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Highlights—May 3, 2014

  • Seeking Alpha:

    Ethics Issues At IBM: Will It Hurt Earnings? By Arne Alsin. Excerpts: Robert Cringely wrote a series of columns in 2012 in which he predicted IBM's (IBM) ultimate demise because the company was "rotten to the core." To increase profits, he said top management had made the conscious decision to "cheat" customers in the form of a cut back in service. His columns generated massive page views and thousands of comments from readers, many of whom claimed to be IBMers or ex-IBMers.

    Is IBM really rotten to the core? The evidence, which I will share with you below, is stacking up, not that all of IBM is corrupt, but that there does appear to be a culture at the top of IBM that prioritizes earnings above everything.

    Above employees? Yes, there are thousands of passionate IBMers who will say so, and from all over the world. They have tried to make their voices heard in Cringely columns and elsewhere. I will share a few with you.

    Above customers? Yes, this is where it gets scary, where rotten to-the-core comes into play. To make earnings, IBM apparently takes it out of customers. A recent spate of legal actions add to the pile of evidence.

    Above technology? Yes, innovation and energy in enterprise IT is in the public cloud, an area IBM is dangerously behind in, as we'll learn below.

    Above ethics? Let's look at the evidence, beginning with two comments that followed Cringely columns. A specific mechanism of corruption at IBM India is explained in the first, and the second accurately predicts a breakout of corruption in India. ...

    We routinely broke contracts knowing full well there was no way we could meet the terms. We went into accounts requiring secret clearances because there was only one person who actually had one and he had to sleep sometime.

    When I left it was primarily because they had downsized us from 18 to 3 and my phone rang almost every single night. I was so exhausted I was falling asleep driving. First my manager avoided me for a week, and then he offered me MORE WORK for the same pay to stay. Hysterical. And clueless. They never replaced me. I accurately predicted that he would retire shortly after I left because HIS phone would then ring almost every night once I wasn't around to answer. ...

    I left last August of my own choice. When I left, I was architecture profession lead for my business unit, a senior certified Executive IT Architect, and the chief engineer of a billion+ dollar account.

    I can vouch for the conditions this article speaks of…things were so bad, that in order to service my customer's 30 million dollar backlog of business, we had to bring in Glasshouse. Executives would not let us hire the people it took to service the business. ...

    I remember when I began my career with IBM, telling my friends and family that I was an IBMer. Oh how proud they were, and so was I.

    Then over the years, I began to see the erosion, competent execs that you looked up to, respected, even liked for the most part, being replaced with BULLIES who didn't have the technological savvy to boot their laptop.

    Then the lies began to surface, management telling the workers to 'book 30% overtime, no matter what', or 'bill your team meeting time to the customer'. ...

    If you add up the customers that have walked away (or sued) IBM in recent quarters, it adds up to billions in revenue that hasn't been replaced: Big names leaving IBM include Disney, ING, Tata Motors, AstraZeneca (nasty dispute), the NFL, the states of Indiana, Texas, Pennsylvania, to name a few.

    Meanwhile lawsuits for failed projects keep coming, such as the $2.5 billion suit last month from Iusacall, a leading telecommunications business in Mexico.

    In Indiana, in February, IBM was found to have materially breached a contract to modernize its welfare system. We're waiting to hear what the award will be.

    In Texas, the state accused IBM of "contractual violation" and "chronic failures" in a $864 million data center consolidation project that was years behind schedule, and the subject of all sorts of controversy. The city of Austin is angry at IBM too, for a system that didn't work. ...

    In Australia, IBM is caught up in a public relations nightmare. The worst of many problems: the botched installation in Queensland that cost the government $1.2 billion. It's hard to believe, but this started as a $6 million contract and, well, there was project creep, several hundred million dollars of it. ...

    IBM has been banned from business with the Queensland government, as a lengthy investigation showed they cheated in obtaining the contract in the first place. "IBM took Queensland for a ride," said Premier Campbell Newman."I don't want companies that have this sort of culture doing work for the people of this state."

    Selected reader comments follow:

    • Article is spot on. On the inside, we see the focus on the 2015 EPS road map every day. We live it every day. IBM has gone from being a company that one was proud to work for to a company that the rank and file within IBM hate.

      Most people I know are happy to get the paycheck, but just hate the environment. The only people that are glad to be working for IBM are the executives. The constant resource actions and the required 70 - 80 hour weeks have taken a heavy toll.

      I used to believe in IBM. No longer. The company has deteriorated over the past 10 years. Business Conduct Guideline's are a joke. We see violations all of the time. A program like the new "Transition to Retirement" program is a joke. Those that enter these programs are abused -- forced to work long hours and given poor performance reviews. I know several who just quit before their planned retirement date because they were so disgusted.

      IBM needs new leadership. Most of those currently in leadership positions should be fired.

    • Nice article, Arne. For all of the Arne-bashers in this comments section, did you spend 25 years working inside IBM and see the reality of the culture and ethics erosion all around you on a daily basis? I didn't think so. But I did, and all of the quoted inserts are spot on. A former co-worker and good friend of mine inside the company, whom I very much respected for his intellect, said it best: at this juncture, if you are an executive or a shareholder, IBM is a good place (for now) but if you are a client or a rank and file employee, God help you!
    • I've been posting about the need for IBM to reinvigorate its culture on other articles on SA. But Arne is more than a bit over the top in gratuitously attacking IBM as an unethical company. Hence, I agree with other posters that Arne is upset that IBM actually is standing its ground, whilst favorites of his like Amazon are taking a value conscious thrashing.

      I posted on past articles by Arne on IBM. I stand fast in maintaining that IBM remains a strong bet to emerge as a cloud leader, continuing 100+ years of proven technology and financial success...withstanding morale issues that IBM management is currently addressing. I remain a hold. I might add more IBM stock.

      IBM certainly might face some more short term turbulence. But I still believe IBM will remain a premiere technology company...long after current momentum companies face a day of decisive reckoning with 1 wall street truism: price must track earnings.

  • Seeking Alpha:

    IBM's Culture Is Its Best Long-Term Investment Metric. By Peter E. Greulich, MBI Concepts Corporation. Excerpts: Summary:
    • Rather than a few thousand financially-motivated executives, IBM needs all its 463,785 employees to be self-motivated employee-owners.
    • IBM’s return on shareholder investment over the last fifteen years—even with massive share buybacks—can only be described as lackluster. There is no reason to expect this to change.
    • If, as Peter F. Drucker said, society is the ecology, IBM’s 21st Century ecology needs to again become an environment that supports growth.
    • IBM appears to have no desire to acknowledge that its cultural heritage is the reason for its hundred years of resilience. ...

    When Tom Watson Sr. was hired in 1914, to lead what was then C-T-R, he told the board of directors, "If you want me to come in here and operate this business for the benefit of the business, I'll do it, but I will not have anything to do with the operation of it from a stock standpoint." He was determined to build a strong corporation first. ...

    Watson Sr. believed that enthusiasm was the "basis of all great things." And he knew that standing alone in the field, hearing "no" every day was a discouraging environment. Therefore, he instructed his executives to help maintain their men's enthusiasm-demanding that they serve as their assistants. In a 1932 meeting of the company's best salesmen, he brought all his executives onto the stage and had them face this sales team. He told his executives they were looking into the eyes of those directly responsible for the success of IBM. It is hard to imagine the sense of pride that swept the audience that day. They knew that every IBM executive understood their first priority: their team. ...

    Gerstner's Legacy - Centralize Decisions, Replace the Constitution, and Manage the Stock. On Lou Gerstner's watch, IBM became a financial organization. As he points out in Who Says Elephants Can't Dance?, to fix the problems that Akers had encountered he centralized decision making and replaced IBM's basic beliefs. ...

    His return on investment would seem to support his decisions as good ones. But what he failed to understand was that the IBM culture was broken, not dead. In his book he wrote that the "most corrupted" of all the IBM Basic Beliefs was respect for the individual,7 which hit IBMers as if the President of the United States had written that we should no longer pursue a more perfect union. Surely a century-old corporation, like a two-century-old nation, is more than its founding words. But great leaders do not seek to abolish a people's constitution; rather they seek a return to its original intent. Mr. Gerstner would have found the answers in IBM's culture if he had dug deeper. He just needed the humility to be a student of the Watsons' IBM. ...

    As Watson Sr.'s legacy is found in his son's performance, so Mr. Gerstner's legacy can be found in the performance of his successors. They continue to be financial stock managers, not managers of the IBM business. Sam Palmisano's results-even after being a share buy-back behemoth-is best described as lackluster when compared to either his 20th Century peers or Morningstar's 2013 Ibbotson® Stocks, Bonds, Bills, and Inflation® (SBBI®) Classic Yearbook large company stocks benchmark. ...

    The drive to manage the stock through ever greater earnings-per-share is the elephant-in-the-room. And if Lou's elephant ever danced, it does so no longer. His legacy is in every room where employees are evaluated, pay for performance is discussed or product investment decisions are made. Mr. Gerstner's financial culture has not delivered the long-term results of IBM's 20th Century sales culture. ...

    Over the last one hundred years, IBM's culture has carried it and its stakeholders through eighteen recessions, the Great Depression, and eight of the U.S. stock market's twelve largest declines.4 You will have to evaluate if catering to short-term stock returns-constant earnings-per-share road maps-is in your long-term best financial interest. ...

    IBM's best long-term investment metric has always been the strength of its internal character and culture. Until its corporate society is once again an ecology where its corporate citizens can breathe freely and talk openly, there will be no on-going, self-sustaining, organic revenue growth.

    Selected reader comments follow:

    • Allow me to post and share on this 'IBM Culture' topic since I spent over 25 years at the company. I personally watched the culture and morale be completely destroyed from within by an out-of-touch and ruthless executive population that loathed their rank and file employees beyond description. Just look at the mass firings over the past decade. Anyone worth their salt has either been fired for being 'too expensive' or finally left of their own choosing because they couldn't take the poisonous atmosphere any more and found another job elsewhere. I was of the latter group and leaving for another job was the best move I've made in my career.

      I still talk to former IBM co-workers who remain there and the stories they tell me of how caustic the culture and general atmosphere have become are worthy of the Dilbert series. IBM will never be able to innovate out of their current trajectory because they have lost the mind share of their remaining employees. Everyone is ducked down inside fox holes for fear of being the next layoff. It is just a matter of time before the house of cards crumble.

    • I could respond with a one word response "Ditto".

      But will expand a bit. IBM abandoned it's cultural heritage years ago when they changed their Mission statements and got rid of "RESPECT FOR THE INDIVIDUAL"

      Caustic (The term used by Vacated) is very appropriate. IBM's road map to 2015 was an ill conceived losing strategy (Internals refer to it as Roadkill 2015) the wrong metric, and no way to run a corporation.

      IBM no longer attract best of breed talent. Top notch talent that did exist has either left in pursuit of greener pastures on their own accord, those that remain are just going through the motions on auto-pilot awaiting the next round of layoffs in the roadkill to 2015 ridiculousness.

      ENORMOUSLY top heavy (More chiefs than Indians). levels upon levels of managers managing managers and Bureaucracy ensures there is no possibility of becoming innovative , Nimble, and quick to market.

      Organic Innovation has long ago taken a back seat to layoffs (internally referred to as resource actions), acquisitions, and share buybacks and selling off assets to boost bottom lines.

      Could IBM turn it around - Anything is possible But it would take an enormously huge cultural shift beginning at the very top. In my humble opinion Rometty, has been abysmal with no clear vision.

      With no new ideas, She has relied on an ill conceived road-map laid out by her predecessor.

      Rudderless and floundering with no clear vision of how best to position Big Blue in coming years. IBM is destined to become at best just another Oracle, and let's face it we already have an Oracle.

    • Seemed that way in GBS. IBM has some great technical resources that keep the organization afloat through hard work. But management is not innovative. The employment system is a popularity contest, at best. On the services side, some clients like are not treated well because IBM knows best. IBM culture was destroyed with offshoring.
    • This is one of the most insightful and important articles about IBM I've read in a while. The author and posters are spot on in citing a degraded culture as the biggest problem facing IBM in the long term. They corroborate my 2 years at the company, after my company was acquired.

      Top down management is the culprit. The best and brightest line employees are not given enough flexibility to produce bottom up results. This applies with sales, marketing, and engineering personnel.

      It's not an issue of malice. I found IBM executives and middle management to be mostly decent people. However, executives indeed made some callous decisions on the basis of financial engineering. Middle managers were structurally bound to comply. Unfortunately management also was incapable of sifting talent from mediocrity.

      However it happened, finance minded folks impose the culture at IBM. Not folks who design, program, and produce products. Even not folks who ambitiously and greedily want to make a killing selling products, which is a good thing

      I was well paid. I was given lots of options to do interesting software engineering work. IBM still had legions of talent. I had lots of former colleagues at IBM who came in from start-up companies we used to work for. I was even cleared to become a band 10 employee. Not all bad.

      But I still felt adrift. Stifled. Nothing was free. Not even coffee. Per diems were lousy. No off sites, except IMOD at Vegas, where fewer of my co-workers were allowed to attend. IBM made the monthly 401k match a 1x/year thing.

      Taking the initiative? Forget it. Unfortunately enough mediocre people were in decision chains to short circuit great ideas, whilst some utterly foolish projects and solutions were selected. Even when assisting the field, representatives of every product would argue, crowd, and bay to be heard. As usual, success had many fathers, whilst failure became an orphan.

      I loved the idea of classical big blue. I still pay homage to the great machine heritage of IBM. I just couldn't take it anymore. And, because I live and work in the Bay Area, it was so much easier to find well paying and very interesting work in a great technology culture. A lot of good IBMers feel similarly.

      IBM management has its work cut out. The old top down paradigms don't work with emergent culture anymore. Google, Microsoft, Oracle, Facebook, SAP, and the newer companies are culturally more attractive.

      To its credit, IBM management is addressing and trying to change this. But they have their work cut out. I'm still betting they will, holding a small stock position, waiting to add more. I believe 100+ years of history will continue.

      But it didn't have to come to this. IBM could and should have stayed true to a technology culture, as opposed to adopting the kind of financial engineering culture that plagues so many American enterprises. A lot of folks are being hurt in correcting this mistake.

      Lastly, yes, a lot of IBM employees are at fault too. It's all too easy at IBM to pigeonhole yourself into a niche role. After so many years, when products become retired, such folks often can't pass a simple interview to join a new team within IBM. Such folks need to grasp the pace of change in modern technology and constantly renew themselves.

      I feel for all such folks, even IBM management. But I hope such an iconic company turns it around. Again...I'm betting on it.

    • Thought provoking article. Whether a "cultural change" can save IBM or not is certainly open to question. But your basic premise that IBM spends more time, effort and intellectual capital on financial engineering than they do on other core activities such as sales, customer sat, and human capital is indisputable. I know Rometty personally and greatly admire her but it is also clear that she is (or has made herself) a prisoner of a road map which is likely unachievable. I think her days are numbered.
    • Culture?

      "Pathway to 2015" is fondly nicknamed "Roadkill to 2015" with employees. While not a scientific measure, executive level neighbors (NY/NJ) in tech industries have openly laughed about IBM, stating they won't go near anything IBM. This is on top of first hand experience of the ridiculously sub-par outsourcing to Slovakia. Outsourced engineers have no way near the skill level to complete complex tasks, taking away time from senior engineers and even architects to handhold them through relatively simple tasks. But hey, it saves money right?

      Speaking of money...Ok, so investors think buybacks are fine (if you say so). To me it means there's nothing in the pipeline and being done only to placate investors through dividend payouts. Maybe that's just me. However, reading Form-4's, insiders have taken out over $120 million, while only buying a few hundred thousand dollars worth. Options? Can we dilute it a little more to keep Directors happy & quiet please?

      For IBM lifers, the culture is exactly what some of the posters above have stated, Everyone just crosses their fingers hoping they're not "next". Palmisano I'd venture will be the last true recipient of a "Golden Parachute" from IBM (Rometty earns less - war on women and all). The only place to work, with lots of cash flowing is Watson and security, all the other groups are getting outsourced crap to maintain what customers they have.

      Some things you just can't find in the numbers & spreadsheets.

    • Author’s reply » 14099282, I couldn't agree more that "some things you just can't find in numbers and spreadsheet." In fact that is the whole purpose of the article. If that didn't come through, let me know what I said that failed the "sniff" test. Your last line is exactly what I wanted to get across in writing this article.

      It isn't about numbers, it is about people. And Rometty needs 400+ thousand employee-owners to wake up each morning wanting to grow the business. Until that happens, growth will be a hard non-financial metric to make.

      Agree? Not? Thoughts? I love the discussion! ;)

    • "It isn't about numbers, it is about people"

      Exactly my point - Unfortunately Rometty is not the person with the ability to change IBM culture. IBM would be best served by throwing away their ill conceived Roadkill to 2015 strategy, and provide significant management change at the top that recognizes the success of IBM hinges upon - investing in growing the business by other means than financial shenanigans, listening to bean counters, monkeying with employees 401k's, and trying to appease quarterly knee jerk reactions from shareholders.

      Instead she should be listening to Senior fellow engineers and World Services leaders , Investing in employees, and reinstating respect for the individual. If she does not her legacy will be nothing more than that of a transitional CEO who's tenure at the helm oversaw the demise of a once Rhobust , innovative, vibrant culture and corporation.

      and as written "Until that happens, growth will be a hard non-financial metric to make".

    • Me again, so a real world example of why, as I stated earlier, IBM has lost employee mind share. You are correct, the nirvana is for everyone in the company to wake up and hit the ground running, driving success on behalf of all stakeholders with great zest. By my estimations and with my legacy inside view, it will not happen. Why? Just consider this true story from the inside.

      I was part of GTS (outsourcing) and on a particular deal to relocate a customer's data center, all was accomplished successfully and on schedule, albeit with considerable amount of effort and pain. What happened in the end? The Project Executive got a mega-bonus, a promotion, and untold numbers of stock options. The lead project manager received a smaller but still quite substantial bonus. I, as the lead technician, received no bonus, and on the contrary my next appraisal contained a slighted reference to one minuscule 11th hour technical miss that had no negative effect whatsoever on the project.

      The two other technicians who were instrumental to the project? They were laid off and their 'positions' offshored to India. Duplicate this one scenario hundreds of times over the past 15 years and you will quickly understand the loss of mind share. Any wonder why I chose to leave?

    • Great article and I am saddened by it. When I was in graduate school in the seventies, joining IBM was the dream of every aspiring student. I did not make the cut but my friend did. But I always looked up to IBM research and the fundamental contributions made by its outstanding scientists. IBM is not unique in the decline of great American companies after being trans-mutated by financial engineering. Xerox, Eastman Kodak, RCA, Polaroid, and there are many others. Dare I include GE in the list? This may be the sign of times and the sign of an eroding value system.
    • Brilliant and spot on. I am a current employee and senior manager. I joined via an acquisition about 10 years ago. I also worked at DEC and marveled at Gerstner's ability to turn the company around. I do not believe any other management style could have succeeded – he saved the company.

      I also agree that Sam P did IBM no favors and he should have changed back to the founding culture. Ginni is doomed to fail. She should have canceled the 2015 EPS goal on day one.

      The single most damaging policy of the company is the PBC system we use for evaluating employees. It actually motivates each of us to diminish the success of others, to not help each other, to never take risks and always have an out – preferably one that blames someone else.

      A year or so ago, we had a managers 'Jam' where managers discussed openly the things they thought IBM needed to change. The results where then summarized to senior management. The number one topic was the PBC system and the need to abolish it in favor of one that promoted the culture you so well defined. Senior management's response to the Jam and that topic in particular, sounded like an angry despot reading The Emperor’s New Clothes – but the despot never got to the end of the story.

      I do hope IBM management reads this article and make the changes we so desperately need.

    • Momintn: I seriously doubt the author of this article is the same person as the man who wrote the book. He claims to be an enthusiastic IBMer on Amazon and this article does not measure up to any IBM standard, much less one of enthusiasm. IBM would not be wasting their time reading a website who does not verify their authors.

      IBM has received many awards for their business practices and corporate leadership all over the world, and most employees in leading corporations expect to receive an appraisal of their performance. Even government agencies do this. No corporation is a democracy. You do not get to vote for each other, nor reward each other. If you cannot appropriately appraise your employees, you shouldn't be a manager.

    • Momintn, Project management teams have been botching contracts from Bridgestone to Disney. Even Amazon won out over big blue for CIA cloud contract.

      Before further commenting please educate yourself - Just do a simple Google search on IBM lawsuits. Even the state of Queensland Australia is suing IBM.

      Inexperience, not so much incompetence, (seasoned talent has departed), antiquated bureaucratic processes and huge brain drain has contributed to IBM's highly publicized failures.

      We use to individually be empowered to run IBM as it was our own company daily, the norm as I was departing was a shift with enormous internal hierarchies up through 3 levels of management had to be followed just to make simple decisions to satisfy and not alienate million dollar customers. Employees are not empowered. Divisions are top heavy silos instead of flat and broad and cross matrix-ed. Poor project management runs rampant (lack of education).

      I have experienced many cultural changes over the years with IBM. (Joined IBM pre Akers, when John Opel was CEO, and departed during Rometty).

      The internal culture shifts I personally experienced slowly eroded morale, stifled innovation and has diminished growth of a once healthy innovative and vibrant corporation.

      I respectfully request you educate yourself further. Here, Happy to point you in a starting direction - http://bit.ly/1rKnSCI THINK

    • The poster above you has it right. The PBC change, at least for engineers had a dramatic effect. The ONLY way to receive a 1 or 1+ today is to create patents. Do you have any idea from the engineering side how hard that is? I'll get right on that as soon as I waste another weeks worth of debugs from the foreign outsourced crap that you loaded my group with. The customers are especially happy when builds break, doing wonders for relations. Are you the PR person for that?
    • @Momintn Now you're hitting a key problem: appropriately being able to appraise an employee. Doing this takes experience in technology trenches. A manager who has never written serious software and deployed significant systems cannot accurately judge those who do...never mind facilitate initiative, creativity, and development bottom up.

      However, your citation of IBM receiving awards for business practices and leadership smacks of a bit of demagoguery. Again, I want IBM to succeed as much as anybody. I consistently defend IBM on SA. But you are dead wrong in promoting the current IBM as a paragon of organizational structure and management.

      Simply consider 1 singular issue: the 401k match being paid 1x/year, with an employee not getting it if he's not employed when it's issued. Pure cynicism. Especially by a management for whom such things don't matter.

    • David Stockman wrote a great piece call "Big Blue: Stock Buyback Machine on Steroids." A must read to understand what is currently happening to American corporations. http://bit.ly/1qPF7nD
    • Boris: There is no such thing as "culture" at large companies like IBM. It's the same story at Apple, Microsoft, Amazon, and others. The majority of people hate working there, plain and simple. Don't believe me? Go and talk to some of the employees that work at these companies. They are overworked, underpaid, and treated poorly by upper management. If you actually believe that the average employee at any of these companies actually cares about that company's "culture," you're delusional!
    • @Boris I totally disagree. Apple, Microsoft, Google, Facebook, SAP, SalesForce, Oracle, are very decent places to work. I have colleagues at such companies and I've worked at a subset of them. I still do. Here in Silicon Valley and San Francisco. I also worked for IBM.

      And yes, I absolutely believe that leadership at these outfits cares about the employees and their culture. IBM has lost its way a bit. They absolutely can learn a thing or two from how the aforementioned companies treat employees.

      I want IBM to win. I'm betting they will investment wise. But I know the management there has lots of work to reverse the negative culture that instilled a lot of uncertainty and fear amongst line employees when I was there.

      IBM reinvented itself before. It probably will again. Fingers crossed.

    • jhesr: Groan, another article dwelling on the past. IBM does not have a cultural problem and it does not have a morale problem. What IBM does have is a lot of old US ex-employees left around that like to moan about the past on message boards because they were either laid off or because IBM is no longer a hardware company.

      IBM is actually one of the best run companies in the world. How many other companies are out there that can successfully manage 400k+ employees? Not many.

      For all of those old US ex-employees that complain incessantly about morale, you know what... your morale doesn't mean diddly squat. The entire US population makes up only around 5% of the total world population. IBM is a global company. The people IBM hires in India or other developing countries are ecstatic to work for IBM. Frankly the morale of US employees (which cost orders of magnitude more than employees in other countries) are completely irrelevant.

      I say this as a white American working in IT... suck it up you cry babies. Don't let nationalism or racism blind you into believing that the US is the center of the world. It isn't. Nobody cares about your morale. Either learn how to compete or find a new line of employment.

      As a shareholder of IBM I want them to be as ruthlessly capitalistic as possible. If that means firing every single US employee they have and replacing them with someone from a BRIC country then so be it. Maximizing shareholder value is the only thing that matters.

    • Jhesr, you sound JUST LIKE a senior IBM executive... maybe you are. BTW, I had first hand access to India employee survey data, their morale is lower than the U.S. population.

      Suggestion: stick to your 'maximizing shareholder value' delirium and refrain from commenting on companies you obviously know nothing about.

    • Jhesr, your comments seem to imply that US workers are lazy and spoiled, and that hard-working BRIC employees are not. In truth, there are hard-working employees in every IBM region, and IBM is treating all of them poorly. While I was at IBM in the early 2000s (my employer was acquired by them), the Indian groups I had contact with experienced high turnover rates, and morale was reported (by the people there) to be very poor also. I personally helped transition a product to India, which I'd worked on for five years and had deep expertise in, and within six months the two engineers trained to continue its development had left.

      I think the root problem IBM has is that it thinks software and services (which they've increasingly hung their future on) are assembly-line operations. Thinking this encourages them to treat their engineering "resources" as identical cogs, and hire as cheaply as possible. (There are excellent engineers in BRIC countries, but for the most part they aren't the cheap talent that IBM prefers to hire.)

      It also causes them to devalue "deep" knowledge in product areas, because they prefer cogs who can be easily shifted to other needs. Their hiring particularly reflects the latter, as they fire older, more experienced people in favor of recent graduates who are cheap.

      This isn't, in my opinion, a formula for being able to successfully develop, deploy and maintain the complex "solutions" they like to sell, and which they need to sell in order to command the high margins their business model demands. Frankly, given some recent very public, high-profile disasters, I'm not sure why anyone even think they still have the competency to make these solutions a success, and I certainly wouldn't want to have my own money invested in them.

    • Interesting article.

      Frankly, IBM had lost its way on 'respect for the individual' years before the official layoffs of the 90's and Lou Gerstner. A forced ranking system and euphemistic "attrition of poor performers" had become a substitute for layoffs, under the guise of 'respect for the individual' well before then. Yet IBM once had the opportunity to reinvigorate its tradition of 'employee-ownership'. The time was about 1988/9.

      At a middle management class, John Akers laid out very candidly IBM's problems, and the need for changes in the company. Those there said it was the best speech he ever made -- IBM was in trouble. Two enthusiastic managers from Canada collaborated to document his message for their senior management team; their management found it an important message, and forwarded it in IBM's electronic mail to their managers, and ... well, within 48 hours Akers' message was distributed world-wide across virtually the entire corporation. It stimulated a huge outpouring of ideas on how to fix the company that came to about 10,000 pages of printed material. It was so voluminous and thoughtful that a few smart laboratory researchers, who had never met in person, working on-line, created an algorithm to analyze common themes electronically and summarize the bottoms-up recommendations for use by senior management.

      Akers was presented with the summarized material and the recommendation that he publicly embrace this enthusiasm and commission a team to build on the ideas presented. Instead, he circled the wagons on the advise of his communications director, and did not respond to this mass outpouring of 'employee-owner' wisdom, because of concern about loss of executive control! Akers lacked vision, or the courage to implement it; IBM's culture change and his destiny were sealed.

      In a way, I think Gerstner did what had to be done with what IBM had become. The company was failing; he was very critical of the 'respect for the individual' myth in IBM. The culture had changed many years before his arrival, and he wouldn't have had the street creds to restore it even if he wanted to. His challenge was rebuilding a new IBM. What he built was a company different than the one I joined in the 60's and whose culture I believed in so strongly; I retired in the late 90's, having worked with both Akers and Gerstner.

    • IBM just announced a retirement-sweetener program for 2014, and I think that there will be a rush of senior IBMers toward the door. Morale is at an all time low, the layoffs have led to terribly overworked teams, and this "transition to retirement" is going to be very appealing to many people. (Like me, for instance... 16 years with the company, planning on retiring within three years, and love the idea of working part time for another year and half and then leaving IBM.)
    • It's fascinating. There is no company in the world that will survive if the employees are not engaged, motivated and driven. Great talent does not stay in IBM, what remains is fearful mediocre talent, new smart talent that was hired or acquired that hasn't learned enough to leave, or self serving talent that has been favored by executive management - who are kept happy. Moffat ran the supply chain and had this idea that people could be like parts in a supply chain, for services anyway, the design was to make people plug compatible, all you needed were strong project executives and you could bring in on demand the rest of the skills. Great talent was let go because ibm did not want to pay for travel and the person was in the wrong city.

      Software has been run by a finance guy, Mills; you have to sit in meetings filled with non-technical people all managing the few people that actually sling code. It's comical. The revenue from "older" products are siphoned off and reallocated to wherever IBM wishes to declare leadership, data analytics today, Linux before, eBusiness before that. It's a cynical means of starving real revenue producing products and reducing their R&D, but not allocating all that was saved to the new space - because you had to pay for non-accretive acquisitions. It's why the goodwill keeps piling up but revenue has barely moved.

      Now sw and hw are together, you will see the hw being milked to favor sw.. Until hw is dead from the same financial engineering.

      But it's really hard to kill a 100b company, you have to screw up for a long time. And there are enough financial levers to pull to keep feeding the buy backs, the dividend and the juicing if the stock for a few more years.

      The company is not run by technical people' the HR system is about promoting friends, allies and family—the best of the best don't find their way to the top—there is a glass ceiling.

      I know golden circle folk who left and are so happy, but there isn't an IBMer who has spent more than 5 years that is not tortured by the decision—however once made, they never look back. Ever.

      An interesting metric, you will never get, is how many ex-IBMers are hired back by the company. How many IBMers seek to go back was always a measure I used to allow people the freedom to seek out opportunities, but keep the door open for their return, and if i had good people come back- that was always a good sign.

  • Linked-In's IBM co/ex workers independent group:

    IBM's Traditional Centennial is coming: May 2014, by Peter E. Greulich President, MBI Concepts Corporation. Documentation spanning one hundred years showing IBM's true centennial is just a few weeks away.

    Selected comments follow:

    • Stan: We already celebrated a centennial in 2011. Haven't seen any other notice of a celebration for this one.
    • Diane: Yes, what is the deal?
    • Peter E. Greulich: Diane/Stan, under John Akers we celebrated the Diamond or 75th anniversary in 1989. Under Sam Palmisano we celebrated the 100th anniversary in 2011. The difference between 2011 and 1989 is not twenty-five years, but 22 years. So my question is, "Are anniversary dates subject to the whim of the individual CEO or subject to something more?" If they should honor tradition, a second question, "Which CEO Akers or Palmisano didn't respect IBM tradition?"

      To me, tradition matters and the link below shows that IBM's Traditional Centennial Celebration should be happening in 2014, and to be exactly accurate May 4, 2014. 1911 as far as I can tell has never been an anniversary date for any IBM celebration. The IBM Centennial happened three years too early. Why?

      Here is the URL that contains both the video and complete 100 year documentation of celebrations of IBM since 1888. There is only one date that stands out as IBM's traditional date. (of course, research is never complete - maybe there are others, but 1911 hasn't shown up anywhere before 2011 in any of my research.)


    • Ken: A special issue of THINK Magazine for the 1989 75th Anniversary. It struck me odd when a century was celebrated in 2011. But then, I thought maybe it was a fitting way to mark a "date" during the tenure of Palmisano.

      Having started at IBM in 1978 -- it was long attributed that "IBM" started when Watson arrived - in 1914. Everything else was just a prelude.

    • Peter E. Greulich: Ken, you are right about 1989 (also 1964 was the 50th anniversary - Fifty Years of Progress at the Chicago World's Fair) and on my web site I document all the "celebrations" along with the event that was used to set those dates. There will be no celebration in 2014, because it would be admitting that an IBM CEO decided to move the Centennial Celebration up by three years.

      One has to wonder what would be the reaction if someone had tried to move the U.S. bicentennial celebration from 1976 to July 4th, 1973. You would think that someone would ask the President why?

      Ken, to C-T-R "now being more important," I would say that it would not have survived without Watson Sr. As I will show in my book, C-T-R would have been another business thrown onto the scrap heap of devastation called The Great Depression because its directors wanted to "pump and dump" the company stock. It was legal but not ethical. Watson put a stop to it and survived the Recession of 1920-1921. He learned the lessons he needed to take IBM through the greatest economic downturn of the 20th Century.

      And his business practices don't look anything like what is going on today. Maybe people believe "times are different" but "human nature" hasn't changed that much. Maybe it is that "human nature" problem that is stumping IBM's revenue growth - it is called culture. It is time for IBM to rediscover its corporate constitution.

    • Ken: Peter, I agree with your comments. When I joined IBM in 1978, there were still pictures of TJ Sr., Think signs were prominently displayed and the Three Basic Beliefs started with Respect For The Individual. The crowning moments of my early career was Opel stating IBM would be a $100 Billion dollar company by 1990. Akers ensured that didn't happen under his tenure.
    • Peter E. Greulich: Ken, we were part of what I call in the preface to my book the "transition generation." A whole lot of folks were hired in the late '70s and early '80s including me in 1980. Most folks forget that Opel not only set a 100 billion mark by 1990, but an "at least" 185 billion dollar mark by 1994. Seems almost laughable today, eh?

      I will be interested in your opinion of my analysis of what went wrong in the '80s. (actually all IBMers) I have never seen anyone look at it from the angle I am taking - from the IBM sales branch office - or a salesman's and cultural perspective. The '80s has been, so far, a financial discussion for almost all IBM analysts.

      I boil the '80s down to three mistakes made by IBM Chief Executive Officers:

      1. They set an unachievable market expectation
      2. They depleted a valuable resource
      3. They failed to see what was happening through their employee-owner's eyes.

      I know that many will not agree with my viewpoint. But I hope to get a different perspective out there from just "Who Says Elephants Can't Dance?" The business schools need it. IBM needs it. IBM is bigger than one book and the turnaround was not Lou Gerstner's executive battle is was our family war. And at that time, we were still a family pulling together.

      Thanks for your thoughts. Feel free to add on. My book is the result of over 2 years of going back-and-forth with IBMers in these and other forums. Some of "my" best ideas came from this team of folks that care about their company. A lot of "private replys" too.

      I know that once my book ships in May there should be a lot of renewed interest in the '80s decisions. Hopefully the financial data and points I make will be enough to broaden the discussion to more than economics. As you said and the subtitle of my books says: rediscovering IBM's Corporate Constitution (its Basic Beliefs of Respect, Service and Excellence) is something that I hope will prove a valid discussion for IBM's 21st Century future.

    • Ken: I'll look forward to the release. People still talked about the Rodgers' book "Think" in hushed tones and brown paper wrappers. Sobel wrote a book in the mid 90's. People related to Gerstner say Lou was much different than Richard.
    • Peter E. Greulich: Ken, just ordered Sobel's book. Not sure how I missed it, but I keep finding great stuff on these forums that come as recommended reading from other IBMers.

      The latest find was a Yale University, Labor and Management Center study done in 1948. It is entitled "Human Relations in an Expanding Company." It is old stuff, but it helped document a lot of the philosophies of Watson Sr. through the eyes of non-IBMers. It is focused on the IBM Endicott plant and the tremendous growth it went through during World War II and immediately afterwards.

  • WRAL-TV TechWire (Raleigh):

    Unions spell out 'demands' to IBM, plan to step up organizing. By Rick Smith. Excerpts: Might more IBM workers choose in the future to seek union representation?

    Look for increased efforts to get IBMers to carry union cards, warns Lee Conrad, the retired IBMer who now serves as national coordinator for Alliance@IBM, the Communications Workers of America local that has tried in vain for years to get Big Blue workers unionized. ...

    While IBM didn't announce any more job cuts during a conference call last week to discuss its latest earnings, unions representing IBMers overseas and Alliance at IBM, which wants to unionize workers in the U.S., met in Europe to discuss strategy. They agreed on a series of "demands" that call for Big Blue to "protect" its "loyal work force."

  • The Four Hundred:

    Unions Criticize IBM's Earning Per Share Focus. By Dan Burger. Excerpts: Workforce rebalancing, IBM's term for erasing higher paid and higher skilled employees in more economically advanced regions while adding to its workforce with lower skilled and lower paid employees from less economically advanced regions, is a short-term win that leads to a long-term loss. And that loss could be the disappearance of IBM as we know the company today. That's the warning message being delivered to the IBM board of directors just ahead of the stockholders' meeting Tuesday, April 29. ...

    The message, which calls for a reorientation of IBM, comes from an amalgamation of employee advocacy groups: the Global Union Alliance @IBM, the UNI Global Union, the IndustriAll Global Union, and the IndustriAll European Trade Union. ...

    In a statement circulated by the unions to draw attention to IBM's former emphasis on employee contributions to the success of the company, it notes a comment by former IBM CEO Sam Palmisano made in 2003 that "the greatest invention ever created by IBM is the IBMer."

    Times have changed and not for the better. The IBM work environment has gotten progressively worse is the point being made by the unions, and the policies now in place need to be disengaged. Investments in the workforce have been set aside while job cuts have been prioritized. Money spent on buying back shares of its own stock and paying dividends is money not invested in the workforce, the unions allege. Since 2000, IBM has generated a net income of $153 billion, while over the same period $138 billion was allotted to share purchases and dividends.

  • ZD-Net:

    IBM Australia profit plummets by a third. IBM Australia's total revenue for the 2013 financial year has tumbled, leaving the company's net profit after tax 34 percent lower than last year. By Aimee Chanthadavong. Excerpts: IBM Australia has suffered a 34 percent drop in net profit after tax for the financial year ending 31 December 2013.

    According to IBM Australia's financial report, which was submitted with the Australian Securities and Investments Commission, net profit for the year was down AU$122 million to AU$233 million from the AU$355 million profit recorded during the previous financial year. ...

    In Australia, the company has also been making cuts to its local workforce, where 500 jobs were expected to be slashed in March, in addition to the 1,500 jobs culled during June 2013, as part of a global restructure plan.

  • Seeking Alpha:

    How And How Not To Launch Mobile App Development Initiatives. By Leigh Drogen. Excerpts: On Wednesday both IBM and Facebook announced new initiatives to spur innovation in app development. IBM announced the 25 finalists of The Watson Mobile Developer Challenge and Facebook announced that if you are a developer and want to build a mobile app, they will willingly hand over $30,000 worth of services to get you kick started. Facebook's gambit to take over the mobile apps industry from the ground of up is a classic example of Mark Zuckerberg's strategy to innovate by firing on all cylinders. Unfortunately IBM's mobile app development initiative for Watson is a bit of a joke. ...

    The pace at which IBM is "opening up" Watson to development is painfully slow. Just to give you an idea about the frustration around Watson, one of IBM's first consumer facing applications of its supercomputer was to make a space age food truck. Sure a super food truck may be cool but it's not what consumers demand on a scalable level. Instead of learning how to make the ultimate kimchi taco, how about doing something a bit more helpful and/or profitable. It seems that IBM just has no idea what its doing in terms of building consumer applications based on Watson. And the new "developer initiative", if we can even call it that, will only allow 3 lucky winners 90 day access to Watson's APIs. This is not how you make money, it's a gimmick.

  • Glassdoor IBM reviews. Selected reviews follow:
    • “IBM is like the best spouse to be with, but he or she may divorce you at any point!”

      Senior IT Specialist (Current Employee), Essex, VT, I have been working at IBM full-time for more than 10 years.

      Pros: Great talented and friendly people! Lots of flexibility in organizing one's work, choosing projects, deciding how much one want to get involved, etc. Lots of resource at your disposal! Within IBM I always felt very protected and respected. Great benefits.

      Cons: Frequent layoffs lead to constant rumors true or false, which lead to a state of fear. Employees tend to forget what they have; instead focus on what they could lose and often become paralyzed.

      Advice to Senior Management: Get rid of mid management. Between 8 and 12 layers is really way too many! Unfortunately I don't think it is going to happen any time soon, as mid management starting at 3rd level and up is always spared during the layoffs. It does make sense as they are the very folks who make the decision on who will be axed :)

    • “Walmart of Tech Consulting”

      Senior Management (Current Employee), Washington, DC. I have been working at IBM full-time for more than 3 years.

      Pros: Federal Consulting only: 1. Large programs with national significance.

      Cons: 1. Pay is crap. 2. No annual raises—even inflation raises. COLA adjustments don't occur. 3. 12% bonus potential mentioned before getting the job is a fallacy. You will never even get 5%. If you get rated a 1 (best), good luck in getting 3%. 4. The way IBM GBS is setup in the public sector, it actually incentivizes one to become a 1099 and work with IBM. In fact—it is great as a subK. 5. Strong smart IBMers leave—unless they're paid well or are IBMers from the "Old Blue". 6. Most IBMers I know have almost never received a raise. In years!

      Advice to Senior Management: 1. End the rack and stack GM performance evaluation methodology. 2. Nickel and diming your employees may increase your PE ratio, but your employees actually don't actually feel proud being an IBMer. That is the tragedy.

    • “Tipping giant”

      Consultant (Former Employee), Stockholm (Sweden). I worked at IBM full-time for more than 3 years.

      Pros: Good access to education. Multi-cultural team.

      Cons: An extreme admin burden and bureaucracy to make things happen. No real ideas coming from within; IBM has been demoted to implementing the solutions of others. If you join their management consulting division, you can forget about working with anything remotely close to management consulting. Most likely you will be stuck with menial administrative tasks in a software implementation project. Poor compensation and professional development. New-joiners in Sweden quickly realize that this is not a company for the future and leave, resulting in high staff turnover and brain drain. Management in Sweden are puppets to the real leaders sitting in the US and UK, merely presenting and trying to implement, in many cases, ridiculous policies that make no sense from a local perspective. Will sooner or later collapse like a card house.

      Advice to Senior Management: Focus on creating a good working environment by understanding that the working environment affects the stock price and that the current and increasing focus on the opposite will only lead to more intelligent people leaving. Improve compensation, benefits and development paths. Understand that the glory days are long gone and that the future is not in the hands of IBM.

    • “Hiding behind company processes”

      IT Specialist (Former Employee), Portsmouth, South East England, England (UK). I worked at IBM full-time for more than 10 years. Pros: Flexible working hours—you don't necessarily have to work from 9-5 as long as you get your work done. Ability to work from home. Lots of online training available for applications as well as management processes. Well known company with a long history (over a 100 years) which has developed much innovative technology. Cons: Extremely focused on quarterly financial results. Expected to work more than contracted hours. Employees aren't always valued—a senior management mentor is essential if you want to progress within the company.
    • “Life at a heartless multinational corporation”

      Service Delivery Manager, (Former Employee), Detroit, MI. I worked at IBM full-time for more than 10 years.

      Pros: Enormous opportunities. A company this size is really many, many companies, and the pros and cons depend more on which part of the company you are working in, not the name on the check. I worked in SO, "Strategic Outsourcing". Here's a standard joke, "How do you know when you are out of transition?" "When you are in CritSit".

      Cons: Like most heartless multinational corporations, they don't care about individuals. They don't go out of their way to abuse people, but if the numbers don't make sense, the person is gone, and their work is probably off shored.

      Advice to Senior Management: Stop focusing on the $20 share by 2015. I was let go April 2014, probably at least in part because of that goal, and a lot of people in management 1 and 2 levels above me are shaking their heads wondering what the hell is going on.

    • “Over 31 years of personal growth. New company direction treats individuals as commodities.”

      Project Manager (Former Employee). I worked at IBM full-time for more than 10 years.

      Pros: You can grow your career if you are in the right growth area. You can move around to various organizations and change your career path.

      Cons: IBM is very much a "what have you done for me today mentality." You need to keep a careful watchful eye of your area and see if it is expanding with the corporate directives. Otherwise, you will find yourself out of a job no matter how high your performance rating.

      Advice to Senior Management: Leaders should be picked from talent not through gender and nepotism. Leaders should lead through trust and not fear.

    • “Work a million hours, make a million dollars!”

      Project Manager (Current Employee), Minneapolis, MN. I have been working at IBM full-time for more than 10 years.

      Pros: Great people! Leading technology. Plenty of on line resources and training. Enough job specialization that you can find a niche where you do what you love and someone else will do the other stuff. You can make lots of money.

      Cons: 1st line managers are often geographically remote. For upper management, it's all about the numbers; do not expect any personal consideration for unique circumstances. Money follows effort, but it takes lots of effort.

      Advice to Senior Management: Year after year, we hear about salary increases being tied to a market reference point (midpoint for similar skills). Yet, we advertise that our people are the best. Please don't tell me I can't get a raise because I am above the market reference point, then sell me to a client as some sort of superman!

    • “Many talents”

      Anonymous Employee (Former Employee). I worked at IBM full-time for more than 8 years.

      Pros: Many talented people in IBM whom are very helpful across the globe. Flexible work arrangements, fairly good benefits.

      Cons: Organisation is at a stage where they have to finely balance growth and meeting their 2015 goals. Many of the recent actions like RA is seen as shortsighted. Employee morale is low at the ground, execution is hampered due to lack of resources and unclear directions.

    • “The new IBM”

      Senior Engineer (Former Employee). I worked at IBM full-time for more than 10 years.

      Pros: A few threads of IBM's old culture of dedication to their employees still exist...but they are quickly changing. Overall, an OK work environment but very limited and slow growth opportunities. Very talented technical skills, tools and work life balance.

      Cons: IBMs commitment to their earning road map is job 1...anything else can be sacrificed to make those earnings. Long term development cycles are sacrificed regularly to make the quarter. Long term career commitment should be approached with caution.

      Advice to Senior Management: Doing an excellent job executing the earnings road map

    • “Tough Climate”

      Anonymous Employee (Current Employee), Chicago, IL. I have been working at IBM full-time for more than 3 years.

      Pros: Lots of opportunities to learn new technologies. Education is pushed heavily, so if you want to learn the IBM product stack, you'll have the opportunity.

      Cons: Where to start? The 2015 business plan is sucking the life out of employees. Raises are almost non-existent (even for top performers), as is any type of bonus payout. Resources consistently leave, and there is almost no headcount to replace (at least in most areas). The emphasis is driving EPS for stockholders, with little to no regard for the employee.

      IBM has been in business a long time, and I'm sure they will weather this storm, and at some point change strategy. But I don't see that happening in the next few years, which gives me no confidence in them as a current employer.

    • “A highly capable company struggling to keep up with the pace of change in IT”

      Associate Partner (Former Employee), Washington, DC. I worked at IBM full-time for more than 8 years.

      Pros: Amazing people and range/depth of innovative IT products.

      Cons: Quality of life within Big Blue has declined over the past five years as IBM has skimped on internal investment to focus on external acquisitions and stock buy-backs. Company continues to cut experienced people in an attempt to drive down costs but now struggles to maintain its edge for large, complex solutions.

      Advice to Senior Management: Abandon the maniacal adherence to achieving a 5-year EPS goal established by the previous CEO in a different economic era.

    • “Doesn't live up to their own values statements.”

      Anonymous Employee (Current Employee), Columbia, MO. I have been working at IBM full-time for more than 3 years.

      Pros: The Director of the Columbia site is a great guy; he really believes in the company and everything it stands for.

      Cons: The managers there are untrained, many of them are not people-persons, and many of them will deliberately stand in your way if you try and grow your career. They are very concerned with their own metrics, and do not care if their employees are happy or not. I personally, and dozens of people I know on other teams, have been told, "you should just feel lucky to be working here, stop trying to push for more." But, I have seen people with better managers have extremely rapid career advancement. But it really depends on how much your First Line Manager is willing to push for you, instead of against you.

      There is an extremely high attrition at the Columbia site. Because of this, there are many people in management who should not be managers. There is also extremely high job dissatisfaction at this site. We see many teams get approvals to work from home, or work at the office 50% of the time, but then other teams will say "no working from home period." There are teams who get to flex their hours, while other teams do not, without any justification. They cut all overtime, but still expect you to get the same amount of work done, so they essentially expect the employees there to work 10+ hours per week for free.

      When anyone brings this up, they just say, don't pay attention to what anyone else is doing, focus on your work. But with such a disparity in how employees are treated, it is not good for employee morale. But no one seems to care. They very much treat employees like they are disposable. And they have the turn-over rate to show for it.

      Advice to Senior Management: Care more about the employees in the Delivery Centers, focus on their work-life balance. Have more training for First Line Managers.

    • “Not your Father's IBM”

      Technical Sales Specialist (Former Employee). I worked at IBM full-time for more than 10 years.

      Pros: Good Reputation for quality of product and depth of resources. Focus on customer satisfaction.

      Cons: Management decisions made at high level leave little room for 1st or 2nd level manager to respond to customer or employee needs. People are treated as interchangeable. Gone are the marketing company with full employment practice and respect for the individual of my father's IBM; now it is hire/fire as needed (no loyalty) and focus on bottom line through expense control (don't expect a raise).

    • “Great Company Over the Years; Starting to Slip”

      Senior IT Architect (Current Employee), New York, NY. I have been working at IBM full-time for more than 10 years. Pros: Flexibility in work assignments, opportunity to change career paths. Cons: Stock dividend focus over employee morale and workload within the last few years. Advice to Senior Management: Go back to what made IBM great—the employees. Start caring about them again.
    • “Some good, some bad”

      Supply Chain (Former Employee). I worked at IBM full-time for more than 10 years. Pros: Very smart people. Lots of challenges. Cons: IBM doesn't invest in internal change. STG exec leadership seems to have lost sight of what the customers want, then sells off business units and lays off people to compensate.
    • “Great company for a working mom”

      Senior IT Specialist (Former Employee), Dallas, TX. I worked at IBM full-time for more than 10 years.

      Pros: Flexibility to work at home to keep life in balance. Excellent vacation plan and benefits that rewards hard work. Pay is in line with the industry. Opportunities for advancement. Annual reviews are valuable, not every employer does them.

      Cons: Work at home is great, but you end up working every spare moment. That's just the trade-off of an incredible benefit as a working mom. Very demanding hours and the possibility of a project ending and being laid off, which is what happened to me.

      Advice to Senior Management: Reward those who continue to work hard, especially in years when the bonuses are non-existent.

    • “Saving their way to prosperity”

      Manager (Former Employee), Armonk, NY I worked at IBM full-time for more than 5 years.

      Pros: A lot of IP. A lot of big customers. The broadest of portfolio in services, hardware and software in the market.

      Cons: No focusing. Diminished partner ecosystem. No new big customers. Fading glory. The 2015 roadmap for EPS is killing it. Since leaving IBM, my cost for benefits went down $7000 and the quality is 4x better.

      Advice to Senior Management: Using a balanced-scorecard reference, there is too much weight on the 'shareholder'. Need to give back to the employees and customers.

    • “It was OK. Liked the people I worked with but not the work.”

      Computer Systems Analyst (Former Employee), Somers, NY. I worked at IBM full-time for more than 10 years. Pros: Good benefits, close to home, ability to work from home occasionally. Cons: Never knowing when my last day would be there. I was there 17 years and there's no guarantee of employment. Advice to Senior Management: Be fair to all the employees, not just a select few. Ginny R. will bring the company down. It's sheer greed the way the company is being run.
    • “Just OK”

      Anonymous Employee (Former Employee) I worked at IBM full-time for more than 3 years. Pros: Abundant diversified opportunities available and flexible work environment. Cons: Mandatory (or nearly) OT required; emphasis on short-term results and not so much long term strategy. Advice to Senior Management: Don't mess with peoples 401k
    • “One of thousands”

      Product Manager (Former Employee), Philadelphia, PA. I worked at IBM full-time for more than 3 years.

      Pros: Global organization with big focus on emerging markets. On leading edge in many respects especially with Watson. Focus on social business and collaboration. Many opportunities for assignments. Just takes time to make that happen.

      Cons: Huge company, easier to get lost, hard to navigate, very slow to move. Sales and number driven perhaps at expense of innovation. Hard to navigate at first. Not always open to new and different ideas.

      Advice to Senior Management: Break up into smaller companies.

    • “Missed opportunity”

      Anonymous Employee (Former Employee), Foster City, CA. I worked at IBM full-time for more than a year.

      Pros: IBM is, without a doubt a great company and a good employer. The company is huge, it's decision-making slow super slow and the business is run by the spreadsheet masters. Nonetheless, job opportunities are there for the right people who don't mind mind-numbing bureaucracy.

      Cons: For people with Silicon Valley DNA, for people who are accustomed to getting things done, it's not a good fit. Decisions are made in a vacuum at HQ in New York. They don't get agile; they aspire to be cloud; but severely lack the DNA and relevant infrastructure to make it happen. IBM's CRM system is a custom version of Siebel. What can I say.

      Advice to Senior Management: No question, it will be difficult to change course and accelerate at the same time. It's a big big ship. My advice: when acquiring west coast cloud companies, leave them alone to retain top talent and IP. Better yet, establish west coast HQ (Connecticut is where great ideas die a slow death), led by experienced startup execs so that agile teams and entrepreneurial people feel compelled to join and stay.

  • Glassdoor IBM Canada reviews
  • Alliance for Retired Americans Friday Alert. This week's topics include:
    • Barbara Easterling, Ruben Burks Re-elected as Leaders of the Alliance
    • Conference Includes Broad Range of Speakers – and Vice President Biden by Video!
    • May is Older Americans Month; Alliance Unveils Medicare Turns 50 Campaign
    • Photos from the Convention
    • Resolutions Address Social Security Field Office Closings, Wealth Inequality, More
    • Action Sessions Delve into ALEC, Social Security Scams and Other Threats
    • Minimum Wage Bill does not Advance in the Senate
  • The Slott Report:

    3 Reasons to Wait Until You Retire to Make a Roth Conversion. By Jeffrey Levine and Jared Trexler. Excerpt: One of the most common Roth IRA questions I'm asked is, "Should I make a Roth conversion?" While Roth conversions can make sense at any age, depending on your particular circumstances, generally speaking, the younger you are, the more it makes sense.

    Converting at a young age gives you the longest amount of time to let your money grow tax-free and, chances are your retirement account balance is lower earlier in life than as you get close to retirement, so the cost of converting may be less. Here’s the rub though, general advice is only right, in general. It does not apply to all situations and may not apply to yours. Maybe a Roth conversion would be better for you when you retire instead of while you’re young. How would you know? Well, there are many factors to consider, but here are three reasons why that might make sense.

  • AlterNet:

    We're NOT Number 1: Guess Which Country Now Has a More Affluent Middle Class Than America? America's rich are surging ahead, but the rest are falling behind. What happened? By Lynn Stuart Parramore. Excerpts: Fancy living up in Canada? Granted, it’s a bit chilly. But the middle class up there has just blown by the U.S. as the world’s most affluent. America’s wealthy are leaping ahead of the rest of much of the globe, but the middle class is falling behind. So are the poor. That’s the sobering news from the latest research put out by LIS, a group based in Luxembourg and the Graduate Center of the City University of New York.

    After taxes, the Canadian middle class now has a higher income than its American counterpart. And many European countries are closing in on us. Median incomes in Western European countries are still a bit lower than those of the U.S., but the gap in several countries, including the Netherlands, Sweden and Britain, is significantly smaller than it was a decade ago. However, if you take into account the cost of things like education, retirement and healthcare in America, those European countries’ middle classes are in much better shape than ours because the U.S. government does not provide as much for its citizens in these areas. So the income you get has to be saved for these items. ...

    The GOP has to take much of the blame for the crazy idea that tax cuts are the only policy for growth and for its insistence on cutting investment on science, health and infrastructure, not to mention an educational debt story that is disastrous. But the Dems have been talking their austerity-lite nonsense for far too long, and they've been doing very little to help rein in the tax dodgers. There's plenty of blame to go around.

New on the Alliance@IBM Site

Job Cut Reports

  • Comment 04/27/14:

    Hi, just some questions about the IBM plant in Essex Junction. The website says they are hiring, yet the headlines say 400+ people were laid off. And some further digging led me here, with all this talk of reducing staff, obsolete facilities, etc.

    So what's the deal? How can a company downsize and be hiring at the same time? Especially if the facility is supposedly obsolete? Is it worth looking at starting a 2nd (or 3rd or 4th) career in chip manufacturing in Vermont? What can you expect to earn starting in the industry? I already work 12 hour rotating shifts in clean rooms (biotech) so I think it would not be a difficult transition. Thanks, I know it may be off topic to many of you, but I'm just exploring options. -curiousNH-

    Alliance reply: So you are not an IBM employee? What do your instincts tell you? From our perspective, it appears that IBM wants to be out of the hardware business, completely and permanently. Others may disagree with us. So, stay tuned to this comment section for other IBMers' PoVs.

  • Comment 04/28/14:

    -curiousNH- Read the job posting for the mfg jobs in Burlington closely. The job add that I read clearly says "Long Term Supplemental positions." Supplemental = Temporary. It does not matter if IBM says "Long Term." IBM can, will and has terminated these positions at the drop of a hat.

    Read the archives here; plenty of examples of supplemental employees being told not to show up the next week. No severance, no transition assistance, you are just gone. Every time there is a bad quarterly report you see supplemental employees being hit. Cut back to x days/week, x weeks of unpaid furlough, or just fired and gone.

    IBM is firing full-time regular employees with lots of experience then turning around and hiring supplemental employees. IBM can cut loose supplemental employees even easier than regular full time employees. If that is they type of stability that you can live with then go for it. Just know what you getting into. -BlueFluLou-

  • Comment 04/28/14:

    To say many managers do not like the way IBM is being managed and treating its employees is an understatement! Sadly, any open challenges to the status quo would be career suicide within management ranks. Even if it's based on moral and sound business ethics.

    I left a management assignment a few years ago for those very reasons. The PBC process is a farce. Even if you wanted to reward performance the salary grid and market reference points prevent it.

    The restructuring of job classifications for exempt/non-exempt virtually cut off career growth for all but the lowest entry level bands.

    The only way to change any of this is to organize and seek collective bargaining agreements. I'm very impressed with the new approach and message from the Global Alliance! I hope "The Street" picks up on this and existing IBM employees especially in the US wake up and get organized. -Anon-

  • Comment 04/29/14:

    I spent 10-years and some months in IBM and I had "access" to many levels of the organization with respect to the nature of the role I played. FLM, SLM, TLM, Directors and VP. On the lives of my children, without a doubt in those 10-years can tell you that:
    • there were more executives and managers that shook their head at the decisions made from above,
    • they implemented those decisions using the fire-first, aim-second approach; maybe sometimes they would ask if the organization was "ready" but not all of the time,
    • If they had concerns maybe there would be a debate but the culture is such that you argue and debate to a point—and then implement anyway -anonymous-
  • Comment 04/29/14:

    I heard from someone who works in HR that the employee engagement survey results were absolutely terrible (at least in her SWG brand). Senior management have spent a while spinning the results to make them sound only bad (up from disastrous) and expect the first-line managers to fix the problem! As a former FLM myself, I found this hilarious considering I had absolutely no influence over anything of significance. -Not Engaged-
  • Comment 04/30/14:

    I agree with Not Engaged. The first line managers have no power to hire RA'd people, except transfers within or outside of the division; can't give merit increases to 2+ employees; have very little pull to give deserving employees pay increases; can't place employees on the old pension even though they had the years of experience but were "too young"; can't give out stock awards at $0; can't organize a simple face to face meeting without getting 10 levels of approval; can't hire U.S. employees and have to settle for inexperienced global resources who don't have the knowledge; can't keep high-performing employees off the RA lists. Exec management set the tone and policies for the low morale; NOT the first lines! Whatcha gonna do? Fire the FLMs next for being ineffective? -not engaged either-
  • Comment 05/01/14:

    They shoot horses don't they? The hubris of our executives continues to grow unabated. I work for GBS, NA. Management is obsessed with utilization rate and we are continually bombarded with emails about utilization. We have forced weekend workdays, only our management calls them innovation weekends.

    The latest proclamation to come down from the mountain and our astute leaders is that they are going to require 131% utilization rate for this quarter. Basically, our management requires employees to work the equivalent of 6 days every week of the year with no vacation, sick time or holidays.

    Now since management has only informed us of the 131% utilization rate this week when the quarter was 1/3 done, some employees will have to work even more in the next two months to meet this number. So management is concerned about their employees being able to meet this utilization rate but the rumor is they will motivate their employees by public floggings. Join the union! -Joe-

  • Comment 05/01/14:

    Canada having another RA in June. Also, heard that another "transition to retirement" program to be announced. -anon-
  • Comment 05/01/14:

    Without a union contract for the IBM employees it will not matter who becomes the CEO. Lou, Sam, Ginny, the new CEO; they are all the same. They are all corrupt and greedy people. Their families do great while RAs continue in IBM and families loose income, and job security, benefits. For all these years IBM has hid behind respect for the individual and full employment. These two factors no longer exist in IBM. For the sake of all IBM employees join the union and have a union contract. Lou had a contract; Sam had a contract; Ginny has a contract; the new CEO will have a contract. It's about time employees in IBM have a contract to protect their jobs and families. -ANA-
  • Comment 05/01/14:

    Just heard from a coworker that the Transition to Retirement program is being offered again (at least in IGS U.S.). It sounds similar to the one two years ago. This time those eligible have to retire by end of 2015. I know many on here dismissed this the last time around, but I found it to be a win-win for those who were going to leave soon anyway. -CJ-Roc-
  • Comment 05/02/14:

    Latest at IBM East Fishkill NY is that they are now dismantling the West Complex with the former MCL area up for surplus and B323 has a buyer! Road Map 2015 in place and on target. Where will you be? -IBM to Real Estate!-
  • Comment 05/02/14:

    The transition to retirement program is a joke. I know about 20 people who went through the program last time. All except one person was still expected to work long hours. When they did not, they received sub-par performance reviews. Almost all of the people got disgusted and quit before their planned retirement date. -Ginny Tookus-
  • Comment 05/02/14:

    What the transition to retirement really means is you will be required to perform your function of 100+% work in 60% of the time for 30% less money. I knew someone who took the transition offer last time around and he never slowed down due to tight schedules and commitments. Do not think that a person who is salaried will see any different in the work load. The idea might work for someone on the clock, but I do not think you would be able to not show up if you are on a real production line. As to old saying goes "product takes precedence". -Ich Bin Mueder-
  • Comment 05/02/14:

    I guess the execs/management were hammered in that global survey last year for, among other things, not communicating enough. So their solution is apparently to spam everyone one with useless emails about cloud and mobile, over and over. We wanted useful communication, not just a higher volume of useless email. They don't get it. -Watson's tumbler-
  • Comment 05/02/14:

    Be careful with Transition to Retirement. The number of hours may not be 60% of 40 hours but rather 60% of 50 or 55 hours which some organizations consider "working hours for exempt professionals". I know some people who took this last time offered and were surprised when they were told they needed to work 35-40 hours a week...so 70% pay for a normal 40 hour week. I guess IBM can have their cake and eat it to. -becareful-
  • Comment 05/02/14:

    The difference with this years Transition to Retirement is that you have to apply and be accepted. No guarantee that you will be accepted. Two years ago anybody that signed up for it was accepted. I guess that is IBM's way of controlling who stays and goes. (pick the highest payed first). -Van-
  • Comment 05/02/14:

    I participated in the first T2R program and knew several others who did the same thing. For all of us, it worked out great. We were all planning on retiring within the next couple years anyway so it was like retiring and getting a part time job immediately. I don't think any of us ever worked more than the 24 hours per week. Advise picking 3 days a week to work and leave your computer off the rest of the time. With the no layoff guarantee you can basically do whatever you want as long as you are prepared to retire.

    The only way they can get rid of you is by firing you and then they will have to justify all the good ratings they gave you, etc. No FLM wants to do that. They will also give you a small severance if you get fired. You can also leave at anytime during the 18 months and retire with little or no notice. So, if you are planning on retiring anyway, this is a viable program if you want a part time job. -anonymous-

  • Comment 05/02/14:

    I think with the Transition to Retirement you may be immune from being RA'd but you also forfeit any severance package when it's time to go. Be sure to check on that before you sign anything. -whatever-
  • Comment 05/02/14:

    -Xmgr- The problem with IBM's so called market rate is it does not, or did not, compare equivalent jobs or even industries. Numerous times it would leave out companies that were well known in software in the comparisons for software engineers. Instead I was compared to telecommunications administrators at AT&T, manufacturing engineers at 3M and so on. For the comparison to be valid it should have contained companies like Google, Oracle, Sun, etc. The reality is the market-based compensation plan is just like the PBC process. It serves no purpose other than to keep dissension down and to pretend that some form of fairness exists. -anonymous_retiree-
  • Comment 05/02/14:

    Reading the negative feedback about T2R—I had two friends who took the offer in 2012, with NO problems. Worked three days a week, and only booted the computer 9-5 on those three days, period. Both worked right into December, both were happy with the program. I guess if you are working crazy hours now, you should probably think carefully about how you will set those limits...but I know it is possible. (And yes, I will definitely be applying. I will make it to 17 years with IBM, and be gone.) -15yrsandcounting-
  • Comment 05/02/14:

    131% utilization for this quarter? Spoke to my FLM & told him I don't think so. Me thinks another group push back email is warranted. This time, maybe CC some local papers & politicians that are up for re-election. -I Will Not Comply-
  • Comment 05/02/14:

    The only reason one should even consider taking the T2R would be if it will guarantee you the Future Health Account. Otherwise it is ludicrous. I know of 7 people that took it last time and all wish they hadn't. Why? Simple math. You will get paid 70% of your salary. 70% x the rest of 2014 and all of 2015 equals 105% of your annual salary for working 18 months.

    There is no severance pay (remember, you are exempt from being laid off). You will get 26 weeks salary if you don't take the T2R and get laid off. So basically you need to work 6 months and then it's a wash even if you do get laid off. IBM would love you to take the T2R. Unless it qualifies you for the Future Health Account, my colleagues all said it was a mistake for them to sign up for it. -Avoid T2R-

  • Comment 05/03/14:

    I was qualified back in 2011 for the T2R. I did the math and it didn't work. I stuck around until March 31, 2014. So I got full salary for almost 2 years, instead of this 70% nonsense. Desperate times for "Carly Rommetti" calls for desperate measures. If this T2R can guarantee that you can make the end date and be 55, to get the FHA, go for it. I was screwed by being too young on July 1, 1999, and also too young on March 31, 2014 to get the FH -RAtirement-
  • Comment 05/03/14:

    T2R may not be a bad deal for those who are planning to work post-IBM. Since it is always easier to get another job when you already have a job, you can use the next 18 months to find a better job outside IBM. You cannot be be laid off and you only work 60% of the time so you can be stress-free and can get to enjoy life a little. You can learn new skills that can help snag another job or look into starting a business etc. while you continue to be on IBM's group health plan and 401k. Then when you finally do find a better post-IBM career, you just ditch IBM and move on. Could work for some. -NotHopeful-
  • Comment 05/03/14:

    Thing is, if you are retirement eligible, you may not get a chance to be RA'd. You may instead become a victim of the other "initiative" to get rid of people—the "PBC 3" check—two 3's, and you are gone. Kiss goodbye to any severance. Another fun initiative if you are in GBS on the IBM Account is forced transfer to commercial and travel jobs. Refusal to transfer implies resignation. In that case, kiss goodbye both severance and unemployment insurance. So, I am not eligible for retirement, but if I were, I would take the T2R and get the hell out. Who knows what new "initiatives" they'll cook up. You can bet that they will not get better. -anon-
  • Comment 05/03/14:

    NBC News reported on unemployment numbers on 5/2. They said that (among others) IBM is hiring. What. The. F. Yeah, sure. IBM is hiring at minimum wage to replace all the people that got FIRED in Feb/March.

    And as far as T2R is concerned, I have 30 years but I'm not 55 and I got a 3 this year because I was forced into a different job in July, and was "the lowest contributor in the department. (What do you expect? I was in fire hose learning mode for the rest of the year; of COURSE I wasn't contributing as much as I was previously! What a CROCK!)

    I am a dues paying member but I'm sorry. I have very little hope that the Alliance is going to be able to do anything for me beyond this board. Too many of the grunt IBM population are too uninformed or too scared (or both) to join the union in high enough numbers to actually come to a vote. If and when things change, it will be FAR TOO LATE for me. -anon-

  • Comment 05/03/14:

    IBM must be breaking some US Labor laws when they ask people to work on their vacation days, etc (which is what you are doing in order to meet those utilization goals. Once, I had this resource manager who asked me to CLAIM 44 hours for x# of weeks so they could bill the customer for these hours. I said, I was super productive and finished the work in 40 hours. No need for OT. She told me to post the hours anyway. I said no; that would be lying. She got on my case about it and escalated to my Business Manager. The BM said he understand what I was saying, but just post the 4 hours/week, anyway. I said that was fraud and goes against BCG. The BM said OK. ha -RAtirement-

    Alliance reply: IBM is not breaking any labor laws re: working on vacation days. There's no labor law forcing companies to even provide "vacation" as a benefit. Union contracts, on the other hand, can be negotiated to include specific benefits such as vacation, and rules that protect workers from losing their vacation.

    Also, Alliance suggests that workers document ALL incidents of management pushing their workers to "claim hours" that were not actually worked, so the company can defraud their own customers. That IS actionable and the customers could sue IBM for fraudulent business practices, if they found out. As far as BCG violations go, the government cannot enforce IBM's own rules of business conduct. IBM can break their own rules any time they see fit. But, once again, with a union contract to protect the workers, those IBM rules cannot violate the contract agreement with their employees.

  • Comment 05/03/14:

    My manager tells me exactly how many hours to CLAIM, and at the end of each quarter, he bumps them up. He does not care if I work them or not. I am on the IBM Account, so it's blue money, but still, what a waste of time and crock of sh**. -Anon-
  • Comment 05/03/14:

    IBM tries to convince the State's Department of Labor that they are hiring but they are not filling those positions. And the State DOL's are not and have never challenged IBM to see if the jobs for hire actually get filled. If you are unemployed in NY or NC or some other US State you can see this fact. -anonymous-
  • Comment 05/04/14:

    Does anyone know how the transfer of the x86 division to Lenovo is progressing? More important, how does Lenovo know how much/what terms to offer the job to the x86 guys? Did IBM gave Lenovo the x86 financials/personal files in order to allow them to make the offers? is that legal? -lenovo-soon2b-
  • Comment 05/04/14:

    For the person that is 30 years but not 55. The 30 years is the magic number. With 30 years you get FHA. Without 30 years its 55 and some other number. Isn't it neat how even within the company our benefits are so convoluted by age, years of contiguous service and so on that we have trouble understanding what we actually have. A Union contract could fix that. -Exodus2007-
  • Comment 05/04/14:

    Ready to retire? Want to see what IBM rewards you with? www.giftnetonline.com IBM company code is 1706. My wife's comment, I quote "WHAT CRAP!" Looking in Kohl's or on Amazon prices average out to about $100. -anon-
  • Comment 05/04/14:

    IBM breaks labor laws? No surprise. They do it all the time: unchallenged. Why do you think they "agreed" to "remix" exempt employees to non-exempt and give them IBM mandated 15% salary decrease? IBM does what IBM wants to. To benefit IBM management and their bottom line. PERIOD. IBM $uck$. Join the Alliance PLEASE! There is no other way IBMers to get what you truly deserve which is much better than current treatment. -beammeaboard-

IBM Retiree Issues Comments

  • Comment 04/27/14:

    Although I have sympathy for folks that didn't receive the FHA, it's important to note how little value it provides compared to the old retiree medical plan that FHA-eligible employees were screwed out of. For a pre-Medicare couple, the FHA will pay for roughly 2.5 years of mid-deductible medical insurance from IBM. (The FHA can be used *only* to buy insurance from IBM; it may not be used to buy other private insurance, including plans on the ACA (ObamaCare) exchanges. In my case, as a 59-year old retiree, I'm using FHA money only for eye care while buying private insurance from the ACA healthcare exchange. If it's still around, I hope to use FHA for a Medicare supplement six or seven years from now. I'm posting because it's important for people to realize that the FHA will not come close to covering retiree medical insurance costs unless you're Medicare eligible, or close to it. -FHA Won't Last Long-
  • Comment 05/04/14:

    I am a IBM retiree. I signed up for the Health Reimbursement account. I was told because I am a Veteran I could purchase health Insurance on my own instead of through Extend Health. I have been fighting them since Jan 14 to get reimbursed for money I have spent for health insurance and out-of-pocket expenses. My last call was to Armonk and was told they forwarded my complaint to Extend Health and that is all they can do. Has anyone else had a problem with IBM about this? -RMAnderson-
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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