employees of Big Blue started an action against IBM in a Dallas district court, alleging that call centre staff were forced to work unreasonable work hours. The action, by Tajuana Banks, Kimberley B Maloney and others, is based on the Fair Labor Standards Act (FLSA). IBM has a call centre in Dallas, Texas. Both Banks and Maloney formerly worked for IBM, and they allege that while employees worked overtime, and were entitled to premium compensation for working more than 40 hours a week, the company "wilfully refused" to pay up.

    IBM's policy, the filing continues, is to only pay for 40 hours. But employees have to arrive at work 10-15 minutes before their scheduled hours to boot up their PCs and load their applications. "In addition, Call Centre employees are required to complete all customer calls before they can leave work, even if their shift has ended, and are required to work during meal and rest breaks if necessary, to complete customer calls. As a consequence, call centre employees routinely work in excess of forty hours per week without receiving overtime compensation."

  • Yahoo! IBM Employee Issues message board: "Sept 1st announcement" by "Paul S". Full excerpt: Well I wouldn't count on staying until the end of 2011 if the announcement is Sept 1st. I'd say, Dec 31st is probably the target. Then they can figure out their 2011 R/A numbers, and pay nothing but our pensions for us in 2011. No salary, no severance, etc. Of course these are all rumors, though we do have the UK case as evidence for what IBM might try. They generally treat the US population with even less respect than the UK employees... or I should say with contempt for the cost of our work.

    But hey they can buy back shares to the tune of 100 billion dollars yet a few bills for pensions...too much.

    One thing I've heard is Larry Ellison of Oracle decided to do some long term planning and unleashed an amazing storage box, and dropping into customer shops. Short-sighted IBM was too busy laying us off to tweak profits and Oracle is now eating our lunch on computer floors that used to be solid blue.

    If you have 14 billion just sitting around, why not plan for long term revenue with investment. The first world employees are the ones that made IBM great through decades of learning and decades on the job. Paying such high CEO salaries has probably attracted sociopaths into the ranks of upper management. Happily a few of them are getting into trouble all on their own.

  • Yahoo! IBM Employee Issues message board: "Re: Sept 1st announcement" by "WalkinDude". Full excerpt: I'm a current IBMer, 130 days till my 30th. I have been following these rumors with obvious interest for some time. I also have some co-workers with good, high-up connections. The word from them, is this announcement on 9/1 is NOT going to be made. The reason given was too high an impact to the STG (Server Technology Group), which I read into as too high an impact on the mainframe folks. The source of this update has been VERY reliable in the past, i.e. he broke that this announcement was called off for a July 1 when everyone else said it was on. Reading between the lines a little though tells me that IBM will look at this EVERY quarter from now until there are no more of us "prior-planners" in the system.

    I also think another factor in this is that people are leaving IBM at a very high rate, the highest by far I have ever seen in 30 years. And we don't seem to be able to replace them. Apparently IBM is not an attractive place to work as it once was - wonder why? :) But since I have always believed this pension change was primarily to get rid of folks (vs. save pension costs), having a high attrition rate might accomplish the same thing. Though attrition will likely shed the best folks since they are the ones who can find jobs.

    My advice, and also given to me by others who have retired, and/or been laid off post retirement eligibility: Once you have your 30, start looking and take a good job elsewhere. You are not wanted at IBM any longer, might as well accept it. Tough lesson for us who have believed in this company for years and given them our best. In the words of The Gunslinger, "The world has moved on". We best be moving with it.

  • Yahoo! IBM Employee Issues message board: "Re: Sept 1st announcement" by "Kevin W". Full excerpt: While I cannot speak to your source, I can attest that the rest of your points are valid. IBM does not seek to be a "great" place to work but only "equivalent to the average" out there. They don't seek to provide "good, great, pay and benefits" simply "average out there". IBM seeks to be at the most "average". It fits the school model with our children that our country is in, "anyone who excels is ignored and those who do poorly are boosted for ego/emotion reasons". Doing us all an injustice in the future.

    With all the mainframe announcements, z10, z196, zNext, the push for Linux on z and showing how our software can run there, IBM has a vested interest in keeping some amount of skills that can spell z, heaven knows none of that skill exists in our acquisitions and they believe that the z is simply another Linux box. Sad state of affairs.

    I upon reaching 30, had a professional resume written and updated to show my current skill set, I opened a LinkedIn profile and subscribed to various groups around my skill set, I started communicating more heavily with my friends in the business partner set. All as a "just in case". Will these actions help me should I be forced out? Don't know. I do know that I have gotten two offers this year although they were 20% below my current pay and with less benefits. If I were forced out of IBM these would be good offers.

    I believe we should all be prepared, it doesn't make sense to not be. We are all mercenaries, we are not employees, we are not career IBM'ers anymore. IBM doesn't want such people and bear in mind the rest of the industry doesn't either unless it is a small company which still values that type of thought. As mercenaries we stay as long as it is in our best interests and IBM only keeps us until they find a better/cheaper sword. Nothing more, nothing less. I wish it was different, I wish it was the 70's again as far as work and loyalty, but both sides gave that up during the 80's and we are still suffering the fallout.

  • Yahoo! IBM Employee Issues message board: "Re: Sept 1st announcement" by "bits_bytes_and_bugs". Full excerpt: I heard very similar to this except that certain sites would be excluded - all of which happened to be STG development sites. In short, the expected brain-drain would leave both engineering development and programming development without the ability to design and build systems products.
  • Yahoo! IBM Employee Issues message board: "Re: Sept 1st announcement" by "Tony". Full excerpt: That's a good point. I have heard the same thing from Federal Systems sales - that they have said that if this 'announcement' happens they will lose too many people to carry on their day to day business supporting their customer and have fed this back up the line. IBM is lucky the economy is NOT better because a lot of people would be voluntarily retiring and getting other jobs - a lot already are. I have seen more retirement notices this year that I ever have in my career.
  • Yahoo! IBM Retiree Information Exchange message board: "Re: Cobra or other insurance?" by "lrafalow". Full excerpt: If you're on the FHA plan, COBRA is cheaper, subsidy or not. COBRA is the employee plan and you're in the young and healthy risk pool instead of the retiree pool. I'd recommend using it until you're no longer eligible unless you can't afford the premiums and need to use the blue dollars.

    I used COBRA until it ran out just like your friend and then used up my blue dollars. Insurance premiums for me and my wife are now out of pocket and roughly $1500/month (CIGNA EPO in NC, expensive but good coverage). We can not get insurance on the open market because of "pre-existing conditions" so we're stuck with the high premiums...but that's probably true for many retirees.

  • Newsweek: Are Fed-Up American Workers Getting Their Gumption Back? Surveys show employees are tired and disillusioned with their employers. By Helen King. Excerpts: As companies cut a higher-than-expected 131,000 jobs in July, you can't blame the American worker for seething. Wages remain stagnant and unemployment is at 9.5 percent, even as employee productivity is at levels not seen since 2002. Much of the workforce has endured pay cuts, furloughs, and a loss of benefits. During the same time frame, corporate profits have rebounded, according to the Standard & Poor's 500 Index. Main Street may not be adding jobs, but Wall Street went on a hiring binge, and according to a recent report by Obama's executive-compensation czar, banks paid $1.58 billion in bonuses at the end of 2008, just days after receiving federal bailout money and dangerously close to the nexus of the financial collapse.

    Is it any wonder the average employee is in a bad mood? "There's more of a divide in terms of compensation between senior executives and the average worker now," says Thomas Kochan, a professor of management at MIT. "This will have a lasting effect and lead to lower trust and lower confidence in management." If this environment lingers, it could lead to a profound cultural change in the way Americans view work.

    Could this signal the return of workers' confidence and attitude—enough to ask for long overdue raises or the return of benefits that were taken away? New Yorker Ilana Arazie feels this change, even as she searches for a new full-time job. The 35-year-old lost her position in digital marketing at the Associated Press in November 2009. Since then, she survived through a mix of freelance writing and unemployment checks while launching a blog called Downtown Dharma. Five years ago, she dreamed of climbing the corporate ladder. Now she dreams of finding a position that does not consume her life. "I think people are less apt to take jobs that stick them in a cubicle," she says. ...

    After enduring grueling work schedules for several years, many people, for the first time in several years, feel empowered to ask for more—be it money, time off, stock options, bonuses, promotions, or the ability to work from home. The CEO of an outplacement firm says he has seen this firsthand. "It's not that workers feel entitled. It's that they feel like they've earned it because there's a little more room out there," says John Challenger of Challenger Gray & Christmas Inc. And, if employees feel like companies are not responsive, the high performers eventually will leave. "A lot of it will be psychological, like they need to get away," says Virginia Mathis, an organizational-development consultant.

  • Jim Hightower: Rigging the Rules Against Unions. Full excerpt: There's one direct, grassroots way that workaday folks can create more fairness in our country's plutocratic, corporate-controlled economy: unite in unions. Indeed, some 60 million workers say they'd join a union today if they could. Well... why can't they?

    Because corporate chieftains and Wall Street financiers don't want us hoi polloi having any real say over such things as offshoring, downsizing, wages, benefits, and working conditions. So, for decades, they have deployed their lawyers, lobbyists, and politicians to rig the rules of unionization to keep people from joining together.

    For example, the Railway Labor Act, which sets union rules for railroads and airlines, has a tricky little provision to sidetrack nearly all new unionizing efforts in these industries. When a vote is taken among workers to decide whether they want a union, all employees who do not vote are counted as "no" – rather than not counted at all, as happens with non-voters in every other American election.

  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Anonymous in Boca Raton, FL: (Current Employee) “STOP Offshoring U.S. Jobs.” Pros: pay, work at home, benefits. Cons: Rampant offshoring of US positions, rolling lay offs, management is pretty much useless. bogus performance evaluations (forced low performance ratings by HR.) Advice to Senior Management: Somebody is making a lot of money in IBM, and it ain't the worker bee. The team at Armonk are making a mint off the backs of the average worker.
    • IBM Anonymous in Somers, NY: (Past Employee - 2009) “Good performance reviews don't guarantee continued employment.” Pros: IBM has many convenient locations. They allowed me to work from home whenever I wanted unless I had a "must attend in person" meeting. They provided good benefits and matching 401(k) funds up to 7%. They reimbursed employees for local travel. Cons: The AIRRP. The Annual Involuntary Resource Reduction Program. Corporate profits drive all actions at IBM. People are treated as commodities. There's always another person who can take your place, and oh, yeah, they can pay them 20% of what they were paying you by shipping your job to India or Slovakia. IBM insists on using Lotus tools, such as Notes, Sametime and Symphony, which are poor imitations of Microsoft products. By spending several years at IBM, you will lose touch with the rest of the world and when they lay you off, you won't have the skills and experience necessary to compete in the job market. Advice to Senior Management: Eliminate the Lotus products and join the rest of the word in using MS Office. Update your operating systems from Windows XP. Figure out how much profit and how much profit growth is really enough.
    • IBM Client Representative: (Past Employee - 2008) “Good place to build resume.” Pros: Name recognition and many career options. Cons: Quota set too high so you made very little commission, even though you're growing the business. The Comp plans were good for a couple of years, 1999, 2000, then after that they were overly complicated and paid out too little. Advice to Senior Management: More aggressive comp plans
    • IBM Quality Engineer in Shenzhen, Kwangtung (China): (Current Employee) “Good Structure and Culture.” Pros: Training program and Promotion process, people is very nice and cooperation, respect team work and promote quality consciousness, Provide the good training plan to all employee. Cons: No concern currently, Senior management need to consider how to develop team career and goal, not only keep original organization. Advice to Senior Management: Need to get more opportunities for people rotation, if people take huge workload, the role should become more significant and salaries need to be considered.
    • IBM Managing Consultant in Glendale, CA: (Current Employee) “The Great Outsourcer.” Pros: A lot of challenging projects, great benefits, and a lot talented people. Cons: Mediocre raises and bonus even though the company has been so profitable. IBM is constantly looking to expand the use their offshore centers. This means all the interesting techie roles are being sent to offshore. Advice to Senior Management: And you wonder why few Americans wants to study computer science and electrical engineering?
    • IBM Senior Managing Consultant: (Past Employee - 2010) “Great company, frustrating environment.” Pros: Quality of Life. Self directed on a day to day operational basis. Great resources. Wife loved the benefits. Opportunity to explore. Cons: Sr. Management more concerned with not making mistakes than pushing the envelope. Too much 'first order' reliance on process and structure. Advice to Senior Management: Incent remote managers to have/build relationships with direct reports. While I was there, several employees said they do not talk with their managers on a regular basis, nor have they ever met their manager. Most of my direct reports would say I was the best manager they had at IBM. I fought for what was right when it came to promotions, bonuses, and RA's. IBM has great tools (PBC, education, Long Term Career goals, etc) but the management is so busy they pay annual lip service to this process. People are the number one asset.
    • IBM Anonymous in Toronto, ON (Canada): (Past Employee - 2008) “IBM (internship term)” Pros: There is no doubt that this is the good place to learn advanced technology. You will learn a lot at this company. You will often work with very smart people. Cons: You need to get ready to handle A LOT of work. Don't expect to work 40 hours a week. There are a lot of work that needs to get done but there are not a lot of people. Advice to Senior Management: Is it fair when you put double work on a single employee. You need to find a way to reduce the amount of work and/or hire more people. Think about "work life balance".
    • IBM Executive IT Architect in New York, NY: (Current Employee) “Good place to learn; poor to grow.” Pros: Access to new technologies, people and products is excellent. It is a progressive employer with a global workforce and opportunities to learn and grow, especially for technically oriented folks. Cons: Unless you have10 years experience in IBM and have excellent mentors you can forget about your career going beyond a certain level. Advice to Senior Management: Stop trying to squeeze costs out of the business and focus on growth. Bring in more outsiders into positions of leadership.
    • IBM Staff Engineer in East Fishkill, NY: (Current Employee) “IBM East Fishkill.” Pros: Paid vacation is on par with other companies. Management is flexible with starting/stopping times, but expects employee to work 40+ hours. Starting salary and on par with other companies. Great selling point on resume. Cons: Cost of living increases are infrequent (1 every 3 years.) Yearly performance bonuses are small (1 - 2%.) Senior management is at odds with efforts of employees. Training and education is non-existent. Advice to Senior Management: Support employees in their efforts to educate themselves and expand their skills. Listen to and understand what employees are trying to accomplish.
    • IBM Senior Consultant in Washington, DC: (Current Employee) “Consultant with 10+ years experience and 6+ years at IBM as a Senior Consultant.” 0 of 1 people found this helpful Pros Name brand recognition, Nice platform into other companies, extensive range of products and applications. Very smart people Cons Many layers in management, Allot of legacy 30+ yr employees, Low pay, so much time spent working at the client site, and doing IBM admin work; thus leading to less time spent on learning new applications or programs. Lack of being challenged (it all depends on what project your on), Advice to Senior Management Reward hard work. Talk to your employees, provide more guidance, and mentoring, pay competitively, do not take too long in giving salary increases
    • IBM Software Test Engineer in Bangalore (India): (Current Employee) “Not a great place to advance one's career.” Pros: Timing Flexibility. Casual Atmosphere. Opportunity to work on any tier of technology. Cons: Very poor compensation. No facilities whatsoever. Work done is often monotonous and provides no pride at all. Endless bureaucracy. Be prepared to be sucked up in a frustrating and back-breaking loop of formalities if you have to travel for work...at the end of which you are made to travel in the cheapest mode possible (each and every step required has to be researched and performed by you.) It is a clear indication that the company does not care at all about the employees. Advice to Senior Management: The company needs to learn that employees are not some dumb machines which can operate without any care and facilities. If you can't provide basic facilities and comfort to employees at least compensate them well, else the deep unrest amongst people will someday lead to a very tragic end
    • IBM Commercial Manager in Warwick, West Midlands, England (United Kingdom): (Past Employee - 2010) “Moral at all time low!!” Pros: Excellent staff, most very professional...not too much dead wood left now! Flexible working means most staff can work from home with hours to suit them (as long as they deliver on time!) Cons: Why, in a company with $100b turnover and $16b of cash reserves is morale in the UK SO LOW. In the department I worked a survey in 2006 had an employee satisfaction rating at 55%, the target was to get it 75%...its now at 25%. Advice to Senior Management: Just too many layers of management, from the employee at the bottom to Sam Palmisano at the top, there are 15 layers of management...too may senior execs only concerned with their bonus payments, and 'job for the boys' mentality
    • IBM IT Specialist in Markham, ON (Canada): (Current Employee) “IBM: Causes mild indigestion and burnout.” Pros: If you've never worked prior to IBM, or you've worked outside of your field of interest (e.g. bar tending, fast food, seasonal employee), then IBM can give you a learning experience. Cons: Low pay. High expectation from management about taking overtime mostly because the OT is due to bad management of delivery, from the requirements phase all the way to the deployment phase. You don't just pull your weight, you pull everyone else's for no reward. Your time is treated trivially by management. Employees are leaving in droves, along with talent and experience, which means at some point a ton of responsibility will be on your shoulders, with unchanged expectations about delivery. You will be a scapegoat for bad management. Advice to Senior Management: Have a vision and get the best people to implement it. Pay for that, not for cronyism. Without a vision that takes into account the new rapid mobile growth, I expect you will be at your grave soon. I don't expect this advice to be followed.
    • IBM Anonymous in Boulder, CO: (Past Employee - 2008) “Cog in a Machine.” Pros: Reputation. International Exposure. Opportunity (if willing to relocate.) Cons: Lethargic culture coupled with Constant Insecurity. Advice to Senior Management: Open Communications better career planning process
    • IBM Systems Engineer in Gurgaon, Maharashtra (India): (Current Employee) “Good work life” Pros: Good cool working environment. WFH available. Most suitable for ladies. Cons: Low hike, compensation for loyal workers. New joiners will be paid more then loyal workers. Petty politics here and there but not always. Advice to Senior Management: Give value to loyal workers and maintain transparency and be accountable for decisions(manager's )
    • IBM Technical Support Analyst in Markham, ON (Canada): (Past Employee - 2008) “IBM Help desks...” Pros: The company name carries some weight anywhere. The pay rate rate was not too shabby and all extra- and over-time was compensated. Parking was provided and the facilities were decent. Cons: A contract comes with no benefits, not even paid vacation, and you are forced to work holidays. Lots of management layers allow for some confusion and inefficiency. Management wasn't top of the line, but I've seen worse. Help desk workers are usually seen and referred to as "bodies" and are only as good as their phone statistics. Overall a mediocre job. Advice to Senior Management: At least pretend you care about your help desk "bodies"
    • IBM Anonymous in Los Angeles, CA: (Current Employee) “Overall IBM is not a bad place to work.” Pros: Diversity of products, Work/family balance. Cons: Career advancement opportunities are rare, and salary increase is extremely slow. Advice to Senior Management: Employee compensation should be improved.
New on the Alliance@IBM Site
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  • 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!
  • Job Cut Reports
    • Comment 8/12/10: RE: 08/11/10 Anonymous translation - DPE - Delivery Project Executive, SDM - Service Delivery Manager, PM - Project Manager. SVC Management is service management, AG is Americas Group. Specifically, it appears that all the DPEs, SDMs and PMs for the Americas will be co-located to a GDF (Global Delivery Facility) to implement LEAN within the next 6 months. The waves are stages of the LEANing. These DPEs, SDMs and PMs have been the last holdouts in dealing with the fallout and resulting poor quality/productivity caused by gutting the US experienced resources and offshoring to cheap, unskilled and inexperienced global resources in low cost countries such as China, India, Brazil and Argentina. Now they too will be LEANed - which means much of the experienced staff will be axed and replaced with low skill, cheap, inexperienced global resources from China, Brazil, Argentina and India. BTW, my DPE just quit and took a job outside of IBM. -Anon-
    • Comment 8/13/10: Can anyone comment on whether or not a typical RA package is offered to people who's jobs are moved to a US based GDF location and the person can't/won't move? I'm curious because I'm one of the SDM's who will be affected the end of the year and wonder if I'll be forced to resign or get a pkg. Thanks. -curious- Alliance reply: Please define what an SDM is and what the job responsibilities are.
    • Comment 8/14/10: SSO-ITD in Western Canada told today that ALL consultants (with few exceptions) must take 10 days "vacation" before Sept 15. One problem 98% of workforce here are consultants. Guess our clients will suffer needlessly until Sept 15...Twits -FewRemainingEmployees-
    • Comment 8/14/10: Hey guys, what's the best way to get RA'd? I've been with this pathetic company for about 10 years and each year it just gets worse and worse with their ridiculous cost saving measures veiled in some idiotic marketing campaign such as 'Smarter Planet'. I thought about volunteering to be RA'd. I've also thought about turning down all travel related jobs in hopes that would place me in the 'Stadium' for a long time and eventually get RA'd. Slacking on my job isn't an option because I work on customer sites so I could never compromise my professional loyalty to the customer just to get back at this discombobulated company. -Zak-
    • Comment 8/1410: I was RAed last year from IBM and found a great job working for Unica in MA. Life after IBM has been so much better for me. To my surprise, and now increasing chagrin, I found IBM has acquired Unica. This stinks. It sounds like I'm back in with IBM and wonder if I will be laid off again now. I have a friend who used to work for Lotus and IBM totally screwed with Lotus after the acquisition. Some folks in Lotus were soon deemed redundant and let go and I hope history doesn't repeat now for Unica employees. Please, Please, folks join the Alliance so you don't fall into the life raft I am in now. -unicabeemr-
    • Comment 8/14/10: Heard from current Lotus sales folk that Lotus brand had the worst sales in history in 2009 and 2010 is looking worse. All the experienced technical people were laid off in 2008/2009 and so now they are scrambling looking to hire. One of my fiends who was let go in Seattle was called and asked if they wanted to come back and he said "hell no...IBM can rot in hell". I will enjoy watching them continue to lose market share to Microsoft and Oracle. -Ex-Lotus Software Group ITS-
    • Comment 8/15/10: A VERY good source has relayed that major benefit changes are on deck for the fall. No details could be provided but it is likely that a big 'incentive' will be to force old plan employees into retirement, (where a very reduced number can be hired back as contractors at a very low price with no benefits or vacation to pay for). The US already has 27% of employees as contractors, with another 15% as partners or vendors and 10% management so less than half the beamers left in the US are actually 'workers' directly on the payroll. So the 80% contractor model the Sr. VP beamer from England let slip out is well under way. You can either stand up and fight or wait to be sheared like sheep. -sept-slam-on-deck-
    • Comment 8/15/10: Like Zak, been at IBM 10 years and I would love to get RAed, get my severance and move on. This IBM company really sucks! -Anonymous-
    • Comment 8/16/10: To -curious- No one can predict what IBM is going to do with this next wave of GDF deployment. They can choose to offer severance packages for a resource action announcement or not offer any package or severance. One thing is sure: any future severance package offered will not be better than the last one handed out by an RA. Since you are an AT WILL employee IBM can definitely say your job will move from location Y to location Z. If you don't move with your job IBM can say you voluntarily resigned since you are not willing to report to your work once transferred. I reckon as an SDM your are a Service Delivery Manager. If you are management with direct reports under you (you can hire and fire employees) then you are totally at IBM's will. IBM management can be terminated without cause. IBM can terminate you for refusing to transfer. If you are an employee then you can better your chances of keeping you job or being able to negotiate the terms and conditions of not being able to move to a work assignment by getting a contract through a labor union. -IBMUnionYES-
    • Comment 8/16/10: "A VERY good source has relayed that major benefit changes are on deck for the fall. No details could be provided but it is likely that a big 'incentive' will be to force old plan employees into retirement, (where a very reduced number can be hired back as contractors at a very low price with no benefits or vacation to pay for)."

      When I read that I had to stop and think about what was left for them TO take. About the only thing they have left to take from me after 27 years is to convert what's left of my "pension" to a cash balance like they tried in 1999. The estimates for my current retirement according to the Netbenefits are about 40% of what they could/would have been before Lou got to it. I won't let them do it this time. I joined Alliance too late, March 2009 after close friends got kicked to the curb.

      The company is far from the company I joined back in the day. I can't do anything about that but I DID join Alliance for a couple of Starbucks a month. All you talkers who make excuses for not joining Alliance make me sick. I feel sorry for my friends who remain because most of them have lots of years remaining in their career. I could retire now and would if I could afford to. A few years and I will be out, one way or another. Planning a big retirement bonfire for everything with an IBM logo. Can't wait. - sign me -Counting the Days-

    • Comment 8/16/10: News today that all mainframe and AS/400 support for the Manulife account in Canada (including command and control positions) will be offshored to Argentina by the end of this year. Manulife was outsourced to IBM in 2001 but offshoring started about one year ago for some mainframe support. - OEM products. -Going Offshore-
    • Comment 8/16/10: To confused...I'm in NC was given a similar "opportunity" last year and sought the advice of an attorney. The result was that I could not be required to move several thousand miles away from my home. The attorney told me that if I did not move I did not resign but was fired and would be allowed to file for unemployment. The company is not required to pay severance, no company is but some do. -engelfisch-
    • Comment 8/17/10: For those who have to buy health insurance, What have you done for insurance when Cobra stops? Choose an FHA plan (double the cost) or something else? -anonymous-
    • Comment 8/18/10: This message is in reference to the question on if there is a RA/Severance package if your job moves to Dubuque. I am in Shared Services/ITD and we were told last week that our jobs are moving to Argentina by Y/E. At this time there is no RA/severance pkg offered. We are supposed to find another job within IBM. So for those of you that are being told your job will be moving to GDF/Dubuque, still within the U.S. Good Luck! -Lady Di-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
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  • AARP: The New Health Care Law and Early Retirees. Your questions answered. By Susan Jaffe.
  • The Hill: Faced with rising health costs, large employers plan to shift burden to workers. By Mike Lillis. Excerpt: Faced with skyrocketing healthcare costs and new insurance rules under healthcare reform, more of the nation's biggest businesses are planning to hike premiums and cost-sharing measures on their employees next year, according to a survey of those companies released Wednesday. Seventy percent of large employers said they will eliminate lifetime dollar caps on overall benefits, according to the latest annual survey conducted by the National Business Group on Health (NBGH), while 63 percent plan to increase premium rates in 2011, up from 57 percent this year. Forty-six percent intend to hike maximum out-of-pocket costs for workers next year, up from 36 percent in 2010. Forty-four percent intend to increase in-network deductibles.
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.

  • This Can't Be Happening: There's Nothing Wrong With Social Security That Taxing the Rich Fairly Wouldn't Fix. By Dave Lindorff. Excerpts: New York Times columnist and economist Paul Krugman, in his column today, is right to expose the attacks on Social Security as being the work of right-wing ideologues eager to destroy a government program that works, backed by cowardly Democrats who want to show their fiscal “responsibility” by getting tough with future pensioners. But he doesn’t go the extra step to point out that this program, founded 75 years ago as a cornerstone of Franklin Roosevelt’s New Deal, could be much more fair and even generous to elderly and disabled retirees, and also placed on a much sounder economic footing, by a few simple reforms that would not cost most people a penny, or require hard working folks to work one day longer before retiring.

    There is a problem facing Social Security, which Krugman doesn’t mention. The Nobel economist is correct that the system has built up a huge multi-trillion-dollar surplus over the years. And he is correct in noting that this surplus--the Trust Fund--is big enough to fund the system probably indefinitely, even during the huge bulge in retirement that is starting now that the Baby Boomer generation is hitting retirement age. What he fails to mention is that the Trust Fund has all been stolen (okay, technically borrowed) by the federal government to fund its own annual deficits, and given the national attitude towards taxes, it will never be repaid. That’s why the right is able to create a panic by falsely claiming that Social Security is going to go “bankrupt” when current workers’ Social Security taxes can no longer pay for the benefits of current retirees.

    But there is a simple solution to even this deception, which is to eliminate the cap on income which is subject to the Social Security tax.

    At present, every worker in America pays the same percentage of income into the Social Security Trust Fund--currently 6.2% of the first $106,800 of earnings. Since everyone pays at that rate, whether they earn $10,680 a year or $106,800 a year, that would be a flat tax, except that it’s not. Because once someone earns more than $106,800 in a year, the tax rate falls off precipitously. After that cap, which is adjusted upward a little bit each year to account for inflation, there is no SSI tax on additional money earned. In other words, if someone earns $106,800.00, she or he pays $6,621.60 into the Trust Fund, but if that worker earns $107,000, or $313,600 a year, the tax is still just $6,621.60. For the person earning twice the income cap of $313,600, that means an SSI tax rate of only 3.1%. For someone earning 10 times the cap, or $1.068 million, the tax rate is only 0.62%.

    Making things even more unfair, if someone were to earn that $106,800, or any other amount, by investing in the stock market, or by investing in real estate, he or she would pay no SSI tax at all, since the tax is only applied to what is called “earned income,” not to investment income.

    According to a recent study conducted by the Congressional Budget Office for the Senate Special Committee on Aging, if this income cap for the Social Security tax was eliminated, so that all earned income was taxed, the dreaded wall when current workers’ tax payments ceases to be enough to pay for current retiree benefits, instead of arriving in 2037, would be pushed back to at least 2075, a date almost as distant in the future as today is from the founding of the Social Security program.

    Of course, if the tax were applied also and at the same rate to unearned income from investment, not only would there be no Social Security crisis ever, but instead of talking about making people work until they are 70, and about cutting benefits for retirees, we could be talking about lowering the retirement age to 62, and raising benefits, so that people could live decently in retirement instead of worrying that they might have to cut their food intake in order to pay the rent or buy required medications. People could also stop having to lose sleep at night worrying about the destruction of their IRA or 401(k) by the Wall Street banksters. Alternatively, the retirement age could be restored to the original 65, and the tax rate on all workers could be reduced. ...

    The system is not in trouble because it’s too generous or because it is underfunded. It has been pilfered over the years by politicians who have been unwilling to raise taxes to fund America’s wars, or to fund the programs that we Americans say we want, like better roads, grants for local schools, etc. Instead of telling us what things cost, they borrow (steal) money from the Social Security Trust Fund, and then tell us Social Security is in trouble. (Actually, the money that is pilfered is invested in US Treasury bills, which would be fine, but in order for the US to actually cash those bills out and pay Boomer benefits with the cash would require either a massive increase in income taxes on, guess who?--the working class, or the printing of trillions of dollars, which would lead to a collapse in the currency, which is why everyone worries about the day the system has to draw on the oxymoronically named Trust Fund.)

    And now, as a day of reckoning approaches, they pretend it’s all our fault. They say we want too much in benefits, or that we want to retire too early. But the truth is, we deserve decent retirement income, and we deserve to retire at 65 or even 62--especially those of us who have slaved away at physically exhausting and destructive jobs for 40 or 50 years. In fact, if we hang onto our jobs until 70 or 72, as these hacks and the lobbyists for corporate American want us to do, it’ll just be that harder for our kids to get jobs and move out of the house! Furthermore, its the trillions of dollars for pointless wars and military over-arming that is the cause of all that raiding of the Trust Fund, not spending on schools, welfare, roads and health care.

  • Wall Street Journal opinion: Where Left and Right Converge. Anticorporatist views are becoming more and more common. By Ralph Nader. Excerpts: Earlier this year, Barney Frank and Ron Paul convened the Sustainable Defense Task Force, consisting of experts "spanning the ideological spectrum." They recommended a 10-year, $1 trillion reduction in Pentagon spending that disturbed some in the military-industrial complex. Other members of Congress were surprised by this improbable combination of lawmakers taking on such a taboo subject. But the spiral of bloated, wasteful military expenditures documented by newspapers has reached the point where opposites on the political-ideological spectrum were willing to make common cause. A convergence of liberal-progressives with conservative-libertarians centering on the autocratic, corporate-dominated nature of our government may be growing. To be sure, there are obstacles to a synthesis of anticorporatist views becoming a political movement. ...

    I have received earfuls on these matters during my three nationwide presidential campaigns from both workers and taxpayers who call themselves conservatives or progressives. The Main Street versus Wall Street figures of speech bespeak a deep sense of loss of control over just about everything that matters to people's lives. In their daily discourse they know that big government beats to the drums of big business or, to use the elegant words of conservative philosopher Russell Kirk, "a host of squalid oligarchs."

    Because corporatists falsely assume the mantle of conservatism, they keep agendas that the left and right would agree on—such as cracking down on corporate crime, fraud and abuse against consumers, taxpayers and investors—from being heard and talked about and acted upon. The issues that don't get nearly the attention they deserve include opposition to the arbitrary erosion of privacy by the Patriot Act and to the daily collection and storage of personal consumer information in corporate databases; resistance to tax-funded sports stadiums, the Federal Reserve's out-of-control powers, unconstitutional wars and monopolistic practices against small business, and to the swarm of corporate welfare subsidies, tax havens, handouts, giveaways and bailouts.

  • truthout: Corporate America Speaking Out. By Jim Hightower. Excerpts: In addition to unfathomable sums that corporations will pour directly into this fall's congressional elections, they are also channeling unparalleled amounts of cash into assorted front groups. For example, in 2008, a presidential year, the U.S. Chamber of Commerce put $36 million into elections, which was the most ever by a corporate organization. This year the chamber intends to more than double that, funneling $75 million into campaigns, with practically every penny going to corporate-hugging Republicans. ...

    With such gross levels of spending, moneyed corporations intend to overpower America's democratic process and purchase a government that'll do their bidding. To stop them, We the People must repeal the Supreme Court's malicious, anti-democratic ruling. To help, connect with a grassroots campaign pushing for a constitutional amendment that will overturn the Citizens United decision. Find them at www.freespeechforpeople.org

  • Washington Post: How the fight over tax breaks affects your bottom line. (Interactive feature). Excerpt: Tax cuts enacted under former president George W. Bush are set to expire at year's end, and lawmakers are battling over whether to extend them before the November elections. Most Republicans want to extend all of the cuts, saying that any increase in taxes will hold back the economic recovery. President Obama and Democratic leaders would extend many of the cuts but say tax breaks for top earners should expire to pare down deficits. Each plan would affect average tax rates for income groups differently.
  • New York Times op-ed: Appeasing the Bond Gods. By Paul Krugman.
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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