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Highlights—December 13, 2014

  • The Telegraph (United Kingdom):

    Is this the next Tesco? The highly regarded Fundsmith manager appreciated Tesco's problems earlier than most. Now he identifies another world-famous company that canny investors would do best to avoid. By Terry Smith. Excerpts: But it is another stake purchased by Mr Buffett that is also going badly which interests me currently. In 2011 Berkshire bought a large number of shares in IBM and is now the largest shareholder, owning 7pc of the company.

    IBM recently abandoned its 2015 profit target of $20 per share, having made only $10.76 in the first three quarters of this year. Its share price fell as a result to a current $162, against a high for the year of nearly $200 and an average price for Berkshire's holding of $170 per share.

    By coincidence, when Mr Buffett was buying Berkshire's stake in IBM, we were looking at it for the Fundsmith Equity fund and rejected it. Why?

    The computer services giant had just delivered its "IBM 2015 Roadmap" in May 2010 via a PowerPoint presentation. My defensive instincts are immediately aroused when someone uses the term "roadmap" unless they are in a motor vehicle. "Plan" is a perfectly good and much less pretentious term.

    This "roadmap" was intended to show how IBM would grow its 2010 profits of $11.52 per share to $20 by 2015. ...

    Acquisitions, cost cutting and share buy-backs are not a particularly high-quality source of growth. The cost cutting and share buy-backs are certainly finite – you can't cut costs and shrink your business to growth, other than growth in earnings per share, which Mr Buffett had already correctly rejected as a useful measure of value creation or performance. ...

    The share buy-back "bridge" was particularly worrying. The slides show it as $50bn of planned share repurchases. How could anyone be sure that they will repurchase shares over the coming years, let alone such a vast quantity? After all, what will the share price be? If the shares are trading above their intrinsic value, a share repurchase will destroy value, other than for those shareholders who exit by taking the opportunity to sell.

  • The Motley Fool:

    Share Buybacks Are Killing IBM. By Jeremy Bowman. Excerpts: 2014 is shaping up to be another strong year for stocks. Thanks to the recent rally, the Dow Jones Industrial Average has tacked on 7% this year after a 27% jump in 2013. But it seems like someone forgot to tell IBM the bull market is still in full swing. Shares of the blue chip tech giant have dipped 14% this year making it the worst-performing stock on the Dow.

    So, what's going on with Big Blue? The troubled started, in large part, thanks to a sharp sell-off following a dismal third-quarter earnings report. IBM reported adjusted earnings of $3.68, well short of estimates which averaged $4.32. In its quarterly release, the tech giant noted, "A marked slowdown in September in client buying behavior, and our results also point to the unprecedented pace of change in our industry." That weak performance prompted management to jettison its long-held target of $20 in earnings per share in 2015. ...

    Over the last three years, the Dow has risen 47% while IBM has lost 15%. ...

    Where's all the money going? The $20 EPS goal for 2015 wasn't just predicated on sales growth. IBM has been implementing a massive share buyback program that has reduced share count from 1.16 billion at the end of 2011 to 990 million today, accounting for over $30 billion in repurchases. ...

    Despite IBM's woes over the last three years, it has not increased spending on Research & Development to boost its growth endeavors, and it has actually spent more on dividends and share buybacks than it has brought in in free cash flow. Last year, expenditures on dividends and buybacks nearly equaled operating cash flow. At the same time, its debt burden has jumped $10 billion to help fund the rampant buybacks.

    But buybacks are a luxury, not a necessity, and for a company to be spending so much on them, especially a technology company, seems to signal an unwillingness to invest in itself and its opportunities, which are necessary for growth. Share buybacks can be useful if shares are undervalued and the underlying business is strong, but for a weak business it does nothing to improve competitiveness. It's the laziest way to spend profits. ...

    And its habit of setting those long-term goals is actually what got the company into trouble in the first place. IBM indeed set a goal for 2015, at $20 EPS, but instead of growing its business to try to meet that goal, it instead took a short cut with buybacks. Now, it finds itself in a much weaker competitive position, and with declining revenue and profits.

  • Seeking Alpha:

    IBM Is Playing A Game Of Hot Potato With Goodwill. By Peter E. Greulich. Summary:
    • There is a hot potato being passed around at IBM. It is called goodwill.
    • Goodwill has grown from less than 1% to more than 25% in the last fourteen years.
    • IBM’s shareholder value is a negative $8 billion without goodwill — one intangible asset.
    • It took forty-two years for Tom Watson Sr., IBM’s traditional founder, to get goodwill off the books.
    • This is a prime example of IBM’s financial engineering. ...

    If you take out the last fourteen years of goodwill, it turns out the stock isn't worth much today from a shareholder's equity perspective, and the trend is not positive. I truly do not want to be the last person holding that last share of IBM stock.

    Unfortunately, IBM is just continuing Louis V. Gerstner's 1999 Roadmap of prioritizing the legal and financially expedient over the judicious and ethical. Shareholders may soon experience what IBM's employee-owners have been experiencing for a decade and a half. The last thirteen years has prioritized the appearance of financial success over long-term corporate survival. ...

    People aren't resources you can nail to the floor. IBM employee-owner morale is terrible and the people that are acquired aren't sticking around. In many cases, after the initial acquisition grace period — and the retention bonus has been paid — they are leaving or being resourced just like any other IBM employee. I referred to this in my book as two conflicting strategies at war with each other: expertise acquired at a premium is set adrift by a resource action. In the days when manufacturing of hard assets was critical to IBM, getting control of the physical asset was important; today, the true asset is in the minds of the acquired employee-owners. If IBM is not retaining and integrating a critical percentage of the 142 companies' employees it has acquired, it should consider taking an impairment. The knowledge, energy, inventiveness and dedication that IBM purchased at a 55.6%+ premium is now gone. ...

    IBM impacts an acquired product. Usually the impact is positive, but other times it is negative. IBM will taint an acquisition's successful product with its own goals and strategic direction. It acquires a product that was usually easily priced, inexpensive, sometimes fit on a thumb drive, had a time-to-customer-value measured in hours, and outstanding installation and ease-of-use characteristics; it then exchanges that for a product that is more secure, hard to price, costly, and blue-washed. Blue washing — an internal IBM process — brings an acquired product up to IBM standards: hard to install because of the supporting product infrastructures required, impossible to even download easily from the Internet, and installation, usability and time-to-value characteristics that are hard to describe until experienced. It takes IBM's best product managers to retain a startup's customers, and IBM's best product managers have their hands tied by IBM finance and development teams spread out across the globe. ...

    I cannot see behind the closed doors of the corporate board room. If Rometty is fighting to get IBM culturally back on track, it will take years, but the employee-owners and customers need to see movement. Shareholders are only now experiencing what IBM's employee-owners have been seeing for a decade and a half: IBM left the path of right over might for wearisome roadmaps based on might over right. It started with Gerstner, and was reinforced by Sam Palmisano. Ginni Rometty should change the course.

  • The Motley Fool:

    3 Reasons to Sell IBM Stock at Its 52-Week Low. By Leo Sun. Excerpts: A stock doesn't hit a 52-week low without a good reason. IBM is one such stock, which has slumped 13% over the past year to what is, in fact, a three-year low. Big Blue's dismal sales growth and muddy plans for its future have caused many longtime investors to flee, but contrarian investors might think of IBM as an undervalued income stock. After all, it trades at less than 10 times forward earnings and pays a forward dividend yield of 2.7%.

    While its possible that value-minded investors may find IBM intriguing, it seems likely that this may be the beginning of a much deeper slide. Here are three reasons why shares of IBM should be avoided-not embraced.

  • Motley Fool:

    The Worst Tech CEOs of 2014. By Sam Mattera. Excerpts: Runner-up: Ginni Rometty, IBM. IBM's 2014 decline — about 13% — is not particularly notable for a tech stock, but it is significant for a company of IBM's size and scope.

    Although IBM has blamed a rapidly shifting market, its underperformance appears to be the byproduct of a mistaken corporate strategy finally coming home to roost. Rather than attempt to generate real organic growth, IBM has spent the last few years engaged in financial engineering, leveraging its balance sheet to deliver on its long-standing commitment to an earnings per share figure of $20 by next year.

    CEO Ginni Rometty inherited that target from her predecessor, but has done little to alter IBM's strategy. Big Blue has paid out a steady dividend, but shares are down more than 10% since Rometty took over at the beginning of 2012. IBM's recent underperformance has raised the specter of potential activist intervention — Cantor Fitzgerald's Brian White believes the company could come under fire if it cannot right the ship next year. Should an activist take a stake in the company, replacing Rometty could be among the top priorities.

  • New York Times:

    Ruling Lets Work Email Be Used to Organize Unions. By Patricia Cohen. Excerpts: In a decision that could affect millions of workers across the country, the National Labor Relations Board ruled on Thursday that employers could not prohibit employees from using their company’s email to communicate and engage in union organizing on their own time.

    The 3-to-2 ruling overturned a decision made in 2007, when Republicans held a majority on the board, that had forbidden such use of email.

    Calling that ruling “clearly incorrect,” the current majority noted how technology had transformed daily habits. “The workplace is ‘uniquely appropriate’ and ‘the natural gathering place’ for such communications,” the board wrote, “and the use of email as a common form of workplace communication has expanded dramatically in recent years.”

  • Los Angeles Times:

    Congress poised to allow cuts to private pension payouts. By Evan Halper. Excerpts: More than 1 million Americans who were promised secure, predictable retirement income probably will see part of their monthly benefit checks evaporate as Congress moves to stabilize some private pension systems veering toward insolvency.

    The expected congressional action to allow previously promised private-sector pensions to be cut is another sign that decades-old assurances that workers were given about retirement income are rapidly fading. ...

    Other unions and retiree groups, including the AARP, have denounced the plan as a betrayal of a promise, enshrined in federal law for four decades, that vested pension benefits would not be cut.

    The retirees whose pensions are at stake are mostly blue-collar workers, including mechanics, truckers and construction workers, who participate in what are known as multi-employer pension plans. ...

    For many workers, the medicine is bitter. The nonprofit Pension Rights Center warns that some workers could see their retirement checks cut by as much as 60%. ...

    "Let's measure this against other things the government has done," Buffenbarger said. "They bailed out Wall Street so those guys can keep their yachts. But we can't come up with the equivalent to bring solvency to the entire nation's pension systems?"

  • Money:

    Congress’ No-Bailout Pension Plan Is No Solution for Retirees. By Mark Miller. Excerpts: The cuts to promised benefits for current retirees would roll back a landmark law protecting pensions—and opens the door to further cutbacks.

    Wall Street banks, automakers and insurance giants got bailouts during the economic meltdown that started in 2008. But when it comes to the pensions of retired truck drivers, construction workers and mine workers, it seems that enough is enough.

    The $1.1 trillion omnibus spending bill moving through Congress this week adopts “Solutions Not Bailouts,” a plan to shore up struggling multiemployer pension funds—traditional defined benefit plans jointly funded by groups of employers in industries like construction, trucking, mining and food retailing.

    A bailout, it is not. The centerpiece is a provision that would open the door to cutting current beneficiaries’ benefits, a retirement policy taboo and a potential disaster for retirees on fixed incomes. ...

    The fix moving through Congress would revise the Employee Retirement Income Security Act (ERISA) to grant plan trustees broad powers to cut retired workers’ benefits if they can show that would prolong the life of the plan. That would mark a major change from current law, which calls for retirees to be paid full benefits unless plan assets are exhausted; then, the PBGC steps in to pay benefits, albeit at a much lower level. The bill also would increase PBGC premiums paid by sponsors, from $13 to $26 per year. ...

    The big problem here is that the plan fails to put retirees at the head of the line for protection. When changes of this type must be made, they should be phased in over a long period of time, giving workers time to adjust their plans before retirement. For example, the Social Security benefit cuts enacted in 1983 were phased in over 20 years and didn’t start kicking in until 1990.

    “It’s a cruel irony that in the year we’re celebrating the 40th anniversary year of ERISA, Congress is trying to reverse its most significant protections,” said Karen Friedman, executive vice president of the Pension Rights Center (PRC), an advocacy group that has been battling with NCCMP on some of the proposed changes to retired workers’ benefits.

    Friedman’s organization, AARP and other advocates reject the idea that solvency problems 10 to 15 years away require such severe measures. They have pushed alternative approaches to the problem; one that is included in the deal, DeFrehn says, is an increase in PBGC premiums paid by sponsors, from $13 to $26 per year. Advocates also have called for other new revenue sources, such as low-interest loans to PBGC by the once-bailed-out big banks and investment firms.

    There are no easy answers here. But cutting the benefits of today’s retirees should be the last solution we try—not the first.

  • MSN:

    Labor Unions Accuse Congress of Sneak Attack on Pensions in Lame Duck. By Billy House. Excerpt: "Making sweeping changes to current pension law that will affect millions of retirees without the benefit of the regular process in Congress—no hearings, no mark-ups, and no public release of the text of the legislative language now evidently being considered, and in a lame duck session no less, is extraordinary and dangerous," said Newton Jones, president of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers, in a letter Monday to House and Senate leaders.
  • Glassdoor IBM reviews. Selected reviews follow:
    • “Culture changed the last 5 years”

      Former Employee — Anonymous Employee. Pros: Great technical talent who have awesome skills. Challenging projects. International projects for Fortune 500 companies. Opportunity for travel. Opportunity to work remotely. Cons: Focus on meeting 5-year EPS goal. Less focus on customer satisfaction in recent years. Little opportunity for training. Advice for Senior Management: Focus on customer satisfaction and empowering employees.
    • “Account Executive”

      Current Employee — Account Executive in New York, NY. I have been working at IBM full-time (more than 5 years).

      Pros: Wide variety of product offerings.

      Cons: Bureaucratic, slow to get pricing approved for clients, offerings are rigid.

      Advice to Senior Management: Cut the countless unnecessary levels of management...many levels of VPs and GMs who add nothing. Many don't even manage people...pay the sales teams better; the best sales people are leaving in droves to other more growth oriented companies who have a clue how to treat people. There is now zero respect for the individual and each year top management thinks of additional ways to cut more off the backs of their workforce and pad their bonuses.

    • “Just average...”

      Current Employee — Anonymous Employee. Pros: Flexibility, work from home, good training. Cons: Pathetic managers/executives; no respect to employees. Advice to Senior Management: Invest and respect employees.
    • “Excellent Company”

      Current Employee — Systems Service Representative in Boulder, CO. I have been working at IBM full-time (more than 8 years). Pros: Pay, teamwork oriented, innovative and trainings. Cons: Slow program for professional development; bad, very bad bureaucracy for employee to move in referents position inside the company. No aid for college education.
    • “Contract Admin”

      Current Employee — Anonymous Employee. Pros: Remote work, wonderful coworkers; was a good career starter. Cons: No promotions; raises were taken away. Advice to Senior Management: Appreciate your workers it's not always about the $$.
    • “IBM is a good company for anyone seeking work/life balance”

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

      Pros: Flexible work environment with great work/life balance; management generally reasonable to provide structure and guidance; people are capable but no that many recent graduates.

      Cons: Working with remote team is typical and can be challenging; management is at different timezone to influence real time decisions; too many processes to be efficient. Not tons of opportunity for growth. Minimal salary increase for the last 3 years.

      Advice to Senior Management: Focus on employee growth opportunity otherwise company will lose star employee. As much as possible, use local management for teams and reduce bureaucratic process as much as possible.

    • “A dying company.”

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

      Pros: IBM still has lots of resources.

      Cons: Upper management is too focused on short-term results and shareholder value. IBM doesn't care about its customers (other than trying to figure out how to extract more money from them) or employees (other than exploiting them more efficiently); only about the bottom line. IBM acquires 4 or 5 companies every single week, which might help the finance statements but does nothing to create new products or services.

      Employee morale is really bad and getting worse. Employees must work long hours with little hope of real reward (other than maybe not being laid off). The performance evaluation system is hopelessly broken and downright insulting. Upper management demands absolute integrity and loyalty from employees while demonstrating none of these qualities themselves.

      Advice to Senior Management: Focus on creating and providing value to customers rather than accounting and marketing tricks.

    • “A usual multinational company with all the advantages and disadvantages”

      Current Employee — Financial Analyst in Budapest (Hungary). I have been working at IBM full-time (more than an year).

      Pros:

      • Management is friendly and helpful
      • Most of the colleagues are young, open-minded and supportive
      • Management is really flexible about working-hours and time-spending if your job is well-done
      • Office(working area) in DunaTower is neat, airy, bright, spacious and comfortable (compared to other multi's offices)
      • Good atmosphere even if it is quarter-end
      • Offers an attractive starting-salary compared to Hungarian circumstances (depending on the department)
      • Perfect reference in the resume
      • Best way to get know an international organization and see how it works.

      Cons:

      • Management usually holds back information about future (more or less organizational) changes and any relevant information which comes from top/higher-management. (I think it is a kind of company policy or usual stuff at mammoth companies).
      • Some of the managers behave like their job would be rocket-since, but in most of the cases the only difference between a freshman and a manager is the experience that they have, but not the real achieved academic knowledge. (Okay, I understand they need to take serious their role otherwise they are going crazy, but there is a limit.)
      • Salary has not been increased for years. The only reason they are opening new positions and hiring is the amount of people who are leaving IBM to pursue better career possibilities.
      • All the talented young guns are leaving within 3 years.
      • Leavings are handled as top secret info.
      • Huge differences between departments in the view of working-hours, extra working-hours, holidays, workload, IBM funded events, etc.
    • “Good, stable and slow to take decisions”

      Current Employee — Advisory Software Engineer in São Paulo, São Paulo (Brazil) I have been working at IBM full-time (more than 5 years).

      Pros: Salary is around the average. Company allows you to grow if you work to it. Lots of good things in IT happens at IBM, mainly cloud, mobile, database, etc. It is definitely a place to stay in touch with very recent technologies. Benefits are good too. Definitely home office is a major benefit to me. It is easy to find experts for any IT area, like people that wrote the books you read at school work for IBM. This is awesome!

      Cons: Due to its big size, there are tons of process even for small things. You are required to run into education courses not related to your day-to-day job. Even though there is space to grow, things are VERY slow. Appraisal process is like a pain in the *** and the results are not always clear.

      Advice to Senior Management: IBM should start thinking to get close to end users, not only companies. We should have products like the ones Google or Apple have. The general public has to recon and think about IBM as a big IT solution provider not only for their business, but for people as well. Getting close to people, will make us get close to their business.

    • “Disappointing. I expected too much, I guess.”

      Current Employee — Anonymous Employee. Pros: Competent teammates. Lots of opportunities to learn with their boot camps, knowledge sharing sessions and online trainings. Cons: Resources tend to be over utilized. Compensation is not really good. No work-life balance whatsoever. No budget for team activities.
    • “Good Career Place, not Part Time”

      Current Employee — Financial Analyst in New York, NY. I have been working at IBM as a contractor (more than an year).

      Pros: Great network, intelligent environment. Everyone working loved to help others and the company had a direct unified mission.

      Cons: Structured hierarchy, long and difficult process to move up. Office culture was a little outdated. Mostly closed off rooms and hard to meet new people.

      Advice to Senior Management: Make the company more interesting to work at for young people. Right now, IBM is still has that old corporate feel. Most offices are located outside cities which make it an unattractive place to work for millennials.

    •  

      “Continuous decline in employment conditions.”

      Current Employee — Anonymous Employee. I have been working at IBM full-time (more than 10 years). Pros: Pay and benefits are pretty good. Cons: Lack of strategic direction. Clear disregard for the welfare and career path of employees. Race to the bottom, with no responsibility or ownership. Advice to Senior Management: Hire people. Figure out how to make it work. Managing a quarter at a time to the market is a losing long-term strategy.
    • “Interesting and challenging work, but definitely a company in the midst of a transition.”

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

      Pros: Incredible amount of resources to access, whether it be mentorship or a masters degree, IBM has got your back. This company is focused on building your skills, so it is a great launching pad for people early in their career and lacking experience.

      For people are skilled enough in what they do to work from home, IBM is a dream come true.

      Cons: IBM doesn't perform cost of living adjustments. In comparison to other Bay Area competition the pay is dismal. However if you move out of the Bay Area, to say Texas where the taxes are low and the living is cheap, you will be making more money than the local competitors.

      Aside from compensation: The company spirit is nowhere near the "Silicon Valley energy" I've seen in other tech firms.

      Advice to Senior Management: Undoubtedly the transition has been tough for managers and has been a source of the slight social breakdown within IBM's teams. (Another source has been from the increased spreading out of teams across multiple sites and states). A big effort needs to be made in the realm of social engagement especially if they are expected to keep their recent college graduates.

    • “IBM Management jobs”

      Current Employee — Anonymous Employee. Pros: Living only by the IBM name sake. Cons: salaries, lack of raises, employee hiring freezes, lack of training, 10% pay reduction.
    • “A solid company in a state of flux”

      Former Employee — Multiple Roles. I worked at IBM full-time (more than 10 years). Pros: Very flexible work arrangements (remote, etc.) and fair compensation. Cons: Benefits slowing being eroded and raises are very small (even for good performance). Very focused on cost side — you need to ensure you are hired in a division with good margins (i.e., software vs. hardware). Advice to Senior Management: Growth is not achievable solely on the cost side — keep longer term goals in mind even given near term Wall Street demands for higher EPS, etc.
    • “My IBM Managers Were Horrific”

      Former Employee — Subject Matter Expert. Pros: None. Unless working having a nervous breakdown is positive. Cons: Way too many managers. Immature atmosphere. Low pay. Long hours. Dishonesty to clients and employees.
    • “Program manager”

      Former Employee — Anonymous Employee I worked at IBM (more than 10 years) Pros Team collaboration challenging projects results-oriented no micro management ability to explore other functions Cons minimal face time, flexibility with work hours comes with a price - while you don't have to worry about taking time during the typical 8-5 hours, you are also expected to make yourself available for Global colleagues, which can mean very early mornings and/or late night meetings.
    •  

      “Ambiguous company to start a career”

      Current Employee — Managing Consultant in Seoul (South Korea). I have been working at IBM full-time (more than an year). Pros: The recognition of the name 'IBM'; stepping stone for next career. Low salary, continuous cut-down on benefits, strategy of global and local office doesn't align. Advice to Senior Management: Should focus on enhancing employee's loyalty.
  • Alliance for Retired Americans Friday Alerts. This weeks headlines include:
    • Sherrod Brown to Introduce Harkin Bill to Expand Social Security in 114th Congress
    • House Passes $1.1 Trillion Spending Bill
    • “Right to Work for Less” Legislation Rears its Ugly Head in Several States
    • The American City County Exchange (ACCE): ALEC Horror Movie, Part 2
    • Activists Protest Meeting of Trans-Pacific Partnership (TPP) Negotiators
    • Bertha Carlton to Retire after 43 Years
    • Obituary: Maryland/DC Alliance Member Annette Hartenstein, 1935-2014
New on the Alliance@IBM Site

Job Cut Reports

  • Comment 12/07/14:

    Dear IBM Management, It was clear you wouldn't know a smarter planet if it bit you in the PBC the moment you axed me in favor of three younger coworkers who collectively knew less about innovation that matters than either of my pinkies. Way to age discriminate your way into irrelevance, you greed-blinded ignoramuses! -how did you plan on doing it without me?-
  • Comment 12/07/14:

    It's amazing that IBMers continue to put up with this BS. Here we go again; blame the worker while executives continue to make millions. Stock and morale continue to fall. This has been the history of IBM since the early 1990s. Have a large amount of RAs in the fourth quarter or first quarter and tell the press that IBM is becoming lean and mean. What a bunch of BS. Join the union and refuse to work for this greedy and corrupt company. That is your only hope, Executives and managers at IBM could not care less about you and your family. Merry Christmas. I'm sure that three top previous and current top executives will have a nice Christmas on the backs of the IBM employee. -Respect for the individual-
  • Comment 12/08/14:

    As an 8 year employee coming to IBM with an acquisition, I am not getting the pension and HFA hit that some of you are. However, I am tired of losing out in other areas, especially the 401(k) match now only at the end of the year. What's next after the Q1 RA's? Join the Alliance...I finally did...New Member #3 -Anonymous-
  • Comment 12/09/14:

    IBM used to tell their employees that their benefits were part of their salary, and that is why salaries at IBM were lower than market averages. Now IBM employees are told to go to exchange and IBM has no responsibility to their retirees for health care. IBM continues to screw the IBM employees and its retirees in health care. This is why IBM needs a union. Executives have a contract the rank and file IBM have no contract. We are getting the shaft. -ANA-
  • Comment 12/10/14:

    Some people have reported that IBM is screwing employees by reducing medical benefits or or shifting a large portion of the cost to employees. IBM is guilty of many things, but to be fair, IBM has not increased the cost of insurance for individuals that much over the last few years, and everyone I know who works elsewhere pays a lot more than I do. The cost for insuring other family members has gone up a lot, but that's true at most companies. For example, I've had individual coverage for IBM PPO (United Healthcare) and IBM Dental Plus for several years, and here are my monthly contributions from 2012-2015:
    • 2012: $0 medical/$30 dental
    • 2013: $0 medical/$31 dental
    • 2014: $10 medical/$51 dental
    • 2015: $15 medical/$52 dental

    My out of pocket expenses for medical/dental services are pretty low, though some prescriptions are expensive. -Survivor-

  • Comment 12/12/14:

    -Survivor- These are individual rates. Most of us are not single hipster web developers without any responsibility. We have families. IBM plans are expensive relative to benefit especially if you are on a family plan. Wait till you have a pregnancy in the family and a delivery. I had to pay in excess of $6000 out of pocket and more because it went across fiscal years. Then IBM and my idiot FLM/SLMs laid me off and left me with big medical bills to pay. Luckily it was a benevolent Catholic hospital and it forgave my debt because of my provable unemployment. I will be giving them a large charitable contribution once I make back some reserves now that I am re-employed. -Non-Hipster-
  • Comment 12/12/14:

    @Survivor, your data may be correct for an individual, but you need to run the same numbers for IBMers with a family. It is a dramatically different story. When I left, my combined family medical for PPO was $1,000/month, with copays and deductibles continuing to erode. I now pay $400/month for better coverage. And, on top of that making more money and got a 3% annual raise. Just before I decided to leave, I did an analysis of the last 10 years of my time at IBM. My net usable income (after medical & taxes) had dropped 33%. I was a consistent 2+ performer through that time. That analysis opened my eyes that it was time to leave. -Gonein2013-
  • Comment 12/13/14:

    GBS China just officially announced Dec.9 that all AI/AMS team be transfered to GD. This impacts 1/3 GBS employee here 200+. If the employee do not like go to GD, then N+1 RA package become only choice. -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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