After writing earlier about Cringely’s article, I’ve had all sorts of numbers coming my way, from IBM via an official spokesman, from insiders who've stepped up to help me sort this out under promise of anonymity, and from folks pointing me to other press and analyst reports. And I talked to Cringely himself for a few clarifications.
Why do I care about what IBM is doing? After all, companies change strategic directions all the time, and as IBM points out, with so many hires going on, the net job loss—whatever that number is—is not going to be that significant on paper. The problem is that it’s very significant for the people who are being dismissed. I’ve heard no talk of retraining from worried IBM employees; I've heard that certain severance agreements forbid former employees from even applying for any new jobs opening up. I’ve heard that, for some employees anyway, the cuts feel random and desperate, not strategic, and that the overall approach to workforce reduction is affecting morale throughout the company. ...
Workforce reduction, Cringely pointed out, is not just official layoffs; it combines resource actions (as IBM calls layoffs), retirement, general attrition, and out-and-out firings. It may or may not include contractors—he’s not sure how IBM counts contractors.
At this point, Cringely is guessing that Project Chrome is global—and that, perhaps, it has already hit some sections of the world. He says IBM’s latest annual report shows a drop of 50,000 in its head count in India, from 135,000 at the end of 2013 to 85,000 at the end of 2014. ...
Selected reader comments follow:
IBM PR should really work on their own accuracy because my 2012 column they cite calling for massive IBM layoffs was actually written in 2007! Here it is: http://www.pbs.org/cringely/pulpit/2007/pulpit_20070504_002027.html. It was one of a series of columns I wrote back then on pbs.org about IBM's LEAN program. There are lots of details, far more than I could ever make up. One result of those columns, by the way, was IBM no longer giving out employment numbers. And the predicted transition of work from the USA to offshore, well it happened. "You busted us," an IBM VP ruefully told me in 2008.
I urge IEEE members to search for IBM columns in my archives on pbs.org and cringely.com. The real value there will be found in the THOUSANDS of highly detailed comments from IBMers in the thick of it. And you'll note that even as IBM calls me names, I don't call them names. These stories of a once great company going bad are just too sad for such bombast, as least from me.
In 2005, IBM had 1.6 billion shares outstanding and a book value per share of $21.12. Buybacks reduced the share count to nearly 1 billion shares by 2014. Unfortunately, the book value per share also tumbled to $14.40, plunging nearly 25%! This isn't the way it's supposed to work. Going back to Buffett's piece of the pie analogy, buybacks are supposed to grow your piece, not serve you crumbs.
The reality is, IBM's revenue has been flat for years, and the company has only been eeking out single-digit EPS growth thanks to the buyback illusion. In fact, the only real growth IBM has seen is in its debt load. ...
IBM boasts extraordinary returns on equity, but is it keeping up with the times? One needs to look no further than insider Peter Gruelich's thoughts on the culture at IBM to question the company's future. ...
I see a great deal of financial risk at IBM. In addition to the long-term debt trend I pointed out above, total liabilities outnumber shareholder equity by 8 to 1. This is a highly leveraged company - in the tech world that's a recipe for disaster.
Rob Lamb, veep of manufacturing and development for Europe and a Hursley Lab leader, informed staff last week that Big Blue was forming an ECC to “represent all permanent” Systems Middleware: Platform, Integration and Smarter Process employees in the UK. ...
“IBM hasn’t yet moved to compulsory redundancies in the UK,” said a source close to the matter. “They are doing it tactically before they decide on compulsory redundancies”. ...
Global Business Services also formed a working group late last year. It was looking for a couple of hundred people willing to leave but some “600 asked for the package”, said a source.
Reader comments follow:
Even so, at 600 thats 1/5.5 of the target population. If it was 1,000 applicants then that would make it 1/3.3 which is a tad embarrassing.
Anyway those days are long behind me (well around 11 to be exact).
As for compulsory redundancies, there were plenty who were forcibly made redundant from STG in the UK around this time last year.
They're doing it division by division. And it will cycle round again. My name will be down.
In June of 2011 IBM gave every employee seven shares (about $1000) worth of restricted stock options, a gift to the workforce on IBM’s 100th Anniversary. Normally the vesting period for such options would be four years. But IBM in this case moved the vesting date back to December, 2015 (4.5 years). It is now like the 401K employee contribution match but unlike any IBM option program I know. So if you’ll still be on the IBM payroll in June but won’t be in December, as looks to be the case for tens of thousands of IBMers, the company gets to keep your money. ...
Finally, pity the poor IEEE, which picked-up information from my Forbes column only to be almost crushed by a negative reaction from IBM. I give the IEEE a lot of credit here for sticking more or less to their (in this case our) guns, but the point I want to make has to do with the varying burden of proof in the case of such business stories.
IBM of course hates me and has worked hard to discredit my work. Yet there is an interesting disparity in how the burden of journalistic proof is being applied. IBM says I am wrong yet consistently won’t say what’s right. Exactly how many employees have been RA’d so far in 2015? How many have been fired outright? How many have been pushed into early retirements by being rated a 3 for the first time in their long careers? And how many of these affected people are age 50 and over? IBM refuses to give any of this information.
If stories are pro-IBM, anyone can write anything without substantiation. If they are anti-IBM, then it has to be wrong. IBM can say it’s wrong, get ugly about it, and not provide any proof of what it says. Ironically, this is exactly the opposite of mainstream news, where the more negative the news, the fewer details seem to be needed.
I'm not going to claim that I'm smarter than Warren Buffett or that I know more than him because I don't. He's got the billions to back up his brilliance. But that doesn't mean he doesn't make mistakes. I think he's so enamored with the idea that he could own the "last share" of IBM that he's blind to the fact that the business is dying and management is powerless to stop it. I've commented at length in my previous IBM articles about how IBM is a listless, drifting ship with no captain and no prospects for rescue at present. I still think that's true but obviously Mr. Buffett disagrees....
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: Enable your front line team (PMs, Architects, BAs) to make decisions quickly for the client; rather than falling victim to Risk Management/QRM/SDM GPE enforced QA's, Pricing Checks.
Shakeup/challenge existing processes — driving for more efficiency and quicker, client focused results.
Basically, "eat our own dog food" and practice what we sell/deliver to our clients (an efficient, productive, solution).
If we can't manage ourselves efficiently (and fairly - to our fellow team members), then I would have zero to little faith that you could deliver the results you've promised me as a client.
Pros: Lots of work from home time, nice people, diverse industry opportunities.
Advice to Senior Management: Keep it up. Your staff turnover and focus on profits over people shine through.
Pros: IBM does a great job hiring amazing people. You'll find almost everyone is dedicated, hard working and professional and has a genuine interest in their customers success.
Cons: Unfortunately IBM does not offer job security. Every year they lay off thousands of talented people (also known as RAs or resource actions). The humanity is completely lost, especially when the layoffs have code names such as this last round "Project Chrome".
Advice to Senior Management: There are way too many middle managers. Rather than laying people off to better your financials, take a pay cut or skip the bonus. Figure out how to utilize the talents you have and budget better rather than flip peoples lives upside down. Also, stop with the mandatory requirement of first line managers having to give out a percentage of low PBC ratings.
Cons: They have great benefits when getting hired out of college, but they do a poor job of teaching college hires the ropes. IBM will place a young (cheap) college hire anywhere and expect them to know the business process/area. There's not much room to grow as a college hire and not much choice on project, you're basically just placed into a position if you have little experience. Even they've said it, you're a body that is charging the client and making a profit for them.
Raises are extremely small, bonuses are rare. They try to cut back to make more profit for themselves and don't reward their 'minions' for the work they do.
Pros: Incredible work flexibility, unlimited work at home and sick days, the opportunity to work on cool projects for big name customers.
Cons: Since our new CEO took over in 2013, morale has been decimated. Good business units have been sold off, others are mismanaged into the ground. It is very difficult to get a bonus, a pay raise, or a promotion. To top it off, our software engineering salaries have stagnated below the national average. Local management teams have almost no leeway to give an employee a raise or promotion to keep them on the team.
Advice to Senior Management: Stop the constant layoffs, pay your employees at least the industry average for their job roles/skills, and ditch Ginni Rometty.
Pros: Many of IBM's internal processes are years ahead of even their closest rivals. The work is intense and high pressured, however, the amount of knowledge that you have access to is second to none. I was at IBM for 14 years and now have a wealth of knowledge and experience, which I have found to be much in demand, when it came to looking for another job.
Cons: IBM tends to 'restructure' every 5 minutes, which is IBM's way of saying that it's going through a redundancy programme. This puts tremendous pressure on all those that remain. If you work less than 50 hours in a week, then consider yourself lucky.. People seem to be left to their own devices with no clear guidance from management. Internal tools are almost unusable, as they are slow, disjointed and fragmented. so be prepared to experience painful levels of frustration.
Having gone from a Manufacturing to a Services company, it is still being run with a Manufacturing mentality which very rarely compliments the needs of its customers.
Focus seems to be only on how to keep shareholders happy, with no thought on the best way of doing that in the long term. Initiatives to obtain this at times just highlights that employees are nothing more than numbers on a spread sheet, and that you are either generate revenue, or you are a cost.
If you decide to take up an opportunity to join IBM, you should do so with the aim of learning as much as possible in as short a time as possible, and then, perhaps, look outside of IBM for your next career opportunity.
Advice to Senior Management: Please try to plan a little further ahead than the end of the next quarter as knee jerk reactions to being under target for either revenue or savings, just highlights that there is no long term plan, or that if there is, then it's being run in a very incompetent manor.
Promote some people to the board who actually understand and have a background of how to deliver Services to a customer rather than products. It may not sound it, but there is a huge gulf of differences between how you deliver these.
Pros: Early on I worked with intelligent people, although most of them have since left. There was good support for filing patents.
Cons: The company has too many managers. They do what they think is good for their short-term personal gain. It is focused on marketing and cutting costs more than technology. It's like a Dilbert cartoon. Pay is lower than it should be. I didn't realize just how bad it was until I started working for a different company. I can accomplish so much more now without management restrictions and interference, wasted time in meetings, and wasted effort on activities that don't add value.
Advice to Senior Management: Please don't buy my new company.
Pros: Potentially great opportunities to work in different parts of the business, giving employees a number of areas to cultivate as part of a diverse career.
Cons: The amount of bureaucracy and company politics is enormous and can take away from the work opportunities. Employees need to be prepared to move and change to keep their career going; cuts throughout the business are quite common.
Pros: IBM feels like a lot of small companies; that is good when you want to move around, as you can have a lot of experiences in different positions, domains, locations and working with a lot of individuals.
Advice to Senior Management: Only have managers in place that the troops respect, can be empowered and motivated by. Invest in newer systems and have better (faster) support. The online chat when ordering online flowers, is much more efficient than our internal support to fix essential software.
Advice to Senior Management: Communicate better. Come up with an actual vision for development already.
Pros: Ethical, some great technology folks, one of the best R&D, and some great managers also.
Advice to Senior Management: Change is about a decade overdue, but you need to reinvent yourself from the bottom up to be relevant in today's marketplace. Re-prioritize the importance of training and retention over "manufacturing efficiency". Open up your tech stack and reduce your focus on licensing legacy software. Flatten your org chart so as to empower those that matter most and reduce the inherent waste of bureaucracy.
Pros: IBMers, and our fellow contractors are the best, brightest, funniest, most loyal, dedicated and articulate people in the world. We are family.
Cons: This once great company's treatment of our IBMers and fellow contractors is unethical and immoral. "Respect for the individual" is long gone.
Advice to Senior Management: We need a clean sweep of the Board of Directors, IBM executive management, IBM upper management and of course Ginni. We IBMers need a strong union which the Alliance for IBM has been driving for years now. I am a proud member of the Alliance for IBM. We need to bring respect back.
Pros: The only good reason to work here is flexibility. You are able to work as a mobile worker from various locations. However IBM does not pay for home costs (broadband, printing etc.) and travel is very restricted. Getting some knowledge of how low corporations can sink in order to lay off staff is another benefit.
Cons: Pay rises are non-existent. There are no progression opportunities, no possibility of building a career. The hours are long as teams are under-staffed due to the continuous layoffs, but expectations are still high and competition is fierce due to the absurd rating system.
There are many processes, for everything so getting anything done is very time consuming, combined with the lack of resources caused by cost cutting this makes working effectively impossible. Managers are tasked mainly with managing these processes, ensuring compliance, rolling out the HR planning schedules and have little decision-making power or resources, so there is no leadership or innovation, just a culture of fear and looking out for the self.
Advice to Senior Management: Reduce processes, break up businesses and scrap the forced ranking system to become more entrepreneurial, modern and return to profitability.
Pros: Work from home. 4 weeks vacation after 10 years.
Cons: Work from home 24 x 7, on call continuously, no second/third shift coverage. Expected to learn not only IBM hardware, but all vendors (EMC, Hitachi, HP, etc etc). Not one single minute of training allowed. Learn on the fly. Pretend to customers that you are knowledgeable. Lie. Stress. Not one single manager technical. Really amazing what questions they ask. Where are all the worker bee's?
Advice to Senior Management: Fire all but one layer. Why are there 7 layers of management when trying to communicate to customer? Don't you see that what you sell we can't support if we've never been trained? Some devices we've never even heard of much less know how to implement. Please get more on board with what your employee's support.
Say, you get six months severance and you come back to work for IBM as a contractor after 4 months. If you come back as a contractor and your paycheck/pay stub will be coming from a company OTHER than IBM, then you do NOT have to return the remaining 2 months' severance pay. In this case, you are not actually working for IBM but for the company that hired you.
You only have to return the severance pay if you actually came back to work for IBM (temporarily as a contractor or permanently) IF you will be getting a pay stub/paycheck DIRECTLY from IBM.
After six months, of course, your paycheck could come from anywhere (IBM or any other company) and you would not need to return the severance pay. However, it is likely that IBM would not hire you (as an employee who gets paycheck directly from IBM) two years after you quit or were fired. -VivaLaUnion-
The thermometer's been stuck at 56 for a while now, come on, join us, organize so we can stop getting treated like this! Unions were formed to fight exactly the kind of employee abuse IBM is practicing. It's a shame it's still happening all these decades later, but that's what happens when employees don't fight back. -LowMorale-
Health benefits you generally have to pay for yourself. Ill for a day or two: NO PAY. 401k plan is generally not matching. IBM can give you an up to two weeks UNPAID furlough without warning at any time and you get NO PAY FOR NO WORK and your contracting company still holds you to your contracting agreement. Nice way to plan for paying the bills, ha?
You can get your hourly pay cut at anytime; you can even get your hours per week worked reduced, you can be shifted or shuttled like a piece of cattle to where ever and whenever IBM wants, etc. You contracting company, and there are only a few IBM deals with, like CTG, Manpower, etc. are basically pimping you essentially. And if you quit then you don't qualify generally for UI. If you want to come back as a contractor I would advice joining the Alliance in solidarity. -Anonymous-
Her manager never informed her of any improvements she had to make on her skills during appraisal review. He neither gave a feedback on her performance and never used to pick her calls when she used to call him to request for a nomination for trainings. Never ever there was a support on anything from her BPM.
For the first time of my career,I saw how brutal work place politics can be and destroy your career to the maximum. She is suffering humiliation now and is not able to concentrate on her work. She is billable until last day of her exit from IBM. The current project manager of the project she is working and the Blue Page manager is not able to bestow any courtesy to let her spend little time in the day to search for opportunities outside and deal with emotional stress. What world are we living in.
I just feel ashamed that my wife is part of this organization all this time. How can your fellow people especially your BPM and other managers behave so ruthlessly? I used to put work before family all the time and never ever used to anticipate any bad word/remark from my boss. I always believed that your work should be your answer to all the politics played in office. And This happens to my spouse now.
I SINCERELY believe she did justice to the job she had done with all the medical disabilities she had. I hope god gives lot of emotional strength to all other RA'd resources who are going through the same phase. -anon-
Alliance Reply: The Alliance has also learned that some jobs in the US are for landed resources/off shore workers only. US workers are being denied jobs in their own country by IBM. If you have examples or documents send to email@example.com
I personally believe that IBM practices age-discrimination for both old and young employees (new grad). I have seen teams at IBM that pad the ranks with young talent (mostly H1Bs or new grads), mainly to serve as a buffer to protect the more politically-entrenched employees. And when layoff time comes as it always does, the good-old-boy architects and PMs keep their jobs while the "young and inexperienced" ones are spit back out. -Anon-
He may have an ulterior one to crater the company, or take advantage of a break-off or sale of Systems, or even be part of takeover. But, the company is doing well in stock price anyway after its evil deeds. Don't let them be rewarded. Join the Alliance, organize, rate the company and CEO on glassdoor.com. Both ratings are inching down. If we get enough momentum in all three places, maybe the board will wake up and can her, then we will at least have that victory. -ReadTheTeaLeaves-
For years, this company has continually dropped the ball on progress and innovation. The job you perform will leave you technically obsolete very fast. At IBM you are basically slave labor to be thrown away at a whim. Don't even think about retraining or learning progressive skills - you won't have time because you will work ungodly hours. I can't tell you how many times I tried to complete certifications only to be denied because of cost or time factors.
Go someplace where your skills will be appreciated and transferable to emerging technologies. IBM is not the place for a young bright person like yourself. They are a stodgy old company that thinks it can bully people and push their way into any market. Truth being, they lost their edge years ago. You don't want that to happen to you, do you? Be patient, look elsewhere. You'll be glad you did. -anon-
Well, sort of. I was RA'd in 2009 after coming back from disability and was told I was not allowed to come to my office if my IBM Director was there. I'm not kidding. I had to work from home remotely as best I could.
I had no IBM interviews at the site to try to get other IBM employment where my office was located. I contacted to IBM HR and they said there was no "work restriction" concerning me. So I was able to work for the office again.
Nice to know IBM hires bullies or executive management that "feel threatened" as Band D and such when doing an RA. At least I was able to go back in to the office and work my last 30 days at IBM as a professional and with class and didn't mention the classless attempt from my then IBM Director.
I wouldn't be surprised the now IBM management makes this restriction on some now to just stop work for the 30 days and be quiet. I would contact IBM HR just to see what they "say". You certainly don't want to lose the RA package and be fired with cause and lose severance, any medical coverage, and even UI. You want to go out with class and as a professional as you are! -sby_willie-
More broadly, I disdained unions as bringing corruption, nepotism and rigid work rules to the labor market, impeding the economic growth that ultimately makes a country strong.
I was wrong.
The abuses are real. But, as unions wane in American life, it’s also increasingly clear that they were doing a lot of good in sustaining middle class life — especially the private-sector unions that are now dwindling. ...
I’ve also changed my mind because, in recent years, the worst abuses by far haven’t been in the union shop but in the corporate suite. One of the things you learn as a journalist is that when there’s no accountability, we humans are capable of tremendous avarice and venality. That’s true of union bosses — and of corporate tycoons. Unions, even flawed ones, can provide checks and balances for flawed corporations.
Many Americans think unions drag down the economy over all, but scholars disagree. American auto unions are often mentioned, but Germany’s car workers have a strong union, and so do Toyota’s in Japan and Kia’s in South Korea.
In Germany, the average autoworker earns about $67 per hour in salary and benefits, compared with $34 in the United States. Yet Germany’s car companies in 2010 produced more than twice as many vehicles as American companies did, and they were highly profitable. It’s too glib to say that the problem in the American sector was just unions.
Or look at American history. The peak years for unions were the 1940s and ’50s, which were also some of the fastest-growing years for the United States ever — and with broadly shared prosperity. Historically, the periods when union membership were highest were those when inequality was least. ...
Richard B. Freeman, a Harvard labor expert, notes that unions sometimes bring important benefits to industry: They can improve morale, reduce turnover and provide a channel to suggest productivity improvements. ...
It may be that as unions weakened, executives sometimes grabbed the gains from productivity. Perhaps that helps explain why chief executives at big companies earned, on average, 20 times as much as the typical worker in 1965, and 296 times as much in 2013, according to the Economic Policy Institute.
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