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:
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.
A reader comment to the article follows:
IBM plans to splurge $20bn on such buyouts over the next five years.
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.
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."
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.
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.)
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.
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.
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."
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.
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.
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.
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.
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.
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.
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-
"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.
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.
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.
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
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