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Highlights—February 28, 2015

  • WRAL TechWire (RTP, NC):

    IBM's work force drops by 50,000 in 2014 under reboot. By Rick Smith. Excerpts: IBM's reboot as a company to focus more on cloud computing and software under top executive Ginni Rometty led to a massive reduction of its global work force in 2014. And more changes are coming, the tech giant says.

    According to a filing with the SEC, Big Blue says it reduced headcount by more than 12 percent, or some 50,000, to under 380,000 from 431,000.

    Rometty, who took over as CEO in January of 2012, is not finished, either. IBM has seen revenue drop for 11 consecutive quarters as Rometty restructures Big Blue in her image. "The company continues to remix its skills and resource needs to match the best opportunities in the marketplace," the filing reads. ...

    How many workers remain on the IBM payroll in the U.S. and North Carolina is not known outside the company. IBM stopped disclosing by-country work totals in 2010 and also has not disclosed a work force total in North Carolina for several years. IBM cited competitive reasons for not disclosing headcount totals. Alliance at IBM, the union seeking to represent IBM workers, estimated that the company had some 7,500 employees in North Carolina before the x86 sale, which closed last fall. ...

    According to the Alliance, IBM is estimated to have had 83,000 U.S. workers in 2014, down more than 5,000 from its estimate for 2013. U.S. workers fell under 100,000 in 2011 to an estimated 98,000. In 2000, IBM had nearly 154,000 U.S. employees, the company said at that time. ...

    "38,000 resources" affected. In the annual report filed with the SEC, IBM disclosed the lower numbers far inside the lengthy document (page 73), the bulk of which focused on updated financial information and a lengthy narrative about Rometty's strategy for 2015 and beyond.

    Big Blue lists employees as "resources."

    IBM said the work force changes reflect the company's "shift" to "higher value segments of enterprise IT [information technology.]" More changes are coming, the report added, saying it "continues to remix its skills and resource needs."

  • Seeking Alpha

    : IBM's One Hundred Year History Is About Cash, Culture And Mutualism. By Peter E. Greulich. Excerpts: When it comes to corporate history, there aren't many companies that have prospered as greatly over their one hundred years as International Business Machines - or faced as many obstacles. IBM has overcome eighteen recessions, the Great Depression, and nine of the twelve steepest stock market declines of the 20th Century. During these times of financial turmoil, it transitioned from hand-cranked mechanical devices sitting on its customers' front and back counters to electrically-powered tabulating machines, sorters, printers and typewriters filling their back offices. It then transitioned from those same customers' back offices to populate their data centers with mainframes. It has prospered in both hardware, software and services.

    It has done so - since its initial inception - with a focus on cash, culture and stakeholder mutualism. ...

    2015: A cash-rich, cultural-poor corporation: Louis V. Gerstner is to be credited with financially saving IBM. He attempts in his book, though, to cast the aura of that success over his cultural changes. History should credit him with the former but discredit the later. In a watershed event for all United States based employees in 1999 he enforced his shareholder-first philosophy with changes in the IBM pension plan (these changes would eventually roll out worldwide and broaden to impact upper-level executives). At the IBM 2000 shareholder meeting he reflected his single-minded shareholder-only perspective to his audience, "We cannot do any more without putting IBM's competitiveness at risk."

    Samuel J. Palmisano, his successor, took the next logical step. Where Tom Watson Jr. spent $5,000,000,000 - almost 10 times IBM's 1964 profits - on people, products and processes, the 21st Century IBM has spent an equivalent 10 times its 2013 earnings on paper - $158,000,000,000 on its own stock. Mr. Palmisano just extended Mr. Gerstner's shareholder-first strategy to shareholder-only.

    IBM is in cultural trouble. It knows this but refuses to acknowledge it and take action. In its 2010 Corporate Responsibility Report its marketing organization turned a negative into a positive - making a Global Pulse Survey result of 65% employee satisfaction sound good while ignoring its 30 point drop since 1986. It failed to publish the most negative aspects or even compare itself with the industry's best. That is an interesting approach for a responsibility report.

    Instead, in the same report, IBM announced it will begin, "implementing a more contemporary approach" to employee surveys. Although IBM is gathering metrics, it has yet to elaborate - now, four years later - on this methodology. Only Glassdoor holds it accountable. Unfortunately, there are few methodologies short of not asking that could put a positive spin on the IBM employee-owner morale. So, maybe it is better that they not ask.

    As Opel did Akers no favors, neither did Palmisano, Rometty. But she, like Akers, has continued the body blows to IBM's culture: the resource actions of Gerstner and Palmisano continue, extracting the final vestiges of value from IBM's retirement plans continue, and - ever so reminiscent of Akers - blaming poor revenue growth on her salesmen rather than on IBM's executive leadership and the poorly prioritized investments of her predecessor.

    Today consumer man, worker man, investor man, and the community of man fight over scraps left by the antithesis of service-to-man: the me-first and -only man. The Watsons' ecosystem of mutualism - finding that difficult balance between the varied needs of all aspects of man to their mutual benefit - is long dead.

    Selected reader comments follow:

    • In the tech industry it is always base on highly motivated employees. IBM today cannot attract any young talent. I have not heard of anyone in the SF bay area even mention IBM as a potential company they are looking at joining.
    • People are what make a company. Old fashioned? Yes! True? Absolutely! Especially so in companies that have a services bent. There is not a single business that does not want high margin. But to command high margins you have to have solutions/products that clients want. There is a reason Apple is where it is. People line up three deep around the block to buy its products. In services it is very tough to achieve competitive advantage and sustain it, as barriers to entry are far lower. It is much easier to copy solutions and/or hire folks away. Consequently, employees need a reason beyond just a paycheck to motivate them to ensure consistently innovative solutions and high customer service is delivered. They need to valued and appreciated.
    • Although I was at IBM only 3+years at the end of my career, I made the similar comment about infrastructure and the treatment of its employees in response to a comment on another article today. Here it is:

      I think you misunderstand how software companies operate and generate earnings. It is not only because there is a messiah called CEO making good decisions. It requires a cast of characters functioning at 100% or as close as possible. And don't let me start on IBM's application infrastructure.

      They have the most antiquated internal systems, with constant failures. When our company was first acquired we continued using most of our own systems for a while email and instant messaging functions were almost never down. Once we were integrated into IBM systems, we started having all kinds of outages, sometimes lasting more than one day.

      We also discovered that the same systems, Lotus specifically, were the butt of internal jokes amongst the long-time IBM employees, and worse yet, amongst some upline managers and program directors.

      That is not counting moving from reliable HP laptops to Lenovo's with everyone on my team and other manager's teams having at least one complete failure of their laptops, having to wait for days at a time waiting for replacement until management agreed that we needed to keep a number of spares around. In my 40+ years in the computer industry, I had never witnessed such a disaster.

      Our software technical customer support used an app form Salesforce to work with customers. Once converted over, we went to an antiquated IBM app that dated back to the 1970's, with multiple face lifts and now running under Lotus. Every time Lotus was down which was often, employees had to use a very inefficient "green screen" CICS interface to "try" to serve customers. One reason we were given for this lack of progress in improving these internal systems was that it would be nearly impossible to maintain current monthly-quarterly operations reports that the execs liked. Still with the current systems, there are people assigned to manually consolidate a lot of data from several apps to produce the said reports. Ever heard of being caught in the mud and being unable to change.

      So you are correct in saying that giving an increase and additional vacation will not resolve IBM's morale problems. Because employees unlike many shareholders are not only focused on the immediate return but on the ability to do the best job they can.

      I can give you another story about the employee environment. IBM supplies laptop to employees, because they come with a built in monitor, IBM does not provide a monitor. It is up to the employee if he/she wants to purchase a monitor. When you work all day in front of a monitor, sometimes have to use multiple sessions... a laptop monitor is inadequate. Now, I will give you that some department managers will buy monitors, but not all. Is that enough caring about employees on the part of the corporation?

      As for all the tooting of the patents, I heard from some developers that were working on apps that are about 15-20 years old, still in much use, being given goals in their PBC (performance evaluation system used at IBM) to generate at least one patent in 2013. To keep their job, I am sure they did, but I question the value of such patents. As a matter of fact, for all the patents IBM is creating, very little new organic revenue has been generated.

      After we were fully integrated into IBM, we continued to provide free coffee to our employees, to save them the time to go get coffee at the cafeteria. After about a year, this was cancelled as it was not offered in other IBM locations. Instead of taking 5 minutes to grab coffee, it now became a 15-20 minute trip to a different building. Penny wise and pound foolish.

      We the managers decided that we would buy commercial grade Keurig machines (that we paid out-of-pocket) and IBM agreed to pay for installation and allow our employees to bring their own coffee. Ridiculous in two ways. The cost of offering coffee, tea, hot chocolate for free is easily offset by the time saved by employee. The way the employees are looking at it is "you gotta be kidding me, what next?".

      So, in short, IBM has a lot of places where it could spend the cash it used to buyback shares to make the company more efficient and better for the future, probably allowing them to reduce workforce in future, but it chooses not to invest in itself, only to satisfy a few shareholders.

      I could go on a long time about the inefficiencies that could use some investment to correct. That is all aside from market/product strategy, but if they cannot even see these internal problems, what else can they not see?

    • To your question of employee bonuses. The ability of IBM to reward employees based on the awarding of bonuses has been completely removed from pay-for-performance for the individual. This started with Gerstner when he removed the ability of the first-line manager (the one closest to the performance) to control those rewards. He centralized bonuses as a mechanism to control yearly cash flows vs. pay employees for performance.

      In 2011 IBMers when faced with a statement in their global surveys "People are rewarded according to performance," responded greater than 60% negative or neutral. The I.T. industry best in this area responded at greater than 65% favorable. I can only assume it has gotten worse since IBM gathers the data but doesn't talk about the results. It, as I have said on many occasions, has removed the data from its corporate responsibility reports starting in 2010. Saying "bonuses are flowing to employees" is much different than the working reality within IBM.

    • Companies, like humans, get old. Companies can go through transformations, just like humans get transplants, but eventually, some part that is essential for life fails and the result is terminal. While it may be nice to think that companies can go on living forever, I just don't see that in history. Historically speaking, IBM has had a long life, but the day when it will be laid to rest seems to be approaching.
  • 24/7 Wall Street:

    IBM Announces Unrealistic Plans as Stock Suffers. By Douglas A. McIntyre. Excerpts: International Business Machines Corp. CEO Ginni Rometty announced new goals for the company that have only a long shot of working, as the company’s shares hover near a multiyear low.

    As investors received forecasts about IBM’s long-term future, the stock is down 20% in the past two years. Over the same period, the S&P 500 has risen 39%. Rometty made her new forecasts at the tech firm’s annual meeting.

    Among Rometty’s predictions is that a very modest investment of about $4 billion this year will help drive revenue of $40 billion in the cloud, mobile, analytics software and social communications areas by 2018. She forecast that two in five dollars of IBM revenue will come from these initiatives by then. Based on IBM’s recent track record, and the extent to which the industries in which it wants to compete are very crowded, the predictions have little chance of succeeding.

    IBM rarely, if ever, discusses the hurdles in its way. Among those are the leading technology firms in the world, which have already staked large positions in the fields IBM has targeted. Many of these companies have revenue of $50 billion or more and balance sheets with billions of dollars of cash. Among the best examples is Microsoft Corp., which has bet much of its future on the cloud, and it claims to already be wildly successful. Also, Oracle Corp. recently announced quarterly revenue of $9.6 billion and net income of $2.5 billion. ...

    Rometty continues a habit of making claims about how IBM can be turned around, while not a single one of the important claims have come through. IBM’s shareholders need to prepare for another period in the wilderness between now and 2018.

  • The Channel (United Kingdom):

    IBM: UK Systems Middleware voluntary redundo plan launches. Some workers itching to grab package, say bye to Big Blue. By Paul Kunert. Excerpts: IBMers wanting to leap from the business before they are pushed will today get more details of the package they'll walk away with when leaving Big Blue.

    The Employee Consultation Committee for Systems Middleware staffers working in Platform, Integration or Smarter Process units was formed last week and its first meeting has already been held.

    The minutes of that session, seen by The Channel, suggest IBM is aiming to push 70 people, or 10 per cent of the SM division, to willingly walk from the building with an “anticipated exit date of 5 April”.

    “IBM has opened the discussions with proposals of addressing the business pressures through a voluntary redundancy programme. The pressures are driven by business transformation and the recognition of potentially lower margin,” the document stated. ...

    Some of the voluntary redundancy offers already run at IBM were heavily over-subscribed, with Global Business Services looking for several hundred people to leave but seeing upwards of 600 staffers applying.

  • Bloomberg Business:

    IBM Employee Count Falls for Second Year in Shift to Cloud. By Alex Barinka. Excerpt: IBM’s employee count shrank 12 percent last year as Chief Executive Officer Ginni Rometty has tried to reinvent the 103-year-old technology giant into a more nimble competitor.

    It’s the second straight annual drop for IBM’s workforce, the first two-year decline since 1993 and 1994 when the company was pushed to the edge of bankruptcy. Rometty has been seeking to transform International Business Machines Corp. to keep up with newer competitors in an industry undergoing what she’s called “unprecedented change.”

    IBM had 379,592 employees at the end of 2014, down 12 percent from a year earlier when the company posted the first decline in a decade, according to a filing Tuesday. Excluding a 35,000 reduction from divestitures, headcount fell about 3.9 percent last year. ...

    To help boost earnings-per-share, Rometty has fired and furloughed workers, cut IBM’s tax rate and bought back shares. She has also offloaded less-profitable business units last year, like the low-end server business sold to Lenovo Group Ltd., a customer-care business and the chip-making unit, which IBM paid Globalfoundries Inc. $1.5 billion to take off its hands. ...

    That reorganization has also included firings, with IBM spending more than $1.5 billion on restructuring its workforce last year. In the fourth quarter, a $580 million charge for “workforce rebalancing” equated to the firing of “several thousand people,” the company said last month.

    With a change in its severance package last year, IBM has also made it more difficult and riskier for dismissed older employees to decide whether it’s worth pursuing age-discrimination claims. The move also allowed the company to withhold data on job titles and ages of workers being let go -- information that has been released for at least a decade and helped people glean how many employees were dismissed.

  • Associated Press courtesy of phys.org:

    IBM outlines plan to revamp business for investors. Excerpts: IBM's CEO says the company's plan to revamp its business to shift away from hardware and focus on business analytics, cloud computing, mobile services and security is on track.

    In a media briefing ahead of an investor conference in New York on Thursday, Virginia Rometty said the company plans that the new tech markets should make up 40 percent of IBM's business, or $40 billion, in the next 4 years. That's up from 13 percent five years ago and 27 percent by the end of this year.

    Once the dominant PC-maker known as "Big Blue," IBM is confronting a sales slump as it struggles to adapt to big changes in the way businesses buy software and other commercial technology. It issued another disappointing earnings report in January, as both revenue and profit fell in the December quarter.

  • Business Insider:

    CEO Ginni Rometty: These are the lessons I learned from IBM's struggles. Excerpts: For herself, she (Ginni Rometty) had two takeaways from the failure of IBM to hit its years-long promise of $20 earnings per share by 2015:

    No. 1. The enterprise tech world is changing faster than she thought it would. ...

    No. 2. She wasn't watching how consumer technology was invading the workplace. Rometty didn't predict how consumer tech was being brought to work, giving employees increasing control over what apps they use and how they want to work. ...

    When Rometty bailed on Roadmap 2015, she sent the stock into a tailspin from which it has yet to recover. We argued at the time that giving up this goal was ultimately good for the company. IBM needed to stop killing itself with layoffs and financial maneuvering to hit an arbitrary profit number at an arbitrary time. It needed to be focused on the land grab going on in the hot new enterprise markets that were quickly overtaking the stalwarts like IBM. ...

    Selected reader comments follow:

    • It is incredible that a company so well positioned with incredible resources has turned into such and "also ran". Working in the computer and software business these last 45 years I can only shake my head with wonder at the missteps and blunders that characterize this company. I'm surprised they are still around. We'll see for how long.
    • This piece reads as if Rometty is making a case for her own termination. How gullible are boards and investors to keep hiring narcissistic sociopaths that insist on living in echo chambers filled with minions? CEOs should be compensated on growing market share and if they can't the board should find someone that can and if it can't be grown then get out of the market. Costs, accounting, supply chain, R&D, HR, processes, etc... should be left to little people. Vision should come from the board. Nobody should be compensated for increasing profit by reducing headcount since it is too tempting to take short-term gains while crippling a company for the future.

      In response to Rometty's cloud strategy; it is impossible to be competitive in cloud services with front-end investments. The nature of cloud is to spin up and deliver services on demand or as sold. It is of no competitive advantage to build an infrastructure and then sell the space. Moore's law punishes all investments in all on-deck investments. The service providers that figure out how to make the fastest and most granular incremental growth in cloud infrastructure are the only ones that will survive.

    • Karma is a bitch ... when you outsource thousands of GOOD American jobs and still get$ 3 1/2 million bonus doing it...hope you sleep well at nights. Here is to the biggest fall and failure to a corporate giant in 2015-2016.
    • This was posted on the Alliance@IBM website by an anonymous poster:
      "Ginni, your Mea Culpa is so phony. You and the rest of the senior management team are presented an annual "GTO" (General Technology Outlook) that looks forward several years where IBM should position itself. 200+ people spend several thousand hours working on this and demos of technology to show how IBM can address the future.

      In addition you and the rest of the senior management team are given monthly or bi-monthly "TT's" (Technology Transfers) again many people spending much time preparing boiled down education sessions so you can give the pretense of knowing what you are talking about.

      Having been involved with both over recent years, YOU WERE TOLD about coming technology changes. As the article points out:

      • "No. 1. The enterprise tech world is changing faster than she thought it would", and,
      • "No. 2. She wasn't watching how consumer technology was invading the workplace."

      means that you were asleep at the wheel, not paying attention to what was presented to you. Bob Cringely and Peter Greulich would have a fun time if they dig into GTO and TT process and contents."

      According to this, she knew (or should have known) exactly what was trending in the tech world as did all the top executives in the company. They are more interested in financial engineering than innovation, laying off thousands of talented people and listening to bean counters has put this company into a death spiral. New leadership is needed.

  • Glassdoor IBM reviews. Selected reviews follow:
    • “Culture Issues”

      Current Employee — Product Manager. Pros: Pay, telecommuting, flexible schedule and clients have interesting stuff going on. Cons: Culture, people, politics, process. Basically, everything is slow and reactive and the culture is political and skewed to seniority over performance.
    • “Looking over shoulder”

      Current Employee — Systems Service Representative in Minneapolis, MN. I have been working at IBM full-time (less than a year).

      Pros: Working behind a well known company. Lots of training available. All jib related certifications are paid for. Many employees have been with the company for a long time. They have lots of experience to share.

      Cons: Having survived the last round of layoffs, I've come to find out that no job at IBM is safe. The company is not employee focused anymore. It's more about cutting costs (i.e. employees) if shares are down. Being a newer guy with the company has felt like I have a target on my back because older guys think I was hired to replace them.

      Advice to Senior Management: Think about cutting out some of the upper management and reduce their insane salaries and focus on innovation instead of share value.

    • “No credibility.”

      Former Employee — Anonymous Employee in Athens (Greece).

      Pros: 40% of staff are great people (medium ranked professionals) but eager to assist colleagues.

      Cons: 60% of staff (managers mostly included) are rude, quite untrusted, always lie to their clients and to their colleagues. All kinds of Reports and Metrics that are used in everyday job, are "just for laughs".

      People have to produce reports (serious ones) by hand, with no use of any inn-house tools.

      Company product know-how is simply nonexistent. Upper management is interested in just selling products and pocket the money.

      No salary increases. Everybody is recruited as IT Experts, paid with "peanuts" and are actually ranked in the bottomless ranking tower. Every now and then they perform appraisals, which most of the time do not constitute a professional's actual corporate image. Let alone that if a professional stands up for himself towards his manager, he will most likely get sacked after 2-3 months.

      People who constantly ask their managers to assist them in order to gain further education in specific sectors, usually get an answer like "You are way too expensive for us and a training is out of the groups' budget for this year".

      People who find their own way round to get certified in various sectors are mostly loathed and put to war within the "local tribe".

      Contemporary sweatshop.

      Advice to Senior Management: What management?

    • “It used to be International Business MACHINES”

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

      Pros: Still tremendous resources, which applied properly make IBM an employment to be sought after. Infrastructure, support and many of the people are the brightest and best. It is a world wide presence unmatched in the computer industry and still develops and builds some of the best super computers, without which the communications and IT infrastructure as has been known for today's "cloudy" world would be impossible.

      Cons: What is best for the customer is often second. Too many layers of management. There is also a mole very high in the management chain that leaks information to the media that either is dead on accurate, but found out by the employees via that media first and not the company, OR, which the company can selectively contradict and soften resource action negativity by not being as large in numbers as originally leaked.

      Advice to Senior Management: Return to being at your core about international business MACHINES, or change your name. And then get rid of about 6 layers of upper management to streamline operations and cut costs where they would have the most impact. Reread over and over Thomas Watson, Jr.'s book "A Business and its Beliefs-The ideas that helped build IBM".

    • “Inside Sales”

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

      Pros: Great company to work for those that are interested in career development. There is a lot to learn. Work flexibility home versus office is available upon request. Having a fitness center is the best.

      Cons: IBM stands for "I'm by myself" very hard to get things done. Very complicated company to work for; lots of politics. If you know people within the company you will achieve great things while others don't. Managers only hire their friends to collect on referral bonus.

      Not keen on rewarding hard work, as they are slowly moving the inside group back to PSP (Pool System Payment) where no matter how well you do towards your goal your commission check still depends on how the organization does for the quarter. Management can still use their discretion to position you in the pool.

      Advice to Senior Management: Focus on what's important, not on the unnecessary tasks and endless reports. A better CRM would help; "SalesConnect" is still not doing the intended job.

    • “Penultimate big company, cares only for their bottom line and could not care less for their employees.”

      Current Employee — Consultant in Washington, DC.

      Pros: Exposure to technology, heavy sales environment in services division where you are pressured to sell IBM technology.

      Cons: Too many, but too many layers of management and bureaucracy at IBM with a ruthless focus on billing productivity above even impacting customer mission. It is terrible here. They should not be in services at all.

      Advice to Senior Management: Get out of services, you are conflicted by nature as a technology provider.

    • “IBM no longer values the most important resource of a company — the employee.”

      Current Employee — Anonymous Employee. Pros: Will hire at a decent salary. Cons: Layoffs and transferring jobs overseas.
    • “IBM is way past its peak”

      Current Employee — Senior Consultant in London, England (UK). I have been working at IBM full-time (more than 10 years).

      Pros: The people are not any more exceptional than any other company, but there are a lot of them which means there is usually someone who can (and will) help. IBM does have a lot of processes and procedures still in place from the 'good old days' so there are flexible work options and supportive time off policies for family crises. There is lots of training on offer (but see below). Pension contributions are better than average (but see below). Poor management actually means you can be left to use your initiative quite a lot (but see below).

      Cons: Training: almost all e-training now, much of what is on offer is poor quality video or audio recordings of people not skilled in presenting material. Embarrassing how often these internal training sessions lose the network or can't transfer sharing the screen to someone else; or (worst) feature some executive with absolutely nothing to say, but taking 40 minutes to say it. Often these latter are mandatory and of course everybody switches them on and goes and makes a coffee.

      Ten years ago IBM had a planned annual process where you agreed training with your manager, obtained quality training (because it was in your plan); now you are presented with HOURS and HOURS of mandatory dross put together cheaply to let our CEO think we are all being trained in the latest technology.

      Pensions quality has been driven down and down (court cases still being heard on this), so although it is better than average, don't expect it to stay that way.

      Everything that can be sold or cut seems to have been in a desperate attempt to hit Sam Palmisano's ill-judged promise to hit $20 by 2015 revenue. It was obvious to most people a while ago it wasn't going to happen. Executives took a loooooooonnnng time to wake up and cancel that impossible dream.

      You have a lot of leeway due to hands off management; but this is largely because no manager seems to want to say/write/do anything that they could be judged for later, so they sit on their hands stay silent.

      From all of the above you might not be surprised to learn that morale is lower than low. New starter graduates might find it quite an exciting environment, most will move on when they fail to get a rise for 5 years.

      Redundancies are now an annual tradition, a big re-org this year is mostly moving the deck chairs on the Titanic. I'm afraid and has had the effect of freezing any decision making process for several months as no manager wants to be responsible for deciding anything they might be held culpable for later.

      Advice to Senior Management: Upper management thinks renaming the products and moving the chairs around is enough. It really is time to listen to your staff rather than dictate to them. It's time to explain rather than threaten. And it is definitely time to prune the upper reaches thoroughly, the workers have been cut and cut, but the senior staff just keep cloning more vice-presidents.

    • “IBM is NOT the company you think it is...anymore.”

      Former Employee — Hardware Planner in Research Triangle Park, NC. I worked at IBM full-time (more than 5 years).

      Pros: Prestigious name recognition for the average person. Company protects the "brand name" at all costs. Dividend checks are nice but at what cost (low wages, layoffs, business unit sell-off, stagnant innovation).

      Cons: Internal turmoil, unhappy customers, disgruntled employees, job-scared work environment. Many layoffs have occurred and the layoffs will only continue. It is inevitable. Business unit sell offs and closings. Current company leadership is clueless regarding how to "right the ship".

      Advice to Senior Management: Stop wasting the shareholder's money on the "SMARTER PLANET" television commercials that are only designed to bolster the IBM corporate image. Start living the so-called corporate values and employee morale might turn around. Ginni Rometty and her confidants have got to go.

    • “Cheapest company I have ever worked for”

      Former Employee — Hardware Entitlement Analyst in Boulder, CO.

      Pros: Saying I worked for IBM for a year looks good on my resume.

      Cons: Clunky, outdated virtual infrastructure; excessive numbers of outsourced employees (most of whom hardly speak English); peeling paint, filthy walls and floors, broken plumbing with open sewage (for over a year); no available drinking water in the building. For a multi-million dollar, international corporation, IBM has to be one of the 'cheapest' companies I've ever worked for. Seriously, they'll even charge you for a napkin and a plastic fork in the employee break room!

      Advice to Senior Management: Way too many upper level managers, and none of them seem to have a clue about IBM's internal organization beyond their own specific department.

    • “Low Employee Morale Company. Rank and file denied yearly raise, meaningful bonus and other benefits at slight pretext.”

      Current Employee — Anonymous Employee.

      Pros: There were some "pros" many years back but not any more. Lots of slogan shouting senior management with no contribution towards revenue generation, client delivery, or technical innovation. They are plain email shooters and spreadsheet movers.

      Cons: 8+ layer of executive management, very top heavy and fat organization. Hardly agile and nimble which current CEO is trying to push.

      Advice to Senior Management: Reduce the management fat, raise the employee morale by reducing emphasis on 130% utilization, re-skill the workforce to drive the new agenda which the company is striving for. Make salary more competitive and earmark meaningful profits toward employee training.

    • “Incompetent Leadership, Poor Management and Greed”

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

      Pros: IBM looks good on your resume. IBM hires smart people.

      Cons: Lack of Integrity (lying to/overcharging clients); poor values/focus (partners are greedy); can't innovate (look at their cloud business); thug/intimidation tactics (like program manager screaming at staff); resources are widgets not people; poor communication; clueless who on the team is working and who is pawning off their work.

      Advice to Senior Management: Too much is wrong to salvage. Best left to continue its slow death.

    • “Great place to learn on the job. More and more miserly across the board.”

      Current Employee — Anonymous Employee in Chicago, IL.

      Pros: Great people, very bright and lots of R&D. Health and 401K are very good, except that they moved to giving the company match only at the end of the year — so either you stay and get it or you loose it. You also loose the benefit of investing through the year instead of one day. Flexibility is great and IBM knows how to get work done, irrespective of where you are (home, beach, office).

      Cons: Employees are not given good incentives and growth opportunities are not even. Too much work for very little monetary rewards. Some have been lucky to be in positions that have great rewards.

      Advice to Senior Management: It's not all about the stock market price. Look within.

    • “Despite hiccups, I've found IBM MD to be a great place to work in. Too bad it is getting divested.”

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

      Pros: Lots of creative freedom. Great work/life balance. Empowered engineering team. Lots of satisfaction of many products that are in production. Server group satisfaction high.

      Cons: Old building, old practices, bad cafeteria, old phones/printers/projectors etc. Poor bonuses, slightly bad salaries.

      Advice to Senior Management: Please don't scrimp on things like lunches for employees and $100 travel; you are not going to make shortfalls of billions by making the employees feel unwanted.

    • “Still a great company in pockets, but the company seems to be fraying around the edges and from the top down.”

      Current Employee — Anonymous Employee. Pros: Smart, dedicated people. Interesting work. Cons: Too many controls from corporate, no emphasis on culture/people. Advice to Senior Management: Reinvent from the inside out. Move beyond "lip service" to people issues.
    • “Overworked and underpaid”

      Current Employee — Staff Software Engineer in San Jose, CA. I have been working at IBM full-time (more than 8 years).

      Pros: The technical writing community is an amazing group of people who are willing to help each other. Plus, there are a lot of innovative documentation strategies being worked on.

      Cons: It's no secret that IBM hasn't been doing well. As such, more and more people are leaving to take better paying jobs at other companies. As they leave, replacements aren't hired so the workload keeps growing. The stacked ranking system is absolutely ridiculous. After years of losing employees, everyone left is amazing, and to have some people fall to the bottom sure doesn't make people want to do more. Morale is at an all-time low.

      Advice to Senior Management: Hire more people, and treat the people who you do have decently. Give employees bonuses and raises when you give yourselves bonuses and raises.

    • “Project delivery growth”

      Former Employee — Anonymous Employee I worked at IBM full-time (more than 5 years).

      Pros: Rotates you to different client projects, giving you lots of exposure in different technology and industry and challenge your ability to thrive in fast paced environment.

      Cons: Get prepared to work on underestimated projects which demands to meet the project baseline like mission impossible. Always need to work with a newly-formed team (and with offshore under-skilled resources) meaning that every time you start from zero.

      Advice to Senior Management: The project delivery approach really needs to move to a more industrial solution based and having a more strategic talent management solution to make business more repeatable and sustainable. They need to position themselves to be more transformation partner rather than transaction based.

    • “If you live in the USA, avoid IBM as an employer if you have ANY other options.”

      Current Employee — Reporting Analyst in Atlanta, GA I have been working at IBM full-time (more than 10 years).

      Pros: You may well be able to work from home, but, at some point you will be replaced with a lower cost offshore employee.

      Cons: The expectations constantly increase while benefits decrease while the most talented leave and the most senior, most expensive are laid off.

    • “IBM is a 100 year old company going strong still”

      Current Employee — Anonymous Employee.

      Pros: Offers excellent work life balance and a chance to work with the brightest in the industry. Smart leader at the helm.

      Cons: No career growth; frequent layoffs; insecurity; bonuses and pay hikes are jokes on employees; too process oriented and clique driven; job promotions and changes only; each division is an island on its own; not a place for minorities or immigrants; treats off-shore resources derisively; executive and management are uncaring and dangerously awful.

      Advice to Senior Management: Leave, make room for new blood.

    • “IBM used to be a great place to work”

      Current Employee — Anonymous Employee. I have been working at IBM full-time (more than 10 years), Pros: Co-workers are extremely talented and professional; work is challenging and gets accomplished with great teamwork. A great deal of flexibility in terms of work hours, work from home, etc.

      Cons:

      • Very long hours for very extended periods of time. Significant overtime is expected on a regular basis along with 24x7 availability.
      • Many people go for years without a raise. When raises are received they are typically small (1-2%).
      • The rating system discourages many talented people from pursuing advancement in terms of promotions. Once you're promoted, your performance rating will drop making you a more likely candidate for the next resource action which is IBM's term for layoff.
      • Very average benefits.

      Advice to Senior Management: Value and treat employees as an asset instead of a liability.

New on the Alliance@IBM Site

Job Cut Reports

  • Comment 02/21/15:

    Dear IBM family...fellow IBMers and fellow contractors. I hope you are all coping as best you can with this heartbreaking downward spiral of IBM in terms of "Respect for the Individual". As we all know, this is absolutely the fundamental and driving catalyst in terms of IBM's horrendous financial performance...over the past years. It is very sad for us all as at one time IBM was the greatest company in the world.

    My proudest achievement in life, apart from my children, and Rudy the Shih-Tzu, has been growing up in IBM and meeting all you wonderful, talented, intelligent, compassionate, loyal, hard working friends. Some of you I know, some of you I don't know. This does not matter.

    My health is not great so I have been absent from posting but following along yours, and of course keeping up with IBM in the press. I did post to glassdoor.com, my post appears on February 20th where I hope I acknowledged all of my friends and colleagues around the world at IBM. It was brutally honest.

    I also hope I acknowledged the tireless work of the Alliance for IBM and all the wonderful people who have been looking out for our best interests for years. Respectfully, -Deb Kelly, Proud Alliance@IBM member-

  • Comment 02/21/15:

    to -Finally out-. You actually accrue the vacation days. You will get paid for unused time that you've accumulated. Taking all your vacation now will require you OWING money when you leave. Those of us in Burlington, VT will get paid x number of days when we go to GlobalFoundries this year. You're allowed to take all the vacation anytime during the year (depending on first-line manager usually) but if you leave before years end you will owe for extra days. Maybe your FLM won't care if you take all your days but YMMV -anonymous-
  • Comment 02/21/15:

    @Finally Out - Be careful. Vacation is earned at the END of a month. It being 2/21, you have only earned 1/12th of your 15 days of vacation, since you have completed only one month so far in 2015. That's 1.25 days (round down to one full day). You will get another 1/12th of it after the end of each calendar month. If you leave IBM, they will reconcile taken vs. earned vacation and charge you for unearned vacation that you have taken. Your four personal choice holidays are yours to use any time. If you leave and don't use them, you won't be paid for them. In other words, if you have taken more than 5 days off (4 PC holidays and one vacation day) and you leave IBM today, they'll withhold the balance from your last paycheck. -Anonymous-
  • Comment 02/21/15:

    To -Finally out- Your vacation is not earned as of the beginning of the year; it accrues as you go. If you take too much, IBM will want the money back. If you don't take all the days you've earned, they'll pay you for them. Personal Holidays are different. Take them all before you go. Also, if you have a Health Care Spending Account, use as much of the full year amount as you can before you leave. (Maybe buy a CPAP or defibrillator) You can spend it all, even if you leave now, and you don't have to pay it back. However, if there's unused money you've paid in prior to your exit date, you lose it. -Anon2-
  • Comment 02/22/15:

    To -Confused by all this- Being given a PBC 3 and being put on a PIP does not mean you're the next for the door, but it also does not mean you are safe! You have to ask yourself a few key questions, the main one being "is the PIP achievable?" Your PIP should be a documented set of achievable goals that you feel you could provide documented evidence that you have completed. For each goal you should agree with your first-line manager (in writing) what evidence will be required to prove you have achieved each goal. If any of the goals or evidence required are ambiguous or cannot be documented then you must decide if you are on a hit list or not.

    Throughout the process you should arrange weekly reviews with your FLM to discuss your process and document your results. Again if your FLM is not prepared to do this then this should feed into your decision making process. Do not leave everything to the last minute and if you can achieve goals early, do so and concentrate on the next goals. Of course, as an at will employee, this could all be irrelevant. But if they are looking to get rid of you as quick as possible then surely a 30-day PIP would have been preferable for their purpose.

    The only chance to change any of this process and PBC's is to join the Alliance; US IBMers not doing so are like turkeys voting for Thanksgiving, but hoping a wave of vegetarianism will save them. Cheers n Beers -Sean-

  • Comment 02/23/15:

    More IBM “resource” trickery: Retirement-eligible staffers PBC 3'd and RA'd. The RA becomes a forced/involuntary retirement, which in turn is portrayed to the public as a (PC) retirement (“please join me in congratulating XX on his/her retirement after YY wonderful years as an IBM employee”). No severance package needed. Sickening. -LackingInIntegrityBlue-
  • Comment 02/23/15:

    -T2R- Like many on the transition-to-retirement program, I received an unwarranted PBC 3. I was just told by my manager that my PIP is under scrutiny by HR and two up-levels of management — get this — because I posted a couple of things in the T2R community on Connections. So, if you are T2R — SHUT UP on any internal forums, it apparently only makes a miserable situation more miserable! -16YearsAndCounting-
  • Comment 02/24/15:

    -Sean-: Your description of the PIP process is a bit naive based on my experience. A PIP is a plan developed by your management team and reviewed by HR with the intent that you will fail. It is a document to fail and has a time limit on it. But as an at-will employee you can be fired at any point during the process. The plan should have difficult deliverable with daily milestones. The employee does not have a say nor can they negotiate the terms of the assignments. There is sufficient subjectivity in the plan that would be a "he said", "she said" argument with the weight going to the FLM. The mere fact that you are on a PIP means you will be fired. The issue is whether you will get a package or not. So the employee should try to convince the FLM to give him a package. That is the only negotiation. -lastdino1-
  • Comment 02/24/15:

    I can't understand how anyone can stay at IBM with the cost of healthcare there. Best case scenario: High Deductible $0 premiums for single person; $2.5K deductible before insurance will kick in; $6.45K max out of pocket.

    Worst case scenario: 2 adults + 6 kids PPO+ premiums of $17,328/year with $300/$600 deductible with $27,000 max out of pocket. Even individual max out of pockets are $15,000/year. IBM must be paying well for employees to take risks like that? Consider an illness in December and January (double these numbers); I wouldn't go near IBM with a ten foot pole. I'd high tail it out of there even with a lower paying job. Good employers are limiting family premiums to $3500; deductibles $500 and max out of pocket $5K range. Worst case. You are paying IBM to work there. -Unbelievable-

  • Comment 02/25/15:

    Second round for 2015 now happening in Australia with exit end of March. Some people already notified from Monday this week, others with required invitations with managers for Thursday and Friday. Will it end after 1Q or will this continue all year? -2015 Round 2-
  • Comment 02/25/15:

    So I got caught in this last RA. At the beginning of 2014 I had some vacation days that I didn't get to use from 2013. Manager "A" verbally told me it was OK to use them in 2014. In 2Q I was transferred to a new manager and he wouldn't honor the verbal agreement. Can I get paid for those days? -Anymous-
  • Comment 02/25/15:

    To: -Anymous- You asked about unused vacation from 2014 when you're RA'd. I had the exact same situation. When your new (RA) manager is filling out your separation paperwork, there is a section about vacation that is used to calculate your final paycheck. In addition to asking how much vacation you've used for 2015, it also asks how much unused vacation you had coming out of last year. You are entitled to get paid for the unused days from 2014, plus the earned days for 2015. (So, if you had 3 unused days and 2 days earned for this year, you'll get a total of 5.)

    Most managers don't understand this, so make sure it's done correctly. When I was RA'd, my manager assumed that since vacation isn't banked anymore, the automatic entry for carried over vacation should be zero. When I later found the correct answer on W3, he vaguely recalled hearing something about that when they went through RA training. But, because he had already submitted the paperwork, he won't put through a change. -RAtired-

  • Comment 02/25/15:

    I have to agree with -lastdino1- on the PIP. I am not an IBM manager, but was a manager at a couple other large corporations in the past. If you are placed on a PIP, your manager and HR want documentation that you were given a clear set of goals and objectives. In many cases these goals end up being subjective. My advice to anyone placed on a PIP is to make sure each goal is quantitative and can be easily documented that you achieved it. Something like "have a better attitude" is not acceptable.

    In general, I believe you would not be placed on a PIP if your manager intended to keep you around. If that was the case, your manager would have been coaching you throughout the year so that you reached your GDP goals. I have seen employees placed on PIP as a "wake-up call" that their performance is an issue. From the cases I observed, those employees were actually once great employees that were suffering from personal problems that affected their work. Their managers were actually trying to help them throughout the year but that help was falling on deaf ears. The PIP was used to alert them to the seriousness of the situation. -Anonymous-

  • Comment 02/25/15:

    Yes, next round of RA's now happening in Australia. Had the meeting with my manager yesterday and received the letter. Last day is March 31st. The rumour is that so many RA's were identified for 1Q that HR did not have the bandwidth to process them all at once. So they did some at the end of January and doing the rest now. -Time to Go-
  • Comment 02/25/15:

    -Anymous- There is nothing you can do. IBM has a use them or lose them policy when it comes to vacation days. A verbal agreement with a manager you no longer report to is worthless. You should have gotten the agreement in writing. Never trust this company with a verbal agreements. -longtimebeemer-
  • Comment 02/26/15:

    You won't get paid for those vacation days. I can't believe anyone working at IBM wouldn't take all their vacation days. Not like this company gives you anything back for working 365 a year. Take your vacation each year! -anonymous-
  • Comment 02/27/15:

    We has 2 round of job cuts in Australia. Target employees are 800 nos. I lost mine yesterday feeling angry and disgusted on senseless cuts. In spite of having experience in agile and cloud and PBC ratings of 2, I got the tap on shoulder. I spend 4 years 11 months and 15 days. Loosing my 5 year benefits of encashing LSL leaves and 1 year additional redundancy pay by just 15 days. Any suggestion how can I at least get my full 5 years rather than missing by 15 days? -Anonymous-
  • Comment 02/27/15:

    IBM will stoop to anything. I never got a PBC review for this past period as others with mid-year RA dates did. I just figured they would not do one because I was RA'd with a departure date of Feb 27 and the last time I looked the PBC was left uncompleted in the tool. Last day today, I went and viewed and lo and behold it was complete. I was shocked at the scathing assessment after support multiple accounts and never a discussion of not performing as was expected.

    The PBC says that I agreed I could not improve my performance in a timely manner and as such I did not need to review the PBC. I never agreed to anything and how can they just stop you from reviewing? I have requested that the PBC be reopened and I be allowed to comment.

    -2015 Round 2- The word has been going around that another shedding of employees will happen in 60 days and it is not those th The word has been going around that another shedding of employees will happen in 60 days and it is not those that have been given RA date through to June. This is supposedly a fresh round of RAs. -LastDayATIBM-

  • Comment 02/27/15:

    Folks, unless somebody actually has a plan to organize, this site will remain what it is today, which is an information exchange. So, let's quit with the "we need to organize" BS postings we've seen for 10 years. Somebody put forth an actionable plan or let's admit that in a W@H culture with a wide range of risk tolerances, the best we can do is exchange information. -Anonymous-

    Alliance reply: We have our platform and some of our action plans at the top of this page. We certainly are not going to put everything on this site so IBM can see it. The main thing we are missing and which is vital to move this forward are people willing to step forward and publicly organize. Are you willing to do that? If so contact us at ibmunionalliance@gmail.com. We need multiple chapters of the Alliance nationwide. Remember, the Alliance has lost people too with all the job cuts. We need to rebuild in some locations.

  • Comment 02/27/15:

    CEOs at IBM have been suggesting a huge turn around in IBMs profits since Lou Gerstner was CEO. The only problem is that the CEOs (Sam and Ginny) have continued mass layoffs, benefits have been cut, pensions for retirees are terrible, and there is no profit in sight. IBM really needs a sweep of the entire management and executive team. The only thing that will cause this to happen is a strong union. -ANA-
  • Comment 02/28/15:

    I'm an Australian and like many of my fellow Australians as of yesterday I am now an ex-IBMer. I have to say I really never felt like an IBMer and I'm not sad about departing. So much I could say but really best to say I wish all those remaining the best.

    As for the Alliance and the website I have just given a donation and would really suggest that others do the same as it has been a source of generally reliable information which otherwise I would not have obtained. I really don't understand why Americans don't join the union other than you are living in a climate of fear and what a sad way to live that is. If that is your reason then it is very sad and it's no way to win.

    If you think that unions are only for uneducated blue collar workers then you are believing a fantasy. The white collar workers have become the easiest to exploit, there must be some books on that topic. When I was young I was educated by the Jesuits. One priest used to open his masses with a dedication "to those who live in fear". A prayer for you all! -Away From Fear-

  • Comment 02/28/15:

    "The only surprise should be that we are still working, without a contract, for a machine that reduces the workforce regularly and with increasingly surgical precision."

    Quite agree! But, I think IBM is a machine that has no clue on surgical precision. If so, IBM would heal and mend itself. IBM just gets more and more unhealthy. IBM management just does lobotomies to its business these days and botched ones at that. If RAs really help the IBM business and grow revenue and EPS, then where is the revenue and EPS growth? Profits are just cost cutting tactics to IBM. Stock buybacks are not true earnings. Revenue is something IBM has absolutely no handle on now. -da_facts-

  • New York Times:

    The Cost of a Decline in Unions. By Nicholas Kristof. Excerpts: Like many Americans, I’ve been wary of labor unions. ...

    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.

  • Alliance for Retired Americans Friday Alerts. This week's articles include:
    • Alliance Joins House Members to Protect Social Security Disability Insurance
    • “Right to Work” for Less Legislation Surfaces in Wisconsin, Passes State Senate
    • White House, Department of Labor Officials Act to Stop Bad Financial Advice
    • The Affordable Care Act has Reduced Prescription Drug Costs by Over $15 Billion
    • Income Inequality Threatens the American Dream
    • Medicare Turns 50: Hospital Care as a Right
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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