Welcome to IBM Employee News and Links

Highlights—May 23, 2015

• Fortune:

  Why Iowa is mad at IBM. $50 million in incentives didn’t stop hundreds of recent layoffs. By Tom Huddleston, Jr. Excerpts: IBM has drawn the ire of Iowa Senator Chuck Grassley over reports the company is firing hundreds of employees in the state.

  Grassley wrote a letter to IBM CEO Ginni Rometty recently seeking answers, and Bloomberg reported Tuesday that the company cut about 700 jobs in Dubuque, Iowa, where it opened a global delivery center in 2009. The Dubuque location once employed as many as 1,300 people, but had reportedly shrunk to more than 800 employees even before this year’s layoffs.

  The layoffs follow roughly $50 million that city and the state of Iowa spent on incentives to lure the company. IBM didn’t comment on specific employment figures. “IBM is constantly investing in skills to meet the demands of our clients, especially in areas such as Cloud, Analytics, Mobile, Social and Security,” spokesman Adam Pratt told Bloomberg.

• Forbes:

  Vampire CEOs Continue To Suck Blood. By Steve Denning. Excerpts: As the economy continues to struggle in the seventh year of its supposed recovery after the Great Recession–despite unprecedented amounts of free government money from the Fed–CEO compensation continues to soar. ...

  When money becomes the end, not the means, then the result is what analyst Gautam Mukunda calls “excessive financialization” of the economy, in his article, “The Price of Wall Street Power,” in the June 2014 issue of Harvard Business Review.

  Even as the members of the C-suite are delivering less and less return on assets and on invested capital, the poor performance has yet to register in their paychecks. In the period 1978 to 2013, CEO compensation increased by an astonishing 937%, while the typical worker’s compensation have declined. These executives are administrators masquerading as entrepreneurs. As Bill Lazonick has documented in his recent HBR article, these executives are “takers,” while posing as “makers”: they are extracting value, not creating it.

  Thus between 2004 and 2013, publicly-listed firms in the S&P 500 used a colossal amount of their earnings—$3.4 trillion—to buy back their own stock. These firms are engaged, Bill Lazonick’s article showed, in “what is effectively stock-price manipulation.” The consequences of these share buybacks are an economic and social disaster: net disinvestment, loss of shareholder value, crippled capacity to innovate, destruction of jobs, exploitation of workers, windfall gains for activist insiders, rapidly increasing inequality and sustained economic stagnation. ...

  The C-suite has become “vampire talent” in the sense that they suck value from their organizations, their customers and from society, rather than creating it. They include:

  1. Super-managers are people who hold administrative positions in the C-suite of private-sector bureaucracies but are masquerading as entrepreneurs. They are, to use Thomas Piketty’s slyly ironic term, “super-managers.” As such, they have been able to extract extraordinary levels of compensation. They have been lavished with stock and stock options and have been able to “manage” the share price of their firms with massive share buybacks and other financial engineering so that they receive massive bonuses. As Bill Lazonick documented in the September 2014 issue of HBR, the net effect of their activities is to extract value, rather than create value. A prime example is Sam Palmisano’s $225 million payout for his stint at IBM, while systematically extracting value from the firm for himself and the major shareholders over a period of years.

• Bloomberg Business:

  Iowa Spent $50 Million to Lure IBM. Then the Firings Started. By Alex Barinka. Excerpts: Five years after bringing high-tech jobs to the Midwestern states of Iowa and Missouri, International Business Machines Corp. has fired half its workers there — sowing ire and disappointment for locals and officials alike.

  In April, Iowa Senator Chuck Grassley wrote IBM to condemn the firing of about 700 employees in Dubuque, Iowa. The same month, Missouri suspended tax credits after IBM’s headcount in the city of Columbia fell below the required minimum of 500.

  When IBM came to Dubuque in 2009 and then to Columbia, it needed workers to help companies run their technology. Three years later a new CEO decided to automate some of the business, and the firings began. It’s a blow to Dubuque and Columbia, cities that spent a combined $84 million on tax breaks and other incentives to lure Big Blue in the hopes of attracting other technology firms and incubating a startup scene. ...

  IBM declined to comment on the employment levels in Dubuque and Columbia, future plans for the locations or on the treatment of its workers there. “IBM is constantly investing in skills to meet the demands of our clients, especially in areas such as Cloud, Analytics, Mobile, Social and Security,” Adam Pratt, a spokesman for IBM, wrote in an e-mailed statement. ...

  IBM’s Dubuque operation opened on Aug. 25, 2009, with a ribbon-cutting ceremony attended by local and state officials. The city and state had lavished more than $50 million in incentives on IBM, including a rehabilitation of the historic Roshek Building just off Main Street. Dubuque sent the company hundreds of resumes from potential recruits. ...

  Chris Ross was one of the first people hired. She and other incoming employees anticipated learning high-tech skills on which to build a long-term career. In a January 2009 release about new jobs in Dubuque, IBM touted its commitment to work with local higher-education institutes “for recruitment and training of potential employees.”

  Instead, Ross found herself toiling on what she described as a new-age assembly line -- each employee solving a narrowly focused part of a corporate customer’s technical problem and then passing the baton to the next person. As a result, said some of IBM’s Dubuque workers, they became experts only in a narrow set of skills that weren’t easily transferable. ...

  Grassley, a Republican, wrote to Rometty on April 16 to express concern about “reports of mass layoffs” even as IBM requested H-1B work visas to allow 5,800 foreign employees to be authorized to work for the company in the U.S., he explained in an interview. “What are you doing to make sure you make a good faith effort to hire Americans?” he said. IBM declined to comment further on Grassley’s comments.

• Wall Street Journal:

  U.S. Navy Looks to Replace IBM Servers for Security After Lenovo Purchase. Department of Homeland Security identifies security concerns with IBM unit sale. By Eva Dou. Excerpts: The U.S. Navy is looking at dropping International Business Machines Corp. servers from some weapons systems after the company’s server line was purchased by Lenovo Group Ltd. of China, highlighting the way security considerations are affecting technology sales in both countries. ...

  Lenovo, the world’s largest personal-computer maker by shipments, has presented itself as a nonpolitical, multinational company. It also has headquarters in Morrisville, N.C., and has promoted Western executives to senior positions. ...

  After Lenovo acquired IBM’s personal-computer business in 2005, the State Department banned use of the PCs on its classified networks in the U.S. and abroad, The Wall Street Journal reported last year citing current and former officials. ...

  Lenovo’s purchase of the IBM server unit was delayed last year by a review by the Committee on Foreign Investment in the U.S., a panel that screens deals that could have national-security implications. A U.S. Treasury spokeswoman declined to comment on whether restrictions have been placed on federal-government procurement of Lenovo or IBM servers, saying that information filed with the committee couldn’t be publicly disclosed by law.

• STV (Scotland):

  Around 90 Inverclyde jobs axed as IBM moves roles to Bulgaria. Excerpts: IBM - which has been a major employer in the Greenock area for over 60 years - will axe the jobs at the facility in the Spango Valley, which opened 10 years ago. ...

  In a short general statement, the company said: "IBM continues to rebalance its workforce to meet the changing requirements of its clients, and to pioneer new, high value segments of the IT industry." ...

  "A decision has now been made to move the work carried out by IBM Greenock, specifically in the GPS team, to the global competence centre in Sofia [Bulgaria's capital city]. "This is in line with the continued focus on competitiveness and growth."

• BBC News:

  IBM call centre in Greenock set for job losses. Excerpts: Nearly 90 jobs are to be shed at computer giant IBM's Spango Valley call centre in Inverclyde, it has emerged. A total of 89 technical support staff in Greenock are affected, most of whom are agency workers employed by Manpower. ...

  An IBM spokeswoman said: "IBM continues to rebalance its workforce to meet the changing requirements of its clients, and to pioneer new, high value segments of the IT industry."

• Computerworld:

  IBM defends use of temp visa workers. By Patrick Thibodeau. Excerpts: IBM says the growth in technologies such as cloud, analytics, mobile and security is "exacerbating the skills shortage" in the tech industry, and underscores the need for temporary foreign tech workers.

  The firm made this point in a letter to U.S. Sen. Chuck Grassley (R-Iowa), the Judiciary Committee chairman, in response to a query from the senator on IBM's use of the H-1B visa. ...

  IBM said it brings in foreign workers who "who have specific profiles and expertise that we cannot source locally in a timely way to fulfill client requirements."

  If it can't bring those skills into the U.S. "then our clients may be forced to move the work to the skills out of the U.S.," wrote IBM. The company also said that it "does not make a practice of cutting positions in the U.S. and then replacing those same positions with either U.S. citizens or foreign visa holders." ...

  The firm's claims were met with skepticism in some quarters. Ron Hira, an associate professor of public policy at Howard University, said that 98% of the H-1B petitions that IBM had approved by the U.S. government from fiscal years 2008 through 2013 were in computer occupations, "the very same types of positions IBM has been downsizing in the U.S."

  The median wage for those H-1Bs, according to the petition data, was $74,753, said Hira, "which is way below the average wages for those types of positions."

  "We know that IBM is using the H-1B program to bring in workers who are being paid a lot less than the average wage," said Hira. "IBM is certainly not paying its H-1B workers as though they have specialized skills."

  IBM cut its U.S. workforce as it grew India-based operations, but accurate numbers are difficult to get. IBM stop disclosing the size of the U.S. workforce in 2010, and its last officially reported headcount was about 105,000. The Alliance estimates IBM's headcount today at about 76,000. ...

  The letter to Grassley offers "a lot of generalizations with no evidence, no specifics," such as a skills shortage, said Hal Salzman, a Rutgers University professor who studies STEM (Science, Technology, Engineering and Math) workforce issues. IBM is "entitled to keep data confidential but I would argue they are not entitled to ask for public benefits, government intervention into the market without providing some evidence for these claims."

• CIO:

  Amazon rules Gartner's magical box. By Joab Jackson. Excerpts: Has there ever been a Gartner Magic Quadrant as lopsided as the one issued this week for cloud infrastructure providers?

  Amazon Web Services towers above other global infrastructure providers in terms of the quality and breadth of its offerings, according to the research firm’s latest calculations.

  Only Microsoft’s Azure nears the AWS juggernaut status in the boxy Gartner universe. Other established players, such as Google, IBM, VMware, Verizon and CSC, are all huddled far further down within the lower quarters. A few enterprise providers, HP and Oracle notably, aren’t in the box at all....

  But what about IBM? IBM is progressing with the technologies from its purchase of SoftLayer last year for $2 billion. The SoftLayer offerings still aren’t integrated smoothly into IBM’s BlueMix set of platform services. Also, SoftLayer’s unique set of API’s for managing cloud workloads is still not widely supported by third-party management tools.

  IBM has been addressing this last deficiency. Earlier this week, the company started offering the Open Stack cloud hosting software on SoftLayer, offering a way, in theory at least, to use the open-source software to manage workloads running on IBM’s infrastructure clouds.

• Glassdoor IBM reviews. Selected reviews follow:

  • “nice to have on your resume”

    Former Employee — Anonymous Employee. Pros: The benefits are good. Flex schedule. Ability to work from home depending on position. Lots of different areas to grow. Cons: The politics are horrible. A big corporation is focused on profits to their executives not on the employees that really drive business. Advice to Management: Management is driven by the goals of their managers. They are like robots concerned with their positions and not of the people they manage.

  • “Information Technology, Desktop Support Specialist”

    Former Employee — Information Technology, Desktop Support Specialist in Southbury, CT. Pros: IBM. If you have to start somewhere... Cons: Your job WILL be taken away from you someday. Advice to Management: No matter what's said, it's better to talk to the wall.

  • “Working at IBM”

    Former Employee — Software Client Leader in Sydney (Australia). I worked at IBM (more than 10 years). Pros: Flexible working hours. Good solutions, especially new acquisitions. Cons: IBM is struggling to transform itself to bring the various business units around the new CAMSS (Cloud, Analytics, Mobile, Social, Security) focus. Changes get announced at the top (in the US) and the various geographies try to play along at the middle management level and everyone else below is confused. Confusing place at this moment.

  • “Good place to work and start a new career”

    Former Employee — Technical Support Engineer in Atlanta, GA. I worked at IBM full-time (more than a year). Pros: Smart people. A lot of structure to follow. Can learn a lot of different fields and technologies if you put your mind to it. Generally, a pretty easy job. People are pretty forgiving and willing to teach you to learn. Cons: Mindless forms to constantly fill out that made no sense. Primary job duties weren't as important as doing mindless tasks to appease a bean counter. Advice to Management: Care for your employees, and the employees will care for you.

  • “Has been better”

    Current Employee — Anonymous Employee. I have been working at IBM full-time (more than 10 years). Pros: Regular pay, deposits clear the bank. Cons: Continuously shrinking benefits and raises that range from minuscule to zero. Advice to Management: Invest in your people and provide opportunity for advancement.

  • “Good experience, horrible pay and work environment”

    Current Employee — Senior Financial Analyst. I have been working at IBM full-time (more than a year). Pros: Interesting work, smart people, flexible work schedule. Cons: Pay is below market level, work environment is deteriorating as employee satisfaction decreases leading to more pessimism. The amount of bureaucracy is second to none.

  • “IBM - RTP”

    Former Employee — Anonymous Employee. Pros: Interesting work! IBM usually does a good job of hiring great people to work with. Employees have access to a vast amount of resources. Cons: Constant resource actions are a big drag on morale. IBM RTP Main Site is a real dump to work in.

  • “Cutting edge research”

    Current Employee — Research Staff Member in Yorktown Heights, NY. I have been working at IBM full-time (more than 3 years). Pros: Doing cutting-edge research, with highly productive team. Working environment is enjoyable. Easy to communicate. Cons: Slow promotion, sometimes the work is not as highly recognized as that is done in a startup. Advice to Management: Assign important roles to young people with talents and abilities, regardless of their experience levels.

  • “Mandatory retirement”

    Former Employee — Software Developer in Rockville, MD. I worked at IBM (more than 10 years). Pros: Good opportunity if you're young and talented and keep up with technology. Cons: Business operations people last the longest. Technically strong employees cost too much so there is a wall we all hit just a bit too early. Advice to Management: Sell.

  • “Big something but it ain't old Blue”

    Former Employee — Staff Software Engineer in Austin, TX. I worked at IBM full-time (more than 5 years). Pros: If you get in the right group, it can be an enjoyable place to work. Cons: Too much hierarchy. Too many middle men accomplishing nothing. Advice to Management: Explain current long term business strategy to employees and how it will impact their careers

  • “Great place to work”

    Former Employee — Anonymous Employee in New York, NY. I worked at IBM full-time (more than a year). Pros: Good pay, great vacation, interesting projects. Managers work with you to keep you staffed. Partners are knowledgeable and are willing to help those who seek it. Cons: Easy to get lost in the mix, internal systems are slow, process for promotion is a drag. Firm is very political; need to network heavily to make it to the top. Advice to Management: Try to be more flexible in letting employees move from organization to organization within the company. Fire the people who don't want to work, or who don't bill time. Trim the fat!

  • “Account Executive”

    Former Employee — Anonymous Employee. Pros: Great support internally and systems are set up to assist in efficiently closing business. Cons: Large organization, sometimes you feel like just a number. Advice to Management: Promote work/life balance throughout organization.

  • “Senior Software Engineer”

    Current Employee — Senior Software Engineer. I have been working at IBM full-time (more than 10 years). Pros: Exciting work at the top of the industry. Good work at home, family friendly policies. Cons: Dubious business strategies, stagnant wages, lack of investment in people and education compared to the "old IBM." Advice to Management: Invest in long-term organic development now that the acquisition strategy has run its course.

  • “IBM too driven by Wall Street”

    Former Employee — Consulting IT Specialist.

    Pros: Excellent salary, great work environment, a lot of excellent people working for IBM. Able to "define" your goals and make the job into what you want it to be. Get to work with some of the top companies in the world. Possibilities for domestic and foreign travel are always available. Exposure to great cutting edge technologies.

    Cons: C-Level executives and Board seem bent on reducing or near elimination of USA work force. No longer a company that innovates and invents. Now just a company with deep pockets that buys new technologies, takes what it wants then discards the remainder. Time will tell if Ginny can hold IBM together or will be the one to sink the ship.

    Advice to Management: IBM has more talent that it knows what to do with. Use your eyes and your brains and use the talent you have in front of you rather than do the old trick of making a surgeon out of a fry cook. Seems to be the case more and more often. Wake up.

  • “Lots of potential, but bad execution and bad management”

    Current Employee — Staff Software Engineer in Durham, NC. I have been working at IBM full-time (more than 3 years).

    Pros:

    • Huge company with lots of opportunities all over the US and the world.
    • Lots of talented and smart people to work with
    • Wide variety of technical jobs that you can transition. Software engineering, consulting, tech sales, design. Good for people like me who like to wear many hats.

    Cons:

    • Very little respect for the employee on the part of upper management. I've had four friends laid off in just the past two years. I've had friends that were "expected" to work weekends for *months.* Facilities are lacking proper care with the bathrooms often messy with broken stalls that forever to get fixed.
    • I've yet to find a team that understands how to properly plan a software release. It's always a hurry up and wait game for each release. Sizings don't properly take into account technical requirements and focus solely on features.
    • Management is extremely opaque and Orwellian in communicating strategic direction. It seems like they don't actually know what they want. This translates into poor tactics when executing on initiatives without a clear direction.
    • Bloated processes all over the place.
    • An HR that cares only about preventing unionization and lawsuits, and doesn't do anything for its employees. They don't have their own organization for new hires, so we created one for them, but they constantly prevent us from doing this under the "IBM" banner (so we just go do it ourselves and organize it on Facebook)
    • Lack of any real perks outside your salary, insurance, and 401k. We don't even get free coffee and we're not allowed to set up our own, employee-provided, station.

    Advice to Management: Respect and appreciate your employees. I can easily jump ship to Google, Apple, Amazon, or Microsoft. What are you doing to keep me here? IBM is going to have a very tough time keeping talent in Cloud and Mobile technologies if you don't start keeping up with the competition.

    Set realistic expectations to customers for product releases. Rein in the sales and marketing guys that show off vaporware years ahead of where the product actually is. Focus more on quality and streamlining the development process.

    Shift HR into a role of retainment, and not containment. HR doesn't seem to have any funding to be useful. Its only role appears to be to prevent IBM from being sued and to discourage unionization (like we're even going to bother unionizing; it's trivial finding another job).

    There is a lot of talent at this company, and when we're motivated we can build great things, but that motivation is easily lost when we don't feel appreciated. The motivated employees will leave and the complacent ones will stay. Your choice.

  • “IBM Global Services”

    Current Employee — Service Delivery Manager in Seattle, WA.

    Pros: A large company provides greater opportunities for advancement or to become a specialist. The projects and accounts I was exposed to were always rewarding and challenging.

    Cons: IBM was so worried about what would happen if the employees formed unions. Additionally they had no loyalty at all towards employees who joined from an acquisition or outsourcing. In most cases they would find ways to speed up the attrition of these people.

    Advice to Management: The off-shoring of jobs and the "good ole boy" network mentality of the management is not going to allow IBM to stay current and competitive. The bureaucracy in too many cases had us jumping over dollars to pick up dimes.

  • “Well organized, but low morale”

    Former Employee — Finance Manager in Research Triangle Park, NC. I worked at IBM full-time (more than 5 years). Pros: Smart people, very well organized, and great place to learn a lot. Cons: Red tape, senior management cares little about employees. Advice to Management: A little appreciation shown toward employees goes a long way in both productivity and loyalty

• AlterNet:

  The 6 Economic Facts of Life in America That Allow the Rich to Run off with Our Wealth. Do you ever wonder why it takes the average family 47 years to make as much as a hedge fund honcho makes in one hour? By Les Leopold
• Alliance for Retired Americans Friday Alert. This week's topics include:
  • Trans-Pacific Partnership Threatens Medicare
  • Executive Pay Watch: CEO Pay Continues to Skyrocket
  • Fiesta Discusses Retirement Security in Chicago and Iowa
  • NCARA’s Fourth Annual Golf Fundraiser
  • Medicare Turns 50: Protection Against Sickness