Here's the record for 2014 the board thought was good enough to warrant a raise for Rometty: IBM's revenue declined by nearly 6%, and net income by 27%. IBM shares began 2014 at a dividend-adjusted $183.12 and ended the year at $160.44, a decline of 12.4%. During that period, the Standard & Poor's 500 index rose 12.4%. (As we write on Monday, IBM has fallen further to $152.12.) IBM has been the worst performing stock on the Dow Jones Industrial Average for two years running.
If you're looking for an explanation of rising income inequality in America, Rometty's compensation is a good place to start. She's far from the most overpaid CEO in America — IBM is still hugely profitable, after all. But her record hasn't been sterling by any measure, and many investors remain on the fence about whether Big Blue is in the right hands. Under the circumstances, and considering the rut in which most working-class wages have been stuck for years, most IBM shareholders, employees and members of the general public are sure to consider her raise inexplicable. Apologists for rising income inequality in America often say it reflects the pay of "superstar" artists, sports figures and CEOs. What about soaring pay for non-super CEOs? ...
In its corporate disclosure statement last week, IBM didn't go into any detail about why Rometty was due for a raise. During a conference call on Jan. 20, when the firm announced its dismal 2014 results, Chief Financial Officer Martin Schroeter made some noises about some company initiatives that will "generate some momentum." But the best he could project for other parts of the business was modest growth in some and "stabilization" elsewhere.
When was the last time you heard of a rank-and-file American worker getting a 6.7% raise and a rich incentive bonus based on the "momentum" of his or her work? ...
IBM's executive compensation process, which covers Rometty and her four top lieutenants, appears designed to stay divorced from the real world. First, at least on the surface, it's the product of logrolling. The four members of the board's executive compensation committee are themselves all current or former corporate CEOs -- Andrew Liveris, chairman and CEO of Dow Chemical; W. James McNerney, chairman and CEO of Boeing; Alain Belda, retired chairman and CEO of Alcoa; and Sidney Taurel, retired chairman and CEO of Eli Lilly. Corporate CEOs are, as a species, known for a sense of entitlement that could make $17 million in raises, bonuses and "incentive compensation" seem like punishment. The process by which CEOs help set the pay for their fellow CEOs is perhaps the biggest flaw in the American way of executive compensation.
The compensation committee members all collect at least $250,000 a year for serving on the IBM board, but as of the company's last proxy statement in March 2014, only Taurel was an IBM shareholder (he owned 11,000 shares). ...
We'll hear some explanation for Rometty's compensation when IBM releases its proxy statement this spring. The document will make interesting reading. One thing's for sure: It will take a corporate CEO to understand the rationale.
In fact, IBM documents show Rometty actually has realized nearly $6 million in incentives and stock sales since last August.
Two items may make Rometty’s haul feel like a sore thumb to newly-fired employees:
First, IBM 8-K SEC filings on Aug. 28 show Rometty (or her proxies) executed 32 sales of IBM stock on Aug. 27, selling some 26,113 shares at an average value of $191.74 for a $5 million gain. On the same day, Rometty purchased 27,678 shares of IBM stock at an average cost of $96.73, making her net take on the day about $2.3 million. ...
Second, amid reports that IBM so far has laid off about 5,000 employees, a sampling of worker posts at the watchdog Alliance@IBM forum leaves the immediate impression the vendor has its work cut out to shore up employee morale if it intends to do so. With the fur flying that IBM intentionally rated employee performances low to avoid paying full severance packages along with charges that it tagged older workers to cut from its rolls, it may be quite some time until it’s able to mollify what appears to be an unhappy workforce.
Selected reader comments follow:
And to add insult to injury, the managers who laid off admin assistants and others who had been with the company more than three decades wanted to send out "retirement announcements" on their behalf and hold a retirement lunch or dinner for them.
Meanwhile, Ginni Rometty gets a $3.6M bonus and a 6.7% salary increase.
The IBM employees' union, which runs the website Alliance@IBM, described IBM's decision to fire the workers at the end of January as "outrageous".
"The recent termination of 202 IBM Dubuque employees shows that IBM clearly does not value the experience and expertise of U.S. workers," Lee Conrad, national coordinator of the Alliance, said. "To have IBM U.S. employees help transfer work out of the country and then get terminated is outrageous and a threat to all jobs and our economy."
The work to which Conrad refers relates to health insurer Kaiser Permanente's account, which Tom Midgley, president of the Alliance, said is having its workload shifted to India.
"IBM employees and their communities continue to see IBM cut employee jobs while shifting the work off-shore," Midgley said. "This destruction of IBM jobs is unacceptable and must stop." ...
In response to the statement an IBM representative told Channelnomics that the firm is "aggressively positioning itself" for continued leadership in cloud, analytics, mobile, security, social and cognitive computing, and that it is investing in and staffing these "priority" areas.
"Transformation on this scale requires IBM to continually remix skills - our clients expect no less as they look to IBM to help them take advantage of these innovations and new technologies," he said.
IBM does not publicly comment on where it is making its job cuts and does its best to keep the thresholds well below whatever numbers each state has that would trigger an official Worker Adjustment and Retraining Notification (WARN) reporting of those cuts to state agencies. You have to let go of 500 or more employees at a site or at least 33 percent of workers for smaller sites to trigger a WARN report. Because of these reporting requirements and the vast number of IBM facilities worldwide, IBM can get in below the radar and not have to tell anyone anything. That leaves the Alliance@IBM, the official site for the unionizing effort for IBM's employees in the United States, as the conduit through which IBMers who have been RA'd, as they say inside the company, tell their stories and we get some sort of count by country and division.
Lee Conrad, who runs the Alliance@IBM effort as Local 1701 (yes, that is the number for the Starship Enterprise) of the Communications Workers of American union, gave me the heads up that layoffs were starting on January 28. IBM is no longer supplying the Older Workers Benefit Protection Act (OWBPA) reports to those laid off, which listed the job titles, business units, and number of people affected in each group of layoffs, and people used to turn them in to Conrad where he could compile them and build a picture of what was going on. Conrad could confirm that IBM had about 250 layoffs in its Boulder, Colorado facility, about 150 from its Columbia, Missouri, facility, and about 202 from its Dubuque, Iowa, facility.
I'm very concerned about how IBM's leadership is handling this cloud transition. I see no fire in the belly or a drive into cloud computing. IBM innovates through acquisitions, such as SoftLayer, but that's a slow way to evolve, and there are signs that SoftLayer's not being easily digested into IBM.
For example, the recent departure of SoftLayer executive Lance Crosby is troubling because he's being replaced not by an innovative thinker but by longtime IBM executive Robert LeBlanc. LeBlanc will lead IBM Cloud, a new division that will try to speed IBM's progress in selling cloud services. To me, that translates into the same old, same old.
The shame of it all is that IBM has many smart people working for it, and I suspect more than few of them will be on the layoff list. Moreover, SoftLayer is a good public cloud offering.
What's needed is a complete reboot of the company, including new leadership and a renewed focus on innovation. IBM won't accomplish that by purchasing other companies. It needs to change from the inside out.
IBM's employee-owners gave up on IBM long ago. The best-of-the-best have been leaving for startups, business partners, the competition or retiring. When a corporation makes it difficult for the best and brightest to prosper, it is time to recognize that its culture is dead. The culture that enabled IBM to survive the 20th Century's 18 recessions, the Great Depression, 9 of the top 12 stock market declines, and even missteps by its CEOs, including Watson Sr., Watson Jr. and, yes, Louis V. Gerstner. ...
IBM's own employees won't recommend IBM as a place to work anymore. It may be a place to build a resume or a place to do your time in a large corporation, but it is no longer a place in which an employee-owner invests their most precious commodity — their loyalty and dedication.
Selected reader comments follow:
Disclosure: I left on my own after seeing the handwriting on the wall.
"With the latest charade of revenue declines, continually firing thousands of rank and file workers and then giving raises/bonuses to the senior execs, this may be the last nail in the morale coffin. I've posted elsewhere before, IMHO, they have lost the mindshare of their employee base.
Bulls will point to 'IBM has transformed before' but that was when they had legions of true-blue IBMers who were willing to crawl through mud for the company. They no longer have that — instead they have scattered ranks of contractors and offshore techs who couldn't give a rat's azz about the company — they just want a check and punch the clock. Tough to transform with that type of employee base — no mud crawling here.
I don't know if SA readers will understand you, Peter. They will all come out with all their erudite numbers and analyses, and their appeals to history, how IBM will do it again...But the past is not prologue. I tried for a long time to fathom the IBM management mindset, and I am forced to the conclusion (however unwillingly) that basically they hate and detest the employees — we really are a lazy bunch of louts.
Yes, Ginny is finished, even if she does not know it yet. In anticipation of defending her own bonus, she announced that employees would get their GDP (growth driven profit) this year — but why? There was no growth last year. I guess Ginny thinks it wouldn't look good to keep taking from the corporation without throwing out some kind of bone.
As I've stated prior, I was with IBM for over two decades and worked with many great I/T people. One in particular was a high ranking fellow, smart with really good insight. I trusted this person because he was a face-value kind of guy, he called it like he saw it. He once told me a story which occurred circa 1998-1999. It goes something like this:
For those who remember the bricks the IBM CEs used to wear, they were glorified pagers which were essentially wireless computers that dispatched the CEs with work details, etc. My friend, who had access to 'higher' circles of authority, sat in a meeting once where a DE (distinguished engineer) said to a group of Band-C/D executives: "What if IBM were to take the brick to a new level, make it a cell phone with its wireless computing and maybe even one of these new digital cameras included in it. Then market it to the masses since cell phones seem to be all the new rage these days?"
The highest ranking exec in the meeting said, without hesitation, "there's no market for that." And that, my friends, was the end of the conversation.
This is but one example of what probably occurred thousands of times over the past 25 years at IBM. The Exec culture evolved into them being 'the smartest people in the room' and they were far too smart to listen to such malarkey coming from rank and file technician types — they wouldn't even entertain such ideas. It is this specific executive behaviour which has driven the company to where it is today.
As mentioned in another SA thread, as recently as 2010, Palmisano was quoted as saying 'IBM customers are not really interested in the cloud paradigm.' And since, in his mind, Sam was the smartest person in the room, nobody within the company, no matter how smart or technologically visionary, could have convinced him otherwise. On the contrary, if this visionary had pushed the idea too hard, he would have simply landed on a resource action (layoff) list.
Welcome to the new IBM executive culture. From what I hear, it is still alive and well within the Blue halls, even with the current state of affairs. They simply don't know that they don't know, it's a deeply flawed yet ingrained leadership culture — the higher you rank, the smarter you are. The lower you rank, well, you get the point.
Maybe they will call the IBM documentary "IBM: The Smartest Maximizing Shareholder Value Executives on the Planet".
I also think you're missing the point. The pain of downsizing is obvious. But it's important to understand how and why this is occurring.
In this case, it's self inflicted. IBM management transformed a positive technology culture with a negative financial engineering culture. It's structurally entrenched, as business managers routinely trump technologists.
That was my experience at IBM after they acquired my company. I stayed for 2 years, not least to experience what it's like being an IBMer. I've posted about this before, so I won't repeat details that can be searched.
But suffice it to say, I left of my own choice. It was simply too limiting and even oppressive, especially in light of how Google, Facebook, Oracle, Microsoft, & SAP treat their people. Lots of top IBMers leave for these companies...but the reverse is not happening, which is a HUGE statement.
I've also posted how 100+ of IBM history was a positive statement about longevity and an ability to reinvent itself. Again, I consistently posted how employee morale was the chief threat in breaking this recycling of the company into a newer and stronger brand. Unfortunately, my fears are being realized.
I'm holding my IBM shares. But no way would I advise anybody to put in serious money. Ginni isn't getting a grip on the employee morale issues. This can seriously diminish IBM in the years ahead.
All the best.
You can financially engineer results all you want IBM, but when all the people who made the company what it was the first 100 years are no longer around, it won't make a lick of difference. No good people = no good company = no good products = company circling the drain.
The cuts in the RA's are arbitrary number targets across multiple business units, including groups performing well financially and in market growth segments. As an example, an area that provides core infrastructure services at the heart of IBM's cloud offerings. Several job openings remained unfilled in 2014 due to hiring freezes to meet "financial challenges". Critical work was impacted due to the staffing shortages. Yet about a dozen employees were notified in this area they were losing their jobs Feb 27th to "increase productivity". Even those in strategically critical roles were selected despite staffing of those positions is a key metric reported at executive levels globally in 2014 & 2015.
I think the point the author was trying convey is investors both long and short should take into consideration how IBM is managing it's business and employees internally. The toll of these annual arbitrary firings aren't just impacting those losing their jobs. Those remaining are severely impacted as workloads double/triple with a fresh reminder that no matter how well you perform or critical your contributions, you may be next.
If this discussion is too emotional for an investment blog maybe you should be reminded that human capital is the foundation of what made this company an attractive investment opportunity. As IBM continues to systematically erode that foundation from within, at what point should that practice be seriously considered in your portfolio risk analysis?
That said, IBM is a toxic environment nowadays. IBMer morale is vapor.
Analysts can play with all the spreadsheet analysis they like looking for "intrinsic value" etc. Less knowledgeable investors may even follow headline data or the drive by media commentaries of talking head pundits on cable financial news shows to aid their decision making — who knows.
This I do know (and Buffet knows it also though in this case he didn't follow his own tenets on a companies management before taking the plunge).
A true leader sets the tone, the vision, and leads ... Rometty manages (and not very well at that). She and top execs have lost the hearts of employees (This latest bonus fiasco ensured that). and without employees buy into a leaders vision of transition all the spreadsheet analysis in the world isn't going to save pale blue.
Unfortunately, IBM is a toxic, toxic environment nowadays. IBMer morale is vapor.
I wholeheartedly wish IBM well, but with Rometty, existing BOD and top execs at the helm the demoralized employees are gonna to have a hard row against strong headwinds trying to navigate this latest transformation in a rudderless ship.
It truly saddens me to say this, but there are much much better companies out there today with strong leadership, clear vision, solid financials and a morale compass to boot with which to invest one's hard earned dollars nowadays.
I'm not sure I would have said that a decade or so ago. Others mileage may vary.
"I can't stand to work in a world of yes-men. They create an atmosphere that can lull you to sleep. I like people who care enough about what's going on to speak up when they don't like what they see. Of course, there are critics and there are critics, but even the worst of them are more stimulating than the best of the yes-men...there's the kind of complainer every organization needs: the royal dissenter. He or she offers not only a well-thought-out criticism but also a considered approach to dealing with the problem."
Treating humans as a relationship rather than a resource is really not that hard or expensive. It does demand accountability, though, which some folks don't like. Cheers, Pete.
This destruction of IBM culture that occurred by the execs of IBM is likely one of the most egregious since IBM was considered at one time a national asset like Bell labs, not just another investment option on Wall Street—just ask any IBM alum of the golden years.
Because of the former brand name of IBM their execs have assumed they will always be able to replace any number of employees especially in a national good jobs deficit environment like now but they are wrong in terms of retention and even first interviews with such sites as GlassDoor.
The destruction of the former IBM culture in combination with its decreased brand and lack of draw to the best brains is yet another headwind the next CEO (I assume Ginny's days are numbered) of IBM will have to correct and it might be one of the biggest. For now it's just another death by a thousand cuts faced by IBM and its unfortunate employees done by its rudderless execs.
"Transformations are only clear when they are retold in revisionist history, never when you are in the middle of them," Rometty said. "I thank you for being part of this transformation." ...
"We made tremendous progress transforming the business," Rometty said in her keynote address to partners. "We completely transformed the hardware business and moved to a higher value solutions." ...
"How does IBM differentiate its portfolio in cloud, mobile, and social?" Rometty asked. She said IBM was a leader in a highly competitive landscape, adding "make no mistake, we are not a me-too option. We serve clients and we know them well." ...
She said that IBM’s cognitive approach to parsing big data — a la Watson — gave partners a competitive advantage in the marketplace. "Yes, big data is a natural resource. But it's not worth anything if you don't refine it," Rometty said.
The company behind punched cards, floppy disks and the Jeopardy-winning computer system known as Watson said it first notified Priceline in 2011 that it was infringing on several of its patents.
“Priceline has refused to engage in any meaningful discussion on the merits, resorting instead to delay and non-responsive answers,” IBM alleges in its complaint.
A selected reader comment follows:
Marriott is buying into IBM's cloud. So is Opera, the browser company. SohoNet is taking IBM's cloud to the movies, ShopDirect is buying its hybrid cloud story, and its channel organization is being reorganized.
Please don't take all this as an excuse to buy into IBM stock, however. These press releases are not proof of growth. They're proof of desperation. Don't believe me? Former IBM lawyer Marshall Phelps wrote in his book Burning the Ships that the purpose of patents is not to troll rivals for cash, but to force your way into new markets. Nope, now IBM wants the cash, from Priceline and subsidiaries Kayak and OpenTable, too. For patents that date from the late 1990s.
This is not your father's IBM. More is the pity.
If your father's IBM signed a reseller agreement with Apple you can be sure it would be driving the relationship. Nope. Apple is. IBM salesmen are going on calls with Macs preloaded, by Apple, with its presentations. IBM insists its layoffs aren't nearly as big as critics insist but we are talking about layoffs in growing markets, like India, where headcount has been cut by 50,000.
The key IBM asset today is SoftLayer, acquired in 2013. SoftLayer brings IBM some key assets, but more important an entrepreneurial spirit and corporate culture. Which is now in the process of walking out the door.
And for this performance Rometty is getting a bonus AND a raise? ...
This is not a growing company. Rometty is being dramatically overpaid. She has no vision, no real growth plan, and she remains what she was trained by IBM to be, a salesman rather than an entrepreneur.
Tech companies that fail to grow wither and die. IBM has been dying by degrees for years. The only news that could really turn around IBM shares, at this point, is Rometty's resignation. Or maybe its sale to Oracle, which at least knows how to milk a monopoly.
Selected reader comments follow:
IBM is unexciting. It’s often described as a “dinosaur” for its history of falling behind the hottest tech trends.
As the tech sector continues to unveil sleek new devices like smartphones and tablets, and begins making forays into wearable tech, IBM is nowhere to be found. ...
Here’s the thing – IBM has a notorious record for spotting the trends, but forfeiting any dominance due to a slow bureaucracy and a lack of zeal. This pattern often relegates IBM to a lesser role in the tech market – as a servicer not an innovator – while an Apple or a Google steal the spotlight.
And while Apple stock is up 61% in the past year, IBM stock has slipped 11% – with more losses likely ahead.
Pros: Good city, lots of young designers all together, nice work space. Charismatic leader. Decent pay and benefits, especially for visual designers compared to other opportunities.
Cons: The new designers in Austin are organizationally and physically far away from the rest of the product teams. Decent designs are being done, but they are not getting into the products. The design management has VERY high opinions of themselves, but not clear it is deserved. IBM Design in Austin has absolutely no respect for the designers who have been in the company a long time and were not hired by IBM Design. The older designers who actually know how to get things done in the company and have worked with the product teams for years are being pushed out.
Advice to Senior Management: IBM Design is a disaster in progress. Putting all the young designers together away from the product teams and the experienced designers was a really bad idea. Confusing visual design with interaction design was even worse. Also, take a look at the diversity in IBM Design — everyone is slim, young, white, and attractive (with very few exceptions). There is something funny going on in the hiring process.
Pros: Mobile work arrangements; large company with numerous opportunities to move; great pension contributions.
Cons: Lack of investment back into product. It's all about numbers for IBM to satisfy shareholders at the expense of reinvestment into product development. Continuous hiring restrictions on professional hires. Instead, straight out of school, inexperienced or outsourced developers are used because they are cheaper but require lengthy training before contributing towards productivity.
Advice to Senior Management: Invest in employees; invest in products. Stop buying successful companies only because you are interested in 1/5 of the company and will neglect and destroy the rest of it.
Advice to Senior Management:
Pros: Still a lot of great people are trying to do good work for their customers, their employees, and for IBM. They're holding out for IBM to return to the type of leadership that made it great in the past. Some of the products are world-class and haven't been too damaged yet by the cycle of corner- and cost-cutting that's taken place since 2008.
Cons: IBM HQ in Armonk continues to focus on EPS and shareholder value to the exclusion of all else. Annual resource actions are a torpedo to innovation and morale. The only people with confidence in the leadership in Armonk are the sycophants in Armonk.
Advice to Senior Management: Change your focus to include your customers, employees, and other stakeholders when setting budget priorities. Instead of firing people annually, encourage internal mobility to address changing business needs. Dump the rank-stacking PBC system which hurts the morale of employees as well as the managers who are forced to administer a specific ratio of PBC 3's. Give anyone who changes jobs internally immunity from PBC 3 ratings for a year
Pros: I thought the people I worked along side were a diverse, eager to learn bunch of folks I was more than comfortable learning and working along side. I also thought the trainer was pretty great, learning tons about Java in a short time in their class.
Cons: The opportunities were very limited, contrary to what some reviews have stated. During my time there, I was locked out of trying to apply for open projects on their marketplace. Then I was basically forced onto a project by the center management. One, where the project manager openly admitted I wouldn't have any billable work because my rate was too high compared to developers at other centers and he needed to make a case to the customer that I could add value to justify the rate. After hearing that, it was clear I had to leave immediately because staying at IBM was guaranteed career suicide. I found a new job within the week.
Advice: IBM is waffling too much. It seems like if they're willing to bring someone like me in with no clear vision of where I could fit, the recent decisions to restructure the company will result in the same. The employees in the various segments will struggle to find where they fit and IBM will wind up delivering more sub-par products.
Advice to Senior Management:
Pros: IBM was a good place to work for. I was lucky enough to be in department where my first-line manager and second-like manager encouraged me to take informed risks. I was one of the few who always got opportunities to take classes and gain new skills. There were many opportunities if you worked hard, had 3 wonderful mentors who took interest in advancing my career.
Cons: As the years went by the company culture changed drastically, the work-life balance was bad, lots of people worked many extra hours with little or no benefit. Training opportunities, career growth opportunities went away. Team was rated with the system called PBC. Non-existent raise and bonus made the environment stressful. There was always a danger of being let go in the next round of cuts.
Advice to Senior Management: Empower FLM (first-line management) to help the team members working under them. Don't treat the people as resources/headcount which can be eliminated to make up some far-fetched number. Invest in the people. Don't make a counter offer after the person has found another job; if you really need a key member to stay, ensure that they are happy and well compensated.
Pros: There are still good people that work at IBM and they have a lot of great offerings. IBM is big enough and has enough money to sustain some of the bad decisions and strategies for many years.
Cons: Lack of vision from the leadership, rapidly diminishing culture, and more focused on short-term stock price has put the iconic company future at great risk. I have worked for IBM for ten years and it is sad to see how quickly this company has fallen. The erratic, illogical, and unfocused change that is deemed “transformational” has put IBM on the fast track of its demise.
Under the current leadership the services business has been highly mismanaged and it has been a distraction that replaced the core competency of IBM’s, which is creating new innovative technologies that will change the world. Customers are being managed poorly, customer satisfaction is at an all-time low, and IBM Watson is the primary new innovation that has been rushed to market too early and many of the solutions in my opinion are not fully ready for market, organization is disjointed, and it is driven by marketing and false perceptions.
The good news is that the company is so big, it has time to get things figured out, it is not like IBM is going to fall overnight, but big changes are needed as soon as possible to put this ship on the right path.
Advice to Senior Management: Your focus on services has been a distraction from what makes IBM great. Although services lead the growth in IBM revenues in the past, but because it has no barriers of entry and new low cost competitors have greatly impacted future growth and picked off many of your existing contracts. We lost the focus on the customer, and lost the focus of your most important asset, your employees.
Pros: Enjoyed the remote office environment and easy hours.
Cons: Execs over sell; managers over commit; PMs underestimate and you are left on an ever shrinking team because of layoffs and attrition to deliver a solution to a customer that is already upset by the time you get to them because of all of the fumbles and additional charges that have occurred, that once they find out that they will receive the most basic of implementations by way of licensing tiers on everything they need thus ending up with something similar to a "small office" type configuration for their company by way of licensing.
Advice to Senior Management: After having seen behind the curtain of this huge circus, I would:
Pros: Great health benefits. Most projects are flexible for work hours and working from home if necessary. Many projects offer training and/or travel. Lots of exposure to clients and executives. Great employees to work with and great team work. Open to work life balance including working and going to school, different schedules. Certain projects are very interesting and well balanced.
Cons: Lots of time spent doing basic IBM training before getting on a project. Can be placed on a project where you do no work from your field of work/study. Not easy to switch projects. Not competitive pay. Lots of expected unpaid overtime and very short notice weekend work; no time off in lieu. No explicit steps to advance your career and no knowledge given about possible promotions. Not open to employee suggestions to deal with these issues. Employees are considered and treated as "productive or unproductive resources" and not as human beings with lives, families, and obligations.
Advice to Senior Management: Offer at least higher compensation or time off in lieu for unpaid overtime. Heed employee concerns instead of letting them get tired of being mistreated and leave.
Pros: Global company. Work with great people from around the world. 100% work from home. Good vacation package with standard holidays and some floating holidays to accommodate everyone's needs. Decent work live balance.
Good place to spend a few years to pick up some skills but don't plan to spend your career here
Advice to Senior Management:
Complete disjoint between senior US management and the rest of the company, pure short term-ism in their approach to satisfying their customer (the shareholder, not the true client). They erode any value from companies they buy.
They do not care about the employee or the client, only the shareholder, and who are the biggest shareholders...the board.
They constantly restrict your ability to do your job yet expect you to support the sales guys in selling as much as possible, even if that means giving ridiculous discounts just to get anything even if it means undermining any future market value.
They say IBM is a great place to have lots of careers and move jobs; that's because it's full of people constantly moving and hiding when they mess things up! What about those who want to do one thing really well!
Advice to Senior Management: Break the company up into smaller units and let them have control over their future. IBM is too big in this day and age to try and do everything for every market in the same way. You buy companies for the success they have had; let them continue that by not instilling IBM processes and controls on them!
Cons: I came to IBM through an acquisition. When we were acquired, we were told about all of the great opportunities that IBM had to offer, there were sessions about advancing your career, about moving into new job roles, about becoming master inventors or senior scientists. In the end, it was all bull.
The opportunities to move up or move into new domains are few and far between, and really come down to patronage and who you know. Most people are pigeon holed, working the same job, keeping their heads down, and hoping their product or team remain intact until they retire.
Business decisions are arbitrary and based completely on short term results. Unless you work on a few blessed products, there is little to no innovation. And when you do innovate, opportunists step in and take over the product, driving out the people who did the original work (example...Watson).
Advice to Senior Management: IBM used to have a reputation as a great place to work...make that the focus again.
Pros: Interesting technology view and on the forefront of some of the technologies, does its best to adapt to changed environment. Work-life balance is preached, but then putting in extra time outside working hours is expected.
Cons: The review process is very frustrating, almost no feedback during projects. Manager constantly changes which provides you with no solid person to act as a reference or provide the possibility to bond with such a manager.
Advice to Senior Management: Get out of your office and understand what is really happening inside the company
Advice to Senior Management: Scrap PBC; start evaluating on things people did not on the people who are good at a** kissing.
Pros: IBM Name on resume. People, projects, experience with IBM. Travel benefits.
Cons: Salary is a joke; $42K for four years of experience with IBM. I know someone that transferred to another sector within IBM and was given the exact same salary even for transferring! You are continued to be haunted by ISC Lansing when you're no longer associated with it. Pay employees what they're worth and stop utilizing the words "low cost center" if you want to keep good hard working employees. All they care about is utilization for the center no matter what project they get you on, even if it is not in your skill set.
Advice to Senior Management: Pay us market value, not what you call your "low cost center" pay scales. Let your employees that live on the west side of the state of Michigan have the same convenience of not having to drive to Lansing and work from home/Grand Rapids like you choose to give the employees that live in the Detroit area at the office in Southfield. Fair is fair. Everyone should adhere to same location if you're going to require them to work from Lansing at least 3 days a week.
Pros: Smart, talented employees; Flexible (remote) work environment; Intellectually stimulating projects; Global reach.
Cons: Constant financial engineering, layoffs, cost-cutting, low-ball performance appraisals, offshoring, use of landed resources...all destroying the culture of a once-great technology company
Advice to Senior Management: Value customers and employees above shareholders. Apply the same age and seniority criteria used to lay off experienced employees to the senior executives.
Advice to Senior Management: Please, keep in mind that people are not just numbers behind computers, but your most valuable "asset". You can't make customer "happy and first" if your own employees are unmotivated and living from salary to salary. Recognize the top guns; say "thank you" after successful project implementation. And, mainly start investing to your own people, their training and career development, and motivate them.
Advice to Senior Management: Treat employees like the valuable assets they were once considered to be — not like consumables. Continuous focus on cost reductions has had a detrimental effect on both employee morale and customer service.
Pros: IBM respects the individual and provides excellent career opportunities. Personal development and work-life balance are primary elements every IBM people manager is expected to work with employees on. IBM has great career growth opportunities and a broad range of career paths.
Cons: Over time the benefits have been reduced but frankly the global market drives compensation so blame the economy not the company.
Advice to Senior Management: Get rid of unnecessary middle management layers that impede progress. Commit to training employees to expert level in their job areas. Get rid of silly expense constraints, and let employees find the best travel bargains to suit their needs.
Pros: Good work environment. Bad management. Should learn from Google and Microsoft on how to treat a employee. Very old technology is still in use. Compensation is bad.
Cons: Benefits: not much as expected. Perks: do not remember any of them. Company values: I haven't seen any value as such.
Advice to Senior Management: Please stop the company.
Pros: Name recognition on CV is perhaps one of the few advantages for having worked at IBM. Personal network of professionals.
Advice to Senior Management:
How the PBC mechanism works and what its intent is: The PBC (personal business contribution) ranking is quota driven — heavily masked by very senior management to be a committee and ground-up appraisal and comparative ranking. What happens is a PBC quota for 1, 2+ is set from USA and then AP HQ for Australia. This is done in October then refined in November, months before any employee or first-line manager interaction. The quota is 1 (5%) and 2+ (20%) Then the rest of the 75% staff have to 'fit' into what was the remaining 2 (60%) and 3 (15%) quota ranking. A person that is 2 is able to claim to be made redundant. A 3 is basically getting readied to be sacked for non performance and save IBM money.
In the last two years IBM reduced the quota of 2's from 50% to 35% and increased the 3's from 15% to 30% to save money on redundancies. Basically, it's set up so nearly on- third of staff can be fired without compensation or cost to IBM. The PBC process is like something out of a Monty Python movie. The PBC Quota is imposed top down. The manager already has submitted their rankings to the top-down quota edict long before the employee even submits their view on performance. The PBC discussions are a sham cover and then the first-line manager (and second-line and third-line, etc.) are told to assign PBC rankings to the top down quota edict. -PBC Class Action?-
Alliance reply: Class action lawsuits against companies that are "at will" employers are rarely actionable in terms of a company that "breaks its own rules". This is the case in IBM U.S. (We are not completely aware of "class action" legal specifics in countries outside the U.S.). The PBC process, while seriously flawed and in IBM management's complete control, is still part of the at will employee's process.
IBM can operate the PBC any way they choose, without violating U.S. federal and state labor laws to the extent that a class action would be an option.
Please take a few minutes to read through our Job Cuts Reports current comments (this page) as well as our archives, using the search or 'find' with the key words 'class action': Job Cuts Archive most recent *Job Cuts Archive #2 *Job Cuts Archive oldest.
You will find several examples and several comments that suggest what you are suggesting, and you will also see responses from Alliance@IBM that explain why class action lawsuits require extensive effort and cost, as well as attorneys willing to take the case. Filing class action lawsuits against IBM has been tried before. The success rate is dismal and is not the best option for IBM employees seeking damages from IBM for their termination for cause or layoff (firing, RA).
There are always exceptions; but historically, most class action lawsuits against IBM, fail.
Since most of these current firings are occurring early in the calendar year, that also means calendar year 2015 should go into your Social Security earnings history at least as a decent year, depending on your severance amount. That boosts your future Social Security retirement benefits, and it also helps workers who haven't vested yet in Social Security and Medicare to make sure 2015 is a full 4 credit year. And it pushes out expiration of your Social Security disability coverage if you face long-term unemployment after IBM. [Or if you start another job your severance payment counts as income toward your annual Social Security earnings cap, so if you're lucky enough to reach $118,500 (2015) in earnings including your severance payment you won't pay the Social Security contributions on earnings above that amount for the rest of the year.
Some people might be lucky that the severance pushes them over the cap for the first time in their careers.] The major disadvantage, of course, is that your net severance payment is reduced by your share of FICA contributions. -FICA Answer-
Medicaid eligibility just depends on your income now (and obviously IBM isn't helping). You can be a multi-millionaire but have low income and thus qualify. You're much better off in states that have expanded their Medicaid programs. In those states you can have earnings up to 133% of the federal poverty line and qualify for Medicaid. (Even higher than that for children and pregnant women.)
So take a look at Medicaid in your state (or in another state) to see if that works for you and your household. As for any stigma, please don't worry about it. Everybody deserves medical care, even if they're out of a job. You paid for this benefit, just as you paid for Social Security and Medicare. Don't hesitate to take care of yourself and your family. -Medical Advice-
An old second-line manager of mine who was then a VP in another group told me to re-apply for STD. I had enough STD time left to cover the 3 months I was short. I had my doctor fill out the form that my condition made it impossible for me to travel or work in an office. I was re-approved for STD after my case was reviewed by the IBM Medical Director. I remained on STD until; then I came back to finish my 30-day RA period for one week in August of 2009. Then I was within my one year for a retirement bride.
My RA date was reset to the date after my return from STD. I was able to take the RA package, go on an 11-month bridge to my full retirement in 2010. I got to keep the FHA and am collecting my pension. Everyone says I beat the system. Truth is I should have not come back after my first 5 months. I should have gone on Long Term Disability, but I wanted to work. Now I am getting Social Security Disability along with my Pension. -Gone In 2010-
Also stop doing all IBM work when RA'd, or at least just doing the minimum. Your job is now to find a job, 100% of the time. While internal jobs look attractive, what happens if your 30 days are up and you have not focused on finding an external job? Time is your most precious commodity.
Personally I gave myself 2 days, scouring the IBM jobs database. Found several jobs that I could do but never applied. My rationale was "If I get an internal job, what's to prevent them from laying me off again?" It was hard — sleepless nights — but in hindsight I definitely made the right decision. Best of luck to you. -Anonymous-
Alliance reply: The Alliance president, the vice president, and secretary are current employees and have been public members of the Alliance since 1999. Other members have also been public. As a member of the Alliance you are under the jurisdiction of US labor law which gives you the right to help organize your co-workers. Of course there are rules and regulations you must follow and all new members that choose to go public must contact Lee Conrad national coordinator before they make that move.
Can IBM fire you for work related offenses? Of course. You are still an "at will employee". But if they harass, intimidate you or take other actions because of your organizing activities then the Alliance will put you in contact with our legal team. They only work on issues related to the National Labor Relations Act. Staying employed inside IBM is something no one can guarantee anymore. But isn't it better to go out fighting?
In your particular case, you have two problems. First, you aren't even on FMLA yet and you have already been given a notice that you will be fired on Feb 27. Second, your firing is part of a larger reduction-in-force anyway. So, FMLA will not protect you from getting fired on Feb 27.
STD is a benefit that pays you a monetary amount while you are on leave due to short-term disability. When people go on FMLA, it is the STD benefit that pays them money while the FMLA protects their job. Note that STD benefits stop when your employment is terminated. In your particular case, as explained above, your employment cannot be protected and will terminate on Feb 27. If your last day is Feb 27, you may still apply for STD and your claim may still be approved. However, your STD benefits will end when your job terminates on Feb 27. -Legal Exporter-
If you are on STD when RA'd and apply and get IBM LTD (to see if you can keep your job and beat the RA) you basically are off the IBM payroll since it becomes a disability insurance case. So IBM basically says you're too disabled to work for them. So you can't beat the RA that way.
New York State has its own State Disability Insurance (NYSDI) that pays you a portion of your working wages when out of work for a medical condition. But it too does not protect you from an IBM RA. -FMLAvsIBMdisability-
It all seems clear now. They are in trouble-now going after other companies for patent infringement, and reportedly the big upcoming conference Feb 22 has abysmal registration from customers, who are busy talking to competitors. The only salvation for this company is radical change - at the top, and gain back the hearts and minds of it's employees. I think we are all willing to act now, even if it means 'outing' ourselves, we just need guidance from the Alliance, and please folks, keep signing up here. Strength in numbers! -LowMorale-
Alliance reply: Anyone willing to help organize in IBM please contact firstname.lastname@example.org so we can discuss.
The thermometer was started before the job cuts. It is a membership drive to support the Alliance. We also encourage employees to join as subscribers/supporters, which is free. The people who sign up in all 3 categories shows us the level of support for a union. Majority support at a given IBM location or division will trigger the process for a union election.
Alliance reply: Thank you for sharing this information. Apparently, no behavior is beneath IBM HR or executive management. This is why the IBM workers need a collectively bargained contract, so they are protected from this skulduggery.
Alliance reply: This is not surprising to some of us that worked for IBM 30-40 years ago. While working in development engineering, there were several engineers that applied for patents at least 5 times a year, depending on what technology or program they were developing. Many of these patents went nowhere but "on the shelf" in IBM. And, those IBMers did not retain sole ownership with IBM...they had to share ownership, as it were. It's not surprising that IBM would search its patent archives to find out if any of them can be used to make IBM revenue, instead of actually making a product or a service that IBM can sell and make a profit. Sad.
So after almost 29 years with the company and almost 54, I was given my walking papers a few days back. In discussion with others, I was advised that in your benefits portfolio in NetBenefits is a "Future Health Account" that IBM puts $$ into every year and when you retire you can use it for medical payments. I looked at my portfolio and there is over $30,000 in it for me at retirement. Wow maybe some sunshine in all this.
OK, here's the kicker. You must retire to get this money. In my case, with the 1-year bridge, I will fall 45 days short of being able to retire and will not get that $$ or any other retirement benefits. 45 DAYS. I asked my manager about it and to see if he could ask for a 45-day extension. His answer was that he could not justify it. Nice! So after almost 30 years (more than half my life) with the company, this is the send off. -Kicked While Down-
I don't have my PBC goals for 2015 either, and we're almost two months in. So it's being held back for a reason, probably to assign more 3's and the door soon. It seems like folks are still being notified, but the posts here are a little vague as to whether these are new notifications or the poster is just getting around to putting something here.
Can everyone please indicate the exact date you were notified so we can figure out what IBM is up to? In the meantime, keep the thermometer moving and please continue to join our ranks! -WaitingForACallFromMyManager-
Fight the PR machine that they are attempting to use to humanize Rometty and provide cover for these actions they are undertaking, and sign up for the Alliance. We are building momentum, don't let it die. It feels good to be wanted, it feels good to belong, and it really feels good to fight back against these greedy, non-caring individuals. Fight to organize, fight for your jobs, fight for those who have been cut.
If you have been RA'd, make a call to MoneySmart to get financial advice. Talked to them yesterday, and they have been inundated with calls from IBMers getting RA'd. The person I talked to told me one woman was a month from FHA eligibility. Evil. -HelpYourself-
It also stated that the repayment was required if you were returned to IBM by being hired directly by IBM or through a third-party agency. This is very unfair — why should you have to repay any amount? The payment was part of you leaving IBM. When you sign your separation papers and are given the checks, you are no longer an IBM employee. If you are rehired by IBM, your service date is reset as there is no credit for your prior years of service. You do not lose any defined benefits you left IBM with (pension, etc.) but as far as vacation and the number of years of service that you have it is as if you never worked for IBM before.
So, you will need to work at least 15 years in order to qualify for FHA (assuming you are 55 at that time) no matter how many years you had already worked for IBM. If you get RA'ed again, your years of service would be based on your rehire date. -OutIn2013-
Alliance reply: The key thing to remember about IBM executives is that they are bound by an "employment contract" that stipulates THEIR responsibilities and performance. It's a rigged game, because the executives are able to "massage" their performance results with excuses that are never challenged by the BoD; especially because some of those executives have 'friends' on the BoD. The PBC system is for the "little workers" in IBM that don't have a voice or a choice in how the IBM rules are applied and executed. It's a rigged game. IBM employees need a contract.
The main reason for me to turn down my first offer was that I had more interests in the Cloud. I was also confident about my technical skills and performance. Until now, I still do not know what my FLM really told that hiring manager that made the hiring manager change his mind in two days. I once asked my FLM’s thoughts about my performance, he replied that “you are very good…etc” . He also told me that he would help me by talking to the hiring manager for that position.
After a few days, then, he told me that “the position is frozen due to the end of year"; “they will consider you next year…” The biggest mistake I made was that I should have recognized my FLM falsehoods and left him earlier. My personality is very trusting of other people. It is why I am so hurt right now. -Anonymous-
I knew then I was talking with someone that was more concerned about his retirement in the next five years, then the technological position of the company.
Twenty months into that 60 months, and well, Scott, I think you're off on your prediction. As it went from $212, to what, $156? Must be nice being part of the 'good ol boy' network. Eight years at SoftLayer; was considering 30, but this is not the company I want to grow old with anymore. You're pushing your old talent out the door, and making the new talent want to leave. -Anonymous-
The road blocks are NOT our demanding customers, the changing IT landscape being ushered in by the new "Cloud" technologies or our being lazy and unmotivated. The road blocks are caused by 10 years of giving all the profits to the stock holders and senior management and NOT putting any money back into improving products, support and people. So, both employee and customer morale and approval of IBM is zero or close to zero.
As I read the emails and listen to my manager, I see how badly they understand the huge crater they made of this company and they continue blindly (see no evil, hear none, speak none). As I recall it, as the Titanic was sinking, the captain and crew were rearranging the deck chairs while ordering the band to play "Nearer My God to thee". Sound familiar? -Stop_making_Sense-
In the UK a company has to launch a consultation if it intends to lay off more that 19 people in a single location. For 20-99 employees, this must be 30 days before the first lay-off. For more that 99 people the consultation needs to start 45 days in advance. The consultation is a process for officially selecting who gets cut. I didn't make the original post, but I thought I'd explain the law here. UK-Happily Ex IBMer. -Anonymous-
People are under the misapprehension that IBM's word is law; well it has been proved in the UK High Court that it isn't. I would not be in the least bit frightened to take IBM UK on with or without Unite as I will never give into the corporate bullying they employ. And people can and do get off PIPs. I am not saying it is easy and you have to be prepared to meet IBM head to head and not be intimidated. -UK IBMer-
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