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6, 2000 April, 2000

Highlights—November 8, 2014

  • Forbes:

    As IBM Commits to New (and Counter-Productive) Share Buybacks, Employees Are Starting to Speak Out. By Robert X. Cringely. Excerpts: My recent post How To Fix IBM struck a nerve among IBM’s 400,000+ employees with thousands of comments about the post on IBM discussion boards and a sharp up tick of IBM employees asking to connect with me on LinkedIn. This latter point is especially important because it shows a significant change in IBM employee behavior where for the first time they are willing to be linked publicly with IBM’s biggest critic (me). This is either foolish of the IBMers or the sign of a huge crack in IBM’s corporate shell. I suspect it is the latter.

    Having read those thousands of messages so you don’t have to, it is becoming clear that IBM’s recent earnings miss and share drop are being misinterpreted by IBM management, whose clearest response so far has been authorizing another $5 billion in share buybacks — just the opposite of what’s really required to save Big Blue.

    So just to be perfectly clear, here is IBM’s big problem: the company is failing faster than it can be rebuilt. ...

    Just as Sam Palmisano came up with a 10 year business plan to get the company to $20 EPS, IBM is doing the same thing with Cloud, selling a dream. To grow Cloud to become a major business will take IBM at least 10 years of spectacular and sustained growth. How many large companies have ever been able to sustain 25 percent annual growth for 10 years? Though some companies have done it the list doesn’t include IBM.

    Ginni Rometty is trying to sell the market on the idea that IBM will not only stem its sales decline with new sector growth, the company will do so by growing faster than it has ever shown itself capable of doing. Ginni is saying she can starve and flog an injured and demoralized IBM back to market supremacy.

    It won’t work.

    The sad fact is that IBM is now killing GTS faster than it can grow the new businesses intended to replace GTS. ...

    Reading through all those comments on IBM discussion boards — some coming for the first time from IBM directors and VPs — I saw no discussion of IBM’s actual business plan. Does anyone even know the IBM business plan? You can’t get people on the same page if the page is unpublished. ...

    There are dark days ahead for IBM with very large furloughs rumored for November and December. You can’t make money without workers and you can’t cut a company to prosperity. IBM’s new rounds of stock repurchases, furloughs, and more layoffs show the company’s priority is short term shareholder value. IBM is now living quarter-to-quarter and that’s no way to run a global corporation.

  • WRAL TechWire:

    As IBM reportedly cuts 50,000 India jobs, CEO replaces Global Services leader. By Rick Smith. Excerpts: IBM recently committed to another round of cost-cutting, some $600 million in all. But due to changes made in how IBM deals with workers affected by layoffs in the U.S., little is known publicly about how many cuts are being made and where. Company documents no longer list workers affected by job unit who are being laid off and how many are being retained. That change, made earlier this year, has cut off virtually all layoff information that could be documented by the media and Alliance @ IBM, the union seeking to represent IBM workers.

    Meanwhile, IBM's CEO is replacing the head of Global Technology Services, the biggest revenue driver for the tech giant as part of her on-going efforts to return IBM to revenue growth, according to The Wall Street Journal.

    Citing a "notice" from Chairman and CEO Ginny Rometty posted within IBM, The Journal says Erich Clementi will be replaced as of Jan. 1 by Martin Jetter, who heads IBM's operations in Japan. According to the notice, Clementi will move to another "important senior leadership role as part of coming organization changes," The Journal reported. ...

    The Economic Times of India is reporting that IBM slashed its headcount from a high of 165,000 in 2011 to 113,000. (Alliance @ IBM estimates that IBM's headcount in the U.S. is down to some 73,000 following the transfer of 2,200 or so IBMers in RTP to Lenovo as part of the recently closed $2.1 billion x86 server sale.

    And more cuts are coming. Citing "people familiar with the company's plans," the newspaper says IBM plans to cut another 13,000 jobs by next year.

  • The Economic Times (India):

    IBM scaling down India business, MD Vanitha Narayanan to return to US. By Pankaj Mishra. Excerpts: A decade after IBM put India at the core of its global strategy for software services, by building an army of engineers, the company is shedding staff, scaling down investments and even shuffling the top leadership in the country. Already, from around 1.65 lakh employees on its payroll by 2011, IBM's India headcount has now fallen to around 1.13 lakh and set to slide to 1 lakh by March 2015, according to people familiar with the company's plans. (Editor's note: A lakh or lac (/ˈlæk/ or /ˈlɑːk/; abbreviated L) is a unit in the South Asian numbering system equal to one hundred thousand.)

    IBM India managing director Vanitha Narayanan, who relocated from the United States in January last year, is planning to return as part of a major organisational rejig. "IBM is looking to rationalise high cost executives assigned across the markets and bring them back to the US," a source said.

    "Such executives cost anywhere between $7,00,00 and over $1 million annually, apart from local country market costs," he added. Another person familiar with the developments added that Narayanan's possible return to the US has "nothing to do with India performance, but a part of global realignment of senior resources." ...

    CHEAP LABOUR NO MORE THE 'SILVER BULLET' As IBM attempts to script another turnaround in over a century of its existence, low cost software services are no more the silver bullet that helped it come out of "a near death experience" in the late nineties. With aggressive disruptors such as Amazon and Google, cloud computing is the new battlefront, threatening models that rely on low-cost labour.

    And that explains the shift in IBM's priorities, company insiders said."India is important, but not critical to IBM's survival like the time when Sam Palmisano brought entire board of the company to Bangalore in 2004," said a person familiar with the changes. "Things are looking quite different from 2011 — I now see half-empty floors, paid parking slots and no free coffee at times," said an IBM employee.

  • ComputerWeekly:

    IBM India staff reductions are sign of shift in outsourcing sector. By Karl Flinders. Excerpts: Talk of IBM reducing its India-based workforce by 50,000 over the past three years, with more to come, is a reflection of the diminishing importance of low-cost operatives.

    The reported reduction in staff in India, although unconfirmed, is in line with changing IT-outsourcing demand and delivery models. One source claimed India's Tata Consultancy Services (TCS) is now IBM Global Service's biggest competition. ...

    In a recent presentation to equity analysts IBM said it is not moving away from offshore delivery and, in fact, will be harnessing global delivery centres to make it more competitive.

    “In parts of our portfolio that aren't as well differentiated, we're continuing to see price and profit pressure," said an IBM statement. "These are the areas where we'll be more aggressive on the use of global delivery centres and applying intellectual property for faster time to value for our clients and improved business results for us." ...

    According to CEO at management consultancy Value Leadership Group Peter Schumacher, based on meetings with about 200 outsourcing customers around the world, IBM is losing ground to offshore-based firms.

    “Pricing is one reason but, perhaps more importantly, top customers also cite IBM's arrogance and weaker partnership capabilities as key reasons. In other words, IBM is seen as lacking price competitiveness, operating flexibility and customer intimacy. These are a complex mix of interrelated challenges and overcoming these can take years to resolve,” he said.

  • Wall Street Journal:

    IBM to Change Leadership at Global Services Unit. Martin Jetter to Replace Erich Clementi as Head of Struggling Technology Services Unit. By Don Clark. Excerpts: Services represent IBM’s largest source of revenue. Ms. Rometty has stressed fast-growing parts of that business, including cloud services that host business applications in data centers operated by the company.

    But revenue growth has slowed from older kinds of services. In the third quarter, IBM reported that revenue from global technology services decreased 3% to $9.2 billion. Ms. Rometty pledged at the time to take steps to accelerate the company’s growth.

  • Seeking Alpha:

    IBM: Red Flags In Free Cash Flows. Excerpts: IBM has seemingly become a mythical investment, with a host of questionable reasons why it is undervalued being constantly discussed. A few of the best reasons I have heard as to why IBM is a great investment:
    • It's Big Blue.
    • IBM has been around for over a century.
    • It's Big Blue. The turnaround is happening.
    • Did I mention it's Big Blue and it has big free cash flows?
    • IBM is shifting to cloud from hardware.

    The common theme behind being long IBM is no more convincing and holds no more merit than simply "just because." I will admit I was long the stock about 15 months ago, but did a complete 180 a few months later after going over their financials a half dozen more times. In my opinion, the increasingly dire situation with cash flows that I detail below make IBM a popular value trap and, at best, a dead money investment going forward. ...

    IBM has averaged $2.8B in annual acquisitions over the last 10 years, and it has become commonplace news when they announce an acquisition. GAAP allows IBM to capitalize the acquisition cost and their auditors to test the value annually for impairment. It essentially boosts earnings with no coinciding cost on the income statement, unless they take a write down for impairment.

    The problem with this is that IBM is essentially capitalizing incremental R&D by acquiring companies instead of internally developing new services and products. IBM operates in a highly competitive, quickly changing industry, and the idea that a company they buy today will have much value in one, two, or even three years without meaningful investment is nonsensical. ...

    It's Common Sense, Watson. I will leave the Big Blue believers with this fact: IBM has spent $97B to fuel growth over the last 10 years, yet they have achieved negative revenue growth. That fact alone would give me concern enough to not be a part of the next 10 years. In addition to that, the adjusted FCF issues I discussed raise enough question to simply pass on investing in IBM. As Warren Buffett says, you don't have to swing at every pitch. So, given the clear warning signs noted above, why swing at IBM?

  • IEEE Spectrum:

    Migrant Tech Workers Abused by Contract Labor Firms, Investigation Shows. By Tekla Perry. Excerpts: California has a migrant worker problem. Reading that statement you’d likely picture a farmworker from Mexico or Central America. But you’d be wrong. It’s migrant tech workers, holders of H-1B visas, mostly from India, who are being abused.

    The Center for Investigative Reporting (CIR) together with NBC Bay Area have been looking at tech immigrants to Silicon Valley—and elsewhere in the U.S.—for a year. And what they have found isn’t pretty.

    The system, on the surface, doesn’t seem like a bad thing. Consulting firms (a.k.a. labor brokers, a.k.a. body shops) recruit skilled tech workers, mostly engineers and computer programmers. The firms handle the paperwork required to get these workers H-1B visas, a category reserved for those with highly specialized knowledge. Then tech companies contract with the consulting firms to use the workers. This allows the tech companies to quickly build up their work forces as needed, without having to deal with all the immigration paperwork. As stated in the NBC Bay Area report on the investigation, it’s a “flexible labor regime…placing skilled people with needy firms.” And the process, if it works properly, could smooth a path for tech workers looking to move to the U.S.—if they sign on with a consulting firm, the firm finds them a job; they don’t have to interview with multiple companies.

    But beneath the surface, the investigation found, many of these arrangements have problems. By looking at court records covering 600 H-1B visa abuse cases, the investigators found that contracts are often draconian, allowing the body shops to withhold wages and force workers to pay large fees if they quit. Some hold visas hostage to enforce these contracts, or threaten lawsuits.

    Others bring in workers even though no jobs await. You can’t legally get an H1-B visa unless there’s a job to fill, so body shops purport to offer engineers open positions, and the engineers hired by a body shop should collect salaries from day one. But the body shops typically don’t pay workers until they place them at companies. And the body shops stockpile, or “bench,” workers so they have them on hand when jobs come up, sometimes sticking them in guest houses and forbidding them to leave the property, the investigation determined.

    Selected reader comments follow:

    • It's all OK. The rich get richer, the foreigners get exploited, and Americans are out of jobs. What could be wrong with that?
    • I have lived in the Silicon Valley long enough that I see this analogy in action everyday. I am a US citizen, born here, and for me to find work here was a huge struggle, while H1Bs continue to flood the workplace. This goes w/o saying, I am a 2nd generation immigrant and in no way against people coming here to seek better lives. But for these big corporations to turn these people's desperation against Americans is simply appalling.
    • They don't turn there to take advantage of the "desperation" of these workers. It is done to cut costs, pad stock dividends and get CEOs a nice bonus. My company freezes hiring, promotions and raises and lets attrition drain of us "expensive" workers, that have worked this profession all of our lives and are "worth" more, then reopens hiring and brings in bus loads of foreign nationals to fill the spots. The percentage of contract workers goes up, the percentage of US workers goes down. Nice little scheme where the company execs and the "body shops" win and US workers lose.
    • At my company the computer worker, workers and support personnel, are required to provide their own equipment. That is another reduction in costs that get CEOs nice bonuses and encourages the human trafficking and slave-like conditions for the H1-B holder.
    • This is very unfortunate but not at all surprising. The IDEAL (but, lucky for us, unobtainable) scenario in the view of the profit-at-any-cost businessman would be for high-paid Americans to have 100% unemployment, and have all the jobs filled by exploited low-paid workers from overseas (whether on American or foreign soil).

      The real scenario is not that extreme. But it is still a problem. I do not agree at all with statements by companies claiming that they cannot find Americans with the right skill set. I know many former colleagues with excellent technical credentials who are working what ever low paid retail jobs they can find just to keep a roof over their heads.

      I have been a hiring manager. I once had a specific, advanced engineering job to fill, requiring lots of RF modeling and analysis and then practical implementations of the hardware. I had little trouble finding several very qualified people. They had three things in common: great qualifications, concurrently high (but reasonable) salary expectations, and they were all Americans. But, instead, I was specifically instructed by upper management to look at people from overseas who were willing to work for the lowest possible salary.

      OK...I found LOTS of such people who claimed experience, education, etc., and were willing to work for half the pay. During interviews (mostly by phone) I found them unable to answer basic technical questions, and many of them could not even communicate in a useful way in the English language.

      While I appreciate their rather desperate attempts to better themselves, they are prone to apply for advanced positions for which they are not qualified. The problem is with the US managers who often will hire them anyway. This, in my opinion, is a big part of the reason why the US continues to fall farther behind in science and technology. We are hiring based on price alone, and paying no attention to actual ability. The people thus tasked to do the work often are not competent. This does no favors for anyone, in the long run.

  • The Times of India:

    Wipro launches 'Notch Up' programme to tackle attrition. By Varun Sood. Wipro has started another employee retention programme by offering them a chance to study at some of the country's premier engineering and management institutes.

    Significantly, this drive by the country's third-largest software exporter is the latest attempt to retain employees with over five years experience as attrition level for this group is higher than Wipro's attrition rate of 17%, according to a senior executive. "How do we retain this group with (over) 5-6 years experience... If we are able to provide them masters in IT or MBA, it serves them and it helps us too," said Saurabh Govil, head (HR) at Wipro. ...

    Wipro's rival, Infosys, reported an attrition rate of 19.5% in the first quarter ending June. For this reason, most companies have taken steps to quell this exodus of employees — from Wipro rewarding its top 20% of its workforce with double salary hikes to Infosys okaying promotions to over 19,000 staff in first two quarters of this fiscal year.

  • Glassdoor IBM reviews. Selected reviews follow:
    • “Stay away from GBS Service Line”

      Former Employee — Senior Consultant in London, England (UK). I worked at IBM full-time (less than an year).

      Pros: IBM on your CV. Flexible work location.

      Cons:

      • Lack of HR, onboarding, off-boarding,
      • Timely pay of expense, remuneration
      • Lack of organisation
      • Lack of leadership
      • Lack of teamwork
      • Lack of motivation
      • Over worked bureaucracy for getting anything done

      Advice to Senior Management: Stop pursuing customer and sales lead and take a look around at your crippling organisation! People are complacent, and management just keeps their head down and exclusively pursues sales opportunities with little regard to how their people are developing or could potentially contribute.

    • “Great place to work if you don't like adding value to a company”

      Current Employee — Financial Analyst in Rochester, MN. I have been working at IBM full-time (more than an year).

      Pros: The paid time off is nice; as a regular employee I get 20 days. Also, the health benefits I have are decent and practically free.

      Cons: I don't even know where to start with the cons of working at the COE in Rochester. Yes, IBM looks good to have on your resume but it's not worth the soul sucking torture you have to go through every day. Training is a joke; they rely on the person who had the role before you to train you in. My past two roles I've gotten because someone has been leaving IBM and they didn't really care about training me. This has left me feeling like I've been "thrown to the wolves" with both of my roles. But it's OK, because it's not like the work you do actually adds any value to IBM.

      I've feel like I've gained very little work experience in the finance field.

      If you do happen to take an FA job here, I hope you don't plan on growing your career here. There are very few opportunities for advancement. I guess I shouldn't say that; the Rochester COE does seem to love to do vertical promotions...you know, the type where you get more work but no extra pay.

      Overall, I highly advise that you only take a job here as a very last resort if you can't get another job out of college.

      Advice to Senior Management: Take training more seriously because boot camp is a joke. Also, find a way to make your employees feel like their role actually adds value to the company.

    • “Strategy”

      Current Employee —Anonymous Employee. I have been working at IBM full-time (more than 3 years).

      Pros: I really can't think of any pros...at some point it was working with great people...but the good ones are leaving one after the other.

      Cons:

      • Heavily political extremely
      • Low employee morale
      • Management lacking any view
      • Extremely random compensation/reward system...even if you work hard you won't get promoted
      • Cut backs, cut backs, cut backs
      • Hemorrhaging young talent...still in the mindset of generation X
      • All the good people leave
      • All in all the past few years with IBM has been the worst of my life.

      Advice to Senior Management: Management needs to be replaced...need new blood like Lou Gerstner; some visionary to turn things around.

    • “Missed Opportunity...again and again”

      . Former Employee — Senior Project Manager in Research Triangle Park, NC. I worked at IBM full-time (more than 10 years).

      Pros: Some really smart and talented people who go way above and beyond under difficult circumstances to meet stated objectives.

      Cons: Knows they have some great people so uses them until they are driven off or ground to dust. Relies too much on the name brand and past glories. Shadow of the company it used to be.

      Advice to Senior Management: Stop obsessing about stock price and focus on delivering products the market wants. Listen to the customer and find out what they want, not what YOU think they SHOULD buy. Get rid of the culture the encourages in-fighting and inter department warfare. In order for my business unit to succeed then someone else has to fail. That behavior is killing your business and needs to stop.

    • “Work environment at IBM is definitely NOT getting better”

      Current Employee — Software Engineer in Research Triangle Park, NC. I have been working at IBM full-time (more than 5 years).

      Pros: Talented coworkers. Good customers. Some of the technology is really good. Medical benefits are OK. 401k matching is not bad. Management recently got rid of two divisions that were dead weight — System x and chip manufacturing.

      Cons: Salaries have been static for years. 401k matching is paid on Dec 15th, so if you leave (either voluntarily or through resource action) before that date, you get nothing. Once or twice a year, management announces big layoffs.

      Because the previous CEO made a commitment to grow earnings per share to $20 by Q4 2015(management called it Road Map 2015, IBMers called it Road Kill 2015), IBM has been cutting every corner they could to get there. This quarter, the earnings were so bad, they finally gave up on Road Kill 2015. What should have been good news (giving up that dumb promise) turned bad with another $600,000,000 reserved for more layoffs and the Board of Directors authorizing another $5 billion for stock buybacks.

      So instead of investing money to grow the company, they continue borrowing money to buy back IBM stock to prop up the stock price — completely ignoring the reason IBM is not growing (hint: It's not because there is too much floating stock). Hopefully, interest rates in the US will rise again so IBM can't continue with this game (borrowing money for less than the dividend payout for the stock they repurchase) and start using the money to grow the company.

      Advice to Senior Management: Need the big investors to get activist and fire the Board of Directors and get new people in there.

    • “10 year Global Data Center Integrator”

      Former Employee — Transition Architect I worked at IBM full-time (more than 10 years).

      Pros: Great place for a new individual to gain knowledge; pays less than comparable companies in the space; benefits are really good; work from home is good and technology offered is OK.

      Cons: Once a year 401k match sucks; compensation is less than market rate; lower management is used to effect the will of upper management—no real say in things.

      Advice to Senior Management: Pay your people commensurately with the market: provide opportunities for training and personal growth.

    • “Not what it used to be”

      Current Employee —People Manager. I have been working at IBM full-time (more than 5 years). Pros: Challenging work, plenty of different jobs. Cons: High stress, automation and tools dependency that don't work; not enough people to provide quality service; company doesn't care about their people. Bottom line at all costs, that is why they are declining.
    • “It was all fun and games until I was laid off”

      Former Employee — Project Manager in Chicago, IL I worked at IBM full-time (more than 10 years).

      Pros: IBM teammates are the best ever. There is a common professionalism that I haven't seen since.

      Cons: They lay employees off strictly because of financial reasons. That's business, though. In the last 10 years, my peers and I were constantly worried about being laid off. This kind of fear does nothing to help morale.

      Advice to Senior Management: Consider retraining current employees instead of laying off. It's difficult to maintain the amazing culture that IBMers share if employees are under the threat of being laid off.

    • “Program management with broad set of complex business problems in a global setting”

      Former Employee — Program Manager in Somers, NY. I worked at IBM full-time (more than 10 years).

      Pros: Very rewarding and a great team of coworkers, great international exposure, broad business exposure and challenges with multiple lines of business, and multiple country legal requirements. Management recognition of high performance contributors.

      Cons: Working in a global deployment with teams in time zones that contribute to long hours in order to support the development and test teams. Weekend work, reduced personal growth as a result of cost cutting and job eliminations.

      Advice to Senior Management: Move away from financial engineering; focus on R&D and start to invent and make new products that business and customers can use. Stop selling off business units and adopt new business models. Invest in training existing employees as the industry shifts to new business models.

    • “IBM Project Manager @ AT&T”

      Current Employee — IT Project Manager in Middletown, NJ. I have been working at IBM full-time (more than 3 years). Pros: Good salary and benefits. Challenging work environment. Cons: Working on weekends is BAU! Chaotic day to day operations. Advice to Senior Management: Create a work culture, offer real career training, and reward your overworked resources!
    • “Great place”

      Current Employee — Senior Consultant in Chandler, AZ. I have been working at IBM full-time (more than 10 years). Pros: Everything is good here. All is the best. Cons: No. This place is good. Advice to Senior Management: Good.
    • “IBM Design is a frustrating opportunity”

      Current Employee—Product Designer in Austin, TX. I have been working at IBM full-time (less than an year). Pros: Ground floor of a big movement in design, inspiring company legacy, vacation and benefits, funding. Cons: Management cares more about perception than substance; they want to promote themselves as good designers more than to be good designers. IBM is a tough company to get things done in. It is so big that projects are disorganized and extremely political. It is hard to do good design here. Advice to Senior Management: Invest in your designers, stop caring about your perception so much, focus on quality over quantity, and respect your employees.
    • “IBM DPE”

      Current Employee — IBM Delivery Project Executive I have been working at IBM full-time (less than an year).

      Pros: Great benefits, flexible schedule if you can carve out the time and are meeting all your deadlines/meetings. Pay does not reflect the time commitment. Depending on how many accounts you manage, you can be expected to work some pretty absurd hours (evenings/weekends in addition to the Mon-Fri). Great support team in place to assist in day to day. Lots of room to grow and learn. Most days bring new challenges.

      Cons: Staff/customers can be demanding, strong people skills are required to build buy-in and maintain customer relationships. Can be very high stress, not recommended for people that do not handle anxiety well.

      Advice to Senior Management: Buy out additional time worked/holidays or officially recognize time in lieu and allow more of this time and holidays to be carried over year to year.

    • “Poor Pay, Terrible working conditions”

      Former Employee — Consulting IT Specialist in Houston, TX. I worked at IBM full-time (more than 5 years). Pros: None that I can think of. Cons: Too much travel. Not proper work/life balance. Advice to Senior Management: Don't let HR run the company.
    • “Great Intern Experience”

      Former Employee — Software Engineer in Beijing (China). I worked at IBM as an intern (less than an year.) Pros: IBM is a company with great culture and countless resources. These are important points working as a intern. Cons: Workload is small, with little pressure. It was like a vacation working there.
    • “Large company with several opportunities.”

      Former Employee — Consultant in Armonk, NY. I worked at IBM full-time (more than 10 years) Pros: The company is very large and if you work in the right part, you will meet and work with many interesting people. There are also several opportunities to learn multiple skills/roles and work with new technologies. Cons: Complex organization with several dotted line reporting requirements. Some positions require extensive travel. Your manager can make or break your career. Advice to Senior Management: There are some do-nothing managers. You are subject to layoffs and politics.
    • “Long term contractor”

      Former Employee — Computer Systems Analyst in Research Triangle Park, NC I worked at IBM as a contractor (more than 5 years).

      Pros: If you like overtime, there is that.

      Cons: Where to begin? No opportunity for advancement unless you are a recent college grad. No possibility of becoming a "regular" employee for contractors. No recognition for hard work and 48 hour work weeks. "Old boy network" hiring practices. I worked there for more than 5 years without a pay raise.

      Advice to Senior Management: I can't provide advice for management, because they take a hands-off approach, and you will likely never meet your manager's boss. I could count the interactions I had with my manager on my fingers.

    • “Not my fathers IBM”

      Former Employee — Client Executive in Birmingham, AL. I worked at IBM full-time (more than 5 years). Pros: The people I worked with were some of the finest I have ever met and I made some friends for life. Great training and could pretty much go to as much as I wanted. Cons: No raises. Unreasonable quota increases. Constant threat of being laid off. IBM has been chasing EPS at the cost of its employees and customers. I still can't figure out how IBM expects to have a good 4Q after re-purposing 500 of its Enterprise Customer Sales Reps and not backfilling the positions for over 9 months now. Advice to Senior Management: Invest in correcting employee moral and compensate fairly. Care about your customers again.
    • “Avoid, no matter what they promise you it's all lies”

      Former Employee — Inside Sales in Dublin (Ireland). I worked at IBM full-time (more than 3 years).

      Pros: Impossible to get fired; good brand because nobody outside the company knows what goes on inside the company.

      Cons: Zero respect for customers or employees; it's all about shareholder value. Poor pay, issues of compliance and organisational controls are given scant regard. Too many chiefs, too few quality employees at the coal face.

      Advice to Senior Management: I would if I thought they'd listen or understand for that matter.

    • “Not bad overall — but I bet they could be much better.”

      Current Employee — IT Specialist in Tulsa, OK I have been working at IBM as a contractor (more than an year).

      Pros: IBM is Americana as apple pie, hot dogs and the good ole green back. Lots of hard working lower level people who want to make a difference. Look nice on resume.

      Cons: I sense IBM feels they are above its customers and tends to be bull headed and not listen. Has a very difficult time adapting in real time situations and tends to act as if employees are expendable or not worth the pay they honestly deserve.

      IBM seemed to be very heavy with upper management all pulling from the contract making money, never on site and not known to anyone working for them who these people are and how they could help.

      IBM, too big for its own good and lost that personal touch care feeling for what is best for the customer. Their short shortsightedness focuses on $$$$, not customer first. If they did, they would keep contracts not lose them.

      Advice to Senior Management: Customer first; spend time with your customer to understand the real needs. Spend time appreciating those who do the REAL WORK; pay appropriately and ask "what is the dumbest thing we do here" once a Month and then commit to fixing or removing that item.

      Focus on the customer and what will make them successful and remember you will reap the financial rewards for a job well done. Should have a template that will flex to the customer and adjust to their needs. Honoring and respecting the customer, thanking them for allowing YOU (IBM) to serve them, the customer.

    • “Mostly good, but ended badly”

      Former Employee — Senior IT Specialist in Boulder, CO I worked at IBM full-time (more than 10 years).

      Pros: Great people, competitive pay, deep technical resources to draw on.

      Cons: In recent years, the focus became increasingly on cutting costs and doing more with less. Pressure to deliver began to override. Many jobs have been outsourced overseas, and we were often expected to compete with cheap offshore labor. From a personal standpoint, my experience was that although my best had always been at least good enough, and generally much better than that, that changed rather suddenly and I began to feel that nothing I could do would be good enough.

    • “opinion about work”

      Current Employee — Anonymous Employee in New York, NY. I have been working at IBM full-time (more than 5 years).

      Pros: great place to work, great talented colleagues, no work place harassment.

      Cons: poor management, low morale of most of the employees, lack of fresh induction of young talents

      Advice to Senior Management: Need to take management training; need to spend more time with employees, be more direct and transparent, show interest employees' career aspirations and personal development.

    • “Interesting work but employees don't seem to matter”

      Current Employee — Financial Analyst in Winchester, England (UK). I have been working at IBM full-time (more than 10 years). Pros: Work is interesting with flexible working hours. Cons: Management by spreadsheet, dispersed teams with little personal contact. Advice to Senior Management: Listen to your employees.
    • “Good work environment”

      Current Employee — Advisory Systems Analyst in Pune (East Timor). I have been working at IBM full-time (more than 5 years). Pros: Very flexible, lots of security for women employees. Cons: No hikes, poor fixed salary, cafeteria. Advice to Senior Management: At least some average hike must be given even at average rating.
    • “FP&A”

      Former Employee — Financial Analyst in Bangalore (India). I worked at IBM full-time (more than 3 years). Pros: Good work/life balance and working environment. Cons: Heavy internal politics, stagnation, low monetary returns, no perquisites or bonus and appraisal comes once in 18 months. Company has not declared hike in salary for 3 years. Advice to Senior Management: Please understand that employees are backbone of every company.
  • Alliance for Retired Americans Friday Alerts. This weeks headlines include:
    • Election Results Heavily Favor Republicans over Democrats
    • New Leadership in U.S. Senate Likely Poses an Increased Threat to Seniors
    • Union Seniors Voted Democratic by a Margin of 35%
    • U.S. Social Security Benefits Compare Unfavorably to Those in Other Countries
    • Help Keep Postal Standards in Place to Prevent Delayed Mail
New on the Alliance@IBM Site

Job Cut Reports

  • Comment 11/02/14:

    There was an employee survey last fall...and the results were supposed to have been shared in jan-Feb 2014 -Yes, Virginia that was a failure-
  • Comment 11/03/14:

    The survey results were so bad even IBM couldn't spin them. FLMs got a summary of their results and told "to fix the problem", which is hilarious given FLMs have zero power to do anything; they're just there so more senior managers don't have to talk to the plebes. -Can'tHearYou-
  • Comment 11/03/14:

    Regarding the 2013 Engagement Survey, our manager went over the results late summer. The output she was given to review with us was a farce. They compared our department results to the "teams scoring in the top 25 percent on the IBMer Engagement Index". So the only company-wide results that were shown were of the highest 25%. I wonder how long it took them to figure out how to spin that. I had also heard the results were pathetic and was surprised to see any results. It still amazes me that they waste their time on these surveys. -East Fishkill member-
  • Comment 11/03/14:

    @SteveGaylord, my experience was similar to yours. I was with IBM for over 31 years and in the last 10 years saw only a couple of raises that totaled a few percent. During that time, our share of medical went up, retirement plans became only 401K, taxes (especially SS) went up, and my calculated effective take home by my estimation went down about 35% during that time. I left on my own terms a little over a year ago...vs. waiting for a package. I got a 25% pay increase in my new job, and after one year I just got a 3% raise. My share of medical is reasonable, and the company values the employees. In fact, our VP of HR during annual appraisal time told the managers that he would never go to a forced ranking system. There are better options out there than waiting for IBM to fix their management problems. -GoneIn2013-
  • Comment 11/03/14:

    Dear fellow IBMers, I just wanted to sincerely thank Lee Conrad for his tireless, superhero efforts on our behalf and his wonderful voluntary team that I cannot thank personally because I do not know all their names. Kathi Cooper is also a superhero. I have been a proud IBMer for 33 years and a staunch supporter and member of the Alliance for only 18 months - SHAME ON ME! My health is not great...so I really needed to post this. I would not have traded my years at IBM for anything in the world. So lets give a shout out to Lee Conrad and Kathi Cooper. Also you have to read the Robert Cringely book and the Peter E Greulich book on IBM. They are spot on. And finally my friends, I posted the first reply to SAM this morning on his article...so the least I could do was to call out to our own superhero Lee (Lee do not edit this down.) You rock! Respectfully, -Deb Kelly Proud IBMer-
  • Comment 11/04/14:

    Hi guys, the silence of the managers is deafening. I am not only bracing for no raises and no bonuses (being 2+ ranking) but also bracing for the possibility of being RAed. There's something I want to get advice from you guys: I want to know if it is appropriate for me to back up my emails and work from the ThinkPad. I don't intend to steal anything from the company but there's a lot of code, communications I want to take a snapshot at for future reference. When I do get RA'ed, I wouldn't get that chance as I'd be escorted out immediately. Is this common practice? If so, do you simply copy everything to an USB stick? I am pretty sure there are things in the ThinkPad that catches these things and reports it to the management. Anyhow, if you guys think it is inappropriate for me to do, then I'll just not do it, but I want to hear your input first. -AfraidOfRA-
  • Comment 11/04/14:

    As IBM reports their ever greater Cloud success one must ask what IBM is counting as Cloud. I hear through the grapevine that non-Cloud workloads are being counted as Cloud so that middle and lower levels of management can make their numbers. I doubt Ginni has any idea how corrupt the counting has become over the years but she and her peers probably do not care as long as they can report an improving Cloud business to the analysts. Again Wall Street is being misled as to the health of IBM but they may finally be realizing that IBM's numbers are not to be trusted. -Anonymous-
  • Comment 11/04/14:

    AfraidOfRA, Buy an external USB drive (500GB should work) and use a free program like VMware Converter or some other P2V program to make a virtual machine (VM) of your system. Save the VM on the external disk without encrypting the external disk. Use a program such as VMware Server or VirtualBox to mount and use the VM. If and when you leave IBM, use a self booting "disk wipe" CD to remove your data before you return the laptop to IBM. -Was4Blue-
  • Comment 11/04/14:

    I have been tasked with validating US STG cloud revenue on a quarterly basis. This revenue is counted MANUALLY using spreadsheets and probably only 50% of the recipients that I ask to validate their data actually respond. So yes, the cloud revenue data that is reported externally by IBM Finance is bogus. If Herman Hollerith could automate the entire US Census in 1890 why can't IBM automate it's cloud revenue validation process in 2014...124 years later? -Anonymous-
  • Comment 11/04/14:

    Anonymous — You are 100% correct when it comes to the method used to tally up and distribute profits and revenue. Since there is no legal or accounting rules to oversee this, IBM is free to do this at their will. I know from my 21 years at IBM that this point alone drives much internal discussion and debate; no doubt due in large part to execs and BLMs whose compensation depends on this. It is a lead-pipe cinch that Ginni Rometty and her minions are assigning anything that is within ICBM distance to "Cloud Profit". What do you expect? That is ALL the Armonk gang has to offer now. -Gone & Happy-
  • Comment 11/04/14:

    @AfraidOfRA: You're not allowed to keep any work related material from your machine, since that all belongs to IBM. That's the policy; what you do with it is up to you. It's not customary for RA victims (in the US anyway) to get walked out the door; they usually get 30 days. If you're really worried about it, make sure you offload any personal data on your machine. By the way, I think you're giving the CIO's office too much credit if you think they're watching what you copy from your laptop; not because it isn't technically possible, but because they're not getting the funding to do more important things they need to do. -Survivor-
  • Comment 11/04/14:

    Manager email today that the CAMSS challenge is now mandatory. Matches with what others have said about this being part of the basis for next RA round. -canuck-
  • Comment 11/04/14:

    I did not see anything reported but I was offered a minimized separation package last Thursday. It gives you 30 days to sign to receive the severance package. If you do not sign you can go back to the manager for a Performance Improvement Plan. I had a 2 rating so was caught totally off guard with this Resource Action. Prior to that many inside IBM were informed, I was one, that we needed to work 32 hours and study 8 hours per week for 10% less pay. Skills improvement...I was already working on a complicated SoftLayer bid. The employee is nothing at IBM anymore! -No More Pay Day-
  • Comment 11/05/14:

    -AfraidOfRA- Back up everything you can before they shut off your internet access as they walk you out the door. Back up all of your Sametime contacts and also do screen shots for all of the people you might need to reach out to in the future from Blue Pages. Save copies of your PBC's, awards, salary history, job titles, sales achievement (if you are in sales), names of internal classes you have taken, certifications received and anything else related to your success. Back up everything and then get it off site for your protection. -Vaughn-
  • Comment 11/05/14:

    The cloud will not replace eroding margins and revenue at IBM. Cloud prices and margins are being driven down every day by Amazon and Google. They can and are built to live on thin margins. IBM is not. Watson will fail as others enter to provide cheaper and more innovative solutions. -1K-
  • Comment 11/05/14:

    I worked in Boulder, CO as a contractor and was cut loose yesterday. I found out I was laid off at the end of the day because I received an email that my AT&T access was being deleted. Then 10 minutes later I received another email that my accounts were being disabled. Went to go ping my manager and she was not online. Got a hold of my contracting company and was told I had been let go. I feel relieved and so happy that I will will never have to use lotus f-ing notes ever again. -hatelotus-
  • Comment 11/05/14:

    @canuck, regarding CAMSS. What Ginni and the other SVPs don't admit to is they have monthly "technology transfer" sessions where key technology sectors spend several months, involving dozens of people preparing a deep dive presentation so execs learn all the applicable key words, buzz phrases, and talking points. These presentations are created by the business area VP or GM in a manner that a former colleague described accurately as a May 1945 Berlin Bunker Mentality with optimistic visions and reports of what will save the day. There are dedicated staff in Armonk to guide the creation of these presentations. Mind you, she and the others do not take a 10% pay cut for this. -gone-
  • Comment 11/07/14:

    The "technology transfer" mentioned earlier, the acronym actually used is "TT". Products, services, deliverables are presented in a best thing since sliced bread format ignoring the maggot mold infested flour they are made with. -beenthere-
  • Comment 11/06/14:

    You will no doubt soon be selected for layoff by IBM Analytics in the near future, if the recent payrise announcement is anything to go by. IBM has run analytics against its staff to identify Cloud Analytics Mobile Security (CAMSS) 'skills' to be eligible for a rise. It looks at who is blogging, who says they have skills and have taken courses; not who is actually doing CAMSS work! So, another scheme that can be manipulated by social braggers. A manager I know has a list of 5 eligibles and only 2 of them do CAMSS work! The others just wised up to the need to blog and put skills up on their profile pages! If this is the quality of central HR analytics then imagine what it will be like when used for layoffs! -Mr Analytics-
  • Comment 11/06/14:

    The only cloud offering that IBM is now a leader in, is the big, dark cloud Ginni and her minions have over the entire company. It is so refreshing being out of IBM and away from the tactics they use on employees they no longer value. My advice is to start looking hard outside of IBM and don't let them subject you to their evil ways -RA'd in March-
  • Comment 11/07/14:

    No More Pay Day - & - anon - Prior to being put on a Performance Improvement Plan (PIP), you have 30 days to decide if you want to be placed on such a plan or to take a severance package. If I remember correctly, the PIP package was for up to 13 weeks of pay (at least that is what it was at the beginning of 2013). This is not part of an RA, but being put on a PIP could make you a target if (when?!?) there are cuts down the road in your area. A PIP can bet set-up for 30, 60 or 90 days (perhaps even longer with HR approval). If at any time while you are on a PIP your performance drops below the target rating cited by your manager (normally a 2), then the PIP ends immediately and you are terminated without severance pay. Normally, PIP's are only used when someone has been rated low in successive years (e.g. two PBC 3 ratings in a row). Of course, "times they are a changin" (credit to Bob Dylan). -OutIn2013-
  • Comment 11/07/14:

    There is now a mandatory 'customer satisfaction' video and test. It said we should never include customers in our surveys that have high severity support tickets open, have legal action pending, basically no upset customers. Huh? Head in the sand 101. Also said the primary reason for customer sat is "they will pay more for our products". Somebody is clueless, shows the attitude that got us here. Money first, customers and employees last. I hope someone from IBM exec level is monitoring this and taking note of the price you pay when you treat your employees like chattel - they will throw you under the bus at every chance, in public, to customers, to the media, to competitors. They will be inspired to organize or leave. Support the Alliance! -LowMorale-
  • Comment 11/07/14:

    @Mark1: I was a solid 2+ performer for decades, but I was RAed back in March 2014. It was about being old and working in the US. On the employee survey in 2013, there was also the question about getting rewarded for doing a good job. Ha! -Yes, Virginia that was a failure-
  • Comment 11/08/14:

    US GTS: management being told to suggest to retirement eligible employees they should leverage their personal "exit plan" before year end. The axe will swing the first month of the new year. -Mike RoChanel-
  • Comment 11/09/14:

    I was talking with a partner at EMC. We both support the same client. We got to talking a little bit about my tenure at IBM. When he asked what happened, I told him I was released by IBM for being a poor performer; went through my PBC ratings the last year and such. The laugh from that person was memorable. -Anonymous-
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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