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6, 2000 April, 2000

Highlights—May 30, 2015

  • Seeking Alpha:

    IBM: The Weakest Stock Out Of Buffett's Big 4. By Alex Cho. Excerpts: Of Buffett's big four, I believe that IBM is the weakest investment.

    "I made a mistake" is a pretty common theme in the investment world. John Pierpont Morgan lost chunks of cash on Edison Electric (as competition from Westinghouse power stations proved DC to be inferior to AC), George Soros lost chunks of cash in the dot com bust (prompting him to change his investment strategy), and Peter Lynch had years of underperformance back when he was a Fidelity asset manager (Black Monday, circa 1987). ...

    Stocks like IBM should be moving higher on technical factors, but because the market anticipates a decline in the business' fundamentals, the valuation has shrunk, as various sell-side analysts have modeled negative sales growth in the current and next fiscal year. To address these issues, management has resorted to cost discipline as a means to improve operating performance. This is a decent response to falling revenues, but the drop-off in revenues shouldn't have happened in the first place, which is why managers and analysts should continue to question the potential returns from investing into the company. ...

    In the past five years, IBM has had an awful tendency of competing in highly competitive markets. Instead of competing in nascent revenue pools, where the market size is small and potential to dominate is large, the company tends to wait until the business opportunity exceeds a billion dollars. What's strange is that the management team pats itself on the back for not investing capital in nascent business opportunities where the projected return on invested capital isn't as clear.

    IBM throws its resources into arenas where competitors have established an early lead. For obvious reasons, I doubt the company will gain back some of the enterprise customers it has lost to Amazon and Microsoft. Amazon was one of the first IaaS providers, and quite frankly the nascent opportunity won support from the CEO of Amazon, Jeff Bezos himself in the earlier stages. The same could be said for Azure, over at Microsoft, which resulted in the company's overwhelming capabilities in private cloud, platform cloud and infrastructure cloud. Clearly, ramping revenue came first and profitability came second. It also earned Satya Nadella his promotion to the post of CEO of Microsoft as he has positioned the commercial side of Microsoft for long-term success.

    IBM's management team is more focused on the day-to-day metrics and functionality of the business, which leads to short-term investments and shortsighted divestitures. You can't attach a market premium to a business that's run like that, because the management team will be reactionary to its business environment and won't establish a business in categories that have yet to be developed into profitable pools. Eventually, IBM will take interest when everyone else is already moving onto the "next big thing" in technology.

    Selected reader comments follow:

    • There are many reason why I believe IBM will be going down slowly in the next 10 years and never recover in terms of top line revenue. It will also slowly decrease its profit as absolute dollar wise (not per share basis).

      I only want to back my opinion up with one point. How many tech companies do you know that do well treating their employees like fast food workers? No one I know of in the tech business in the SF area ever talks about joining IBM. The best quote today is "the best 2 days of my life are the day I join IBM and the day I left IBM". For my wife the best day is in 1989 she decide to join Chevron and not IBM. At that time IBM and Chevron were about equal in most areas and both were great companies to work for with great benefits. If she had joined IBM she would have lost over a million dollars in retirement benefits (401K plus defined benefit).

    • Gerstner, a non technologist entered at the same time and shifted IBM from technology innovation to one of managed financials. By doing that he not only gleaned $0.5B for himself but consumed the seed corn of future innovation to the benefit of investors riding his coattails. But no matter how clever the finance guys are, in the end only fundamental tech innovation dominates in this sector.

  • The Motley Fool: 3 Dow Stocks Hiding Weak Growth Prospects With Share Buybacks. By Matthew Frankel, Sean Williams, and Dan Caplinger. Excerpts: Companies repurchase shares in order to return capital to investors, and this can help a company boost earnings. But there are some downsides to buybacks as well. Some companies' buyback programs boost earnings per share (EPS) to the point that the business appears to be growing more rapidly than it actually is. And every dollar used for share buybacks is one dollar that won't be invested in the future growth of the business. ...

    One of the companies ultimate users of buybacks to boost earnings is IBM. Since 2007, IBM has spent more than $10 billion repurchasing shares in every single year except 2009, when it spent "only" $7.4 billion. The result has been a massive drop in outstanding share counts from 1.38 billion shares in 2007 to just 985 million shares as of the most recent quarter.

    IBM's buybacks have masked a huge slowdown in net income growth. Between 2008 and 2014, IBM's EPS jumped from $8.89 to $11.90, which equates to a slow but respectable growth rate of 34% during that six-year time span. Yet on an absolute basis, IBM's total net income dropped slightly from $12.3 billion to $12 billion. Other key financial figures, such as total revenue, have also declined substantially, showing the weakness in IBM's overall business.

    One of the worst things about IBM's buybacks is that they've largely been made at much higher prices than today's share price. Recently, while the stock has fallen to its worst levels since 2010, IBM has essentially squandered money it could have used to pay dividends or invest in growth. Barring a successful turnaround, IBM could turn into yet another example of buybacks gone bad.

  • Norm Matloff's Upon Closer inspection blog:

    IBM in the H-1B Hotseat (Again). Excerpts: After exposure earlier this year of Southern California Edison and Disney of those firms’ abuse of the H-1B work visa, thus giving a black eye to the visa program, the latest outrage involves IBM. This is interesting because IBM is a tech company — all the tech firms abuse H-1B, but usually that doesn’t make the newspaper — yet it is hardly the first time IBM has been embroiled in controversy over H-1B. On the contrary, abuses by the firm have emerged ever since the visa program was established in the early 1990s. One 2012 internal memo is particularly damning, in which IBM HR says, “The cost difference is too great for the business not to look for” H-1Bs.

    In the last few days, IBM has been accused of reneging on commitments it made to hire in Iowa, with funding from the state and local governments, all the while hiring H-1Bs. But the firm may have chosen the wrong state in which to engage in this kind of thing, as it is the home state of Senator Chuck Grassley, a major critic of H-1B, who asked the company to explain its actions.

    IBM has now responded to the senator. The thrust of its argument is that it is hires H-1Bs because the latter have skills for which there is a shortage of qualified American workers, citing among other things cloud and mobile computing, data analytics and security.

    As quoted in one of the above links, Professor Ron Hira replied that the median wage IBM has been paying its H-1Bs is $74,753, far below what American professionals with those specialties make. This is a fundamental economic principle; a rare in-demand skill should bring higher wages, not lower ones. Expertise in mobile computing, for instance, commands about a 20% salary premium.

    Using the standard argument the industry lobbyists have been making for almost 25 years, IBM says once again that H-1Bs are needed for the short term, but the long-term solution is beefed up efforts at education and retraining in special skills. This has been the greatest red herring in the entire H-1B debate, and I’ve written extensively about it. No need to go into that here; let’s just say that it is certain that IBM rejects many American applicants who are well qualified for those jobs, and that many existing IBM workers could quickly learn new material to perform that work as well.

    Selected reader comments follow:

    • Marnie Dunsmore: Hi Norm, This is a very good article, which touches close to home, since I work in the area of wireless, a field that overlaps with mobile computing.

      It’s widely acknowledged in the wireless industry that IBM is no longer an employer of choice for engineers. I’d say that’s been the case for about the last 15 years.

      To some, a salary of $74,753 might seem very attractive, but that has to be considered in light of the fact that this mobile computing job probably requires:

      • a master’s degree,
      • probably does not come with much of a pension
      • probably requires that the candidate have good, if not top, marks
      • very likely requires that the candidate have several years of work experience in the exact sub-specialty that IBM is looking for

      What is the opportunity cost to gain such skills?

      Bright engineering students and recent new grads look around, see the opportunities at startups, in the financial industry where their skills are also in demand, and quickly realize that there are better paying, more secure opportunities than working at IBM for $74,753 a year.

      In today’s economy, there is no way that you could pay off student loans, purchase a home, raise a family, pay for college for your children or hope to retire with dignity on a salary (with no or little pension) on $74,753 a year.

      Yet, you’re right, there are probably many older engineers at IBM who would be happy to go back to school for six months to pick up whatever skills that IBM desires.

      Yes, IBM doesn’t bother with this, because they:

      • They secretly want to get rid of their “older” (read 35+) better paid, higher benefit cost, engineers.
      • Every penny must be squeezed out of the engineer, quarter by quarter. There’s little room for long term vision, so the idea of training someone for a few months is beyond consideration.
      • H-1Bs are cheap, can’t complain, and are readily available.
      • H-1Bs facilitate outsourcing of some work, making them an attractive option for IBM, who has a sizeable portion of its workforce offshore.

      I’ve reached the point that I don’t care that this is going on. I just wish the National Science Foundation, political leaders and CEOs would stop telling us that there is a “shortage” of science and engineering grads (usually required to have an advanced degree) willing to work for in a job that requires long hours, inadequate benefits, and relatively low pay.

      It’s disingenuous and clearly, very self serving.

      As an engineer, I’m tired of being a “STEM” football. Let’s just tell it like it is. The leader ship at IBM, and most tech companies, don’t really care about the long term viability of there organizations. They care about short term profit, and squeezing their workforce, including their technical workforce, as hard as they can to maximize short term revenue.

    • JRStern: They know the cost of everything, and the value of nothing.
    • R. Lawson: Being on the other side if the fence (hiring) there is no doubt I am able to find cheaper developers through the H-1b body shops. They have an onshore and offshore presence, and their rates are extremely cheap either way. Their quality and speed leaves much to be desired, but their sticker price is taking away opportunities from American professionals.

      $12/hr offshore and $35-$55/hr onshore is the end rate to the body shops in our area. American consulting firms all bill out at much higher rates, but the offshore developers that come here puts downward pressure on all of us.

      Rates to independent consultants has remained stagnant for years. This is most likely high. The government has allowed companies to game the system and tamper with the supply side.

    • Norm Matloff: I agree on the quality issue, but the employers seem to treat programmers as commodities, one as good as another, so price becomes the main issue. Of course, this means they’re shooting themselves in the foot.
    • JRStern: This of course is the real issue, that importing a ton of low-grade, cheap labor treats the whole field as if commodity skills could get the job done. Generally, they can’t. They get the job halfway done, and then they call in the high-skilled guys, typically American, to fix and complete it. Think the Obamacare site.

      Or think this employer I’m talking to now about a gig. They outsourced the development to India, and when they turned it on in production it didn’t work. They US crew has now been working 60-hour weeks for a year, testing and patching and yelling at the outsource company, who of course respond in realtime at 3AM.

      They asked me how I felt about joining a project that would continue working 60-hour weeks for the foreseeable future. In spite of the wonderful money involved in billing that many hours, I wasn’t much for it.

      This is too, too common: commodity developers cost MUCH MORE in the end than increasing salaries, hiring high skills, and hitting the target earlier. If IBM or anyone really saved money importing cheap labor I could understand it – but they DON’T. Not even near-term, it takes 2x more commodities to do what even 80th percentile developers could do. Maybe 5x, when you figure in all the extra overhead and corruption.

      American business PREFERS IT THIS WAY, they’d rather spend 2x the budget just so they don’t have to pay mere engineers high salaries. That’s where we are today, folks.

    • Bill Kennedy: Hedrick Smith’s book ‘Who Stole the American Dream?’ , 2012, has a good chapter on H1-B. Rick is a dinosaur – an old-fashioned honest reporter, unlike the new ones who would never tarnish their ‘personal brand’ [and career prospects] by criticizing H-1B.

      IBM was a pioneering offshorer beginning in the 90s, mostly to India. They began to sell their offshoring expertise to other companies as consultants.

      ‘In September 2007, IBM applied for another patent on what it evidently thought was an even smarter blueprint, promising clients a computerized “Workforce Sourcing Optimizer” to assess the pros and cons of moving out of one country (unnamed) to other countries such as India, China and Hungary (named). IBM’s application boasted that its program could help clients achieve “50% of resources in China by 2010.”

      When the U.S. Patent and Trademark office made IBM’s patent application public in March 2009, it was a bombshell. Congressman John Hall of Dover Plains, New York, a Democrat to whom IBM had made campaign contributions, denounced IBM as “downright unpatriotic and un-American.”

      Within twenty-four hours, IBM pulled its patent application.’

    • Sonny: I’m retired so I no longer have a horse in this race but if the younger tech workers think this won’t effect them I think they’ll eventually will be in for a very big surprise. As more and more people loose employment to cheaper foreign labor these people still have to work somewhere. Those who loose their jobs don’t just disappear. Put very simply this whole outsourcing trend has the end effect of increasing competition for the remaining available jobs and in the process reducing the wages they will be able to command. I believe it’s the biggest problem the remaining middle class faces and IMO far to many appear to be oblivious to it.
    • Bill Kennedy: China has generally been cracking down on foreign corporations, and particularly computer and communications companies. The NSA spying revealed by Edward Snowden has given them some excuse for this. They have demanded that these companies open themselves up to China – turn over their source code, security keys, etc. – though they did recently back off a deadline for doing this.

      Most Western companies have been resisting these demands, but the one that seems to be complying is IBM. The situation is complex however, and IBM says that it is a project that they already have in place with other countries and companies.

      IBM Venture With China Stirs Concerns

      ‘In the past 16 months, IBM has agreed — and received permission under United States export laws — to provide the Beijing company, Teamsun, with a partial blueprint of its higher-end servers and the software that runs on them, according to IBM announcements and filings from Teamsun. As the chief scientist overseeing the IBM project on behalf of the Chinese government, Mr. Shen is helping Teamsun, and in turn China, develop a full supply chain of computers and software atop IBM’s technology.

      The goal is to create a domestic tech industry that in the long run will no longer need to buy American products, thus avoiding security concerns.’

  • IEEE Spectrum:

    A Tool for Analyzing H-1B Visa Applications Reveals Tech Salary Secrets. By Tekla Perry. Excerpts: For years the U.S. Department of Labor has regularly published detailed reports of Labor Condition Applications. These cryptically named documents are filed when an employer seeks to bring in workers from outside the United States under H-1B visas and their variants. The data has been available as downloadable files for years, but only the most motivated have tackled the analysis, it wasn’t easy to navigate.

    But last week a French software engineer, Théo Négri, who has been running a job search web site for tech professionals, released a much more user friendly version of that database, and suddenly, the numbers look very interesting.

    “This tool tells people how much engineers are being paid at a company they might be interested in,” Négri says. It also indicates “which companies are hiring foreigners,” so engineers from outside of the United States can better target their applications. ...

    After weeks immersed in the data, Négri offered me a few insights. (You can browse the data yourself here.) ...

    A big surprise for Négri: He found that the best paid software engineers appear to be at Netflix, where senior software engineers are, according to the labor department data, being paid $240,000 to $250,000 and up for positions for which the official prevailing wage is $153,000. (By comparison, Google applied to hire a host of software engineers at $100,000 to $110,000; the prevailing wages listed are $88,000 to $99,000 for those positions.)

    Négri also said he was surprised that several of the technology companies with the largest number of visa applications submitted over the years he analyzed, including Infosys and IBM, don’t appear to hire many software engineers at all; instead, they hire “technology leads” or “consultants”. In Négri’s opinion, that could be a trick to bring in a technically skilled worker at a lower cost: “If the title says software engineer, you pay a lot” to stay in compliance with the H-1B laws that require immigrants to be paid the prevailing wage, he says. “If the title says ‘consultant’, instead of $130,000 you might pay $60,000, the gap is that big.” He pointed to a “technology lead” for Infosys in Sunnyvale, Calif., listed in the database as having a salary of $87,000. “That’s not much for Silicon Valley,” Négri says.

  • Glassdoor IBM reviews. Selected reviews follow:
    • “Exploiting employees to the fullest”

      Current Employee — Anonymous Employee in Brno (Czech Republic).

      Pros: IBM is only great if you're just about to start your career. Once you've learnt everything and have something to show on your CV, move to another company where you are actually appreciated.

      Cons: There is not enough time in the world to list all cons. IBM is a great place of fake talent. Everybody is faking, especially those people who have "expert" in their job title.

      Management is exploiting employees to the fullest. If somebody leaves the team, they don't hire someone new but you will need to do the leaver's job too as a default from then on. Appreciation in return? None. Even if you would be willing to work overtime, it's not paid, or if it is, it's just simply not worth the effort.

      There is a process for everything and that would make you think everything is working smoothly but quite the opposite: IBM is chaotic, bureaucratic and trying to live off of its old reputation. Well guess what: it doesn't live up to its name at all and it's simply a miracle that it still hasn't sunk yet.

      Advice to Management: Put the employee first, instead of the client. Underpaid, undervalued and overworked, over pushed, over frustrated employees won't be able to make any customer happy!

    • “23+ years, two tours of duty”

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

      Pros: Great coworkers, very talented. Work from home is encourages, most of the time.

      Cons: Benefits and pay sucks; constant layoffs. I started in 1984, and it was the best place to work; now one of the worst. Morale is horrible, and management does not care. No chance of upward mobility. Clueless management, except for a 1st level once in a while. Right now you have entry-level kids, and gray beards with 20+ years. When they leave there will be no skills or expertise left. IBM can't fulfill commitments now with lack of talent.

      Advice to Management: Go back and take a basic business class about how to retain employees. It is NOT always about the share holder. EPS will not come if no talented people work for you. Offshoring skilled positions does not work. Company and management needs to be blown up

    • “Thick culture, but good place to learn”

      Current Employee — Anonymous Employee.

      Pros:

      • A good place to learn all about the latest technology
      • Management recognizes flaws of the company and try to implement new way of working such as agile.

      Cons:

      • Although IBM touts their products as revolutionary, we don't get to use them in our office
      • Some IBMers can be snobbish towards contractors or interns
      • Can be hierarchical, employees rarely give any feedback on policies or strategies of management
      • Too much cost-cutting in my opinion: no free coffee

      Advice to Management: Do try to appreciate your staff and think of them as people who need to be engaged and motivated to perform well and be the best they can be. Your progress is as fast as your slowest team member. Little things make a difference.

    • “Engineer”

      Current Employee — Anonymous Employee.

      Pros: Huge company with lots of different technologies to work on. Groundbreaking research in analytics, natural language processing, etc. IBM is very progressive with their work from home programs.

      Cons: Lackluster and uninspiring management. There are zillions of layers of management at IBM and they seemingly only create more and more bureaucracy while whipping everyone into a frenzy telling them to 'do more, faster' and to 'transform' all without supplying the leadership, tools and guidance to do so.

      The IBM model is to buy small fast growing businesses and stuff their products into IBMs sales channels. So, you could say they have outsourced product innovation. At the same time they shed businesses and products which have lower margins, so you could be laid off or sold off at any time. It is a typical MBA mentality of business portfolio management. The results have been disappointing at best and IBM recently backtracked on its commitment to make $15/share in 2015.

      For years and years IBM has spent tons of cash on stock buybacks and reduced employee benefits rather than investing in product development and research, all in an effort to stabilize the stock price and appease wall street. The stock performance has been dismal over the past decade, but does throw off a dividend.

      Morale in many areas is very poor, not because of the lackluster business performance, but because IBM pits their employees against one another in a Darwinian rating system which marginalizes 2/3 of the population. This is madness because most folks are very talented, self motivated and hardworking.

      Advice to Management: Remove at least 1/3 of the layers of management; 50% would be better. Replace the employee rating system which pits employees against one another and foster a more cooperative framework for collaboration. Spend much more on product development, on par with Microsoft, Google and other worthy competitors, as a similar percentage of earnings. Restore the concept of 'respect for the individual' and change the mentality of employees as a cost towards a more balanced view which values them as assets to be invested in and developed to their potential.

    • “Trabajar en IBM”

      ("Working at IBM") (Translation courtesy of Google Translate). Current Employee — Mobile Regional Service Owner - Senior Cost Analyst in Buenos Aires (Argentina). I have been working at IBM full-time (less than a year).

      Pros: Muchísimas oportunidades de entrenamiento y desarrollo de carrera. Buenos salarios. (Many opportunities for training and career development. Good wages.)

      Cons: Demasiada burocracia, pocas herramientas, el bienestar del empleado no es un factor importante para IBM. (Too much bureaucracy, few tools, employee well-being is not an important factor for IBM.)

      Advice to Management: Los empleados necesitan contacto frecuente con sus líderes para plantear ideas, preocupaciones, riesgos, necesidades de crecimiento y desarrollo de carrera. (Employees need frequent contact with their leaders to raise ideas, concerns, risks, need for growth and career development.)

    • “IBM”

      Former Employee — Anonymous Employee in Wappingers Falls, NY. I worked at IBM (more than a year). Pros: Interesting work, smart, lovely people. Cons: Management shortsightedness — knee jerk reaction to numbers, making decisions based only on bottom line, not on maintaining talent, development and industry trends.
    • “Lost their way”

      Former Employee — Anonymous Employee in Armonk, NY. I worked at IBM (more than 8 years). Pros: Great company to learn and to grow. Coming out of college I could not think of a better place to start your career. Strong benefits. If you want to travel it is there for you. Cons: They do not care about their people as a whole. The constant change within the company and then within each organization creates an atmosphere of "follow the bouncing ball". They are not up to par with salaries. Nine years there and no one seemed to care about the growth of the employee. As an individual you can only do so much but management needs to help as well. Advice to Management: Care more about your most important assets, your people!
    • “So So”

      Current Employee — Anonymous Employee in Vác (Hungary). I have been working at IBM full-time (more than 8 years). Pros: Flexible working hours, possibility to work from home, great colleagues. Cons: Underpayment compared to the industry average. Benefits are cut regularly, Loyalty to the company is not appreciated. Advice to Management: Pay more to employees. What is really frustrating is that IBM would pay more money to an outsider applying for a job, then to an IBMer who applied for the same job. Loyalty to the company should be much more appreciated. No wonder so many people leave the company.
    • “Dreadful company”

      Former Employee — Consultant in Chicago, IL. I worked at IBM full-time (more than 3 years). Pros: Health Insurance is pretty good and your co-pay is relatively low. Cons: Force employees to work extra hours even though there is no real work needed. Advice to Management: It should not always be about the numbers.
    • “Good company but few prospects”

      Current Employee — Senior Consultant. I have been working at IBM full-time (more than 10 years). Pros: Great people, highly motivated colleagues. Work from home environment. Cons: Slow personal growth, terrible salary growth. Advice to Management: You are going to lose your best people when they realize how much less they are being paid compared to the competition.
    • “Unfair performance reviews, underpaid”

      Current Employee — Anonymous Employee in Chantilly, VA. I have been working at IBM full-time (more than a year)

      Pros: Great resume builder to work for a company as big and well known as IBM. Great healthcare benefits for full time employees. As an employee you get a lot of discounts from various companies.

      Cons: Because of the size of the company it's extremely hard to get recognized for good work. Pay raises are based on a ranking system that is unfair. I say this because senior management tells your direct manager how many people they can select for each ranking. 1 is the best. 4 is the worst. Only 10% of staff can be a 1, 10% can be a 2, the 80% left need to be 2's and 3's. Only people with 1's get a raise.

      Advice to Management: Recognize people for there hard work. Get rid of this unfair ranking system or don't tell managers how many people in there staff can be each ranking. Increase pay to keep experienced employees.

    • “Depends on...”

      Current Employee — Project Office Coordinator in Brno (Czech Republic) I have been working at IBM full-time (more than 5 years).

      Pros:

      • Huge company, lot of services and opportunities for job roles, educations and certifications.
      • Easy to step in, mostly for entry positions.
      • Strong processes.
      • Home office is allowed for almost all employees, at least the ones working in IDC Brno.

      Cons:

      • Salaries are the worse in the whole IT market, no benefits, poor tools, first aim is to save costs.
      • Company is so huge that you take the risk to be just a number, or maybe to manage a so small part of a processes that you cannot even understand what you are doing. Despite what they say during first interview.

      Advice to Management: Top Management is deaf :-) Processes, mostly the ones with immediate financial impact are so "strict" that even managers can do only miser things to properly reward the employees.

    • “OK company”

      Former Employee — Anonymous Employee. Pros: Good benefits and worked with some of the best in the industry. Work and life balance is great. Cons: Politics and high-level management constantly makes mistakes. First-level employees will get laid off due to the mistakes made by high-level management. Advice to Management: The corporate debt is the highest ever and the company is not doing well. However, teams get to go on luxury trips to celebrate a release.
    • “Administrative Assistant”

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

      Pros: Depending upon which location you work in, lots of opportunity for cross-functional teaming and some upward mobility.

      Cons: Company is not only outsourcing its administrative team to contractors. It's also sending a lot of these roles to countries outside of the U.S. and while some of the assistants in these countries are IBMers and not contractors, they're not being as well trained as they should be.

      Advice to Management: Keep your administrative assistants and don't resource them just because they've reached a certain age and support only a certain level of executives. Yes, we affect the bottom line as a cost, however, a lot of the executives we support would be lost without us and sending them assistants outside of the US isn't the answer.

    • “Software Test Engineer”

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

      Pros: My original company was bought out by IBM, so the team that I worked for still has a previous company culture. Flexible work time and people I worked with were mostly age 33 or above so they value their life besides working hard. Good benefits, especially health insurance.

      Cons: Management team got changed to IBM folks who basically grew up with IBM. Since then the culture is getting more bureaucratic and I didn't feel individuals are appreciated as before. Not much salary raises...so you should be high salary when you start.

    • “IBM”

      Current Employee — Delivery Project Executive in Baltimore, MD. I have been working at IBM full-time (more than 10 years). Pros: Great place for passionate, motivated people. Company is committed to its clients and to making meaningful advancements in technology to make the world a better place. Cons: As an employee it's easy to get lost in a company this large. Advice to Management: Give more autonomy to first- and second-line managers.
    • “TSM Admin”

      Current Employee — Anonymous Employee Pros: Work from home everyday except one day per week. Easy going manager, and work load not too heavy. Cons: Risk of job getting outsourced to India is always present. IBM has many "resource actions" (layoffs). Potential for advancement limited to nonexistent. Advice to Management: Need to show they value their employees. Most U.S. employees feel very expendable and non-valued.
    • “Sometimes who you know more important than what you know”

      Former Employee — Senior Project Manager in Jackson, MS. I worked at IBM full-time (more than 8 years).

      Pros: Plenty of continuing education opportunities available direct from company. Real good opportunity from someone starting out their career fresh out of college. Work/life balance entirely dependent on job role and group within company, but especially in client-facing roles, very generous.

      Cons: Fortunes of whole teams and groups impacted by the ups/downs of executive management politics. Senior level non-executive professionals at constant risk of cost cutting and offshoring without strong executive patron. Quality of health care related benefits have continuously declined although employee portion of premium has stayed reasonable.

      Advice to Management: Remove the internal silos and budget resources (both human and financial) on long-term success and return to focusing on providing quality services to customers. Have meaningful employee evaluations that actually impact HR's decisions on layoffs so the best/brightest are retained instead of lost, especially since the ability of direct management to influence is directly related to the political clout of their executive.

    • “Not what it used to be...”

      Current Employee — Senior Information Security Specialist in San Jose, CA. I have been working at IBM full-time (more than 10 years).

      Pros: Work/life balance, flexible work schedule, generally good management direction, little to no micromanagement, ability to work independently, professional atmosphere.

      Cons: Overall salary/compensation package is generally below average when compared to other companies. Internal movement is limited. Career advancement is limited. Continuing education and job training is subpar.

      Advice to Management: Good place to start out, but don't expect to retire here. Put in a few years and move on out to the real world. The company has changed for the worse over the past 10 years.

    • “Sinking ship. Late to the dance.”

      Current Employee — Senior IT Specialist in New York, NY. I have been working at IBM full-time (more than 10 years).

      Pros: Work from home, but even that comes with a price.

      Cons: Too much management. Most are clueless. Execs in company only care about their stock options and stock price. Employees and employee benefits are used to make their numbers. No education budget for employees.

      Advice to Management: The work environment is extremely toxic. Everyone fears for their jobs. First line management are even scared. They spread their paranoia (justifiably) to their employees. Every month there is a new rumor of what sector is getting hit next with layoffs.

    • “Could be better”

      Current Employee — Senior Loan Officer in Beaverton, OR. I have been working at IBM full-time (more than a year). Pros: Love the co workers...lots of hard working people. Good location. Great benefits...lots of paid time off. Cons: Management does not have a clue. Need to fire some of them. The systems do not work well. Makes departments have to do work two and three times. Advice to Management: Listen to the loan officers. Fix the system issues. Hire from within the departments.
    • “Technical support engineer”

      Former Employee —- Technical Support Engineer in Marlborough, MA. I worked at IBM full-time (more than 3 years).

      Pros: Lots of job opportunities and working for a company that has distinguished itself over the years.

      Cons: The company gives you a feeling that you are just a number. The company is very impersonal and all your answers and questions can be answered by some internal website, not a face to face encounter. I think the Employment Assistance Program is a joke; if you go there for help you may find yourself unemployed. The company tends to have you do so many things that it is sometimes hard to perform what you were hired for!

      Advice to Management: IBM is a very large US computer company yet we get connected to India for desktop and connectivity issues; I think there is talent here at home. This is a "one size fits all" company, but the technologies and functions are sometimes diverse so one size does not fit all. The PMR is the worst system I have ever worked with. This is a bean counter operation!

  • LinkedIn:

    Talent Mantra: People should lead – People. Rest is just waste! By Khalid Raza. ( Talent Development Leader in IBM HR). Excerpts: I was listening to Karan Thapar yesterday where he had a panel talking about employment and engagement. One of the panelists, Aruna Jayanthi, CEO, Capgemini India Pvt Ltd, shared how ‘people should be leading people’ and that this should be the mantra. She asserted that even if people have great roles, they may leave the organization if the people they work with create a hostile environment.

    Especially managers play a great role. We all have been hearing this since dogs were tied with sausage how ‘people leave managers’ and yet managers pay least focus on people. Some of them are oblivious and some do not care – in either case they cost organization more than they create value. In turn these managers become the biggest cost heads for organizations.

    Selected reader comments follow:

    • I retired after spending the last 20 years at IBM in the UK. In my opinion, IBM leadership does NOT have the talent. With the possible exception of profit, process is paramount to IBM. When IBM was a product company, they valued ideas, ergo people. When IBM successfully transitioned into services, they valued customer satisfaction and delivery excellence and people were still important. But now they had too many as each outsourcing deal brought more mouths to feed. The answer was deemed to be standardised processes, global delivery and LEAN (another process!). Process became king and still is today. People are disposable. IBM may be different in some other regions of the globe, but for now, Khalid, I wish you every success in your role. IBM needs you.
    • I spent 17 years with IBM South Africa up until 2011, all of it within Services in the project management discipline. My comment below is a serious, objective observation and not intended to be cynical or sarcastic.

      In IBM process is not paramount, it's sacred. Profit will not save you from the process violation sin. Putting people before process is an even greater sin. Preaching the gospel of people over process is career limiting in the extreme.

      The people IBM used to value have become resources and costly ones at that. They are also the first target for cost cutting when profit numbers become problematic.

      Unfortunately this problem becomes self perpetuating because those who climb the management ladder into positions of influence are inevitably those who are committed to the numbers and process philosophy. They very seldom have good people management skills and they look to grow others like themselves.

      Process standardisation is a key factor in many large organisations, but processes should enable good business not replace it. Sound human capital management is key to good business in my opinion.

      I believe IBM needs to change its management philosophy in order to survive in the long term, but it's going have to come from the top, firmly and persistently.

  • Alliance for Retired Americans Friday Alert. This week's topics include:
    • The Alliance Releases Annual Congressional Voting Record
    • Planning for a Healthy Retirement
    • CARA Senior “Flash Mob”
    • Medicare Turns 50: Expanding Health Security
New on the Alliance@IBM Site

Job Cut Reports

  • Comment 05/23/15:

    More layoffs this week in Brazil. Second layoff in a month. Wow...they will close Hortolandia site for GTS. GBS got some cuts as well...part of IBM restructuring. No future for IBM in Brazil. Get some better job out there while you can! -Anonymous-
  • Comment 05/23/15:

    I would like to encourage folks to join. I was RA'd 4+ years ago. At the time I was thought IBM would figure out who joined and target them for RA. Like it mattered :-). In retrospect, now that I follow the forum here, I see no evidence of that.

    IBM has wonderful, talented, hard-working people. I now realize the best way to take a stand back then would have been to join. I felt like, as an IBM US employee, I was the 'bad guy'. I felt labeled as stupid, lazy, overpaid, uncaring. Bull feathers.

    We were, and I presume you still are, dedicated, caring folk who want to provide superlative service and products to the customer. Take a stand and make it happen. -Anonymous-

  • Comment 05/23/15:

    Word has it that there will be another round of RA coming in June for Canada. Communication of the RA to be made first couple weeks of the month with termination at end of month. Be prepared! -HeadsUp-
  • Comment 05/25/15:

    ISC Singapore is up next. Rumours are strife that reorganization is on-going and the 'new structure' will take effect in June. Not sure if the fats (hoards of useless FLMs and SLMs) will be trimmed this time round or are they gonna cut the bones instead and get rid of the persons who are actually doing useful work. -Anonymous-
  • Comment 05/27/15:

    If you get notice (RA) this week, please help the Alliance fight for us by providing as much information as you can, such as your country, business unit, any details you can. If you hear rumors, please indicate if they are from a credible source and what country/unit you are talking about. Please join the Alliance, even if you believe a true union is far away, or you are in another country; you can contribute or become an associate member and help fund them. They are in the trenches fighting for us every day, notifying congress of these egregious actions by IBM, sending out press releases about our mistreatment and the executive greed going on.

    A good article in Motley Food exposing IBM's smoke and mirrors, we need more of these: http://www.fool.com/investing/general/2015/05/26/3-dow-stocks-hiding-weak-growth-prospects-with-sha.aspx. -WaitingForACallFromMyManager-

  • Comment 05/23/15:

    I received a cryptic meeting invite for next week to meet in the office sent to me by someone in Finance (not HR). Told to bring my laptop as well. I'm assuming this is an RA masked as a meeting. For those of you who have been RA'd, did you get an invite from an unknown person? Was it sent a week in advance? Any tips for getting prepared for this? -NextOnTheBlock-
  • Comment 05/23/15:

    -NextOnTheBlock- Wouldn't it be nice if you had a union contract and you would have a union representative with you at this "meeting with finance"? With a union contract you don't have to guess usually with what a meeting is called for. For now, good luck and watch your back. I hope IBM is not trying to fire you for expense accounting reasons. -Anonymous-
  • Comment 05/25/15:

    @next on the block: A few years ago a friend of mine was invited to such a meeting. They were auditing his expenses. After a very stressing process he was fired. Be very careful with the auditor. Watch what you say. Good luck! -Blue Never More-
  • Comment 05/25/15:

    -NextonTheBlock-. Can't help but wonder if Finance thinks they've found an issue with an expense report or similar that you submitted and you are about to be held accountable. I wonder it you should bring all recent expense reports with all supporting documents. -Anonymous-
  • Comment 05/27/15:

    So perhaps this is the new ingenious ploy by IBM — get rid of people by accusing them of cheating on their expense reports, or analyzing expenses and looking for any little problem, even an honest one.

    We already saw indisputable evidence of giving good employees bad performance ratings/reviews, and labels like 'distracted' just to justify kicking them to the curb.

    What's next, accusing people of intra-office affairs to get rid of them? Sure, why not destroy people's personal lives along with their careers just to dump them overboard because the company is sinking due to the greed and stupidity of the executives at the top.

    How many out there could survive an intense expense audit? I doubt that many hands are up. You may be next.

    Join the Alliance today so that you have someone at your back, you may be the next one to get the call. -HelpYourself-

  • Comment 05/27/15:

    @Nextontheblock - If this is an audit, do not volunteer any information unless asked for it. Only answer the question asked; do not embellish. Be truthful in your answers and if you don't know, just say so -longtimebeemer-
  • Comment 05/27/15:

    -NextonTheBlock- IBM Finance is sure up to its dirty little tricks again. They have to get a % of folks that they find negligent on expense reporting. So this number will get fired with cause and save IBM money on the next RA since they don't have to pay severance to them.

    Go ahead you all, roll the dice, take your chances still and don't join the union and the Alliance, and see what will happen if and when you travel for IBM when they want to cut resource cost! Ask for the blindfold; but you'll pay for it as well as the cigarette, gun rental, and the lead bullet. -Anonymous-

  • Comment 05/27/15:

    Ever since Lou was CEO IBM executives and managers are all about greed and are full of corruption. I live in Endicott and worked for IBM Endicott, and Lou totally destroyed the economy of the village of Endicott with massive layoffs. The tax base has shrunk, the Union Endicott School District has lost revenue, house values have shrunk, and car dealerships have gone out of business. Washington Avenue has never recovered. IBM needs a union so this these corrupt CEOs can never do again what they did to Endicott. JOIN THE UNION -Anonymous-
  • Comment 05/27/15:

    "Is IBM really worried of a union: a reason to keep so many managers in the USA? I think so. -Anonymous-" I doubt if they are worried. Why should they be? IBMers have shown very little interest in protecting their own jobs by joining. Management has seen how little the join thermometer has moved. IBM workers don't raise their voices even when they are abused. Pathetic. I don't know how the Alliance keeps it going with such an uncaring work group such as IBMers. -member-

    Alliance reply: IBM management isn't the only group watching the lack of growth on the thermometer. Our parent organization tracks it and we give monthly status reports to the organizing department. If anyone here thinks this can go on forever they are mistaken.

  • Comment 05/27/15:

    Has the Alliance been active in trying to get US labor law changed so that it is easier to have votes for unions? There was a bill many years back to accomplish this but Big Biz succeeded in killing it via lobbying. I am in favor of a union but do not think it is really feasible to get one when the current law makes the barriers to even having a vote so high. Continuing to try to get 50% (or whatever it is) of US employees to join one by one is the carefully laid trap the corporations are happy to have laid for us, because it makes the employees think there is some hope while it is clear that under this system there is none. Changing the laws to make votes for unions possible to happen seems like it should be Job #1. -Anonymous-

    Alliance reply: There have been changes from the National Labor Relations Board that have made it easier for unions to organize. But the Republicans have been fighting this. Elections have consequences.

  • Comment 05/27/15:

    To HelpYourself- You are so RIGHT. If IBM management and the bean counters want to get rid of you they will find a way including lying! I know several people who were falsely accused for expense issues. Example: I worked for several managers who approved my weekend stays in hotels in order to save on flights to foreign countries. Then they questioned why I was taking cabs on a Saturday or having expenses for activities. I mean, REALLY? Did they expect me to STAY IN MY HOTEL ROOM and WORK on a weekend? I was already sacrificing and saving the company hundred of dollars but yet they questioned a measly $50 to $100 charge.

    Then the expense system would hold up a $5000+ expense for a measly $20 cab disputed charge. I would then get penalized by American Express for being late.

    These are the types of games greedy IBM execs are playing so they hold on to the funds longer and the worker suffers. Several times I had to pay late fees because of this type of ordeal. I am sure others have similar stories.

    Employees remaining: JOIN THE ALLIANCE. Don't wait like we did to get pushed out because we were old, or making too much money, or had too many benefits. A union would've helped us protect our benefits and jobs! -GLADTOBEGONE-

  • Comment 05/28/15:

    RE: Joining the Union: What many people do not understand is most employees have become trapped by workplace abuse. Every move we make — Facebook, Twitter, LinkedIn, email, SameTime, etc. is tracked. People are emotionally beaten down, resigned to just walk the IBM walk and hope not to give IBM the ability heap any more on our plate. We cannot exhale — always walking on eggshells.

    When I read about joining the union, is it going from one extreme to the other? I do not deny people their right to earn bundles, I do not like it it is off our backs with NOTHING in return but more emotional beatings. Having the ability to post Union posters or contact colleagues about joining the Union does not sound appealing and will add to that abuse.

    Perhaps if the Union noted that we could join, yet be free of expectation to be public, at least for now, there might be more interest. There is a silent majority out there, but the key word is silent, lest the beast be unlashed even further. I am one of those who have been teetering on joining for a few years now, yes years, but cannot hit the enter key. Instead i just wait to exhale when they tap me on the shoulder. -Whoz2say-

  • Comment 05/28/15:

    When will IBM employees take any ownership for their careers and lives. IBM has continued to make their employees unmarketable in the real world. The fact that you have so few employees joining the union is proof that there is no ownership among its employees. The doors at IBM open two ways in and out, if you choose to stay in then you pay the price. My advice get backbone and do what's right for you! -Anonymous-
  • Comment 05/28/15:

    To -Whoz2say-: Seriously? Not go public and expect things to change? Not fight back and not get more people to join? Just join quietly and pay money to an organization that cannot move forward because that's all that the "members" do is quietly exist?

    And you've been "teetering" for YEARS?? Seriously?

    I'm an Alliance member and have been for 16 years. I've been active. I've made IBM aware that I'm here. They know who I am. I've been to several pickets. I've written letters to the editor of my local newspaper. I've recruited new members, and those members have, too.

    I've seen many IBMers come to this site and ask for help to understand their 401k, pension, medical, vacation pay, service time, vested rights and even how they manipulate their retirement money once they leave IBM with barely the shirt on their back after they are Fired...that's what it's called: FIRED. IBM chooses to call it "layoff" or "resource actions" or some other 'Orwellian' nonsense—but YOU, -Whoz2say-, YOU can decide what you want to call it. And YOU can choose to SHOUT IT OUT LOUD. Alliance members have had sixteen years of vacillation back and forth, taking baby steps when we should be taking giant steps. Why? Because of people like you -Whoz2say-

    A large silent majority? A silent majority can never be proven to exist as a "potential" for moving this organization forward into an "action oriented" body that gets things done. Won't happen. You need to put your "big girl or big boy pants" on and do something.

    Whether you like reading this or not, this is reality: Get busy fighting for your job PUBLICLY, or Get Busy Losing your job SILENTLY. Understand? Joining the Alliance isn't just all about paying money every month. It's about growing a large group of people that are determined to take some action and get something done. The Alliance has been struggling because its total membership does not act as a single body. Silence may be golden; but you can't spend it anywhere -Whoz2say-.

    My advice to you is simple. Join or not. If you decide to "hit that enter key" then go the rest of the way. Make the effort to understand how to take action and mobilize your co-workers, regardless of where they are located in the US. This web site has enough information to teach you, believe me. You have to take the initiative to read it.

    If you decide NOT to join, then don't come here asking for help anymore. I'm not speaking for the Alliance; I'm speaking for me: I didn't pay dues here for 16 years so that you can get free advice and not do anything to further the Alliance@IBM cause. If that's what you want to do, then just go away, will ya? -are_you_comfortably_numb?-

  • Comment 05/28/15:

    "-WhoZ2say- ... Every move we make - Facebook, twitter, LinkedIn, email, SameTIme msg etc. is tracked...Perhaps if the Union noted that we could join, yet be free of expectation to be public, at least for now, there might be more interest."

    With this kind of paranoia, no wonder the Alliance numbers are so low. Do you have a computer or cell phone at home that is neither IBM property nor connected to IBM? If you are so scared of IBM tracking your every move, you should use that personal device to join the Alliance. IBM cannot find out. Also, where did you get the idea that members are expected to be public. If you would rather be a "silent" member, that's fine. Your name is required by law to be kept completely confidential by the Alliance@IBM/CWA. http://www.endicottalliance.org/aboutmembership.htm -DeepThroat-

  • Comment 05/28/15:

    I knew a lot of co-workers that "teetered" for years too. They "teetered" so long a resource action caught up with them. They were so afraid of being fired for joining the Alliance. IBM fired them and tens of thousands of others who just sat back waiting for the right moment to join. How did that work out for them? IBM workers are their own worst enemy. -member-
  • Comment 05/28/15:

    "Every move we make - Facebook, twitter, LinkedIn, email, SameTIme msg etc. is tracked..."

    You do have protections under the National Labor Relations Act Section 7. And this applies to all communication channels not provided for by the employer.

    US Mail, though slow, is not tracked and cannot be tracked by IBM. Good 'ole word-of-mouth also works well and probably is the best communication channel we have. So get the word out! The "old archaic" communication channels still work and need to be used. IBMers need to use all the communication channels available and without fear. FEAR is what IBM management is using TO CONTROL YOU, if you let it. If you don't stand up with the Alliance and join to fight "Big Bad Brother Blue" then who will? -Anonymous-

  • Comment 05/29/15:

    "The Alliance has been struggling because its total membership does not act as a single body." I can understand this sentiment. But I think it needs some clarification: It is tough for private members to do their part when public members are more willing and brave to take the fight. If we ever could find the right mix and "formula" that is what I pray for. That will, and I always pray for, will make the difference! And other fledgling union organizing groups sure feel the same way. Yes, we always need the distinctions, between public and private, and even associate member or just contributing/donor, based on personal preference and convictions.

    Everyone counts! We are all in this in our own way, together.

    As a public Alliance member since 1999, who was RA'd in the big one in 2009, it hurts me to this day knowing I can't hand out fliers and try to organize within IBM. But I still try to get the word out whenever I can. Even wearing my IBM Alliance tee shirt in public places.

    We all need to act bravely and do our part, public, private, associate, even anonymous contributor/donor. We all need to do it for the greater good to bring fairness and a return to respect for the individual, whether employee, ex-employee, retiree, or customer, with regards to IBM! -sby_willie-

  • Comment 05/29/15:

    What (several of) you are describing is an abusive relationship. That's not exaggeration, it is a point-by-point derivation of the material posted below. I can't get out, I can't get ahead, I can't stay with any sense of safety, they're watching me, they're finding new ways to hurt me, they're counting the days till they can finish me. I must deserve it. I can't find anything better. Etcetera.

    You have three choices. Sit back and take it (which will, one way or the other, be over shortly). Get out and don't look back. Or, fight the power (collective bargaining, litigation, throw-shoes-into-factory-machines). In the immortal words of Gen. James Cartwright, who grew up in a Pennsylvania coal-town, "stop whining, get back up, and defend yourself." -SimpleMath-

  • Comment 05/31/15:

    Today's my last day with IBM as the Emptoris Rivermine TEM Unit of IBM is sold off to a competitor. 110+ or so of us are being pushed out the door with the sale. I watched for 3 years as the IBM processes stagnated our product line while we focused on IBM integration, and failed leadership in SWG drove down our revenue while talented employees left IBM rather than watch the ship go down. Three years of ruining our business was enough. Glad to be be moving back to a smaller TEM focused company. -Anonymous-
If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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