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Highlights—May 7, 2005
- Alliance@IBM: Attention IBM employees:
IBM is blocking e-mail to and from the Alliance@IBM e-mail address firstname.lastname@example.org
from inside the company.
Please send your job cut information and other correspondence from your home e-mail.
You can also contact us the following ways:
Phone 607 658 9285 or Fax 607 658 9283.
- Wall Street Journal: IBM
Plans Restructuring, Job Cuts. By Charles Forelle. Excerpts: IBM's last
restructuring came in 2002, when it took a pretax charge of $2.1 billion to exit from the business
of making computer disk drives and laid off workers in its chip-making unit.
Yesterday's action is indicative of the rough time IBM is having with its services-oriented model
-- selling its experience designing technology systems and business operations, not just its
namesake machines -- in Western Europe, where labor costs remain high and economies are slow-growing.
Yesterday's restructuring was aimed at doing just that, IBM said. The company said
it expected layoffs of between 10,000 and 13,000 people. IBM said most of the cuts would fall
in Europe and would include both "voluntary and involuntary work-force reductions." The restructuring
eliminates a layer of pan-European management, and associated support staff, that oversaw operations
on the entire continent.
- IBM Press Release: IBM
Plans Restructuring Actions to Accelerate Global Integration of Operations, Company Will Take
Second-Quarter Charge. Excerpt: IBM today announced it plans to implement a series of restructuring
actions designed to improve the company's efficiencies, strengthen its client-facing operations
and capture opportunities in high-growth markets.
The actions will accelerate progress toward more globally integrated operations, while addressing
profitability in slower-growth regions, primarily in Europe. These actions will also allow
IBM to shift resources to higher-growth markets and opportunities such as Business Performance Transformation
version of this press release by "blue_and_bitter". Full excerpt: IBM Plans Ad-Hoc
Cost Cutting to Continue to Try to Make Something of a Behemoth Organization, Company Will
Take It In the Shorts Next Quarter Too. ARMONK, N.Y. -- May 4, 2005 -- IBM today sheepishly
announced it continues to plan to implement a series of cost cutting actions designed to
improve the perception of the company's efficiencies, pretend to strengthen its "client-facing" operations
and dream about capturing opportunities in high-growth markets.
The actions will accelerate progress toward more corporate jobs in India, while cutting costs
in Europe and the U.S. These actions will also allow IBM to try to please the stock market
analysts in hopes of moving the stock price above 80 before the end of 2006.
As a result, IBM estimates that it will be spanked something on the order of 1.3 billion to
$1.7 billion in the second quarter. The company expects to show how dramatically lower
costs with a decrease in sales and revenue will realize benefits starting in the second half
of the year.
The company plans to layoff a bunch of legacy personnel in its operations
and organizational structure in Europe to increase the workload of those left behind while
still underperforming for its clients. The perceived success of this strategy will depend
on scaring away legacy IBMers and manufacturing more infrastructure in China and creating teams
that can work across country borders, shifting more clueless employees into direct client
roles that pretend to support the company's plans to deliver higher-value services and products.
This eliminates the need for a traditional pan-European management layer to coordinate activity
such as occurs in the US. As a result, IBM will create a number of smaller, more flexible local
operating units in Europe (also known as Boots) to increase direct client contact.
On a worldwide basis, IBM plans to spread the love as well by pretending to improve the efficiency
of its services operations by consolidating much of the service delivery workload into
fewer locations by using cheaper, less-experienced labor forces.
IBM's restructuring actions include scaring, intimidating and layoff workforce reductions
of between 10,000 and 13,000 employees worldwide. The majority of the overall workforce
reductions are not expected to be noticed by anyone besides those leaving, since their work
was redundant or not effective.
Additional details about the actions will be provided during a crystal ball reading, seance
and Webcast hosted by the former IBM Senior Vice President and Chief Financial Officer
on Thursday, May 5, beginning at 8 a.m. EDT. Competition and Vault members may view the Webcast
at http://www.ibm.com/investor/events/ir0505/. Replays, in Hindu, will be available
shortly after the original Webcast.
- BusinessWeek: IBM's
Restructuring Blues. By Steve Hamm.
The tech giant's overhaul of its workforce contributed to disappointing first-quarter results.
Now, analysts are expecting a further shakeup. Excerpts: IBM started off the year with
a strategy aimed at "lowering the center of gravity." The idea consisted of revamping
a 330,000-person workforce to reduce expenses, shift work to lower-cost countries, and strip
out bureaucracy. So far, the program has mainly lowered Big Blue's stock price and employee morale.
Workers in Western Europe, in particular, are up in arms over the staff cuts. More than 2,000
positions are likely to be eliminated in France, Germany, and Sweden. Word is hundreds of tech-services
jobs will shift from Western Europe to Hungary.
HUGE CHARGE? On Apr. 26 some 600 unionized employees rallied outside IBM's German headquarters
in Stuttgart, and similar protests are planned in France. "People are angry about how this
is being done," says Gerhard Rohde, a director at Switzerland's Union Network International,
a labor coordinating group. [...]
Before the first-quarter miss, IBM said it expected to hire tens of thousands
of employees this year, even while pruning the workforce of thousands with less-needed skills.
It was all part of Big Blue's strategy to add staff with a combination of consulting, business,
and technology skills, as the company continues its effort to boost the value of the work it
does for clients. It's unclear now if that planned hiring will go ahead.
During last year's analyst briefing, Palmisano was flying high, buoyed by a series of strong
earnings reports. This year, he has a lot of explaining to do.
- iSeries Network: Big
Blue Ax to Fall on IBM Employees. By Cheryl D. Ross. Excerpts: IBM employees are bracing themselves
for a dreaded round of layoffs, expected to hit in the next one or two weeks, according to
reports gathered by the IBM workers union, Alliance@IBM. [...] "When IBM starts panicking about a
drop in the stock price, they start throwing the crew off the ship," Conrad says. "The
long hours everyone's working mean nothing when the ax starts falling." IBM is closing its
subsidiaries in Hanover and Schweinfurt, Germany, leading to about 600 layoffs. French workers
in Marseille and Toulouse went on strike last week, protesting impending layoffs.
IBM did make one concession at last week's IBM annual stockholders meeting,
says Janet Krueger, a former Rochester IBMer and still an advocate for the iSeries. When Alliance
members voiced their concerns that it seemed wrong to lay off people on the bottom rungs of
IBM's employee infrastructure, CEO Sam Palmisano said that he and 50 others at the executive level
had agreed to forego their raises until things improve.
Krueger applauds the gesture, but she also notes wryly that "I could easily forego my 12
percent increase if I knew I could still get the 300 percent bonus I've grown accustomed
to. When you're at the salary level of Palmisano, a 12 percent raise is like me picking up a dime
on the sidewalk."
- iSeries Network: IBM
Cuts Thousands of Jobs, Mostly in Europe. By Cheryl D. Ross.
Excerpts: Yesterday, IBM announced that its much-dreaded layoffs are now underway and will claim
10,000 to 13,000 jobs. For now, it appears that the layoffs won't have a major impact on IBM's
iSeries operations. Big Blue is still working through the details of the layoffs and restructuring,
the company said, but they will most deeply impact services and IBM's European operations, specifically
in France, Germany, Italy, and the U.K. [...]
IBM's plans also call for providing more services through Integrated Delivery
Centers stationed around the globe where there's an abundance of "lower-cost, highly qualified
skills." It's unclear from IBM's press conference this morning whether those lower-cost skills
are to be provided by offshore contractors or simply low-paid IBMers. At last week's stockholders
meeting, shareholders resoundingly defeated a stockholder resolution calling for an independent
committee to investigate the potential damage to IBM's brand and reputation as a result of
its outsourcing initiatives. Former IBMer Janet Krueger, who attended the meeting, said that
IBM didn't say much about offshoring. "It didn't seem like an issue they're willing to talk
The layoffs and restructuring will cost IBM an estimated $1.3 billion to $1.7 billion
in the second quarter, and should start saving the company money in the second half of the
year. For the latest IBMer reports on who's getting laid off,
check out the Alliance@IBM at http://www.allianceibm.org/jobcutstatusandcomments.htm
- Evening Times (United Kingdom): Job
fears at IBM as hi-tech giant plans to cut staff. Excerpts: IBM workers at Greenock were today
bracing themselves for a jobs purge as part of a major shake-up of European operations.
The American hi-tech conglomerate is thought to be about to axe 15,000 workers in an attempt
to drive down overheads and raise profits.
Staff in the UK are expected to suffer most and the jobs cull has fuelled speculation that hundreds
of workers at Greenock will be targeted. [...] However, a jobs cull in Greenock will cost IBM
dearly. Last year senior managers in the Clyde town were given £5m in grants from the Scottish
Executive after promising to create 800 jobs.
Any swingeing job cuts are likely to trigger immediate pay-back calls from the unions and government
- Associated Press: IBM
Shares Fall on Job Cut Announcement. IBM Shares Dip As Co.
Announces It Will Cut Up to 13,000 Jobs, Mostly in Europe. By Ellen Simon. Excerpts: IBM spokesman
Fred McNeese in Paris said most of the cuts in Europe will involve workers voluntarily leaving
their jobs, but declined to give a breakdown of how many jobs would be lost in each country.
"We're still working with work councils and consulting with employee organizations," he
Under the law in parts of Europe, councils of employee representatives must be consulted on
many workplace issues at larger companies. Layoffs must first be agreed with them. IBM said
the changes will be implemented by July 4, subject to the completion of the consultation process.
The company began eliminating jobs in Europe even before it announced its disappointing first-quarter
earnings last month. In March, IBM laid off 500 Swedish workers, 9 percent of its work force
there, and shut down most operations in five cities. [...]
The company will also cut jobs in the United States. Those cuts will be
In continental Europe, however, IBM will have to deal with European Works Councils, which provide
a forum for unions to meet with managers and be consulted on changes that affect a company's
operations. European Works Councils cover 1,400 companies throughout the European Union.
Linda Yueh, a former lawyer and an economics fellow at the London School of Economics, said
the job cuts in Europe will be more involved because of the required negotiations.
"In Europe, people have rights to continue working -- in other words, they are more protected
and they can't be fired without a just cause," she said.
Lorenzo Codogno, co-head of European economics at Bank of America in London, said any company
planning major job losses in Europe needs to be prepared for the process to take some time
and be more costly than layoffs in the United States.
"Clearly labor unions are still very important in these countries," he said. "It's
not like in the U.S. where if you decide to do that -- the day after, you are done."
- New York Post: IBM Deletes
Up To 13,000 Managers In Europe. Excerpts: The computer
giant yesterday said its layoffs would be mostly in Europe, which it calls a "slow-growth area " where
pension contributions mandated by European laws have seriously dragged down earnings per share,
as much as 20 percent by some accounts.
As a result, IBM wants to unload what it labels as a "bureaucracy" heavily laden with
management across Germany, France and Italy.
The company said that eliminating 13,000 from payrolls and ending high-benefits contributions "will
allow IBM to shift resources to higher-growth markets and opportunities such as Business Performance
That lengthy-sounding unit is being built to help corporations make seamless interactions among
all corporate components, from research and development to marketing and human-resources layoffs.
[...] It would be the second biggest layoff at IBM since CEO Sam Palmisano fired 15,600 in 2002 following
five straight quarterly sales losses.
- CNET News: IBM
retools Global Services.
By Martin LaMonica. Excerpt: Rocky transition?
But, as the company's planned restructuring illustrates, reforming its massive services division
will be a complex, and sometimes painful, process. The areas that are expected to feel the brunt
of layoffs are traditional "break-fix" computing
services, an IBM insider said last month. The anticipated changes have already drawn protests
by IBM workers in Germany and France, where IBM reported poor results last quarter.
- Forbes: IBM's Growth
Engine Sputters. By Dan Lyons. Excerpts: Earlier that month
IBM had paid $3.5 billion to acquire PricewaterhouseCoopers Consulting to help the new push.
As for the rest of the $10 billion, Palmisano vowed to acquire the necessary companies, develop
the software and build new data centers across the world, all to make On Demand a reality. Onstage
with him that day were representatives of two big customers embracing the pitch: DaimlerChrysler
and the University of Pennsylvania hospital system. "It's a big bet,
a bold bet, no doubt about it,"Palmisano told the crowd. "But a risky bet?I don't think
so." Maybe it wasn't a risky move, but it turned out disappointing results. DaimlerChrysler,
whose chief technology officer spoke at the 2002 event, outsourced its North American data center
operations in 2004--not to IBM, but to Electronic Data Systems. And
while a Penn professor onstage had described an IBM-based system he had developed for sharing
medical images, the hospital system's technology chief says he isn't interested in it; he has
begun unplugging his last remaining IBM mainframe.
Some big customers--J.P. Morgan Chase, Cable & Wireless, Invensys--are pulling the plug on billion-dollar
contracts with IBM, giving rise to a new buzzword: insourcing. [...]
There was a time, decades ago, when IBM's commanding presence in computer
hardware made it a growth company like Dell. The coda to that bygone era came late last year,
when IBM abandoned the PC market and agreed to sell its ailing, $9 billion-a-year PC unit to
Chinese maker Lenovo Group (otc: LNVGY - news - people ). That followed a retreat in disk drives
(IBM sold its business to Hitachi (nyse: HIT - news - people ) in 2002) and, a few years earlier,
in network switches and memory chips. At $31 billion last year, revenue in IBM's hardware business
today is 12% lower than it was a decade ago. Software revenue at IBM has grown 19% since 1995,
while the entire software market more than doubled in the same period.
Now the last growth engine IBM has left--Global Services--is showing signs of sputtering. "For
years all they've talked about is services, but now services isn't growing. There's no ‘there'
there,"contends William Fleckenstein, president of Fleckenstein Capital, a Seattle hedge
fund, which has been short-selling IBM shares. "This is a company that has been deteriorating
for some time." [...]
Palmisano's PwC Consulting acquisition was supposed to help IBM gain a
foothold in this new area, since PwC's 30,000 consultants had experience doing high-end strategy
consulting and running business processes like finance and personnel. Instead, former PwCers
have been bailing out, complaining that customers don't want to buy strategy advice from
a company that pushes its own hardware and software. (IBM says its turnover in consulting
is lower than that of competitors like Accenture.) In an awkward move for a company trying
to establish its skills in managing human resources, IBM has found itself chasing down defectors
to retrieve advances on bonuses (see box). [...]
On top of all this, IBM has had to contend with a litany of legal troubles
of the sort that corporate giants are prey to, including an investigation by the U.S. Securities & Exchange
Commission, the indictment of executives in South Korea for bribery and bid-rigging, lawsuits
from two software makers (Compuware and SCO) claiming IBM stole their code and lawsuits from
Gerstner was fortunate enough to preside over IBM during a golden era for tech stocks. Palmisano
is going to be hard-pressed to win the same kind of adulation from Wall Street.
- ZD-Net UK: Union
fears IBM job cuts could hit UK first. 'Slash-and-burn reaction'
causes alarm at Amicus, while analysts predict job losses in France, Germany and Sweden. By Dan
Ilett and Graeme Wearden. Excerpts: Britain's second-largest trade union fears that UK workers
at IBM will be the first to be axed as the IT giant gears up to cut up to 13,000 jobs, mostly
Amicus, which has more than one million members, said that it is cheaper and easier for IBM to
make redundancies in the UK than anywhere else in Europe. "We've called it a slash-and-burn
reaction to poor first quarter results," said a spokesman
for Amicus on Thursday morning. "We fear the worst as it's considerably easier to get rid
of workers in the UK than in the rest of Europe."
- The Financial Express (Bombay, India): More
than 30% job cuts in IBM outside Europe.
Excerpts: RALEIGH, NC: Though IBM plans to do most of its retooling in Europe as it streamlines
its operations, as many as 4,500 job cuts could happen elsewhere. [...] However, 30% to 35% of
the planned personnel cuts will take place outside the continent, said Mark Loughridge, IBM’s
chief financial officer, in a conference call with analysts and investors. That equates to between
3,000 and 4,500 jobs.
"The United States will also participate in these plans,” Loughridge said during
the call, “on an involuntary basis.”
That helps frame the effect the restructuring could have in the Raleigh area, where IBM employs
11,000. The operation is IBM’s biggest in the world, and though IBM officials won’t
say how it will be affected, there is a chance that some cuts will happen there.
- Yahoo! message board: "Southbury
hit today 5/5" by "ibmgrunt". Full excerpt: Layoffs
happening in IGS Southbury. Two IBM'ers from my team, others
within the building. The Lotus Notes team lost 8 of 13 people.
Getting hit pretty hard for what they said would be mostly in Europe.
- Yahoo! Hot Jobs: IBM
Jobs and Profile. (Editor's note: As of the date of this posting,
IBM has 13,171 job listings with Yahoo! Hot Jobs).
- National Retiree Legislative Network (NRLN): IBM
Retirees Gain Bernie Sanders Co-Sponsorship of HR1322. Excerpt: I was proud to meet with over 200 IBM retirees and employees who expressed
their concerns about letters they received from IBM informing them of cutbacks IBM was making to
their health benefits. Specifically, one IBM retiree told me that on their monthly health care premiums
were going to skyrocket from $116 per month to $410 per month. Others told me that they were facing
significant increases in their health care premiums as well.
Under current law, companies that offer health benefits to employees and retirees can cutback
or even eliminate these benefits for whatever reason at anytime - a policy which I think is unacceptable.
That is why I am a proud co-sponsor of H.R. 1322 to prohibit companies from reneging on the promises
they made regarding earned health care benefits. Specifically, this bill, in most instances would
prohibit companies from cutting back or eliminating retiree health benefits and to require companies
to restore any health benefits they took away from retirees. This legislation currently has 95
As you know, IBM used to provide free health insurance for their retirees
for life. Now, IBM has turned their retiree health benefits program into a "cash balance" health
benefits plan in which retirees are responsible for paying more and more of their health care
Many of you know full well what happened when IBM slashed the pension benefits of workers by
as much as 50% through an age discriminatory cash balance pension plan.
Vermont IBMers, and IBMers throughout the country fought back, forcing IBM to change its cash
balance pension plan and increasing the retirement benefits of some 35,000 employees in the
Unfortunately, Tom Watson's IBM is not Lou Gerstner's or Sam Palmisano's
IBM. At the same time IBM was reneging on the promises on pension and retiree health benefits, at
the same time IBM was laying off thousands of IBMers in Essex Junction and throughout this
country, while agreeing to train 100,000 software specialists in China over the next 3 years, it
helped one man become one of the richest people in the U.S. worth $600 million, according to Forbes
Magazine. And, that person is the former CEO of IBM, Lou Gerstner. Even though, IBM gave Mr. Gerstner
over $260 million in stock options, and annual bonuses of$8 million during his final years as IBM's
CEO, apparently they were so concerned about his financial well-being during his retirement
years, that IBM made sure that Gerstner will be receiving an annual pension benefit worth over
$1 million for the rest of his life.
- Yahoo! message board: "annual
ibm shareholders meeting...2005" by "democratizeibm".
Excerpts: For those who weren't there, here's a brief rundown of the IBM annual
shareholders meeting in Charleston S.C.. This location appears to
have been carefully chosen as it was a large complex removed from
public access by acres of parking lots: i.e. "protesting by permit
only" and that means no Alliance IBM/CWA people could plan on getting
a permit. [...]
The actual event was fairly low key, the `jumbotron' TV's were not
used at all, I guess all those close-ups of the CEO biting his tongue
during previous agm's killed that particular feature. After Sam's
overview (things didn't go right and we're going to fix them!), and
everyone was done yawning, came the proxy part of the meeting. Jimmy
Leas went early and did a rather scathing review making the point that
not only were IBM's action's immoral but as a result of the class
action law suit were also illegal! He also stressed that it was clear
IBM knew this ahead of time which put the company in an "at risk"
position, maybe we need a proxy along the lines of "IBM should stop
obvious violations of the law!!!". Jimmy also said it was obvious
employees needed a union to protect their rights. Sam ignored all
these points in his response saying in effect only that IBM was
concerned about retirees and funding of the pension; you would think
he wasn't even in the room listening but then what could he say other than something like, "yeah
we're guilty and it's gonna' put a hurtin'
on us stupid crooks when we settle". [...]
This was followed by a question and answer period, using wireless
microphones and Sam picking questioners from the audience and also
reading questions from the internet. The internet questions were
pathetically screened questions and canned answers from Sam designed
to avoid and real questions from the audience. One Alliance supporter
was given a microphone and had it removed as Sam realized who would be
speaking and quickly changed to another person. They had a larger than
usual number of fawners asking question and only Linda Guyer of the
Alliance got to ask a question from our group, suggesting Sam give
back some of his bonus in light of the company performance. Sammy made
the supposedly on the spot announcement that future bonuses would be
held pending company performance improvement for certain executives,
whoop dee doo… [...]
A good joke that came out of the meeting… What's the difference
a profession thief and a crook? If crook robs you and gets caught, he
gets arrested and goes to jail, if a professional thief robs you and
gets caught, you go to court, he keeps some of what he took and votes
himself and the rest of those that planned the crime a big fat raise.
- Yahoo! message board: "annual
ibm shareholders meeting...2005 (part 2) " by "democratizeibm". Full excerpt:
And in other news, Sam said share buybacks had reached 63 Billion and
the board announced another 5 billion for this year. He didn't mention
that the board of directors had voted themselves an over 40% pay
raise, I guess partaking in the illegal pension theft was so anxiety
producing they needed tens of thousands of more dollars to salve their
consciences. I wonder if you look in the dictionary under greed if
you'll find the ibm BOD listed?
- Yahoo! message board: Mike
Saville's Speech about his shareholder resolution on off-shoring jobs. Full excerpt: Good Morning
I worked at IBM for 32 years in various capacities including management.
I consider myself a long term shareholder as I purchased my first IBM
stock in 1968 and I still have that stock.
Offshoring jobs will hurt the $51 Billion IBM Brand name and Reputation
in countries and communities where IBM does business.
Tom Lynch, IBM's former Director of Global Employee Relations told an
internal meeting that "offshoring" is going to destroy morale as IBMers
are forced to train someone from China, Brazil, India or Russia to do
The Employee and all those working with the employee will be outraged
because of the indignity, unjustness, and unfairness knowing that their
job will not be theirs at the end of a fixed period of time.
IBM Human Resource Partner Christoph Grandpierre described how European
IBMers have greater protection because of their Unions and Work
As American IBMers lose their jobs to Offshoring and European IBMers
fight back through their Unions as demonstrated this week in France and
Germany, American IBMers will learn the value of Unions as Mr.
Mr Palmisano, Offshoring is short term, short sighted, immoral and
There is nothing wrong with IBM hiring people from all over the world.
IBM has long done that and it is good business to do so.
The Problem is eliminating jobs here in the United States and Europe and
transferring those same jobs to low wage countries.
The real loser will be IBM.
Instead IBM should Re-train and retain its loyal American and European
employees while the workforce in other countries expands. IBMers should
be treated as Assets and not Commodities.
I urge you to vote for this proposal - Thank You.
- Communications Workers of America (CWA): IBMers
Stress Accountability at Annual Meeting. Excerpts: Members of CWA Local 1701, Alliance@IBM, voiced the concerns of thousands
of workers and shareholders at the IBM Corp., annual meeting in Charleston, S.C. About a dozen
Alliance members attended the meeting, seeking shareholder support on resolutions to improve
corporate governance and accountability. [...] IBM employees continue to face many critical issues,
including the loss of jobs due to the company's increased focus on offshoring. Alliance@IBM has
been fighting to improve accountability at the company and to keep quality jobs, said Lee Conrad,
national coordinator for Alliance.
Alliance members also spoke in support of several shareholder resolutions. A resolution directing
that senior executives be compensated based on their actual performance, not additional earnings
generated by "pension income," gained 38.1 percent of voted shares.
- iSeries Network: IBM
Annual Meeting Overlooks iSeries. By Cheryl D. Ross. Full excerpt: Former IBMer and longtime
iSeries advocate Janet Krueger was disappointed at IBM's annual shareholder meeting last week
that the IBM brass never made any mention of the iSeries. At one point during the meeting, she
says, someone asked CEO Sam Palmisano about IBM's commitment to innovation, and he mentioned
how the POWER5 processor in the pSeries is a great example of that innovation and is very well
received by its audience. He specifically mentioned the pSeries, Krueger says, not the iSeries
and the pSeries. In fact, she says, no one from IBM discussed the iSeries at all in any of the
talks about strategy.
"I wanted to ask if the iSeries is really part of IBM's long-term strategy," she
says, "or whether this latest marketing effort is just a last-ditch effort to milk the
install base. ... Unfortunately, I never got the mic after I presented my stockholder resolution,
and Sam never called on me."
- Additional coverage of the 2005 annual shareholder meeting is available in last
week's edition of these highlights.
- KTTC-TV (Rochester, MN): Age discrimination
lawsuit. Excerpts: A new court ruling
gives a former IBM employee the okay to move forward with a lawsuit. The rural Rochester man
is suing Big Blue for age discrimination after being let go nearly four years ago. NewsCenter's
Asia Zmuda filed this report.This latest court ruling from the U-S Court of Appeals re-instates
a lawsuit that was originally dismissed.53-year old Dale Thomforde is suing IBM for lost wages
Thomforde and others were let go from the Rochester plant in 2001 as part of a reduction in
Thomforde worked for the company for some 28-years with his last position as an advisory engineer.
The pink slip included an agreement not to sue, which Thomforde's lawyer says has caused some
confusion and even caused a federal judge to dismiss the case when it was first filed.
But lawyer Bill Egan says that agreement did not include suing for age-discrimination, which
Thomforde believes did happen.
"When Dale took a look at the statistical evidence given to him by
IBM he noticed first that the average age of persons laid off in his job group was 52 and the average
age of employees not being laid off was 42," said Egan.
- Yahoo! message board: "Homforde
wins on appeal!!!" by Janet Krueger. Full excerpt:
Laid off IBMer Dale Thomforde won his appeal of dismissal of his age
discrimination in layoff case at the 8th circuit court of appeals. The
district court had dismissed his case based on IBM's motion for summary
judgment because he signed the waiver. The appeals court today reversed
and declared the waiver illegal as a matter of law. The 8 page decision
was just uploaded to the FILES area of this board as ThomfordevIBM.pdf. This is excellent news!
- New York Times: Drug
Makers Reap Benefits of Tax Break. By Alex Berenson. Excerpts:
A new tax break for corporations is allowing the biggest American drug makers to return as much
as $75 billion in profits from international havens to the United States while paying a fraction
of the normal tax rate. The break is part of the American Jobs Creation Act, signed into law
by President Bush in October, which allows companies a one-year window to return foreign profits
to the United States at a 5.25 percent tax rate, compared with the standard 35 percent rate.
[...] Already, four of the six drug makers have collectively announced plans to return $56 billion
in profits to the United States. Two others say they are still considering but could repatriate
an additional $18 billion. Had the six companies faced standard federal taxes on those profits,
they would have paid $26 billion to the United States. Instead, they will pay less than $4 billion.
Chris Senyek, an accounting analyst at Bear Stearns, said drug companies would probably make
up about half of all the money repatriated by publicly traded companies.
During this window, returning money to the United States is to the advantage of the companies
because they can spend the cash here rather than having to use it overseas as tax laws generally
require. Lawmakers have said their main intention for the law was to encourage American companies
to build new operations and hire workers. Congress passed the law in response to pressure from
the European Union to resolve a long-running trade dispute.
Although the act is intended to create jobs, Pfizer said last month that
it would cut its annual costs by $4 billion over the next three years. Pfizer, which will repatriate
at least $28 billion under the act, did not say how many jobs it planned to eliminate, but
analysts expect the company to shrink its work force by thousands of people. Mr. Senyek said the
law would create an insignificant number of jobs because companies can easily work around provisions
in the law meant to stop them from using the money for dividends to shareholders rather than new
After the break expires, companies will probably go back to stockpiling profits overseas as
they wait for another tax holiday in a few years, tax lawyers say.
Employee Purchase Program. Discounted pricing for IBM U.S. and Lenovo
U.S. employees, their family and friends.
|Coverage on H1-B and L1 Visa and Off-Shoring Issues
- WashTech: WA
State Passes Offshore-Outsourcing Study Bill. Excerpt: Washington State
has become one of only five states to pass legislation on the politically explosive issue
of offshore outsourcing. [...] Earlier in the year, several bills in the Legislature dealing
with offshore outsourcing died after intense lobbying by the business community. In the
end, legislators realized that the issue of job losses due to outsourcing is such a hot
topic that they had to do something. A coalition of labor unions comprised of the Boeing
engineers, the Society of Professional Engineering Employees in Aerospace, and the Communications
Workers of America, including WashTech, did intensive lobbying during the entire legislative
session to remind law makers that workers in the state of Washington want action on the
- Yahoo! News: Upstate
New York Man Gets the Poop on Outsourcing. Excerpts:
Computer programmer Steve Relles has the poop on what to do when your job is outsourced
to India. Relles, one of a rising number of Americans seeking new opportunities as their
work shifts to countries with cheaper labor, has spent the past year making his living
scooping up dog droppings as the "Delmar Dog Butler."
"My parents paid for me to get a (degree) in math and now I am a pooper scooper," Relles,
a 42-year-old married father of two told Reuters. "I can clean four to five yards
in a hour if they are close together."
Relles, who lost his computer programming job about three years ago, got the idea of
cleaning dog dirt from people's back yards from Mark Booth, a friend in Buffalo, New York.
Ralles has over 100 clients who pay $10 each for a once-a-week cleaning of their yard.
- Computerworld: Q&A:
Information Builders CEO blasts Gates' H-1B stand.
'He can find all the engineers he wants in this country,' says Gerald Cohen. Excerpts:
Gerald Cohen, the outspoken founder and CEO of New York-based business intelligence software
vendor Information Builders Inc., spoke with Computerworld on Friday about the controversy
surrounding offshore outsourcing and the H-1B visa cap. Excerpts from that interview
follow. Q: A lot of CEOs of companies like yours are saying they just can't find the people,
so they're lobbying Congress to get rid of the H-1B visa cap. A: That's bulls---. A
couple years ago that was true, and that's when the cap was raised. You know who wants
[to get rid of the cap]? The Indian companies. The way the Indian companies work is
they have to have a certain number of people here, and a lot more people back there
-- so they're the ones who want to get all these people in. And they don't even pay
them American wages -- they just pay them as cheaply as they can.
- Minnesota Public Radio: Thomas
Friedman Speech. New York Times columnist,
Pulitzer Prize winner and Minnesota native Thomas Friedman discusses globalization, and
his latest book, The
World is Flat: A Brief History of the 21st Century. (Editor's note: We highly recommend
listening to Mr. Friedman's talk. Links to both the audio and video versions of his talk
are available at the linked Web page.)
- IEEE: U.S.
Government Agency's Approval of Unauthorized Visas Cuts U.S. Jobs. Excerpt: IEEE-USA "is
extremely discouraged to learn that the United States Citizenship and Immigration Services
(USCIS) in the U.S. Department of Homeland Security has accepted and approved more than
75,000 H-1B visa petitions for Fiscal Year 2005 even though they were capped at 65,000," said
IEEE-USA Career Activities Vice President Ron Hira, an assistant professor of public policy
at the Rochester, NY, Institute of Technology.
The IEEE-USA Vice President stressed: "We're not sure just how or why this excess
in authorized visas occurred. But this certainly isn't the first time that the Federal
agency charged with responsibility for administering the nation's immigrant and non-immigrant
admissions programs has failed to enforce a very plain and straightforward law. How hard
can it be to count to 65,000 and stop issuing visas?"
Dr. Hira continued: "This excess in approved visas defeats the
purpose of one of the most important safeguards for American workers. By increasing
the number of visas issued, the USCIS has unilaterally reduced job opportunities for American
workers at a critical time, when the job market is still very soft." He also noted: "Several
years ago, the USCIS predecessor agency — the Immigration and Naturalization Service
(INS) — issued 20,000 more H-1B visas than it was supposed to have approved, and added
this additional number into the following year's total."
IEEE-USA's Hira also applauded Senator Charles Grassley (R-IA) and others in Congress "for
moving quickly to hold the USCIS accountable for its actions."
- Jim Hightower: Offshoring
Is "Psychologically Disturbing".
Excerpts: An Indian trade group says there are 350,000 people there working in such back-office
service jobs for U.S. corporations, and the number is expected to grow by 40 percent
this year alone. The corporations are tapping India's vast pool of workers who are English-speaking,
tech-savvy... and cheap.
But these workers are also nervous wrecks, for they know that Americans are very angry
about the offshoring of middle-class jobs – and American callers often take out
their anger on them, using creative combinations of four-letter words. The Indian call
centers try deception to deflect this anger. Rahail Manzoor, for example, is told to
call himself "Jim" on the phone, and he has undergone lessons in how to speak "American." Some
call centers have giant TV screens showing the current weather in U.S. cities, the
latest sports scores, and such, so workers can make small talk and pretend to be in
But many callers know better and berate the poor operators, who are
under such stress that they suffer all sorts of debilitating illnesses. It's "psychologically
disturbing," says Manzoor.
It's also psychologically disturbing for Americans to see our middle-class future exported,
while CEOs calmly count the billions of dollars that they rake in by pitting us against
the Indians. To help unite workers here and there, call the AFL-CIO's international department:
|Vault Message Board Posts
from a stone" by "MythAndMeaning". Excerpt: You have to kinda wonder when someone
on Wall Street is going to look critically at what IBM is doing and begin questioning
SP. Problem: didn't meet growth projections: Ostensible solution: cut cost. What?
Everyone in my practice area has been flat out for years, and we're making great money.
Just not enough money. Any cutting just eliminates staff who are on sold work. Which
won't stop them, of course.
You can't grow a business by cutting costs. You can't compete and charge a premium
if you haven't invested to create that market differentiator. SP and his minions need
a refresher in business basics.
and PAT answers" by "Dose of reality". Full excerpt: M&M - I’m
glad I am not the only one who noticed the irony in our new growth strategy.
There are a number of reflex actions that overmatched CEOs take when things get tough.
Most of the time, the action plans have nothing to do with the official company line.
Here’s SP’s pat answer du jour, in the style of that old SNL skit:
“We need to get closer to the customer. We have to cut out layers to get closer
to the market”
What he really meant to say was: We need to indiscriminately cut out
large components of the organization that are run by folks that have never really supported
me. All of my loyal supporters will be protected, and I won’t really reorganize or streamline
the functions that should be, since then we really would have to reinvent ourselves, and I
don’t have the foggiest idea how to structure this company any other way than the way
it has been structured since I left history class back in 197x. I will shift costs to low cost
jurisdictions and quality be damned. There’s no way I am going to admit that the organization
is sick, or that my stewardship over the last few years has been an abysmal failure. I am just
hoping I can hang on for another year or so of zero strike price options. Do you think anyone
will notice if I re-price the other options I have now?
Business is really not that difficult. Some never-has-been companies
fail due to a lack of management talent. However, it is the presence of unfettered, self-serving
leaders that is at the core of most failures of previously successful companies. We are witnessing
a colossal example of this. For the last ten years, IBM has existed for the enrichment of the
top few hundred leaders (ABC – feel free to refine the numbers), and it has been on borrowed
time ever since.
- "Denial" by "Dose
Excerpts: The impression SP is trying to leave is that we have an acute problem in Europe,
and by implication that we don't have any problems in the U.S. He is still in denial
about the fundamental organizational and strategic weaknesses, like a lack of pay for
performance, excessive overhead, stifling bureaucracy, pervasive infighting, business
unit favoritism, hyper-political culture, etc. If we just get rid of those 13,000 deadweight
troublemakers, all of our problems will be solved.
Now shifting resources to higher growth markets is a code word for offshoring, at
least in services. China, Brazil, India, Eastern Europe are growth markets from a supply
standpoint, but they are still not high growth from a demand or a profitability standpoint.
This will do nothing to improve profitability, other than to shift to a lower cost
jurisdiction. But I thought we had a problem in closing deals and were too distant
from the market??! This is just another move into the commodity services market - part
of the death spiral that put us in this situation to begin with. It's like drugs -
the more you take them, the more you need them until you are too far gone to help yourself.
Then we have the amount of the restructuring charge - $1.7 billion.
That's $130k per person net of the favorable impact of reduced pension liability! Two
things driving this - first we are not finished yet. Second, the standard play is to
take a much higher restructuring charge up front so that you can use the release of the excess
to cover operating earnings shortfalls later on. It is a common game.
We in BCS have to love that phrase "consolidating much of the service delivery workload
into fewer locations by using standard job roles, processes and tools". CRM technical
architect and ERP application configuration - we can combine those right? Specialization
is what we sell. Bureaucratic standardization is the reason we can't sell work.
I expect a little bounce over the next year or so, and then we will be back on that secular
downtrend, unless something is done to really cure what ails us.
Shaky Foundation" by "Dose of reality". Full excerpt: When times
are tough, the absence of fundamental management tools and the drain of having a political
self-serving culture really rear their ugly heads. They are rocks being uncovered by
an ebb tide.
I wouldn’t be surprised if we had enough warm bodies to fill project needs,
but many of the people on the bench have the wrong skills, or do not have the experience
or talent needed for critical roles. If we had a robust and accurate staff evaluation
process, and a culture of merit instead of one of nepotism and socialism, we would
at least be capable of making the right hard choices about staff.
What is more likely to happen is that those that are connected will remain, and those
that aren’t connected will be RIF’ed, regardless of performance, potential, or
skill set. There is a strong negative correlation between how connected people are and how
much value they have – hmm… wonder why that is?! Mark my words – we will
be throwing out a lot more babies than bath water.
The other problem in the background is the excessive utilization targets. When utilization targets
are 90%, that means that at any given time, the “expectation” is that only 10% of
staff will be on the bench. Factor that down by >5% for the “useless” class, which
is always a fixture in the roster, and you are left with <5% of staff to choose from. What
are the odds that you will find the right group of consultants with the right tool, industry,
functional knowledge, experience, and geography to staff a project when it is sold? Even with
the most sophisticated pipeline management system in the world, it is impossible to manage resource
capacity and field an “A” team.
you really believe that?!" by "Dose of reality". Excerpt: Your skills
and value increase over time, and the cost of living goes up over time. Your performance
will be better or worse than your colleagues, and the company should prefer that it is
better. Those are the reasons why companies give raises, not because they promised you,
or are contracted to do so.
When bonus targets are given as ranges from upper single digits to mid-teens, and
your performance targets are established and you comfortably beat them, there is a
more than reasonable expectation that bonuses should be paid. Again, there is a contractual “out” that
IBM as a whole did not meet its targets. But when that happens year after year, the
targets keep increasing, and the feasibility of achieving them keeps dropping, something
has to give. If we don’t reward better performance, we won’t get it.
Doesn't Pass the Smell Test" by "Dose of reality".
Excerpts: Unable to maintain a workforce of desperate internal slave labor due to the
availability of other opportunities and the annihilation of employee goodwill that was
built up over decades, we are now looking to create a workforce of desperate external
slave labor that are unable to find suitable employment elsewhere, or in some cases will
be exploited by a different middleman. It is all about pension and health care disintermediation.
Candor had it right when she said that the employment market is efficient. An employee
will find their worth in the market. If there is less all-in compensation earmarked for
service providers, you will get less service, whether your paycheck says IBM, or Sweatshops-R-Us.
It truly is a shell game.
Now the theory is that we would no longer have to carry idle resources
as a fixed cost. But we do have to carry sourcing overhead, and we will double the amount
of complexity in contracts, since we now have to manage external relationships on both sides – supply
and demand. In addition, how can we possibly ensure adequate resource quality when projects
are sold? How will this make us “more responsive to the market”. How are we going
to develop capabilities in our new core competency of contract broker if we don’t have
people who are immersed in the services we are selling? Who is going to be walking the halls
of clients and beating the carpet for more opportunities? A tangential relationship manager
isn’t going to be able to do this effectively!
|Coverage on Social Security Privatization
- New York Times: A Gut Punch to the
Middle. By Paul Krugman. Excerpts: By now, every journalist should know that you have to
carefully check out any scheme coming from the White House. You can't just accept the administration's
version of what it's doing. Remember, these are the people who named a big giveaway to
logging interests "Healthy Forests."
Sure enough, a close look at President Bush's proposal for "progressive price indexing" of
Social Security puts the lie to claims that it's a plan to increase benefits for the
poor and cut them for the wealthy. In fact, it's a plan to slash middle-class benefits; the wealthy
would barely feel a thing. [...]
I asked Jason Furman of the Center on Budget and Policy
Priorities to calculate the benefit cuts under the Bush scheme as a percentage of pre-retirement income.
That's a way to see who would really bear the burden of the proposed cuts. It turns out that the middle
class would face severe cuts, but the wealthy would not.
The average worker - average pay now is $37,000 - retiring in 2075 would face a cut equal to 10 percent
of pre-retirement income. Workers earning 60 percent more than average, the equivalent of $58,000
today, would see benefit cuts equal to almost 13 percent of their income before retirement.
But above that level, the cuts would become less and less significant. Workers earning three times
the average wage would face cuts equal to only 9 percent of their income before retirement. Someone
earning the equivalent of $1 million today would see benefit cuts equal to only 1 percent of pre-retirement
In short, this would be a gut punch to the middle class, but a fleabite for the truly wealthy.
- New York Times: Hitting
the Middle Class, Again. Excerpts: As he moved into
the home stretch of his 60-day Social Security road show last week, it became clear that
President Bush had saved the worst for last.
Mr. Bush endorsed a proposal that would take a huge bite out of the Social Security retirement
benefits for the middle class, claiming that would close some 70 percent of the system's
financing gap. That figure is almost certainly overstated. Under the proposed reductions, young workers
who now earn about $36,000 would face a 16 percent cut; those earning about $58,000 would
face a cut of 25 percent, and those earning $90,000, 29 percent. People not yet in the work force
would face even larger reductions. [...]
Worse, if Mr. Bush succeeded in creating private accounts, these newly
proposed cuts would be only the first whack at retirement benefits. Workers who opened
private accounts would also see their government benefits reduced by one dollar for every
dollar invested - plus interest, computed at 3 percentage points above inflation. That
would occur even if a private account performed miserably. In the end, the Social Security
checks would be minimal - or nonexistent - for millions of Americans. [...]
Politicians also have to face the hard truth about taxes. Raising the
payroll tax by a mere three-tenths of a percentage point - starting 10 years from now and adding
tiny increments over the succeeding 20 years - would be fair and lucrative, without being too
steep or too sudden. It would also be fair to raise the cap on wages subject to the Social Security
tax to about $150,000 from the current $90,000.
- TomPaine.common sense: Stuck
In The Spin Cycle. By
Robert L. Borosage. Excerpt: On Social Security, the president offered a warmed-over stew
of distortions and dodges. With the retirement of the baby boomers, America faces a serious,
long-term fiscal challenge. But Social Security isn't the problem. Even if nothing is done,
Social Security will meet the president's standard of paying out higher benefits in the
future than are received today. Soaring Medicare and Medicaid costs are the major problem,
an expression of our broken health care system. The president's only significant initiative
in regard to this 'right now' crisis has been to make it worse— passing a prescription
drug bill that prohibited Medicare from negotiating a lower price for drugs, a multi-billion
dollar payoff to drug companies and HMOs.
While Social Security isn't in crisis, the president's plan would create one. He disparages
the Treasury bonds held by the Social Security Trust Fund as simply "file cabinets
full of IOUs." Then he proposes issuing another $15 trillion of those IOUs over
40 years—effectively tripling the national debt—to pay for private accounts.
The president describes this as a boon to younger workers. But they will end up paying
the interest on that debt, while suffering deep cuts in their guaranteed benefits. The
only certain results of the president's plan are more seniors in poverty and more debt
for the nation.
- Washington Post: Social
Security, Day by Day. By Richard Cohen. Excerpts:
This column is about Day Two. Day One is the first day of the work year. On that day, the
average American worker earns about $142.31 and, of course, has a piece of that withheld
for Social Security. Since the cap on such payments is $90,000 a year and the average American
earns only $37,000, he or she pays Social Security tax all year long. Now we come to Day
Two. For some people, it's not like Day One at all.
A couple of those people happen to be Tom Freston and Les Moonves. They
are co-presidents of Viacom, the entertainment conglomerate that owns CBS and Paramount Studios.
Last year they each took home more than $50 million. Of that, about $20 million was in salary
and bonuses (I'm rounding like crazy here), which means that if they get paid for 52 weeks a
year and work a five-day week, they earned about $77,000 on Day One. By, say, 10:15 in the morning
of Day Two, their Social Security obligation was behind them.
I give you these data so you will see what suckers we Americans are.
Here is the president of the United States, a certain Mr. Bush, attempting to sell us a revision
of the hallowed Social Security program -- FDR, Warm Springs and all that -- that would reduce
benefits for many of us while at the same time ruling out any increase in the cap. The cap would
stay where it is, about $90,000, because to raise it would mean a tax increase, and it is dogma
in the Republican Party and the White House that such a thing must not be done. Instead, taxes
must only be reduced, which they have been under George W. Bush. To refer back to Freston and
Moonves, had they been in the money back in, say, the 1980s, their marginal tax rate -- the
rate paid on anything over the first couple of hundred thousand dollars -- would have been 50
percent. (It's been as high as 94 percent.) It is now around 35 percent. Not bad. Not bad at
- Center for Economic and Policy Research: The Regressive Impact of the
Indexation of Social Security Benefits [PDF, 14 pages]. By Dean Baker. Excerpts: President Bush’s
proposal for progressive indexation would put in place a structure of
benefit cuts that would have the greatest impact on middle--income retirees. While the
plan calls for protecting the lowest wage workers, middle wage earners would see cuts
that grow through time, eventually reaching a level that is more than 35 percent of the
scheduled benefit by the end of Social Security’s planning period in 2080. Although
the cuts projected for higher income wage earners will be a larger share of their projected
benefits, this is likely to be of much less consequence to these workers, because Social
Security is a much smaller share of their retirement income.
When progressive indexation is coupled with the system of private accounts
President Bush, the system appears even more regressive. President Bush’s proposal
treats the money in the private accounts as a loan that will be paid back from the
guaranteed Social Security benefit. However, with progressive indexation, the guaranteed
Social Security benefit will not be large enough to repay the money owed by the highest
income earners. In effect, by cutting the benefit for the highest income earners with
private accounts, progressive indexation simply cuts the amount of money that Social
Security is repaid. In this case, middle and high wage earners will not only lose a much
larger share of their retirement income with progressive indexation than the highest
income workers, they will also lose a much larger share of their Social Security benefit.
In short, progressive indexation is a regressive way to cut Social Security
benefits, if the
criterion is the percentage reduction in retirement income. While the lowest wage earners
would be protected, middle--income earners would see by far the largest reduction in
their retirement income under this plan. If progressive indexation is accompanied by
system of private accounts comparable to that proposed by President Bush, then it is
more regressive. Under this system, middle--income workers would not only lose a larger
share of their retirement income than the highest income workers, they would also lose
larger share of their Social Security benefits.
- United States Senate Republican Policy Committee (RPC): A
Broader Perspective on Social Security Reform.
The Status of Hybrid-Pension Plans. [PDF, 10 pages]. Excerpts:
- In the end, Congress must clarify the status of hybrid-pension plans
as soon as possible to remove the threat to the retirement-income
security of millions of participants affected by the current legal
uncertainty. Moreover, Congress should make such clarification apply
to all hybrid
plans – new and existing ones. A prospective solution only
the uncertainty for more than 7 million participants of existing
- With Social Security reform as a national priority, Congress has an important opportunity
to take a broader view. By
addressing the issue of retirement-income security for Americans, Congress can provide comprehensive
solutions, including steps to enable employers to strengthen and expand the private-pension
system in this country. The absence of clear legal standards concerning
hybrid-pension plans places the retirement income of millions of
Americans at a greater risk. Left unresolved, the likely upshot will
be an acceleration of companies eliminating their defined-benefit
pensions, not to mention the collateral effect it will have on the
PBGC – fewer defined-benefit plans contributing to the agency's
insurance fund, which already faces financial strains.48 To avoid
these outcomes and help Americans secure their retirement income,
Congress should act this year to address the myriad pension issues
facing the nation, including the legal status of hybrid-pension
- "fhawontcutit" comments on the RPC report. Full excerpt: They don't want prospective legislation
-- they want legislation to
cover plans already in place.
Gee, I didn't know that Cooper V. IBM was a "threat to the
retirement-income security of millions of participants affected by the
current legal uncertainty".
Krueger comments on the RPC report and the status of the Cooper v. IBM pension lawsuit.
Excerpts: The legal teams have a hearing scheduled with Judge Murphy on May 9
to request the final order for distributing settlement notices.
Assuming that takes place, final settlement details should be posted
on the web and settlement notices should be mailed within two weeks.
Please continue waiting patiently; it shouldn't take much longer! [...]
The current administration's tort reform is targeted at torts, not
employment litigation, and should have no impact on the IBM
What *should* scare you is some of the administration's proposals on
retirement reform -- there a number of Republicans who are claiming
business cannot stay 'competitive' unless they make it easier for
them to default on both health care and pension promises -- and they
are proposing these reforms be done retroactively, not just
prospectively! It is time to once again remind our senators and
representatives in Congress that employees and retirees VOTE!!!
(I posted a link last night to a policy paper from the Republican
Policy Committee, that shows they are directly targeting Cooper v
IBM for retroactive relief, just to show I'm not making things up...)
Krueger responds to a defender of the Bush administration. Question: Who wants Cooper dismantled? Who has it in
their political platform? uhhh...1995 and 1999, when this all happened, Clinton
was in. And no one made a peep. Both parties are drawn to money and power, and by
the holders of both. In 20+ years I've seen party power switch back and forth...and it
never made a difference. Every so often I would see my benefits reduced or negated.
Janet responds: Apparently, you haven't been paying attention over
the last 6 years.
In 1999, the IRS under Clinton put a complete hold on putting out
any more Treasury approval letters for hybrid plans, pending
resolution of court cases and the outcome of an EEOC/Treasury/DOL
task force that was put in place to study the issues, several senate
hearings were held, and multiple bills were introduced to address
the issue. If that had not happened, several million more American
workers would have suffered under cash balance conversions.
Since the Bush administration stepped in, the task force was
disbanded, the IRS is back to business as usual relative to issuing
letters, the DOL now has blessings for cash balance plans on their
web site, and multiple bills and treasury regulations have been introduced to
retroactively legalize what IBM did. Responsibility for those actions needs to
be placed squarely on the shoulders of the politicians taking the actions!
On *THIS* issue the Republicans have clearly taken a stand that
people reading this board need to understand. It is NOT a stand
shared by ALL politicians. Perhaps this issue isn't important
enough to impact your feelings about your political allegiances, but PLEASE
don't pretend the stand has not been taken or ignore what is happening right
under our noses!
Everyone needs to work on educating their representatives and
senators -- that will be tough to do if their heads are buried in
THIS BOARD does not condone political bashing, but it
absolutely requires informed analysis of political bills, policy
papers being circulated on Capitol Hill, and government agency
actions and regulations that WILL impact middle class retirement.
on the Alliance@IBM Site:
- Job Cuts Status & Comments
Page. Excerpts: Job cuts are coming. Information needed:
What is Your location?
How many job cuts at your location?
What locations are cutting jobs?
Name of Division and Business Unit?
- 50+ people in the IBMGS Strategic Outsourcing Groupware tower were cut last Thursday. Roughly
10% of the organization.
- IBM currently is laying off people in Belgium, at the same time it is denying in the press there
is a restructuring going on. My own internal sources indicated at least 30 people were affected,
but when I handed in my company car (most senior consultants and managers have company cars in Belgium
as a tax friendly form of compensation), the person at the garage told me 53 IBM cars were brought
back during the last weeks...
I have also heard more layoffs will be implemented during the next months. There clearly is a difference
in what IBM says and reality.
- Integrated Supply Chain Layoff, ISC, 10% Indirects and 5% directs.
Employees will be notified on 5/26 with the earliest departure date of
- IGS: All Deskside support contractors in Dallas, Texas have been laid off
- Here in the UK: according to a reliable manager (one who is also volunteering to go) the original
target for the number of employees to leave Global Services was ~ 650. So far over 1900 expressions
of interest in the voluntary package have been received (cutoff is the weekend). On May 17 the company
will confirm back to the employees who will be permitted to go, and people will be expected to work
their last day on June 16th.
The Manager also confirmed that it is customary for about 50% of offers to be taken up, so they
expect that over 900 people will go. The plan apparently is to accept all volunteers (hence the
amount put aside for the one-time charge is on the high side), and to backfill the excess with
staff from low-cost countries (for the UK, that means workers in South Africa and India).
I hope they accept my volunteering to leave. I can't stand to see the
company I loved once tear itself apart like this. Its almost worse than watching a loved one die.
- Scotsman.com: Fears
for Scots jobs as IBM set to axe 15,000 in European shake-up.
- Silicon.com: Leader: Why would IBM make layoffs?
- An employee of IT company IBM is seen in front of the closed main gate
of the German IBM headquarters wearing a shirt that says 'IBM - 9 billion $ profit are
not enough to preserve my job' during a protest demonstration in Stuttgart-Vaihingen,
southern Germany, Tuesday, April 26, 2005. The US company announced some closures of
German IBM branches with a possible cut of around 600 jobs. (AP Photo/Daniel Maurer).