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    Highlights—April 21, 2007

  • Poughkeepsie Journal: IBM profits rise, but staff cuts are expected. By Craig Wolf. Excerpts: While profits at IBM Corp. are up 8 percent in a year, the company plans to cut costs further, including staff, to help keep up the profitability. In the current quarter, more downsizing will occur, executives said Tuesday, saying it would be similar to what IBM has been doing routinely in recent years, shifting work from higher-cost countries such as the United States to lower-cost ones such as India. [...]
    Most of the job cuts will come in IBM Global Services, particularly in the segment known as Global Technology Services, Loughridge said. That unit brought in $8.3 billion of revenue, up 7 percent over a year ago, Loughridge said. Global Services overall grew revenue 8 percent. [...]
    "We are putting in place a series of actions to address our U.S. cost base," said Loughridge, "including a basic focus on resource and cost management disciplines, and rebalancing of resources as we execute our global resource strategy." In IBM lingo, rebalancing resources means letting some workers go while hiring others, either domestically or in other countries. [...]
    Harry Blount, analyst at Lehman Brothers, said during the call IBM's data showed the pension plans producing a 30-cent-per-share benefit to earnings. "That is about half of long-term earnings per share," he said. Critics of the required practice of including a pension impact formula in earnings statements deride it as "vapor profits" instead of real gains. Loughridge said pension impact provides "a very strong tailwind as we go into next year." [...]
    Robert Djurdjevic, president of consultancy for Annex Research in Phoenix, was troubled by the services results. "The biggest part of IBM - Global Services - is back to its old malaise - slow or no growth,' he said in an e-mail. "Declines in new signings and the backlog are clearly disappointing. It means that this unit is losing more business than it is winning. And that has to be worrisome in terms of future growth."
  • Yahoo! message board post: "MBA" by "sby_willie". Full excerpt: We are now slowly and painfully finding out that a lot of IBMers will not be eligible for a "market based adjustment (MBA)" to their present low paid salaries supposedly happening in June 2007. The reason IBM has announced this MBA is because they have been purposely underpaying IBMers who have been getting PBC "1", "2+" and "2"'s over the years.
    I'd rather have a union contract in writing, and protected by labor law, with across the board salary increases based on whether you are a PBC "2", "2+", and "1". I would also like to see fairness and automatic peer reviews for those that got a PBC "3" since some who get a PBC "3" do not deserve it.
    The only way we can do this is by a collective bargaining agreement. For all you union bashers and union unbelievers out there: do you think that IBM is really playing fair with employee relationships? If not, then what are you willing to do about it?
  • Yahoo! message board post "Re: New Health Care Retirement Account - Do employees understand it?" by "soft_ball_mom22". Full excerpt: Dear abouthadit, Allow me to response since I am the one who started this whole conversation up a couple days ago. I am a second generation IBM'er. My Dad worked at IBM 37 years and he pays more and more each year for HIS medical - upwards to $250.00 a month and he has been retired over 17 years. And to add my step mom on it would double his payments - and he is on a fixed income with medicare his first option and IBM plan second! But at least he has the old IBM retirement so he has a decent retirement.
    The reason some of us are 'bitching' is because - me for example was a no choicer. If I make it to 30 years and get forced out - my retirement calculator says I get about $16,000 a year in retirement! How can I afford this health insurance with that retirement? Do I have a 401K? thank God I was smart enough to put money into that since I have been with the Company - but that will only put me in low 30's per year if I buy an annuity. Again - how can I afford this health care insurance?
    So are we pissed? YES
    Do we have a right to be? YES - is it annoying that after giving our life and loyalty to a co. that we would get what we were TOLD we would have pulled out from under us? Like retirement and health insurance? Yes and Yes. Sorry - but that is what this is about. Yes we planned for car insurance and home owners insurance in retirement - and a decent retirement and reasonable health care. Without the last two WE ARE SCREWED.
  • "2.6 Billion reasons the 600,000 IBM shareholders should show up" by "ibmmike2006". Excerpt: If you are NOT coming to the IBM shareholder meeting next week, and you are one of those 600,000 IBM shareholders who sit home, and when the average attendance is 400 with 200 IBMers watching the other 200 shareholders, you might want to take a drive to Knoxville, TN at 10AM on Tuesday April 24th and be there. Many of you wonder why, well, there are 3 proposals on the proxy ballot to restructure IBM.
    The guy in charge is Randy McDonald, remember Randy was the architect of the Cash Balance Conversion where most IBMers lost 50% of their pensions. Was successful in removing $10 Billion from the IBM Defined Benefit Pension plan and implemented the SERP and EDCP that gave Sam a lifetime pension, if Sam's average earnings are $25 million a year which looks like he is making the "$25 million number" and will receive $22,000 a DAY lifetime pension for he and his spouse and if a cost basis of $125,000,000 is put in an annuity for Sam, the SERP benefit will be 75% tax free.
    I think some of you should show up. This chart has since disappeared after given to a reporter at the shareholder meeting, but if you want to dig, you will find it. There are major issues that appear out of Randy McDonald's office every five years. Since he was successful in the theft of the $10 Billion from the IBM defined Benefit Pension plan with the Supreme Court win in the Cooper vs IBM case, this is the next phase of Asset Theft.
  • Yahoo! message board post: "Proxy Shareholder 3 through 6" by "ibmmike2006". Full excerpt: Reading the Proposals and the reasoning given for the proxy proposals 3 thru 6, lowering the approvals from two-thirds to simple majority, it appears the IBM Executives are setting up the IBM Corporation to make it easier for a buy out, hostile takeover, or to be dissolved. Stock will spike, assets will be sold and the Pension trust fund will disappear. What do you think?
    • Proxy Shareholder #3 - To Adopt a plan of Merger or Consolidation If approved, the number of IBM shares needed to Merge or Consolidate...assume another company or Leveraged Buyout by Carlyle (Gerstner) or Bain requires only simple majority of shares voted instead of two-thirds.
    • Proxy Proposal #4 - To approve the sale, lease, exchange or other disposition... Sale, Lease, exchange or other disposition of all or substantially all assets outside the ordinary course of business...assume after another company or Leveraged Buyout by Carlyle (Gerstner) or Bain, assets not needed to conduct business are sold and requires only simple majority of shares voted instead of two-thirds. Bye Bye Pension Trust Fund like KB toys along with buildings and anything not tied into course of business.
    • Proxy Proposal #5 - Plan for the exchange of shares To adopt a plan for the exchange of shares...assume another company or Leveraged Buyout by Carlyle (Gerstner) or Bain requires only simple majority of shares voted instead of two-thirds to exchange shares with another company like a merger with HP.
    • Proxy Proposal #6 - Authorization of Dissolution To authorize the dissolution of the Corporation...assume another company or Leveraged Buyout by Carlyle (Gerstner) or Bain requires only simple majority of shares voted instead of two-thirds.
  • Washington Alliance of Technology Workers (WashTech): Pathway to immigration falling short for high-skilled workers. Excerpts: Proponents of the H-1B visa program, which enables international workers to be employed in the U.S. for up to six years, argue that the temporary work visas are the best way for the U.S. not to lose out in the global technology race. They also argue that the visas offer a "pathway to immigration" for highly skilled workers.
    This blueprint for immigration..."whereby a skilled worker comes to the U.S. on an H-1B visa and eventually applies for a green card" would on the surface appear to benefit the individual, the company, and the U.S. economy.
    But new evidence suggests that few H-1B workers get green cards and become permanent U.S. citizens, casting doubt on the long-term goals of guest worker visa advocates. [...]
    "If you look at top H-1B requesters, basically they simply don't sponsor many people for green cards, the actual pathway to immigration and citizenship," said Ron Hira, a research associate at the Economic Policy Institute and longtime critic of guest worker visa programs.
  • Fox News: Change Your Mindset About Social Security. Excerpt: One of the most (financially) significant decisions you face as you approach or begin retirement is also one that few people spend any time thinking about: when to start receiving Social Security benefits. That’s unfortunate because the date you choose will impact your income for literally the rest of your life. The record shows that the majority of retirees begin receiving their monthly Social Security checks when they reach age 62, the earliest date possible. My hunch is, this decision is based on the flimsiest of criteria: “Because I can.” In many cases, this is a huge mistake.
  • BenefitNews: Fighting for staying power. By Lynn Gresham. Excerpts: Employee retention has nosed out cost control as employers' No. 1 benefits objective. More than half of employers (55%) now rank "retaining employees" as their top benefits goal, according to the fifth annual MetLife Study of Employee Benefit Trends. The percentage was even higher among companies in certain industries, including retail (62%) and services (59%). In 2003, less than 50% of employers indicated retention was their primary goal.
    "This is a significant change," says Ronald Leopold, MetLife's vice president of institutional business. "We're at a tipping point. We've gone from a buyer's market to a seller's market where benefits are becoming a much more important lever to use in attracting the best talent and retaining people."
  • Yahoo! message board post: "Projected FHA balance: $45K - Projected need by NetBenefits:$900K w" by "thekanck". Full excerpt: My Projected FHA balance at age 55 is about $45K IBM NetBenefits website projects (myself + spouse) lifetime healthcare cost starting at age 55 on to be a very modest $900K Why worry? ;-/ Sigh, TK
  • New York Times: Parsing the Truths About Visas for Tech Workers. By Steve Lohr. Excerpts: The United States has benefited immensely from its role as a magnet for the best and brightest workers from around the world, especially in innovative fields like high technology. Bill Gates, the chairman of Microsoft, sounded precisely that theme in Senate testimony last month when asked about the visa program for skilled workers, the H-1B.
    Mr. Gates said that these workers are “uniquely talented” and highly paid — “taking jobs that pay over $100,000 a year” — and that America should “welcome as many of those people as we can get.”
    But that is not how the H-1B visa program as a whole is working these days, according to an analysis by Ronil Hira, an assistant professor of public policy at the Rochester Institute of Technology. The median salary for new H-1B holders in the information technology industry is actually about $50,000, based on the most recent data filed by companies with the United States Citizenship and Immigration Services agency. That wage level, Mr. Hira says, is the same as starting salaries for graduating computer science majors with bachelor’s degrees.
    Yet salaries, according to Mr. Hira, are only part of the story. He says that while Microsoft may be paying its H-1B visa holders well and recruiting people with hard-to-find talents, other companies have a different agenda. The H-1B visa program, Mr. Hira asserts, has become a vehicle for accelerating the pace of offshore outsourcing of computing work, sending more jobs abroad. Holders of H-1B visas, he says, do the on-site work of understanding a client’s needs and specifications — and then most of the software coding is done back in India.
  • Columbia Daily Tribune: Motorola workers split into pension haves and have-nots. Excerpts: There are two kinds of employees working in big companies: Those hired in a paternalistic era when pensions were common, who will get retirement payments for life; and those who signed on after such rich benefits disappeared, who will retire on what they can save and invest, with a little help in the form of matching contributions from their employers.
    In truth, not even the veterans’ pensions are immune from corporate cost-cutting. Often a company’s decision to close its pension to newcomers is a prelude to trimming retirement benefits for other active employees, pension experts said.
    A case in point is Motorola Inc. [...]
    Effective next January, Motorola will change the way it calculates benefits for employees who were in the plan before it closed, resulting in smaller payouts for 24,000 workers. Retirees are unaffected. "It’s a variation" on pension freezes, "but the theme is still the same: Less is being provided through defined-benefit plans," said Dallas Salisbury, president and chief executive of Employee Benefit Research Institute, a Washington, D.C.-based not-for-profit. [...]
    A total freeze means benefits stop accruing, leaving employees with the pension they earned up until the freeze. IBM, Coca-Cola Bottling and Circuit City are among the employers that chose this route.
  • The Nation: The Establishment Rethinks Globalization. By William Greider. Excerpts: The church of global free trade, which rules American politics with infallible pretensions, may have finally met its Martin Luther. An unlikely dissenter has come forward with a revised understanding of globalization that argues for thorough reformation. This man knows the global trading system from the inside because he is a respected veteran of multinational business. His ideas contain an explosive message: that what established authorities teach Americans about global trade is simply wrong--disastrously wrong for the United States.
    Martin Luther was a rebellious priest challenging the dictates of a corrupt church hierarchy. Ralph Gomory, on the other hand, is a gentle-spoken technologist, trained as a mathematician and largely apolitical. He does not set out to overthrow the establishment but to correct its deeper fallacies. For many years Gomory was a senior vice president at IBM. He helped manage IBM's expanding global presence as jobs and high-tech production were being dispersed around the world.
    The experience still haunts him. He decided, in retirement, that he would dig deeper into the contradictions. Now president of the Alfred P. Sloan Foundation, he knew something was missing in the "pure trade theory" taught by economists. If free trade is a win-win proposition, Gomory asked himself, then why did America keep losing? [...]
    Now Gomory is attempting to re-educate the politicians in Congress. He has gained greater visibility lately because he has been joined by a group of similarly concerned corporate executives called the Horizon Project. Its leader, Leo Hindery, former CEO of the largest US cable company and a player in Democratic politics, shares Gomory's foreboding about the destructive impact of globalization on American prosperity. Huge losses are ahead--10 million jobs or more--and Hindery fears time is running out on reform. [...]
    At IBM back in the 1980s, Gomory watched in awe as Japan and other Asian nations captured high-tech industrial sectors in which US companies held commanding advantage. IBM invented the disk drive, then dropped out of the disk-drive business, unable to compete profitably. Gomory marveled at Singapore, a tiny city-state, as it lured American manufacturers with low-wage labor, capital subsidies and tax breaks. The US companies turned Singapore into a global center for semiconductor production.
    "It was an unforgettable transformation," Gomory remembers. "And it was pretty frightening.
    "The offer that many Asian countries will give to American companies is essentially this: 'Come over here and enhance our GDP. If you are here our people will be building disk drives, for example, instead of something less productive. In return, we'll help you with the investment, with taxes, maybe even with wages. We'll make sure you make a profit.' This works for both sides: the American company gets profits, the host country gets GDP. However, there is another effect beyond the benefits for those two parties--high-value-added jobs leave the U.S."
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Los Angeles Times: Health insurance options dwindle for self-employed. Group plans are being dropped or becoming unaffordable to many. By Lisa Girion. Excerpts: A major source of health insurance for people who work for themselves is disappearing, casting thousands of contractors, freelancers and solo practitioners into the ranks of the uninsured with little hope of obtaining new coverage.
    Health plans offered by professional associations were once havens for millions of people who couldn't get coverage anywhere else. But as medical costs have soared, groups representing professions as varied as law and golf have been forced to stop offering the benefit or been dropped by insurers. [...]
    Insurance carriers began pulling out of association markets about 10 years ago amid mandates requiring the groups — like employers — to offer coverage to all members who wanted to buy it, regardless of preexisting conditions. Unlike employers, however, who typically pick up the much of the premiums for employees, most associations do not share in the costs. Instead, they arrange for their members to purchase coverage at group, rather than individual, rates.
    In today's marketplace, that's almost always a better deal for older members and often the only option for people with preexisting conditions. But insurers are eager to sell individual policies to the young and healthy for as little as $100 a month, scooping the cream off the risk pool. That leaves higher-risk older and less-healthy people to the group market, resulting in what is known as adverse selection.
    As healthy members leave an association health plan, the concentration of members with higher-than-average medical costs increases. That forces the underwriter to raise premiums. A "death spiral" sets in, when medical costs exceed the plan's ability to raise premiums to cover them.
  • Rocky Mountain News: Hospitals give the wealthy a leg up. Executive physicals save time, provide best in diagnostics. By Joyzelle Davis. Excerpts: A balcony with a sweeping view of the Rocky Mountains, 350-thread-count linens, flat- screen TV and a PC with a broadband Internet connection.
    If that sounds more like accommodations at the Four Seasons than a hospital room, that's the idea. The Pavilion Suites at the University of Colorado Hospital are just the latest example of regional and national hospitals catering to the booming niche of health care for the affluent.
    Rose Medical Center recently created a private VIP entrance for plastic surgery patients and offers a concierge service to run errands during recuperation.
    At a time when hospitals are strained by cutbacks in reimbursement rates from private and government insurance programs, high-end patients either pay out of pocket or have their tab picked up by their employer as a corporate perk. For services such as a comprehensive physical, the bill can range from $1,500 to upward of $7,000, depending on the tests selected.
  • Physicians for a National Health Program: Physician Consideration of Patients’ Out-of-Pocket Costs in Making Common Clinical Decisions. By Hoangmai H. Pham, MD, MPH; G. Caleb Alexander, MD, MS; Ann S. O‘Malley, MD, MPH. Excerpt: As insurers and employers seek to control health care spending in the post-managed care era, patient cost sharing is likely to remain a prominent tool for influencing health care utilization. How well this works depends in part on physicians’ sensitivity to their patients’ OP costs, because physicians are responsible for decisions that affect how 90% of each health care dollar is spent. We found that while most physicians reported routinely considering patients’ OP costs in clinically straightforward prescribing decisions, only half or fewer do so in more complex situations that allow greater clinical discretion.
  • Wall Street Journal: AARP to Offer Health Coverage To Wider Group. By Vanessa Fuhrmans. Excerpts: The powerful senior lobby AARP announced an ambitious expansion in the health-care products it markets to older Americans, targeting in particular the roughly 7 million who are still under the age of 65 and have no coverage.
    As part of the expansion, the 38 million-member organization renewed and expanded a longstanding contract with UnitedHealth Group Inc. to continue to sell AARP-branded indemnity health plans, Medicare supplement policies and drug benefit plans. It will also market private, comprehensive Medicare plans, known as Medicare Advantage, under the AARP name. The group also struck a new partnership with Aetna Inc. to design, underwrite and administer a range of health plans for the under-65 set.
    AARP says its move is an effort to improve the health and to bring more affordable and stable health care coverage to a population that increasingly finds it out of reach. Unless they're covered by an employer, many Americans between the ages of 50 and 64 find individual insurance either too expensive or simply unavailable from health insurers eager to avoid customers in declining health.
  • Kaiser Family Network: Prescription Drug Costs Cause Some High-Deductible Plan Members To Stop Treatment, According to Report. Excerpt: Some patients enrolled in high-deductible health plans fill fewer prescriptions for medications rather than switching from brand-name drugs to generic versions, according to a report released on Tuesday by Express Scripts, the St. Louis Post-Dispatch reports. Express Scripts reviewed the health care claims of two national employers that began offering high-deductible plans in January 2006. Researchers compared the first nine months of 2006 with the first nine months of 2005 in terms of prescription claims. They found that employees in the high-deductible plans filled fewer prescriptions while paying a higher percentage of drug costs.
  • The Ottawa Citizen, courtesy of the California Nurses Association: Health care just as good, half as much as in U.S., report says Ex-CMAJ editors feature study in new web journal. By James Gordon. Excerpts: Canada's health system is as good or better than that of the United States and is delivered at half the cost, new research suggests. A review in the inaugural issue of online medical journal Open Medicine, which was launched yesterday by a group of doctors who left the Canadian Medical Association Journal last year over an editorial dispute, examined the results of 38 major studies that compared health outcomes of patients in the two countries.
    It found that while the United States spent an average of $7,129 U.S. per person on health care in 2006, compared with $2,956 U.S. per person in Canada, more studies favoured the latter country in terms of morbidity and mortality. They covered a wide range of diseases and conditions, including cancer and coronary artery disease.
  • New York Times: The Plot Against Medicare. By Paul Krugman. Excerpts: The plot against Social Security failed: President Bush’s attempt to privatize the system crashed and burned when the public realized what he was up to. But the plot against Medicare is faring better: the stealth privatization embedded in the Medicare Modernization Act, which Congress literally passed in the dead of night back in 2003, is proceeding apace.
    Worse yet, the forces behind privatization not only continue to have the G.O.P. in their pocket, but they have also been finding useful idiots within the newly powerful Democratic coalition. And it’s not just politicians with an eye on campaign contributions. There’s no nice way to say it: the N.A.A.C.P. and the League of United Latin American Citizens have become patsies for the insurance industry. [...]
    Public opinion is strongly in favor of universal health care, and for good reason: fear of losing health insurance has become a constant anxiety of the middle class. Yet even as we talk about guaranteeing insurance to all, privatization is undermining Medicare — and people who should know better are aiding and abetting the process.

New on the Alliance@IBM Site:

  • From the Job Cuts Status & Comments page
    • Comment 04/17/07: Rumor mills going 240 MPH.. supposedly a spectacular announcement supposedly will be out this month.. I don't think it will be positive news.. anyone hearing any other rumors or facts -Ibm employee ?-
    • Comment 04/17/07: First quarter profit reports are great, but they can always be better can't they. To improve we will discuss strategies in the next meeting. Translation, cut more people in those areas. That's all the execs know how to do. If they didn't rape the company maybe we would do better. -IBMSUKS-
    • Comment 04/17/07: A response to Joe - from everything I have seen as an insider working the LEAN implementation within IBM, it appears the company is doing practically nothing right - it's an abomination of LEAN. The execs and management leads are clueless about LEAN principles and are misusing it as an unsharpened axe to force onerous cuts in headcount. It will be a disaster for the company and our customers, but more so for the employees - those who get booted from the company, and also those who keep a job with double the workload as before. Nobody wins except the execs with this implementation. -Another Joe-
    • Comment 04/18/07:A young employee was telling me how a trainee working in India that was supposed to assist his team is now called a transitions team member, meaning he's not really there to help, he's there to take the trainer's job! The employee doing the training said he's is now telling the 'transition' employee virtually nothing, when asked a question he responds, "it's in the database you just have to read it"! This same employee that caught on to the 'train your replacement" game has the same attitude about lean,.. "how can I train for lean when I can barely keep up with work, it's a total joke"...
      Ah yes, another brilliant ivory tower scheme that is receiving all the enthusiasm of a root canal from the employees while wasting millions of dollars on travel and meetings, go Randy! This could be the greatest idea since stealing pensions which got the last great HR maverick the boot! Oh yeah and it reverses the employee rating method, now being a 1 will mean, see ya'later!-HR-follies-
    • Comment 04/18/07: I understand that China is graduating many top notch MBA's from their Universities. Here's a great idea! Let's out source Director and VP jobs to China. I heard we can get them a lot cheaper. Nearly three for one! What a savings that would be. All Director and VP work can be done from China as most of us have never seen our director or VP anyway. Since communications is so fast and since most of what the do is on conference calls and email, location would not be an issue. If Sam is reading this, please think seriously about his suggestion. Sending 2 or 3 hundred Director and VP level jobs over to China will really save a lot of money and give IBM that competitive advantage -Boca99-
    • Comment 04/18/07: HEY TICKEDOFF1STLINE: Can you give us any details on the severance pkg? 1 wk/yr of service to 26wks or 2wks/yr? Any other allowances for retraining or ???
      In other news: I work at an SO account in south east and we got some information on LEAN this week from the account exec. At least according to what she said Wave 3 of LEAN was originally to be 100 or so accounts and has been EXPANDED at the last minute to include 500 accounts (not sure if that is a total of 500 or a total of 600). All the account execs are beside themselves as they have no clue how to bring this news to the customer and be able to leave the room standing up...
      This will result in breach of contract suits and many customers kicking out IBM.
      The only explanation I can come up with is they need some "serious" window dressing in terms of expense reductions for 2Q .... ??? Put this together with the items up for vote on the shareholders mtg. proxy and what have you got ....Any other ideas? -Anonymous-
    • Comment 04/18/07: Rumor mill in Raleigh / RTP says 400 RTP Lenovians will be let go on Thursday, April 19th ... out of 1,600. That's one in four. -Anonymous-
    • Comment 04/19/07: SoftWare Group cuts coming soon to RTP. Don't ask who exactly because I don't know. -RTPsuks-
    • Comment 04/19/07: End-User Services is implementing a new support model, effective in the very near future. The model will effectively serve to eliminate the ever-shrinking workstation support that we do have left. Under this new model, unless you can meet certain rigid criteria to qualify as a Severity 1 issue, you will be directed to Self Help on w3 by the Customer Service Center (Help Desk). Plans also include to reduce all North American deskside by 40%, meaning that productivity for the rest of us is going to really go down the tubes if we have a PC issue. This is truly frightening to me, and makes me wonder why it is that the fat cats in Westchester think that workstation support is not an appreciated and needed function in this company. Salesmen and secretaries at car dealerships don't work on their own cars... they drive out back and ask the mechanic. This is no different! Shame on you, EUS. Shame! -TrulySaddened-
    • Comment 04/19/07: Phase 3 was supposed to be 100 Accounts in the SO area. Now I have heard that its like over 600 Accounts now. Creating core groups and moving people to these core groups taking them away from individual accounts. But not much news about this LEAN program. I searched w3 and found a Wiki about it. Read up.....ODD thing is that we got an email recently about Careers and IBM offering information about resume creating and interview tips....Oh well time to bail out of a sinking ship. -IndiaBrazilManagement-
    • Comment 04/19/07: "we’re going to utilizing a much larger share of that existing operational rebalancing in our GTS organization, specifically SO, specifically the United States. So, with those actions in the second quarter, we see that overall GTS margins should improve by the third quarter in the range of 9% to 10%. And I think we should really see some operating improvement in that business within the second quarter as well." Mark Loughridge - Q1 2007 Earnings Call.
      Under the dull leadership of Mr Moffat, the sponsor of IBMs LEAN lie "we can cut labor cost 40% and improve quality in 2 months " over 3000 GTS/SO US employees will be notified on May 1 that they are terminated as of June 1 which is only 30 not 60 days notice. IBM has changed their own rules that a sub contractor has to be fired before a regular employee in the same job so they can fire regulars in the second quarter. The regular employees are being fired because IBM came into some money in the second quarter through a business unit sale. Layoff costs will be covered by the business unit sale as not to impact the second quarter earnings.
      I doubt one of the hundreds of GTS/SO executives are being fired just the workers. The only employees IBM wants in America are the executives and their YES people in finance. The GTS/SO group did so poorly in the US because finance couldn't figure out their budget until the middle of March. It was too late. Someone should have gotten fired in finance but guess they will get a bonus instead by reducing cost through layoffs. If you work in GTS/SO – find a new job now. The IBM values are a lie so protect your self. -Anonymous-
    • Comment 04/19/07: I think that's a great idea to transfer the exec's job's to China. Sam wouldn't even have to upgrade his skills because there is always a calling for butchers. Wouldn't his nice face look great peering out at you from behind the meat counter? It's enough to freak the horse and chase the rider! -Anonymous-
  • From the General Visitor's Comment page:
    • Comment 04/11/07: Why don't some of you give up a Starbucks or 2 a month to support the Alliance? Those of us that do support the Alliance shouldn't pull all the weight! -sickofit-
    • Comment 04/17/07: Unbelievable.... In today's "First-Quarter 2007 Results" note, that fat bastard Sam has the gall to say "So, our results were good. But we should have done better." "We" did the best we could given the resources provided. "We" spend more time fixing problems creating by our cheap Indian drones, (whoops, meant to say Global Resources) than doing productive work. It makes me ill to be associated with Sam, he's gutted this once great company.
    • Comment 04/18/07: Sam complains that US Revenue is flat, guess what asshole, nobody in their right minds would recommend or buy any of your services or products after the screwing you have dome to America. I strongly suggest that you move your ignorant ass to China or India. -Anonymous-
    • Comment 04/18/07: "Anybody know what IBM does these days for employees making 25 years?" They give you a blindfold and a cigarette. -Anonymous-
    • Comment 04/19/07: I'm leaving IBM in a few weeks, of my own choice. I'm accepted a new position with a competitor with a significantly higher package.
      After 21 years, I'm sad but relieved to be on my way out. IBM used to be the largest IT company in the world, in fact one of the largest companies in the world. We've watched many other companies grow faster, generate loyal customers and overtake us.
      In the last 10 years, the very best people at IBM have left. It's a shocking waste of talent. In my job search, I had dozens of recruiters call me about opportunities at, yes, you guessed it, IBM. Apparently we are desperate to hire new talent, but on the other hand, as soon as it's here, we treat them like dirt and push them out the door.
      Sam and Randy, you better wake up soon. You may well be getting rich, but if you kill this company that will be your legacy, for generations.
      This week, we had flat revenues in the US announced, what a surprise. Morale is at an all time low, whatever HR says.
      Randy should have one PBC objective. Get IBM back in the top 30 companies to work for. When you do that, morale, passion, drive will follow. We will start to solve the problems that affect our customers, rather than just posturing and covering our arses. We will focus on rebuilding a company where we are valued, respected, and have some vested interest in the success of the company.
      These actions will be the start.
      Stop all Resource Actions.... retrain, relocate skills where necessary, but no RA. Stop the PBC system for 3 years, its a total farce, find some better system that recognizes contributions, not brown noses. Re-instate the 15% discount on stock purchase plan, so we can be shareholders too. Restore respect for the individual as the main focus of VP's downwards, as employees we contribute our best when we aren't under threat, aren't being assaulted by bullshit and lies on a day to day basis, and when we aren't sure that whatever we do this year will never be recognized anyway.
      Good luck, sorry I won't be around to see the patient on life support recover, or die. -Anonymous-
    • Comment 04/20/07: Based on the exec scorecard letters this quarter, something must be in the works. Doesn't matter IBM met expectations - all the letters managed to include at least one negative comment - many even using the same verbiage. Common themes - 'weakness', 'lackluster performance', 'disappointing start', 'flat growth', 'did not perform', 'did not achieve', 'fell short', 'lacked', and on. It's almost like the execs were given a guideline to ensure their letters would continue to drive morale further into the basement. Yet another quarter of thanks for the great work but it's still not good enough... -Anonymous-
    • Comment 04/20/07: Jim Cramer's Stop Trading! Eyeing Apple. By TheStreet.com Staff 4/20/2007 2:56 PM EDT. IBM could pick up a quick 15 points with a long overdue CEO change, Jim Cramer said Friday on CNBC's Stop Trading! segment.
      Cramer said Big Blue chief Sam Palmisano is on "a permanent intellectual vacation" and that the stock could easily drop 20% from a recent $94.50 if a new leader isn't selected. Cramer suggested helpfully that "maybe IBM could get a board of directors," since he said it's clear the Armonk, N.Y., company must not have one given Palmisano's continuing employment in spite of his sorry track record. -Anonymous-
    • Comment 04/20/07: Wow! What a great post. The post on 4/19/07 from a person with 21 years leaving IBM is so true. Let me sum it up by telling you what I actually heard from different Senior VP's at IBM: "Our products are good enough, they are just as good as our competition, we don't need additional research" - Good enough!!! I remember when IBM was BETTER, not just as good as..
      "Anyone in IBM can be replaced" - We just lost our SOA DE to Microsoft. The VP said "It's just an opportunity for someone else to step up".
      You are so correct about the PBC. What a joke. Visibility is the key (substitute "brown nose"). You are correct again. To move up in IBM you need to be visible, not the best, just the most visible. This is a new skill. Creative writing on your PBC also helps. It doesn't matter what you do if your VP or director does not know you. I agree. Get rid of the useless PBC and focus on respect for the individual. You will see this company turn around in a heart beat. -Anonymous-
    • Comment 04/20/07: Our Manager gave the feedback on the 1Q performance in our IBM country (a major English speaking country). And 2Q plan, everyone thinks the plan is made up to keep the whackos above happy & how the plan is met is anyone's guess (axe, axe, axe...). Everyone had a laugh (including our Manager) when it was stated that 1Q had been impacted by Executive bonuses being over plan (we assumed it was bonuses being paid in 1Q 07 from 2006 which was a crap year!!). What a joke. -Anonymous-
  • Pension Comments page
  • Raise and Salary Comments
    • Comment 04/8/07: Salary = 130K; Band Level = 8; Job Title = Advisory Engineer; Years Service = 27; Hours/Week = 40-50; Message = I'm happy that IBM has not been unionized, and happy that it looks like it will stay that way. Unions have contributed to the employment problems in other industries like steel, airlines and now auto manufacturing. Unions have become little more than organizations protecting those who can't hold a job on their own. -Mike-
    • Comment 04/10/07: Hey Mike: Based on your current salary and band you better watch your back since anyone close to the top of band salary could easily be a prime candidate for the next "30 day march"! IBM can easily hire someone(s) to do you job at well less than you are making! You might not like unions but without one what job protection do you really have in IBM? -Anonymous-
    • Comment 04/11/07: Salary = $105K + perf bonus (~$5K this year); Band Level = 8; Job Title = Service Delivery Manager/Project Manager; Years Service = 6; Hours/Week = 55; Div Name = IGS; Location = Not provided to protect the guilty Message = Can't believe how this company has regressed in benefits, bonus pay, people care, management philosophy and plain old common sense in the past 6 years. IBM's lousy deal crafters have made this job and company into a hellhole from which we may never recover. Considering moving outside IBM, but too tired and burned out to even do that. -Anonymous-
    • Comment 04/13/07: In 2007, anyone in job family 09A (exempt professional) WILL NOT be eligible for a raise. Only 1 performers are guaranteed a raise (if they are not in the job family 09A). Even 2+ are not guaranteed a raise... forget it if you're a 2 performer. -Anonymous
    • Comment 04/13/07: Salary = $103,500; Band Level = 8; Job Title = Project Manager/Delivery Manager; Years Service = 8; Hours/Week = 40+; Div Name = GBS; Location = Toronto, Canada; Message = Same stuff happening north of the border too. Not many raises or promotions going around in Canada. Typically only 2+ or 1 get raises and bonuses are limited to. Morale sucks. People work hard as dogs but rarely get a heart felt thank you from their management. I see it day in and day out. It is becoming really disheartening. IBM sure does not walk the talk..... work / life balance...what's that? -Anonymous-
    • Comment 04/15/07: Salary = 112K; Band Level = 8; Job Title = Adv SW Engineer; Years Service = 25; Hours/Week = 50-60; Location = Mobile'; Message = Posting for comparison purpose. -Hope to hang on till 30-
    • Comment 04/16/07: Salary = 89k; Band Level = 7; Job Title = IT Specialist; Years Service = 6; Message = Can we get some salary postings from IBM competitors such as HP, Dell, or Cisco? If I had hard numbers on how much I am underpaid (if I am at all), I might be motivated to start looking for work elsewhere. Please include years of service, bonus, information, current job role, location, etc. if possible. Thanks! -Anonymous-
    • Comment 04/16/07: Here's an update, with Band 4 added:
      • Band 4: 9 respondents, avg: $44K, standard deviation: $11K, range (min/max): $32K to $60K
      • Band 6: 19 respondents, avg: $64K, std dev: $7K, range: $53K to $78.5K
      • Band 7: 33 respondents, avg: $73K, std dev: $13K, range: $57K to $110K
      • Band 8: 35 respondents, avg: $98K, std dev: $16K, range: $60K to $130K
      • Band 9: 19 respondents, avg: $119K, std dev: $17K, range: $90K to $152K
      • Band 10: 11 respondents, avg: $146K, std dev: $26K, range: $107K to $190K -Anonymous-
  • PBC Comments

Vault Message Board Posts

Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. A few sample posts follow:

  • "GBS and GTS/ITS borrowing from SO/eBHS?" by "phooey69". Excerpt: As some of the longer term readers know, I come from the SO/eBHS side of the business. The work in SO, eBHS and related divisions is mostly outsourcing related.
    Recently, however, management has started discussing "opportunities" for working on GBS and ITS contracts. From what I gather, GBS and ITS are in need of PMs and architects.
    The benefit that has been promoted so far is that such work would be beneficial to SO/eBHS as well as GBS/ITS. To use the ever-popular lingo, there would be enhanced "synergy" between the different groups.
    I am wondering, however, if something bigger is happening. Is there simply an urgent staffing need that is prompting a search in other IGS divisions? Or is this a sign of bigger structural changes that may be coming along?
  • "Both" by "GTS Grunt". Full excerpt: There is a chronic skills shortage and we can't seem to get good people in ITS. At the same time, SO and eBHS is beginning to lose ground to commoditizing competition so they are idle.
    There is no doubt that June appears to be bringing major structural changes. The GTS sales plan was changed to a 6-month plan that ends in June, for probably that reason.
    IGS cannot stand with a division like ITS not making its targets for years.
    Rumors are rampant that in IGS except just the consulting arm of GBS is up for sale. SWG and STG have their own services organizations, so why have an IGS?
  • "Rationalization is needed" by "Dose of Reality". Full excerpt: There are too many overlapping services here, and we compete against each other. From diagnostics to transformation, to support/maintenance, each group along the chain competes with its neighbors, and there is insufficient structure to make each stay in its own lane.
    We should just stop pretending that we have an independent arm at the front of the chain (consulting), and consolidate the groups. It would be cleaner, cheaper, and easier to build the right balance of skills and capabilities; no competing for spend, and fewer botched handoff's.
    Of course that would mean fewer band C+'s, so it will probably never happen.
  • "Consolidation" by "phooey69". Full excerpt: If I were to make a guess, I'd say that consolidation is definitely part of the plan. The LEAN efforts that are taking place in Delivery are expected to significantly reduce the US staff in the service delivery centers, in favor of "global resources".
    What is not so certain, however, is what will become of the architects, PMs, etc. From what I can see so far, the consolidations have been among system administrators, operations staff, etc. That leaves a lot of band 8-10 staff standing around, especially in US and EMEA.
  • "Not quite all" by "jleti". Full excerpt: That says a lot Bigbluescrew but add in the following: "We're putting in place a series of actions to address our U.S. cost base, including a basic focus on resource and cost management disciplines and rebalancing of resources as we execute our global resource strategy."
    Translation: We will continue to reduce U.S. resources and replace them with global resources which are much cheaper.
  • "Translation of the translation" by "Dose of Reality". Full excerpt: "We will continue to chase and chew off our own tail until we have nothing left to sell".

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