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Retirees, Vendors, Contractors, Temps, and Active Employees are all eligible to become members of the Alliance.
- Forbes: IBM
cuts 300 computer systems group jobs in U.S. Excerpt: IBM said on Tuesday it cut 300 jobs in its computer server and storage
group, mostly in its San Jose, California location, as part of an effort
to revamp it workforce to match skills with jobs.
- Forbes: IBM
cuts about 250 U.S. computer services jobs. Excerpt: International
Business Machines Corp. cut about 250 jobs within
its U.S. services division as part of its efforts to match its work force
to the skills it needs, a company spokesman confirmed on Thursday. ... The
cuts came just a few days after the company said that it had eliminated 300
jobs in its computer systems group. It said on Thursday that it was combining
that systems group with its technology division.
- USA Today: IBM
retiree mounts campaign aimed to lower costs. Excerpt: Sandy
Anderson is a retired 61-year-old IBM "lifer" who jokes about revering
the company enough to tattoo its initials on his haunches — but that loyalty
soured after his health-care costs jumped this year.
Anderson is drumming up support on the Internet and, with his congressman,
planning to take his case to the Vermont courts and to IBM, which he says
has breached its promise of free health care. "I staunchly believe, as
an IBM manager, that I got up and told people that they could rely on this,
and so this is a violation of the social contract," Anderson
... "It's substantial out of pocket cost for the retiree," Anderson said, pointing
to feedback from his Web site, www.benefitsrestoration.org, that indicated premiums
tripled last year for some ex IBM-ers. The premium for Anderson and his wife is
more than doubling, even after he decided to drop his college-aged daughter from
his policy. After paying $189 last year per month, he'll pay $433 per month this
year for his Vermont health maintenance organization, or HMO. ... John Kotson, a
69-year-old IBM retiree from Fort Collins, Colorado, who worked for 30 years at the
company until 1989, said his health-care premiums rose by 20% this year. Kotson is
part of a lobbying group called the National Retiree
Legislative Network that includes
retirees from other companies such as Lucent and Raytheon that are fighting to restore
pension and health-care benefits.
- SiliconValley.com: IBM
doctor: I didn't give false diagnosis to plaintiff.
Excerpt: As attorneys for IBM opened their defense Thursday in the trial
over workers' exposure to toxic chemicals, an IBM physician denied giving
a fraudulent diagnosis to a worker who is suing the company alleging a
medical coverup. But Dr. Peter Lichty admitted sending the worker, Alida
Hernandez, back to work with toxic chemicals against the advice of an outside
- Raleigh News & Observer: More
interest in IBM union. Fears of job losses may fuel activism. Excerpt:
A group that's trying to unionize IBM's U.S. work force has seen its rolls
swell by 1,000 in the past six months largely because employees are concerned
about the migration of jobs overseas.
Traffic on the Web site of Alliance@IBM, which now has 6,000 full and associate
members, including 280 in the Triangle, has more than quadrupled in the
past year, said Lee Conrad, the group's national coordinator. "That is
unusual. We credit that to the offshoring phenomenon," he
said, referring to the practice of shifting work to low-cost countries.
People are afraid of "losing their jobs and not being able to find
another similar job in the [information technology] field in this country," Conrad
- Business Day (South Africa): IBM
SA Pensioners Once Again Out of Pocket. Excerpt: IBM SA pensioners are once
again out of pocket, this time because the company has made stringent cuts
to their medical aid benefits. Last year, IBM SA pensioners threatened legal
action against their former employer over what they alleged was improper
use of their pension fund surplus. Now the pensioners are furious with IBM
SA for cutting back on their medical aid benefits. IBM SA is also attempting
to merge its in-house medical scheme, the IBM SA Medical Aid Society, with
a retired IBM South Africa employee comments. Excerpt: We have 2 pensioner
action groups here in SA, one to fight IBM on
pension issues, now another to take on IBMSA on a second front - the
medical aid. (sounds like World War 11) The medical aid action
group has a site on Yahoo
groups called ibmsamaag, if you want to
read about how we are slugging it out with IBMSA. The IBMSA
Pensioner Action group can be contacted by email. IBMSA wants to get
its grubby paws on the substantial surplus 200
million+ rands in the IBMSA pension fund, and, it now also wants to
grab the millions of SA rands sitting in the IBMSA Medical Aid - the
retiree prefunding. In addition, South African IBM retirees will
have to pay for their medical aid, which benefit was free on
retirement, as per IBMSA's employee handbook and has been the case
since my husband retired from IBM in 1985. The 2004 IBM medical
benefit plan has also been cut to ribbons, providing very very basic
health care needs, nothing approximating the previous level of
health care benefits.
- CBS MarketWatch: Posters
enraged by report on IBM. Excerpt: That was the chant
echoing throughout cyberspace Tuesday after a report in the Wall Street Journal
detailed IBM's plans to save $168 million by moving thousands of programming
jobs abroad. The sore subject of exporting jobs, which has been in focus
for months in the chat rooms, just got a bit sorer. ...
How do you feel about IBM's plans? Share your thoughts in
MarketWatch's "IBM" discussion group .
- Washington Post:
NOT FOR THE first time, Congress has muscled up to an important problem, taken a
good long look at it and resolved to make it worse. The problem is the vast hole
in the nation's corporate pension schemes, and the perverse rules that helped create
them. Congress's solution, championed in the Senate by an alliance of Sens. Charles
E. Grassley (R-Iowa), Judd Gregg (R-N.H.), Max Baucus (D-Mont.) and Edward M. Kennedy
(D-Mass.), is to reward the hole-diggers with what amounts to a $16 billion loan
- CNET News:
Don't mention the 'O'
word! Excerpt: Like poor Fawlty, IBM these days finds itself forced to employ
the oddest of circumlocutions to prop up the pretense that plans to shift thousands
of high-paying programming jobs overseas are anything but. I find that awfully
curious. That a global company such as IBM is trying to save money by exporting
jobs to Asia and Latin America is hardly a showstopper. The only real news
is the size of the number of jobs affected, expected in this case to number
in the thousands.
But somebody in upper management apparently believes this is a political
hot potato. Ever since this story first began to leak out late last year, IBM
has shucked and shimmied and done whatever else it can in order not to mention
So why the spin? A couple of reasons. In an election year, one of the other
major parties--or both?--may play to voters by decrying the loss of skilled
jobs to other parts of the globe. An image-conscious company like IBM naturally
is anxious not to wind up starring in any campaign commercials this fall.
What's more, any big offshoring announcements could pry open the door to
further unionization. With few exceptions, unions have failed to make major
headway with computer and software companies. That could change because American
jobs are clearly at stake when U.S. companies go searching for less-expensive
skilled labor in other regions of the globe.
- New York Times:
Passes a Bill to Cover Pension Plans. Excerpt: The Bush administration has
repeatedly expressed skepticism about such pension breaks for individual companies
or sectors. Last week, three cabinet members issued a warning against pension
legislation that "encourages firms to underfund their pensions."
- Socialist Worker Online: Corporate
America’s pension rip-off.
Don’t let them steal our future. Excerpt: Overall, companies with
traditional, or "defined-benefit," pension plans, are underfunded
by a staggering $350 billion. During the boom years of the late 1990s, pensions
at many big corporations were "overfunded"--meaning that the investments
to cover pensions brought returns far beyond what was needed to cover retiree
benefits. But companies like General Electric simply counted the extra cash
from pension investments as income to look good to Wall Street--and refused
to improve retirees’ miserable benefit levels.
- The ERISA Industry Committee ("Advocating the Employee Benefit and Compensation
Interests of America's Major Employers"):
Praises Senate Passage of Pension Funding Bill Urges Agreement with House.
Excerpt: The bill has been a major ERIC initiative since virtually all of
the Association’s members sponsor defined benefit plans. The business
community has argued that if the defunct rate is not replaced now, companies
will be forced to use an interest rate to calculate their liabilities that will
require them to put as much as hundreds of millions of dollars more into their
plans than is reasonably necessary. That money would otherwise be used to increase
spending on employment and on plant and equipment that would further fuel and
support economic recovery in 2004.
- The Hawk Eye: Congress
readies pension break. Companies likely to see reduced contributions to
retirement plans. Excerpt: Companies struggling to meet staggering pension
obligations are in line for some immediate help from Congress — reduced
contributions to their retirement plans. It's a $26 billion break over
the next two years, with additional relief for the airlines and steel industry.
The Senate began debating the measure Thursday after more than 200 companies,
including AT&T Corp., Exxon Mobil Corp. and IBM Corp., wrote senators
last week urging quick passage.
- Dow Jones News Service: SBC
Employee Lawsuit Adds To Company's Pension Woes.
Excerpt: SBC, the nation's second-largest local phone carrier, kicked $1.6
billion into its pension and retiree benefit plans last year to help close
a funding gap. Now, it's being sued by a group of former employees who say
they're owed about $ 123 million in retirement benefits. In a suit filed Monday
in U.S. District Court in Hartford, the plaintiffs say they were hurt when the
company, then Southern New England Telephone Co., converted its traditional
pension to a cash-balance plan.
- Watson-Wyatt Worldwide:
Balance Debate Continues in Congress and the Courts. Excerpt: In an unpublished
opinion, the Ninth Circuit Court of Appeals ruled on CBS’ adoption
of a cash balance plan and the conversion method it used. The court held
that the plan and conversion method do not violate ERISA’s fiduciary
standards, do not result in an impermissible cutback of benefits and do not
violate federal age discrimination laws. This is the first time a federal
appellate court has considered whether cash balance plans violate the age
discrimination standards. The court’s
decision certainly refutes the charge that federal courts view cash balance
plans as inherently violating age discrimination standards, a charge that
has served as a rallying cry for cash balance critics. However, the fact
that the decision is unpublished means it has less precedental value than
if it were published. Moreover, the analysis supporting the decision is
much less in-depth than that in Onan v. Eaton, a district court decision
that held cash balance plans were not inherently age discriminatory, or
in Cooper v. IBM, which held that they were.
Plan Litigation Developments. Excerpt: Some of you may have read a recent
article in a newsletter from a major benefits consulting firm which discussed
developments in the cash balance plan litigation arena. The article states
that "[t]he first appellate court to consider whether the plan design
violates federal age discrimination laws has ruled in favor of the plans." The
article later describes how in an unpublished opinion, the "Ninth Circuit
Court of Appeals ruled on CBS’ adoption of a cash balance plan and
the conversion method it used" and "held that the plan and conversion
method do not violate ERISA’s fiduciary standards, do not result in
an impermissible cutback of benefits and do not violate federal age discrimination
laws." Here is what the unpublished opinion in Godinez et al. v. CBS
Corporation et al., 81 Fed.Appx. 949, 2003 WL 22803700 (9th Cir. 2003), actually
- Minnesota Public Radio:
State of the Unions. Excerpt: ground they lost in the changing realities of
the modern work world. At one time, half of American workers were in a union.
Now the number is just one in eight. Minnesota Public Radio's Mainstreet
Radio team examines "the State of
the Unions," in this series of stories looking at how unions have changed
their organizing strategies. The laws governing strikes are different and
that's affected who and how unions are trying to organize. We'll also look
at how union workers feel their unions are representing them, and whether
unions are relevant in the high-tech economy of the 21st century.
blue collar workers of the 21st century. Excerpt: And at IBM, workers
organized over changes to their pension plan in 1999. The uprising became
Alliance@IBM, also a CWA unit. Garrett Lanzy is a national vice president
of the Alliance and works for IBM as a software designer in Rochester. "Initially,
people started looking at (pension) numbers and thinking, 'This doesn't
look like a good thing.' A couple people started a discussion group on
the Internet, and word of it spread like wildfire and started employee
activism, which was kind of unusual at IBM up to that point," Lanzy
says. Lanzy says the group helped spur U.S. Senate hearings on the
pension change, and older employees won the right to stay in the old
plan. Alliance@IBM claims only a tiny portion of IBM's 150,000 employees.
Of nearly 6,000 workers in Minnesota, just 30 are dues-paying members.
Lanzy says the group is far from having the number of members it would
need to negotiate a contract or go on strike. "Our strategy at this point
is more one of getting out, getting information to the press, so people
in the communities where IBM does business can find out what's happening,
and see if we can get some pressure from outside to affect what the company
says. Lanzy says the union has publicized layoffs IBM hoped to keep under
wraps. Members have spoken up at shareholders' meetings. And they recently
published the transcript of an internal conference call, in which managers
discussed moving jobs to India and China. IBM declined to comment on
the Alliance, or the topic of IT offshoring. Other Minnesota companies with
offshore technical workers in India that declined comment for this story include
Best Buy and UnitedHealth.
work for health insurance. Excerpt: If you grew up in Virginia, Minnesota,
you might know Paul Thomas. He's about 50 now -- getting a bit thicker
in the waist -- with frosty hair and a closely trimmed goatee. His wife
says he's just a big kid. You can often spot Thomas at the SuperOne grocery. "So,
I come up to you and I ask you if you want paper or plastic," Thomas
says. "And I found myself saying, 'Geez, this is almost as bad as McDonalds,'
and saying, 'You want fries with that?'" It's a big change for Thomas.
He'd put in more than 20 years at LTV Steel Mining. Thomas made good
money and earned generous benefits. He looked forward to a comfortable retirement,
with a good pension and a health plan. But LTV is gone now, and with
it the health plan for thousands of retirees. Now, Thomas is bagging groceries
-- a job that comes with health insurance.
- Durham Herald-Sun: Man
who invented computer key combination retiring. Excerpt: David Bradley
spent five minutes writing the computer code that has bailed out the world's
PC users ever since. The result was one of the most well-known key combinations
around: Ctrl+Alt+Delete. It forces obstinate computers to restart when they
will no longer follow other commands. Bradley, 55, is getting a new start
of his own. He's retiring Friday after 28 1/2 years with IBM.
- Economic Policy Institute: Economic
growth not reaching middle- and lower wage earners. Excerpt: The trend reveals two notable facts: first, those
in the middle of the earnings scale and below (at or below the 50th percentile)
are losing ground—their weekly earnings were lower, after adjusting for
inflation, at the end of 2003 than one year earlier. Second, the pattern of
earnings changes is highly skewed: the losses are greatest for the lowest earners,
while the weekly earnings of those at the top of the scale (the 90th percentile)
grew by 1.1%. This pattern of earnings growth suggests that while the economy
is expanding, the benefits of growth are flowing to those at the top of the
- The Center for Public Integrity: The
Buying of the President 2004. Who Bankrolls Bush and his Democratic Rivals? A look at the presidential race.
- In These Times: Working
the System. Agency advises employers how to duck overtime pay. Excerpt:
When the Bush administration announced plans last year for a controversial “reform” of
New Deal-era wage and hour regulations, it assured Congress and labor unions
that the proposal would make overtime pay available to some 1.3 million low-paid
workers—even as it removed many high-paid employees from overtime protection.
It now turns out that the administration’s Department of Labor (DOL),
in a little-noticed report on the proposed regulations published in the
Federal Register, actually was offering alert employers a set of instructions
on how to avoid paying overtime to many of those long-suffering low-paid
- National Public
Radio: Bush Offers Plan for Health Care Reform. Excerpt: President Bush's State of the
Union address includes plans to overhaul the nation's health care system. The
president calls for computerized health records, curbs on "wasteful and
frivolous" medical lawsuits and tax breaks for those who buy their own
health insurance. Economists say the proposals as a package could reduce costs.
Hear NPR's Joanne Silberner.
- Center on Budget and Policy Priorities: President's
Savings Proposals Likely to Swell Long-Term Deficits, Reduce National saving,
and Primarily Benefit Those with Substantial Wealth. Excerpt: In his upcoming
federal budget plan, the President is likely to promote a proposal contained
in last year’s budget to establish new savings tax breaks. This proposal — to
establish tax-favored “Lifetime Savings Accounts” and to replace
existing Individual Retirement Accounts with “Retirement Savings Accounts” — is
ill-advised for at least five reasons.
- Seattle Times editorial: The
shame of Kaiser. Excerpt: On Jan. 12, Kaiser Aluminum & Chemical Corp.
said it intends to cancel the medical and pension benefits for all employees,
union and nonunion, and retirees. The pension benefits are federally insured,
but the medical benefits are not. It is a sorry thing to end medical benefits
to employees because the business can no longer afford them. What is happening
here is more than a sorry thing; it is a shameful thing. Under cover of bankruptcy
law, a company is taking away benefits from its retired workers who already
have earned them and who have no chance to earn them again. Only part of
this has to do with the plight of the aluminum industry in the Pacific Northwest.
Because of the rise in power costs here and competition in developing countries,
our industry has become marginal at best. Of 10 plants, eight are closed,
and none operates at capacity. But only two of the closed plants are Kaiser's.
Other owners dealt with the same problems, and in generally better ways.
- Washington Times commentary: Rx
bill's fine print. Excerpt: Now that Congress
has finally released the details of the Medicare prescription drug bill,
it is worse than one's remotest fears. A coalition of 50 conservatives groups
had opposed the bill for its $7 trillion unfunded price tag, its lack of market
reforms and its incentives for employers to throw retirees on to the government
plan to reduce their own costs.
Well, the trillions of liability survived the final drafting and market reforms were
few and mostly limited to impractical demonstration tests, but billions of new subsidies
were written in at the last moment to buy off big business.
Does it surprise that it takes a month after the congressional vote to know what
was in the bill? One of the few truthful books on the legislative process was authored
by a state senator named H.L. Richardson and called, "What Makes You Think We
Read the Bills?" Of course we do not. It was generally known the drug bill would
provide an employer reimbursement for 28 percent of the drug costs spent for retirees
insurance plans, up to $1,330 per employee. What the midnight language added was
that the subsidy would be calculated on the basis of both the employer and employee
health insurance premium contribution.
Get it? The employer can shift the premium costs to the employee and still receive
the whole subsidy for itself — quite a deal. The tendency has already been
for employers to shift costs to their retirees, but this new incentive will cause
an avalanche. The Wall Street Journal reported that benefits consultants were already
designing plans for the 65 percent of large firms that now pay for senior health
coverage to transfer the costs to retirees and nevertheless rely upon the subsidies
to build corporate profits. Employers now will have the option of taking the 28 percent
subsidy without paying any of the premium costs or saving 72 percent more by throwing
the retirees entirely on the government plan.
- San Francisco Chronicle: Lazarus
at Large. State must lead the way. Excerpt: More than 43 million Americans may now
be uninsured, but no one expects a national health care system similar to
Canada's to be adopted any time soon. The obstacles, not least the fierce
opposition of the $300 billion insurance industry, make such an enormous
change politically untenable. If universal coverage is to come to the United
States, most experts agree, it will be introduced gradually, state by state.
And California is positioning itself to be among the first out of the gate
with a workable plan. ... A pair of Harvard Medical School researchers determined
last week that $45 billion of the $163 billion spent on health care in California
last year was eaten up by administrative expenses. With a single-payer system
in place, the researchers found, California health care spending would be
reduced by almost $34 billion -- enough to cover every uninsured person in the
state and improve treatment for others.
- Congressional Budget Office: Limiting
Tort Liability for Medical Malpractice
[PDF--116 KB]. Excerpt: Evidence from the states
indicates that premiums for malpractice
insurance are lower when tort liability is restricted
than they would be otherwise. But even large savings
in premiums can have only a small direct impact on
health care spending—private or governmental—because
malpractice costs account for less than 2 percent of that
spending. Advocates or opponents cite other possible effects
of limiting tort liability, such as reducing the extent
to which physicians practice “defensive medicine” by conducting
excessive procedures; preventing widespread
problems of access to health care; or conversely, increasing
medical injuries. However, evidence for those other
effects is weak or inconclusive.
- Los Angeles Times: More
Workers Are Likely to Retire Without Company Health Benefits. Excerpt: Increasing numbers of Americans are likely to learn in
the next three years that they will retire without any health-care benefits,
according to a survey of some of the largest U.S. companies that was released
Wednesday. Citing the rising costs of health care, 71% of 408 companies surveyed
by the Kaiser Family Foundation and Hewitt Associates said they had made
retired workers shoulder a bigger share of insurance premiums in the last
year. About 10% said they had eliminated subsidized health benefits for future
retirees, and 20% said they probably would eliminate the benefits by 2007.
If employers follow that path, more Americans who retire could join the growing
ranks of the underinsured. "This is a retreat from the promise that companies
have made to workers since World War II," said Jamie Court, president
of the Foundation for Taxpayer and Consumer Rights in Santa Monica. "It's
an abrogation of a social contract."
- Institute of Medicine of the National Academies: Insuring
America's Health: Principles and Recommendations. Lack of health insurance causes roughly 18,000
unnecessary deaths every year in the United States. Although America leads
the world in spending on health care, it is the only wealthy, industrialized
nation that does not ensure that all citizens have coverage. To help policy-makers,
elected officials, and others judge and compare proposals to extend coverage
to the nation's 43 million uninsured, the Institute of Medicine of the National
Academies offers a set of guiding principles and a checklist in a new report, Insuring
America's Health: Principles and Recommendations.
- New York Times:
Would Tax Businesses That Do Not Insure Workers. Excerpt: Two powerful
interest groups, health workers and hospitals, are proposing an audacious
and costly effort by New York State to cover one million people without health
insurance and modernize hospitals. The proposal would be financed by a tax
on businesses that do not insure their workers and by a billion-dollar state
bond act. ... The core of the plan is what in Albany has been called play-or-pay,
a $3,000 tax on employers for each worker they do not insure, with a smaller
levy for small businesses that pay low wages. No state imposes such a tax of
any significant size, health care advocates say. Some of the money would be
used to increase the number of people in New York's state-subsidized health
plans like Medicaid, Family Health Plus and Healthy New York, which together
already constitute the most expansive such system in the country.
- The Commonwealth Fund: Mirror,
Mirror on the Wall: Looking at the Quality of American Health Care Through
the Patient's Lens. Excerpt: Health care leaders in the United States
often claim that the American health system is the best in the world. Based
on both per-capita spending and the percentage of national income spent
on health care, our nation is certainly far and away the leader. But are
Americans really getting what they pay for? A report from The Commonwealth
Fund that examines how well the health system works from the perspective
of patients confirms what several other recent studies have shown—that
the U.S. performs worse than its peer nations on several dimensions of
- Patient Safety: U.S. Ranked Last
- Patient-Centered Care: U.S. Ranked Second-to-Last
- Timeliness: U.S. Ranked Third
- Efficiency: U.S. Ranked Last
- Effectiveness: U.S. Tied for Last
- Equity: U.S. Ranked Last for Lower-Income Patients
- Fort Worth Star-Telegram:
Pension idea would cash
in on teachers' deaths. Excerpt: Under fire for its sheer
ghoulishness, an unorthodox proposal before state leaders would raise money
for teachers' pensions by banking on their deaths. The plan has drawn questions
about its feasibility, its macabre nature and the involvement of former U.S.
Sen. Phil Gramm, who floated the idea on behalf of his investment bank.
... Gramm has pushed the idea on behalf of UBS Investment Bank, of which he is vice
chairman, in recent meetings with Perry's staff, Insurance Commissioner Jose Montemayor
and pension officials. Gramm's involvement has prompted an ethics complaint by the
Texas Democratic Party, which alleges that the former lawmaker engaged in improper
lobbying. UBS, a Swiss company, declined to comment on the ethics complaint or the
overall proposal. Two phone calls to Gramm were not returned. The UBS proposal, in
theory, would add income to the Teacher Retirement System through the purchase of
life insurance policies on retirees ages 75 to 90.
- Towers-Perrin HR Services: Is
It Time to Take the “Spin” Out
of Employee Communication? [PDF--1.2 MB] Excerpt:
A Towers Perrin survey of 1,000 working
Americans suggests that many companies
may be losing the credibility battle
when it comes to communicating with
employees. Specifically, the survey
responses indicate that companies may
be trying too hard to “spin” their internal
communications and, as a result, may
be undermining their credibility with
many employees. While other research
shows that Americans in general have
become increasingly cynical and suspicious
of major organizations, both public
and private, most corporate leaders
would likely be concerned to learn that only half of employees believe what
their companies tell them — and
almost 20% do not believe that their
employers usually tell them the truth.
- John Mellon has posted a document titled IBM'S U.S. Employee Internal
Appeals Program on his Web site. It is in Microsoft Word format and may be downloaded
| Coverage on H1-B and L1 Visa and Outsourcing Issues
- Sydney Morning-Herald (Australia): Lees
expresses concern about Telstra outsourcing. Excerpt: An independent
senator, whose vote could determine the sale of Telstra, today expressed
anger at the telco's plans to outsource 450 jobs to India. Meg Lees
said the move would do little to win Senate support for the government's
plans to sell its remaining majority share in the telco. The furore
surrounds an agreement between Telstra and US-based IBM Global Services
to extend their IT outsourcing arrangement under which IBM manages
and develops software applications for Telstra. IBM has said that to
be competitive the work would be carried out by its Indian and Australian
operations. The move offshore has been on the cards for several months
and is part of Telstra's plan to slash $957 million in costs by sending
1500 jobs offshore over the next few years. ... Lees said she had retained
an open mind about the possible full sale of Telstra, but its actions
and those of the government were difficult to defend. "I reject Telstra's
spin that any loss of jobs as a result of this contract is the responsibility
of IBM rather than Telstra," she said
in a statement. "Telstra is the Australian company, not IBM, and
with an Australian majority shareholding, it is Telstra that should
be acting in the interests of Australians.
- Information Week: High-Tech
Degrees Don't Guarantee Jobs. As graduation
approaches, college students who focused on IT are finding that offshore
outsourcing has cut the number of available jobs. Excerpt: While
there are hopeful signs outside the technology sector, outsourcing of
computer programming and customer service jobs to China, India,
and other countries with cheaper labor costs have dimmed prospects
for seniors like computer-science major Andrew Zhou, said Richard
White, director of career services at Rutgers. Eager to ride the high-tech
tide, Zhou double-majored in computer science and finance when he arrived
at Rutgers University in 2000. But as graduation approaches, Zhou is pinning
his hopes on finance and dropping the idea he once had that computer
know-how guaranteed him a job. "Four years ago, it seemed like an awesome
major," Zhou said
as he waited to speak with a recruiter for a telecommunications
management firm at Rutgers' annual career day. "Now, nobody wants
to get in because all the jobs are going to India."
- Information Week: Bush
Calls For Funds To Boost Job Training. Excerpt:
In the State of the Union address last week, the president called
for a $250 million investment to fund partnerships between community
colleges and employers to help furnish Americans with the knowledge
they need to succeed in the job market. "This country of ours must
also recognize that the workforce needs to be constantly trained
to stay up with the technological advances," Bush said after his speech
at a job-training panel at Owens Community College in Perrysburg,
Ohio. (Editor's note: I guess Zhou should have gone to a community
college instead of Rutgers).
- Associated Press:
jobs abroad: More interest than ever from corporate America.
Excerpt: More than 150 corporate executives, many paying $1,400 a
head, listened intently for tips on how to move jobs overseas effectively.
Outside, on a frigid Manhattan sidewalk, a group of fewer than 20
spirited demonstrators protested the "offshore outsourcing" conference
that opened Wednesday. ... One speaker unexpectedly decided to bar
the press from his presentation. His topic: Is offshore outsourcing
unpatriotic? "I'd prefer not to comment," the speaker, Jeffrey
Cohen of the big consulting firm McKinsey & Co., said when asked why
the session had been closed.
- New York Times: Education
Is No Protection. Excerpt: In Mr. Barrett's
view, "Unless you are a plumber, or perhaps a newspaper reporter, or
one of these jobs which is geographically situated, you can be anywhere
in the world and do just about any job." You want a national security
issue? Trust me, this threat to the long-term U.S. economy is a big
one. Why it's not a thunderous issue in the presidential campaign
is beyond me. Intel has its headquarters in Silicon Valley. A Mercury
News interviewer asked Mr. Barrett what the Valley will look like
in three years. Mr. Barrett said the prospects for job growth were
not good. "Companies
can still form in Silicon Valley and be competitive around the world," he
just that they are not going to create jobs in Silicon Valley." He
was then asked, "Aren't
we talking about an entire generation of lowered expectations in
the United States for what an individual entering the job market
will be facing?" "It's tough to come to another conclusion than
Mr. Barrett. "If you see this increased competition for jobs, the
immediate response to competition is lower prices and that's lower
- ComputerWorld: Save
the Coders. Excerpt: If you had any doubts about the effects of offshoring
on IT pay, you can stop doubting. According to a January report from Foote
Partners, the bonuses that programmers once received for specialized knowledge
are evaporating -- off 25% over the past two years and still sinking. Yes,
things are tough all over, but the numbers for application development are
much worse than the average for IT specialties -- and the app dev falloff
coincides with the uptick in offshore outsourcing of many software projects.
For programmers, it's starting to look like the end for big paydays -- and
maybe for any paydays at all.
- The Business Times (Singapore): Top
White House aide defends outsourcing. Call against Bill to prohibit
government jobs from being sent overseas. Excerpt: Contracting jobs
overseas is 'simply the latest manifestation of free trade', a
top White House economic aide said in defence of a practice used
by American companies. 'Public policy needs to help workers find
new jobs, not retreat from the principles of free trade that have benefited
the US and economies around the world,' Greg Mankiw, chairman of President
George W Bush's Council of Economic Advisers, said in a question-and-answer
forum on the White House web site.
- PBS's "I, Cringely": Thick
as a (Campaign) Plank. U.S. Leaders Either Don't Understand or
Prefer Not to Understand the IT Outsourcing Crisis, So Here's the
Cliff Notes Version. Excerpt: Last year, I wrote a pair of columns
on information technology outsourcing to countries like India,
suggesting that the practice was generally not a good idea. It
was a smokescreen for age discrimination, and was not in the long-term
interests of either the American employees or their companies.
Then in my 2004 predictions column, I said that this outsourcing
or offshoring or whatever you want to call it would become an issue
in the coming Presidential election. ... Shipping work overseas
saves money that drops to the bottom line as profit. Stock prices
are today keyed to earnings-per-share as is, to a certain extent,
executive compensation. Now look at the average time that an institutional
investor actually holds a given stock. This can be measured in
months, sometimes in weeks, but hardly ever in years. So the investor
timeline is short and the CEO timeline -- with average tenancies
in those positions at less than five years -- is not much longer.
So offshoring works great for these two groups. The stock goes
up and along with it, the CEO's bonus and stock options. By the
time the long-term effects of this policy are felt, both the investors
and the CEO are long gone. And even if the CEO is still around,
it is with a golden parachute negotiated long before that often
pays him more to go away than he might have got to stay. (Editor's
note: This is a "must read" article).
Considers New Worker Protection Bill. Excerpt: Olympia, Wash. — Two
House lawmakers intend to send a message to Washington companies that fire
their employees without notice after compelling them to train their foreign replacements.
The message: notify the state and the employees who are about to be laid off 10
days before the layoff, or face fines and civil damages. Rep. Zack Hudgins, D-Tukwila
and Rep. Sandra Romero, D-Olympia, are primary sponsors of House Bill 2352, which
is one of a handful of measures they've authored in an effort to define the rights
of Washington state workers — particularly
technology workers — in an emerging global economy.
Eye New Call Center Regulation. Excerpt: Olympia, Wash. — Washington
state lawmakers are considering a measure that will require call center.
The purpose, said one of the bill’s sponsors, is to make call
centers more responsive to their customers. "The aim is to give
customers more information,” said
Rep. Zack Hudgins of Tukwila. "The beauty of modern technology
is you can bounce calls all over (the world). But it’s a problem
if you want to do business with somebody that respects your laws." Hudgins
said the issue first captured his attention when he heard about New
Jersey’s welfare call center that was moved to India.
- The Motley Fool:
Passage to India. Excerpt: Legal and financial publishing giant Thomson Corporation
recently launched a pilot program to outsource many of its legal
jobs to India, continuing a trend towards U.S. companies moving professional
jobs offshore. Foolish international attorney Rich Smith takes a
look today at the causes and consequences of moving legal work --
and legal bills -- offshore.
- CNET News: H-1B visas
going fast. Excerpt: Information technology services companies with
much of their operations in India may be among the biggest applicants
for the visas, according to Lakshmi Narayanan, CEO of Cognizant Technology
Solutions. Cognizant, an IT services company, is based in New Jersey, but
most of its employees work in India. "Companies like us are applying
get a greater proportion of the cap," Narayanan said in a recent interview
with CNET News.com. India-based companies with operations in the United
States are significant users of the H-1B visa program as well as the
L-1 visa program, which allows companies to temporarily bring in employees
from other countries for managerial or executive work, or for work that
entails specialized knowledge.
- Tech Central Station: Jobs
Across the Water. Excerpt: Sitting at a computer
talking into a head-mike advising the British traveling public of
train timetables from Leighton Buzzard to Birmingham New Street Station,
and calculating how long they'll have to wait for a connection up to Scotland,
doesn't sound like much in the way of career moves.
Yet to employees of the British rail network inquiries call center
in Calcutta, it's a well-paid job opportunity and one rife with glamour.
Not only do they spend the day chatting with people in the wealthy,
faraway West, they make, in local terms, good money and are the envy
of their friends. Icing on the cake, the British companies that have exported
around 10,000 call center jobs so far tutor their Indian employees
in how to chat about the weather -- a peculiarly British obsession -- and
brief them on the developments in British soap operas and sporting triumphs
so they can respond if a caller in England, bored with listening
to keys clacking in cyberspace, decides to initiate a discussion.
- The Economic Times (India): Hue
and cry over BPO 'temporary hardship': US Senator. Excerpt: Terming
as ‘temporary hardship' the hue and cry over business process outsourcing
(BPO), US Senator John Cornyn and Congressman Joseph Crowley on Thursday
said the Indo-US efforts should be focussed on free trade and encouraging
global economy. "There has to be a give and take approach... Outsourcing
has added to the competitive edge by uplifting standards in India and made
US companies efficient and competitive," Crowley , co-chair of Congressional
Caucus on India and Indian Americans, said while addressing the CII Partnership
- CNET News: Bush immigration
plan could affect techies. Excerpt: Details
of President Bush's plan to tackle illegal immigration remain fuzzy,
but the program could create a new way for technology employers to
bring in foreign workers. If so, the stage will be set for another
round of debates about the practice of temporarily importing guest workers
for tech tasks--already a sore spot for critics of the H-1B and L-1 visa
programs. "Should the Bush proposal be implemented, it would be disastrous
for American programmers, engineers and everyone in the country
who can't make a living on the stock market alone," said John Miano,
founder of software programmer advocacy group the Programmer's
- The Economic Times (India): Washington
senators to bring bill against BPO. Excerpt: Furious about Washington
state contractors shipping tech jobs to India and other countries,
two lawmakers in Seattle have announced they will bring legislation
to ban outsourcing. Zack Hudgins, a Democrat from Tukwila and a
former Amazon.com employee, and Sandra Romero, a Democrat from
Olympia, said they will introduce legislation this month to prevent
state government contracts from being awarded to companies that
send jobs to India , which is becoming a forerunner for back-end
office support . What provoked the politicians is that the Washington
state Department of Corrections is negotiating with a company to
send part of the agency's $20 million Offender Management Network
Information system to India. Besides this, in the past two years
the Washington State Health Care Authority and the state Department
of Social and Health Services have signed contracts with US companies
that then hire Indian subcontractors to do the work. ... The Health Care
Authority is not the only state agency whose work is being shipped overseas.
About 18 months ago, the Department of Social and Health Services (DSHS)
received word from Chicago-based Citicorp Electronic Funds that it was
moving the agency's call centre functions to a subcontractor with operations
in Pune, India, Bangalore, India, and Tijuana, Mexico.
- Links to many other articles about offshore outsourcing are available
at Your Job is Going to
on the Alliance@IBM Site:
- IBM’s Plan
to Lower Professional Salaries.
Excerpt: The Alliance@IBM has recently received information about IBM
Global Services’ AMS organization’s plans to reduce professional
salaries. Managers are already working on evaluating each employee’s
job responsibility and deciding whether to put them into a lower
band job. According to the internal documents, employees are to start
hearing from their managers whether their job is affected, starting
- Poughkeepsie Journal: IBM
trims 40 local jobs, 300 across nation. Excerpt:
The cuts are an example of the deteriorating investment picture of
the U.S. in a global environment, said Robert Djurdjevic, president
of Annex Research in Phoenix. "The emergence of China as the world's 'virtual
factory,' and of India as the global 'help desk,' means that future will
only get bleaker for the American workers," he wrote Tuesday in a note to
clients. "Sooner or later they may realize that 'free trade' really
translates into corporate freedom to trade their jobs away in pursuit
of cheaper sources of goods and services."
- Binghamton Press & Press-Bulletin: Forum
on IBM breaks silence. Whistle-blower stresses the 'cause' of worker
Excerpt: James Little, a 15-year veteran of the IBM Corp. workplace,
described himself as "a company man" who had not intended to
speak out against his former employer at a forum Thursday night.
Nevertheless, he said Friday, he found himself compelled to walk
to a microphone and tell 80 people and a panel headed by U.S. Rep. Maurice
Hinchey, D-N.Y., something that had been troubling him for a long time.
IBM coerced workers into stifling complaints of chemical exposure on the
job, he said. "Placing workers on chemical lines was
used as punishment for those who made waves," he said.
- 2004 Stockholder Resolutions:
- Alliance@IBM expects continued job cuts at IBM, over the coming months.
Please send any information to firstname.lastname@example.org
- ThinkTwice December 2003/January 2004 Newsletter [PDF--243 KB]. Articles in this issue
- IBM Retirees Shocked by Health Care Increases
- An open letter to The IBM CEO
- New Band Changes to Affect
- The Utimate Takeaway—Your Health
- Former IBM
Suit on Age
in Job Cuts
- Legislative Actions Relating to
- Rollback Health Care Increase
- Australia IGS employees bring
IBM to negotiation table.
on the WashTech site:
- Tell '60 Minutes' to Cover Both
Sides of the Offshoring Story. Excerpt:
On January 11, 2004, The CBS News show 60 Minutes ran a segment called “Out
of India”, reported by Morley Safer. In case you missed it, the transcript
can be found here. This segment was not objective in its coverage of
this important issue. It did not report how outsourcing has negative
effects on the US economy and American workers, nor did it say how the entire
IT industry is being devastated by this unethical practice. Instead, It showed
outsourcing as boon for American business. It may be a great for American
companies but American workers and their families pay the price. Help
us tell CBS News they need to do their homework before airing such a one-sided