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Highlights—June 27, 2015

  • I, Cringely:

    The U.S. computer industry is dying and I’ll tell you exactly who is killing it and why. By Robert X. Cringely. Excerpts: This is my promised third column in a series about the effect of H-1B visa abuse on U.S. technology workers and ultimately on the U.S. economy. This time I want to take a very high-level view of the problem that may not even mention words like “H-1B” or even “immigration,” replacing them with stronger Anglo-Saxon terms like “greed” and “indifference.” The truth is that much (but not all) of the American technology industry is being led by what my late mother would have called “assholes.” And those assholes are needlessly destroying the very industry that made them rich. It started in the 1970s when a couple of obscure academics created a creaky logical structure for turning corporate executives from managers to rock stars, all in the name of “maximizing shareholder value.” ...

    This mad rush to send more work offshore (to get costs better aligned) is an act of desperation. Everyone knows it isn’t working well. Everyone knows doing it is just going to make the service quality a lot worse. If you annoy your customer enough they will decide to leave.

    The second issue is you can’t fix a problem by throwing more bodies at it. USA IT workers make about 10 times the pay and benefits that their counterparts make in India. I won’t suggest USA workers are 10 times better than anyone, they aren’t. However they are generally much more experienced and can often do important work much better and faster (and in the same time zone). The most effective organizations have a diverse workforce with a mix of people, skills, experience, etc. By working side by side these people learn from each other. They develop team building skills. In time the less experienced workers become highly effective experienced workers. The more layoff’s, the more jobs sent off shore, the more these companies erode the effectiveness of their service. An IT services business is worthless if it does not have the skills and experience to do the job.

    The third problem is how you treat people does matter. In high performing firms the work force is vested in the success of the business. They are prepared to put in the extra effort and extra hours needed to help the business — and they are compensated for the results. They produce value for the business. When you treat and pay people poorly you lose their ambition and desire to excel, you lose the performance of your work force. It can now be argued many workers in IT services are no longer providing any value to the business. This is not because they are bad workers. It is because they are being treated poorly. Firms like IBM and HP are treating both their customers and employees poorly. Their management decisions have consequences and are destroying their businesses. ...

    Cloud computing is a prime example of a high volume, low margin, commodity service. If you don’t make the adjustments to operate as a commodity business, you won’t be able to succeed with selling cloud services. IBM and HP continue to cling to their 1990’s business model. Soon they will have no high margin products and services to sell, and they will no longer have any high volume products or services. Every time they sell a high volume, low margin business they paint themselves tighter in a corner. ...

    It is only a matter of time until a company emerges that truly understands the value of IT service, because that need isn’t going away. Companies are only as smart as the collective intelligence of all their workers. If all their workers understand the value and business model, they can be a formidable competitor. When that happens IBM and HP will be in serious trouble. IBM ignores 99 percent of its workforce and keeps them in the dark. ...

    Now look at the American IT industry in a similar light. American companies have been pretending to offer a superior product for a superior price while simultaneously cutting costs and cheating customers. Do you think IBM respects its customers? They don’t. But what if they did? What if IBM — or any other U.S. IT services company for that matter — actually offered the kind of customer service they pretend they do? What if they solved customer problems instantly? What if they anticipated customer problems and solved them before those problems even appeared? You think that can’t be done? It can be done. And the company that can do it will be able to charge whatever they like and customers will gladly pay it.

    Selected reader comments follow:

    • John: Excellent, Bob. Excellent. The message to employees of IBM and HP is a sobering one. Your employer is destroying their business just as Detroit did in the 70’s and 80’s. We can complain about H1B’s. Even if the H1B program was fixed, the destruction of the IT industry would continue. This is a business management problem and evolution is the only thing that will fix it. A lot of jobs will be lost in the process. We can expect the same level of job destruction as was seen in the auto industry before things began to stabilize. IT workers, you need to find a different career and move on. IBM and HP employees, you really need to find different work and move on, and quickly.
    • Misty: John, couldn’t agree more. I worked at IBM for many years and watched the executive ranks turn into a bunch of ruthless goons. The handwriting was clearly on every wall, the execs called ALL the shots and they viewed the worker bees as a bunch of derelict idiots easily replaced with any available offshore body, skilled or not.

      Of course these execs, being technologically ignorant themselves and typically nothing more than corporate politicians, failed to grasp the service repercussions of their actions. However, since they were ‘the smartest guys in the room’, nobody could tell them otherwise.

      So to your post, I went and found a new job with a company that isn’t smash-faced drunk on ‘maximizing shareholder value’ and it has made all the difference in my life and career.

      I give IBM about 5-7 years before the wheels completely fall off the chassis.

    • John: To fully understand this problem. Let's forget this column is about the IT business. This problem could be in any company or any industry, and the results would be the same. The core of the problem is painfully simple. Our corporate leaders have forgotten the most basic role of business. Business exists to provide products and services to its customers. It is the customers who provide the income to a business from which part of it is profit. If the business is managed properly the shareholders receive value. No customers, no shareholder value it is that simple. No amount of cost cutting can provide shareholder value if one loses their customers.
  • Glassdoor IBM reviews. Selected reviews follow:
    • “Expendable — Immobile — Ignorant”

      Former Employee — Advanced Teleservices Agent in Boulder, CO. I worked at IBM full-time (more than 3 years).

      Pros: You are almost impossible to fire for gross misconduct, you will likely be given significantly less work than you can do, and the company is developing a significant amount of interesting technology (Watson).

      Cons: You will never get a "1" on your annual review which is the key to getting any form of promotion/raise/bonus. These will be reserved for people who have hung out in your job position for more than a decade and came up with your manager.

      You WILL be paid the same as your peers in the same job role. This entirely disregards how much work you do, your annual rating, or any other factors compared to their annual rating or effort. For example at the time I quit, I was doing the work of 2.5 people in my position while I had co-workers who were doing half of their actual work and getting on just fine.

      Continual education only has value if it's IBM's continual education, and even then, you'll have to pay for it. I have a masters degree and put in more than 1200 hours of continual education in the last two years on my own time. Upon completion I was told by management "that's great" and received zero recognition, advancement, or acknowledgment for it. To add further insult to injury, I was then told I could not train in their "program manager" career track because I wasn't qualified (pay grade).

      Nepotism is rampant. This may be restricted to my division, but several managers have siblings, kids, or _____-in-laws working for them. As a result, these people will take a remarkable amount of vacation, leave early and arrive late, get the best assignments, and somehow rack up a lot of overtime despite never seeming to be in the office.

      The career track is a meat grinder. To get to my position and to advance beyond my position is this: Join the company as an extremely underpaid contractor via CCI or Kelly Services. Get worked to death for an unlivable wage. Prove that you're somehow special (maybe) and get the opportunity to interview for a Long Term Supplemental position (a 3 year contract at a flat pay rate that hasn't been adjusted in 5 years and if/when it does, will NOT be retroactively bumped), where you will then compete against about 100 other LTS staff for a chance at getting converted to an IBM "Regular" (the odds are about 1-3%).

      If you make it, you will not receive any raise or special recognition, you're just not going to get fired at the end of 3 years. Beyond this point, there is a layer of managers who have all worked there for at least a decade and who have no career motivation, so your only hope at advancing higher than this is that one of them gets fired or quits, and even then they tend to just double up over the accounts rather than leaving the position open.

      Advice to Management: Re-work your services business model. You have annual attrition of 95% and it's a huge waste of talent and effort. Your emphasis on "speed to answer" makes it so that the vendor contractors will hire almost anyone so long as they have a pulse so they pick up the phone, resulting in huge wastes of training, coaching, and HR effort to keep these borderline retarded people still "working".

      Your emphasis on "Think 40" for your staff is stupid. You force staff to educate themselves in things that have nothing to do with them (teaching HR about Cloud Infrastructure is akin to teaching field workers astrophysics; is it interesting? Sure. Is it going to help them do their jobs at all? No.) Your strategic initiatives are great ideas but you are executing way too slowly (by the economic definition you have been in two consecutive depressions).

      Your system for promotions/retention is insane and borderline abusive. You will hire someone off the street right out of college and pay them six figures, but if someone works for you and gets the same degree, you will not promote them or shop them around to other managers, nor provide them with any raise. This will *always* result in you losing that employee when they get tired of your "see this as a learning experience" BS.

      The ivory tower viewpoint of the company is killing the employees. I had two mentors who were 20+ year employees who received the fabled "1" ratings for years in a row, and both were placed on the "Developmental Plan of Action" in which you cut their pay by 10% and give them a day off during the week to "educate themselves to improve". This was done to save the company money in a year that it was going to fail to show a profit in 3rd quarter (2014), and resulted in you losing both of them. Don't insult your employees.

      Specifically to Ginny: Resign. Your tenure as a CEO cannot be excused under the "we're undergoing a strategic transition" blanket. It is 100% your responsibility to make the changes in a timely, efficient, and effective manner. It never occurred to you that the divisions you believed were "low margin" were still producing a margin, whereas firing thousands of talented staff to get rid of these low margin divisions has pushed them into the hands of our competition.

      You can't get away with giving little-to-no-raises at the company and then pay yourself a multi-million dollar bonus (yes I know the board awarded it to you, but I also know you're super-chummy people).

      You and your hair band have lost touch with the pulse of the company in a deeply fundamental way. You use and abuse the staff and expect them to be grateful to work at IBM, despite it not being the same company that it was when you were down in the trenches 20+ years ago.

      You live a charmed life atop your tower, and I'm pretty sure you thought Marie Antoinette was spot on when she said "let them eat cake."

    • “Well Paid/No Work-Life Balance”

      Current Employee — Senior Bilingual Analyst in Mexico, Distrito Federal (Mexico). I have been working at IBM full-time (less than a year).

      Pros:

      • Better than average salary in all the areas
      • Competent managers and coordinators
      • Opportunities to grow.

      Cons:

      • Work 6 days a week (Service Desk)
      • Upper management shouts at its employees
      • Old employee management styles
      • Minor mistakes are made into big deals.

      Advice to Management: Trust your employees and be understanding when they make mistakes. Treat your employees the way you would like to be treated. Employees are people too; understand that they need time to spend with their families.

    • “Zero Care for Employees and Below Par Salary”

      Former Employee — Project Staffing Professional in Bangalore (India). I worked at IBM full-time (more than 3 years). Pros: Being a big company there are opportunities of learning. This the only pro I would see in my 3 years of employment with them. Cons: Other than learning opportunities everything is a Con here. Zero care for employees and almost no increment in salary once you join IBM. Leadership lacks vision and often indulges in micromanagement and politics. Cost cutting is everywhere as you won't even get a cup of tea for free while you are at IBM. Salaries are below market standards at almost all levels. Advice to Management: Treat employees with respect and most importantly start paying them well.
    • “Analyst”

      Former Employee — Anonymous Employee. Pros: Fantastic exposure to how the IT Industry shapes the economy at one of the world's leading companies. Cons: Overwhelming organizational complexity. Also, despite the volumes of bright employees, IBM is riddled with nepotism that undermines the meritocracy and promotes org silo fiefdoms. Advice to Management: HR has been an undeserved functional area within IBM. Ironically people are the most valued asset in IT. My advice to management is that they focus on keeping good people happy, and hiring only the best.
    • “Good for learning. Horrible for being recognized”

      Current Employee — Project Manager in São Paulo, (Brazil).

      Pros:

      • Amazing Team Work
      • Excellent libraries of processes, methods, procedures, etc.
      • Chance to change job inside the same company
      • Good benefits
      • Very high flexibility.

      Cons:

      • HORRIBLE salaries, unless you are in sales or came from the market with a good proposal
      • Managers in Brazil take preference on employees who work close with them and promote them based on friendship other than achievements
      • You need to be a hero to achieve the best level of performance — yearly goals are subjective and comparison between employees is not fair
      • LOTS of processes, policies you need to follow, blocking you from doing project in an agile manner.

      Advice to Management: CHANGE the PBC process. It needs to be fair, with less power to the managers who are not close to employees' work in global projects, home office or in projects not directly related to the manager's daily tasks. The goals need to be individual for each employee and it needs to be CLEAR what he needs to achieve to be a HIGH performer.

    • “Project Manager”

      Former Employee — Anonymous Employee. Pros: Ability to work from home and be independent. Also giving us the ability to get paid training courses that are available online or in classroom Cons: IBM has too many levels of management. Getting approvals for anything can take a very long time. Recognition has been very little over the years. Advice to Management: Treat your employees with respect and show support when good work has be done. The rewards system is not as good incentive program. Employees like to feel needed within an organization.
    • “Disappointed”

      Current Employee — Asset Management Analyst in Raleigh, NC. I have been working at IBM (less than a year). Pros: Working remote is nice, but difficult as a new grad. Con: Working remote as a new grad means no connection to your team or people. Lots of "fluff" projects that don't ever go through. No room for growth within my dept. Advice to Management: Actually give the new hires some funds and some power or they will leave for better opportunities
    • “Associate Partner”

      Current Employee — Associate Partner in Denver, CO. I have been working at IBM full-time (more than a year). Pros: Stable company, however not in tune with current reality. Senior management knows nothing about its products, and is only numbers focused. Cons: No training in any capacity. Advice to Management: Be sensible.
    • “Senior UX Consultant”

      Current Employee — Managing User Experience Consultant/Strategy in South Bank, England (UK). I have been working at IBM full-time (more than a year).

      Pros: Fast progression into a career that normally takes years. They progress juniors and hand out grandiose titles so they can charge more. Lack of visibility so you can do as you please. Work from home. Lots of time, they tend to charge in minimum time blocks so plenty of time. A week to do what could be done in a couple of hours.

      Cons: Low quality and lack of real training. All the training is IBM's way of doing things which will not get you a better job. You could be moved off to something else. The seniors are forced to do sales. Everyone is assigned to their own project so no where to go for help. Managers are crap. All anyone cares about is money.

      Advice to Management: If you are going to market IBMiX as a design-orientated service then actually make it design orientated and not a sales tool for Watson and antiquated crap software. It's all just pretend.

    • “Meh, it”

      Current Employee — Team Leader in Phoenix, AZ. Pros: It's a very large corporation, and if in the right place, can be a good place for advancement. (If part of an account team — not so much). Cons: Lots and lots of layoffs. What started with 25 people per shift has dwindled to 3 or 4. Automation has helped, but no match for the knowledge that has been lost. Constant delivery issues; lots of expectations that are not area driven. Yes, that means doing someone else's job that is either incapable or unwilling to do the job. Constant turbulence with each quarter, and the loss of personnel each.
    • “Program Manager”

      Former Employee — Senior Program Manager in Hartford, CT. I worked at IBM full-time (more than 10 years). Pros: Good people. Excellent opportunities. Cons: Everything in my group was about billable hours. If you were not billable, you were on a layoff list. Advice to Management: Take care of your people. Get a business plan. Stop the layoffs
    • “one of the worst companies I ever worked with”

      Current Employee — Associate Systems Engineer in Pune (India). Pros: If you wanna do nothing and learn nothing. Cons: Lowest salary, increments are negligible (you won't even notice). There is very less chance of learning; they even work on projects where you have to do just data entry (nothing technical).
    • “Tech”

      Current Employee — Technician in Essex, VT. I have been working at IBM full-time (more than 10 years). Pros: Zero. I can't tell you anything that would be positive because I would be lying. Cons: Management. If you have a spouse that is very sick, they do not care. They use the time you missed for your wife against you in your appraisal. Advice to Management: Treat people better. Have some compassion.
    • “IBM is not the company it was”

      Former Employee — Anonymous Employee. Pros: IBM does have a decent benefit package but it is probably competitive with other more attractive employers. Cons: IBM has not turned a profit in years. Employees do not get promotions or raises while the CEO takes a $3 million bonus and 6% raise. Employees are dispensable to simply manage the bottom line in the short term without thought to long term consequence. I don't see where there are opportunities for those entering the workforce from college.
    • “Advisory Software Engineer”

      Former Employee — Anonymous Employee in Boston, MA. I worked at IBM (more than 5 years).

      Pros: The team and the product I worked in was excellent. But there has always been a dearth in sharing the knowledge within the team.

      Cons: I can list a ton but to name a few:

      • No respect for employee. You are treated as another head-count by the upper management.
      • Upper management consistently under performs but the lower-level employees get RA'd consistently
      • No salary hike for the half-decade that I worked there.
      • The employee portion of the healthcare kept on increasing. With no pay hike + inflation, every year it was like salary reduction.
      • The bonus kept on shrinking even though the product did very well.

      Advice to Management: Please RA yourself as you are doing for lower-level employees who don't perform well. For the past 12 consecutive quarters, there was only declining revenues which shows the upper management capabilities.

    • “Worse place I have ever worked.”

      Current Employee - Anonymous Employee in London, England (UK). Pros: Can work from home; the pension is OK. Cons: Everyone is stuck in a 1970-80s time warp. The 'tools' you are given to do your job will make your life miserable. They are so anachronistic it is staggering. The Accounts Dept will invariably incorrectly calculate your salary. There is no community spirit because everyone works from home. Advice to Management: Get rid of Lotus Notes, SameTime and ServiceNow; learn what your staff actually does. Employ some people less than 50 years old in the UK. Cheap Indian labour isn't the answer to every problem.
    • “Software Engineer”

      Former Employee — Anonymous Employee. Pros: Good technology, good (but increasingly expensive) health-care insurance. Cons: Central planning. Also, have you ever heard of a company that removes the per-paycheck contribution to 401K in favor of an end-of-December payment? The main purpose is to save the extra cash that would be spent on people being laid off. Advice to Management: Allow more autonomy at lower levels of the organization. Stop cheating workers out of their 401K contribution, even as you brag about "values."
    • “Terrible working environment”

      Current Employee — Senior Software Engineer in Dublin (Ireland). I have been working at IBM full-time (more than 8 years). Pros: Great people, nice work and promising career prospects. Cons: No money for anything; offices are dark with no sun light. Developers are forced to hot desk which is difficult with lockers; monitors not allowed to personalise your desk. Miserable environment. Advice to Management: Stop treating staff like cattle!
    • “Managing Consultant”

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

      Pros:

      • Big name company
      • Good to have it in your profile

      Cons:

      • Bad management
      • Worries about Wall Street too much
      • Their employees are like machines; are replaceable any time
      • No job security
      • Bad compensation
      • Sweat shop; force you to work 44 hours/week minimum; otherwise you are out.

      Advice to Management: All of you need to go away. New management need to take care of their employees and customers and not their stock option value.

    • “Datacenter and Cloud Specialist”

      Former Employee — Principal Datacenter and Cloud Specialty Seller in Cincinnati, OH. I worked at IBM full-time (more than 5 years). Pros: Great brand name. Nothing works better than to have a brand name that everyone knows and a reputation of finishing the work regardless of the price even if they loose money. Cons: 1st line managers only last about a year so you get a new boss every year. I had 8 in 7 years. One boss had me as an employee and we never met each other. You get the feeling that you're not part of a family; you are only a number. They will never pay for training to keep you qualified for your job. Advice to Management: Employees are people too. All people desire to feel needed and important at their job. IBM is too focused on Wall Street and manages a 9 month sales cycle weekly. Do you really expect something to change every week?
    • “Project Manager”

      Former Employee — Project Manager in London, England (UK). I worked at IBM full-time (more than 10 years). Pros: Good work/life balance (depending on team/manager). Cons: Pays lower than market. Aims at 75% of market rate. Staff treatment increasingly becoming lower priority to share price. Advice to Management: Value your employees. They are your 'real' assets.
    • “This company treats me very well, from heart”

      Current Employee — Software Engineer in New York, NY. Pros: what does a "job" mean to you? I believe everyone has different answer. But to me, this job with IBM means a better life, I'm feeling safe and grateful. This is what IBM gives me. She gives me a job for living, a life for safeness, a future to imagine bravelessly. No matter what other people say or think of this 104 yrs old Blue Giant, I define IBM with my own feeling and experience. I'd say, I will always remember and thank to her no matter wherever I go in the future. Cons: Can't think of at this time. If shuttles for all sites could be provided, some free food like those internet companies could be served, innovative workplace could be applied to all sites, that will be better.
    • “Very Insensitive Top Management”

      Current Employee — Oracle Database Administrator in Lagos (Nigeria). I have been working at IBM full-time (more than a year). Pros: Big name company that would attract quite a lot of people. Salary very competitive and job flexibility. These are all benefits you'll enjoy. Cons: Very poor employee rating system where your managers are given the number of people that must score a poor rating. To make it worse, they have a policy of laying off yearly (In recent times reduced to quarterly). Very insensitive top management.
    • “IT Specialist”

      Former Employee — IT Specialist in Durham, NC. Pros: The first-line managers I worked for were good people and my coworkers were nice as well. As a remote employee I did not have to cope with commuting and my schedule was flexible to an extent. I could take time during the day to do personal things, sometimes since I needed to do other work at night or early in the morning with colleagues or clients overseas. Cons: As time went on my organization shifted from a primarily US staffed team to about 35% US and 65% internationally based workers. My international colleagues were mostly very professional but there were still problems supporting US based clients. During US working hours clients expected attention for their needs but the assigned person from my team would be often offine due to timezone differences. Also, there seemed to be a push to replace IBM regular employees with contract workers.
    • “Marketing Executive”

      Former Employee — Anonymous Employee. I worked at IBM full-time (more than 10 years). Pros: If you are talented, you will have job security. You also have the opportunity to change roles every couple years, learn new skills within marketing, and work with smart people. Cons: They will work you to death. The culture remains stiff and boring. They don't encourage innovation or creativity within most groups. And there is zero incentive to better work. Advice to Management: Reward your top talent. IBM is losing great people to other companies because of a broken PBC program that does not motivate its people!
    • "OK Place To Work

      ” Current Employee — Software Engineer in Columbus, OH. I have been working at IBM full-time (more than 10 years). Pros: The pros are having a job to go to every day. There are so many nice people working there and they help whenever they can. Employees are encouraged to participate in a lot of community involvement and diversity is respected. Cons: No pay raises ever and they tend to pay under the national and local averages. Promotions are promised but never come to pass no matter how hard you work or how much of your life you devote to your job. You have to be in the right clique at the right time. Managers are not given head count to meet the growing demands of the business. Advice to Management: Pay more attention to your employees and recognize them for the hard work they do.
    • “DPE”

      Former Employee — DPE in Dallas, TX. Pros: A few good managers left from the old days. Cons: Over worked, over stressed, quarterly layoffs. Advice to Management: Increase pay.
  • Alliance for Retired Americans Friday Alert. This week's topics include:
    • Supreme Court Upholds Federal Insurance Exchange, Benefiting Early Retirees and Older Workers
    • Alliance Members Rally at Senators’ Offices Ahead of TPA Vote
    • Indiana Alliance Holds its Convention
    • Medicare Turns 50: Join us in Celebration by Sharing Your Story
    • Less than Two Weeks until National Legislative Conference
New on the Alliance@IBM Site

Job Cut Reports

  • Comment 06/24/15:

    Was told by a neighbor there was an RA at the Finance COE in Rochester, MN. Do not know any details. -Anonymous-
  • Comment 06/24/15:

    RAs already under way in Africa too, most of the functions moving to India. -Anon-
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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