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Highlights—January 26, 2008

• ZDNet UK: Strong results boost IBM's 2008 profit forecast. Excerpts: The world's largest computer services company forecast 2008 earnings would rise 15 percent to 16 percent, hitting $8.20 (£4.20) to $8.30 per share, while Wall Street analysts had expected $7.91 on average, according to Reuters Estimates.

  "That is above the Street consensus. They are going to save $800m from pension costs, year-over-year. But having said that, that is a good forecast." said Peter Misek, an analyst at Canaccord Adams.

• Christian Science Monitor: Seven things employees want most to be happy at work. Experts say job satisfaction begins with respect and appreciation, not salary and perks. By Marilyn Gardner. Excerpts: Ask bosses what makes employees happy at work, and many are likely to think in terms of tangible rewards: a good salary, a pleasant office, generous benefits. Those play a role in job satisfaction, of course. But increasingly, workplace specialists are discovering that for many workers, the "happiness factor" depends heavily on intangibles, such as respect, trust, and fairness.

  "Study after study has shown that it is the small things that make workers feel committed to an organization," says Barbara Glanz, an author specializing in workplace issues. "One study shows the top three things workers want are interesting work, full appreciation for the work they do, and a feeling of being in on things." ...

  "The most important factor in keeping employees happy is treating them with fairness and respect," says Pamela Skillings, a career coach in Jackson Heights, N.Y. "People want to be paid what they're worth, treated like adults, and rewarded for their good work." ...

  Andrea Kay, a career consultant in Cincinnati, finds that respecting employees' ideas and time, as well as their ability to make decisions and be creative, makes them want to stay. "My clients who are miserable are in companies with policies that focus solely on profits at the expense of people," she says.

• Wall Street Journal: IBM’s Salary Cuts. By Ben Worthen. Excerpt: IBM last week raised its earnings outlook for 2008. One reason it may make more money: IBM is cutting salaries for 7,600 employees by 15%. ...

  The AP also tracked down some employees, who, not surprisingly, are livid. “I was so angry I could hardly speak, and it takes a lot to make me angry,” said one. “I just don’t know how IBM expects us to take this and just run with it.” What does it mean for businesses that rely on IBM’s tech-support staff? In the long run, probably nothing. But for now, don’t be surprised if the person on the other end of the phone when you call IBM for help has a shorter temper than normal.

• Wall Street Journal: IBM’s Pay Cut is Bad Symbolism. By Ben Worthen. Excerpts: IBM’s decision to cut pay for some tech workers isn’t going over very well if the comments on yesterday’s post on the subject are any indication. ...

  Here are some of the things people who identify themselves as IBM employees are saying, with the caveat that we have no way of verifying if the people really do work for the company:

  • “It was very disheartening to know that all our hard work to provide quality to our customers, means we get a pay cut. Guess now we really know how they feel about us workers.”
  • “I’ve been with the Co. for more then 15 yrs. and I didn’t send back the form on that LAWSUIT. So I lose on that and now I have to pay for it. They just don’t care.”
  • “I am salaried and never expected to be paid overtime since I still get paid when I am home with sick kids or personal illness. IBM preaches Work-Life Balance, but how can you be so if you now have to work 50 hours to make up for the pay cut. And I am quite sure they will prevent you from working the overtime unless the customer has to make up for the overtime cost.” ...

  But symbolism matters. Sure, a blog is a magnet for a vocal minority, but there probably isn’t an employee out there who would be happy about a pay cut. When asked whether he worried that disgruntled employees would leave the company or that a drop in morale could lead to poor customer service, the IBM spokesman tells us that those issues are between employees and their managers.

• The following are selected comments posted on the Wall Street Journal Web site in response to Ben Worthen's blog:
  • We’ve already had issues trying to get support. I’m sure this will do wonders for us…… Comment by Annoyed customer..... - January 23, 2008 at 4:41 pm
  • They just don’t care. For the most part they’re getting away with it. You been in customer meetings? Biggest snow job you’ve ever seen. Just a bunch of charts and graphs and metrics to impress. The customer has no idea “what’s under the hood” until several months after the deal. Then all the problems arise. SLA’s get breached. Calls don’t get routed properly. Skilled techs are not available when needed because they were fired, or laid off, or are not allowed to work OT anymore. IBM is great at abusing it’s resources….err people. Comment by Burned again... - January 23, 2008 at 6:48 pm
  • Typical and not surprising. I worked for IBM as an outsource (not my decision) employee back in the early/mid 90s. I left within 2 years due to poor management and leadership. My pet dog would have been a better manager than the ones I reported to. As the old saying goes, “treat your employees well and they’ll treat you well.” Treat them like %^&*……… Need I say more? Comment by BinkysDad - January 23, 2008 at 8:31 pm
  • The cuts/restructure isn’t just affecting IT workers at IBM. About 40 administrative workers in my group today got changed from salary to hourly and got the 15% cut. These are people with college degrees and YEARS of business experience. The press isn’t picking up on the fact that this is affecting many more employees than just the IT workers involved in the lawsuit. Comment by Am Also IBMer - January 23, 2008 at 11:28 pm
  • Working for IBM is like being in a bad marriage. I joined in the early 80’s when “respect for the individual” still had meaning. I left in 2000 right after the pension change - I was one year of age shy of qualifying. A previous poster mentions ‘resources’… yes - when ‘individuals’ got transformed into ‘resources’ the marriage was over! Good luck IBM’ers. Comment by BeenGone8yrs - January 24, 2008 at 8:03 am
  • The cuts are indicative of IBM spiraling downhill with service and product reliability. IBM does not care due to it’s size what it offers customers or employees. How can the economy recover? When major corporations like IBM prefer to hire less skilled less experienced and less knowledgeable people to do the work. Comment by current IBM'r - January 24, 2008 at 8:06 am
  • IBM has not been a great place to work for a long while. I just left at the end of 2007 due to a resource action after 10+ years with the company. I did try to find another position within the company, but they sure made it difficult. Open positions would suddenly vaporize or get frozen, etc…. Not a good environment to be in.

    It was a good place to work at the start, but after a number years it just became a numbers game. All we got was lip service regarding education, etc.. Travel freeze, education freeze. Oh you could take any free online courses…. but that does not compare external stand-up courses…

    In many respects, I am glad to have left and look forward to finding a new opportunity elsewhere. I’ve always had a hard time listening to people on the inside and the outside saying how IBM was a great place to work.. From where I was ’sitting’ I could not see how anyone could say that IBM was a great company to work for. I wonder what they were sniffing/smoking?

    The company will save money on their contribution to the 401k since they only match on the base pay and not on the overtime pay… So the employee gets screwed twice.. first on the base pay and second on the 401k match.

  • It’s not just bad symbolism, it’s a sign of how out of touch company management is with reality. I voted with my feet and left IBM within the past year. To call the commenters a “vocal minority” is to casually dismiss the massive discontent within the IBM Global Services division. Comment by Timotheus - January 24, 2008 at 5:03 pm
  • Left Big Blue after years of 60+ work weeks, benefit take away and even threatened with a demotion after a work related injury !! IBM deserves ALL the bad press it can get after this move. Comment by Former Big Blue Accountant - January 24, 2008 at 8:27 pm
  • So overtime is going to make up for the pay cut? Right-seen this before. Keep your eyes and ears open, guys, because somewhere down the line in 2008, overtime will be so severely restricted only the saviest and most persistent few will ever be able to claim any. Ask the Band 6 folks if you dare. Comment by Mercury-Current Band 7 IBMer - January 25, 2008 at 1:57 am
  • Another example of what was once a great company, who focused on its’ customer, and attracted the best talent.. now only focused on earnings. IBM has completely lost sight of its employees and its customers. These workers are the ones that take care of customers, and this is how IBM treats them? I spent 14 years at IBM and left after watching them, time and time again over the last couple years, make decisions in favor of quarterly earnings, at the detriment of their lifeblood, the customers.. not to mention continuing to screw their employees.. Very sad big blue. At some point, they’ll run out of ways to cut and your continued loss of market share and diminishing customer satisfaction will catch up with earnings.. what then? Comment by Frank Baldino - January 25, 2008 at 9:39 am
  • Just my observation from what is going on but if I were one of IBM’s direct competitors I would think that now is a good time to pick up some great IBM employees and some new business by hiring some of the upset 7600 away from them. The impact to the company would be huge since the tech support roles have been LEANed and these people have a role in IBM’s critical business. In my opinion IBM is ripe for the picking and this could surge a competitor into the fore-front. It would be nice to see the IBM execs. crushed by there own greed and stupidity. Comment by Outside observer - January 25, 2008 at 9:50 am
  • Make it up with overtime. What a joke. What about the loss in company match to 401(k) based on base pay not base with OT. What about bonus’ if paid this year based on a % of base pay. What about all the others based on base pay. From now on IBM will get 85% effort. Comment by Another Current IBMer - January 25, 2008 at 11:03 am
  • This 15% pay cut has been height of all weirdest stuff going on within IBM for last few yrs. Had seen many players leave IBM in the last year, and just wondering if IBM main goal is get rid off as many players possible with these torturing measures. Just hope the folks at TOP know what they are doing before the whole company gets grounded. My feelings go for all those thousands of employees ( including me ) who have to bear this cruel treatment. Comment by Shocked IBMer - January 25, 2008 at 12:45 pm
  • It’s hard to know where to begin with this. I’m an employee affected by this cut, and I didn’t know that I had it in me to be this angry. The outrage expressed in this blog and other places is anything but a “vocal minority”. Make no mistake… the anger and discontent within IBM is stunningly broad and deep, and it’s not limited to those impacted by this latest indignity. This move is the latest–and most egregious,in my mind– in a long series of demoralizing moves…layoffs, job reclassifications, band reductions, benefit cuts, etc. I’m a free-market economist and I realize that I don’t own my job, but sound management and common decency should prohibit the scandalous treatment of employees by upper management that we have been witnessing over the last few years.

    A year ago my organization went through a laughable “LEAN” initiative. The entire thing collapsed under its own weight in two weeks, but not before most of the teams were “leaned” nearly out of existence. One week into the lean pilot, my team was cut by 60%. My dept.’s “global resources” ( i.e., peers in India) are good people, but they have weak technical skills and poor English, making them a hindrance rather than a help. They are system administrators for servers that sit here in the US, for which IBM has made no “hands and feet” arrangements. If the server goes down, there isn’t any skilled technician who can go to the server and troubleshoot it. If you’re an IBM customer, you might want to keep in mind that when something happens to your server, a wild scramble will likely ensue trying to club, cajole, or bribe someone into helping because the guy responsible for it is halfway around the world and there’s no plan in place to take care of it. Might not sound like a big deal, but if it’s the week before Christmas and your web server goes down, it could cost you a bundle.

    Raises have been almost non-existent, bonus pay is a joke, hours are long, and morale is so bad it would be funny if it weren’t so maddening. There are 9 layers of management between me and Sam Palmisano. NINE! You wanna save some money? How about taking a look at what those 9 layers are doing? And how much they’re earning? When I moved to the job I’m currently in, the move had to be approved by six layers of management. At the time I was earning $45,000. Six layers of management had to approve a lateral job transfer for a low-end job and it didn’t even involve a pay increase. What are they paying all those people for if they can’t make a simple decision like approving a job transfer with no additional compensation??

    IBM tells us that we’re not getting our pay cut, and that as long as we work 5 hours of overtime each week, we’ll bring home the same amount of money. The brazenness of that insult nearly takes your breath away. Just how stupid do they think we are? Past behavior is the best indicator of future behavior, so we all know how this will end up. We’ll get the overtime for a while, but eventually the screws will tighten, and then I’ll be trying to figure out whether to buy dog food or put gas in the car.

    Somehow IBM makes money in spite of itself, usually on the backs of good, decent people who are trying to raise their families and can’t or won’t take the risk of jumping ship. They work hard despite the abuse because they feel a responsibility to put in an honest day’s work and take care of their customers. IBM doesn’t deserve them. I’m sure that most investors don’t much care about the plight of people like me, but they might care about bad management. How are you going to attract and retain talent in a company that cuts its employees’ salaries on the heels of a banner year? Sooner or later this jig will be up.

    To “24 Years at Big Blue” …no, there are no bars on the doors and windows, but leaving a career position on which your family depends is not a trivial matter. Most people are working at IBM because they thought they were signing on to a company that would treat them with respect. We’re finding out differently the hard way, and IBM management couldn’t care less. Many people WILL quit, including me, as we should, and I’m sure that’s what they want. Fine. But it doesn’t make this bitter pill any easier to swallow. I also agree that there are many wonderful people working at IBM, including most of the people I work with on a day to day basis. Unfortunately, they’re not generally the ones making these decisions, so we’re left sitting on volcanoes all the time wondering where we’ll end up after the next explosion. Comment by Seeing red in big blue - January 25, 2008 at 12:49 pm

  • I was shocked to know that big business IBM would retaliate on its employees in this way for exercising their legal rights with the class action suit.. Once again the little man is paying the bigger price while their execs continue to make money hand over fists with their big bonuses. Big Business thrives as the families that are the back bone of big business suffers.. I really shouldn't be shocked or appalled.. That's the American way if you have George W Bush tell it. Comment by SHOCKED & APPALLED - January 25, 2008 at 2:34 pm
  • Granted IBM may have had some employees incorrectly coded as exempt, but now it seems like IBM is going to be incorrectly coding exempt employees as non-exempt! Is IBM making good business decisions? What are the IBM executives and upper management thinking of anymore? IBM has created a company that no longer pulls together as a team, a company that now has an “Us against Them” (i.e.: employees vs. management) mentality. It used to be that employees would do whatever they could to help IBM’s bottom line and its customers. Now IBM has become an: “IBM has screwed me over and over, so I give a rats ass about IBM” work force. How long can a company continue where upper management and employees are not pulling for the same team goal? IBM upper management better get their heads out the sand, pull this company out of its employee-moral death spiral, and recreate the IBM team mentality that made IBM what it once was. Comment by wakeUP - January 25, 2008 at 2:39 pm
  • Mr. Robert worked for IBM for about 15 years. One day Mr. Manager assigned Mr. India to be “trained” by Mr. Robert. After about 9 months, Mr. Manager called Mr. Robert to his office and notified him that his services were “no longer needed here” and that he was being laid off because his job was “moving to India.” Mr. Robert was offered another job at another IBM site after a demotion in both grade and pay. That lasted about one year whereupon Mr. Robert left the company. IBM stands for: Idiots Become Managers. Mr. Robert is now working for a large aerospace company as a development manager, and has authored or co-authored 5 patents. Life is good. Mr. Roberts advice? GET OUT! LEAVE IBM! Comment by Mr. Robert - January 25, 2008 at 2:55 pm
  • I was purchased by IBM during an outsourcing contract. Once the contract went steady state, 4 of my counterparts where let go. I was stuck supporting multiple sites working 24/7 with no other resources. I worked hard and did my job. At the end of the first year I was told that I could not be given a raise due to being at the top of my band. My manager would not re-band me. I supported that contract alone for 18 months and finally got transferred to a work from home contract which was nice but still no increase. When that contract went south I transferred to what I though would be a more secure position. I was told that re-banding me was being worked on but that is now impossible. I have worked for IBM for over 4 years with no increase in pay and health care coverage that has increased on average of 30% a year. This is pathetic. I did participate in the lawsuit and I have no regrets. I do take offense that the participants are looked down upon like we did something wrong. It wasn’t us that did wrong. It was IBM and their cowboy management style of riding a horse until it’s dead. Everyone that has not been treated fairly by IBM should join the union…. Comment by Enough is enough... - January 25, 2008 at 4:27 pm
  • Being a current IBM employee of 7 years with a 2+ PBC, I can vouch for most of what has been said here about the trials and tribulations imposed by management at IBM. I won’t go into the boring details of how I, and others, have been wronged. But, suffice it to say, I would not ever recommend employment with IBM to anyone for any reason. Now, to quote Ace Ventura, “Hey guys, I’ve gotta go. I have a date with your mothers.” Comment by I'm Laughing All The Way To A Severance Package - January 25, 2008 at 4:31 pm
  • Well, I recently received an advanced degree and am now making less than when I started with the company due to the 15% pay cut. Lucky me —where is the trust and responsibility in all relationships value that IBM preaches! Comment by Current IBMer - January 25, 2008 at 4:37 pm
  • I see that no one has mentioned that if you work over 10% OT, you have to get it approved by upper management. That means, that if you lost 15%, you are more than likely not going to be able to make it up with the OT hours because upper management will deny it. Personally, I think everyone that works for IBM should start refusing OT. Work 40 hours and let the customers just sit. What do we care anyway? We work ourselves into the ground and at every turn get slapped down with RA’s, pay cuts, no education, higher health costs, etc.. We have NO incentive whatsoever. So, let’s all go on an OT strike. I call for all IBMers to stop working any and all OT. If we all do it, it would send a message to the bastards at the top. And they ARE bastards. They increase their bonuses and raises, and we that actually do the work get nothing but threats, RA’s, and pay cuts. This whole thing has made me look at running from tech as fast as I can. And I used to really love it. Now that I have written the above, I realize that no one will have the guts to actually refuse to do OT.. I, for one, will not be working over 40 hours. Do you all have the stones to follow my example? I bet not. PROVE ME WRONG!!! Comment by Current IBMer - January 25, 2008 at 5:13 pm
  • Did not take part in law suit, and got screwed by IBM. little or no pay increases, work 60 hrs + per week for no pay and don't complain, do as a loyal IBM’er, bonuses go down, insurance costs go up, co-workers get fired and replaced by off shore employees, PBC ratings me nothing, get a great review and get a 15% pay cut , get poor review and get fired. Sam, I would love to know how you sleep at night, shame on you, take a good look at yourself, what goes around, comes around. If not in this life but the next, don't think you will be able to fool the maker when your time is up. One way ticket to the hot spot for you.. Comment by Blood not blue anymore - January 25, 2008 at 6:03 pm
  • So glad I left Blue last year. If I’d stayed I reckoned the peanuts they gave as raises would have taken me 7-10 years to get to the salary I’m on at my new company. This cut would have meant working another 10 years on top of that….It was hard enough finding an accurate way to document 40 hours of work - and management insisted you show 40 hours. Now those extra overtime hours will simply get charged to the customer. Biggest problem will be for those employees who work efficiently and finish their work in 40 hours. Since they don’t waste time and show 50+ hours on the books, will IBM create a ‘creative timekeeping- screw the customer’ activity in their time keeping application? Comment by Lucky me! - January 25, 2008 at 6:03 pm
  • There is more news coming folks. IBM is doing this pay cut to more than just I/T folks. Rumors are they want to eventually cut up to 25% of salaries. It will continue. It’s just the next in the series of steps to force US workers to quit. Cut pension, no raises in years, reducing variable pay, reducing benefits. They want to move all work overseas. Easier than layoffs and having to pay severance. They don’t care about US , just the stock price. Nice timing too, with us suffering as it is with the economy. All other workers beware, there is nothing stopping other corporations from pulling same stunt. Wait and see. Comment by Soon to be ex-ibmer - January 25, 2008 at 6:33 pm
  • Mr. Worthen, I would love to see your paper or any new media challenge Sam and the boys to field questions on this matter. Better yet how about a off site, town hall meeting with a panel of IBMer, ex-IBMers, customers, lawyers, federal labor reps, the works. I personally would love to challenge Sam to show good faith by cutting the top 20 IBM executes salary for 1-2 yrs as a “good gesture” to their employees. I know that this is a lala-land dream, but still someone needs to challenge the powers or maybe us IBMers should all do a BLUE-FLU week. Just to make a point. Please respond to this note, thanks Ben! Comment by Zuki750 - January 25, 2008 at 7:04 pm
  • “Shadowing this trend , IBM recently conducted a worldwide conference call in which senior executives stressed accelerating the transfer of white-collar, often high-paying jobs overseas, even if it means a backlash from U.S. politicians and its own employees. During the call, which was recorded by a participant and sent to The New York Times, the employee relations executives 3 million service jobs were expected to move abroad by 2015 and that IBM would move software design from North America to such countries as India and China.” PM Network | December 2003 | www.pmi.org Was in a town hall shortly after this story broke. VP, SSO Americas, in a less than composed manner, indicated that the person who leaked the story should be run out on a rail. Your IBM. Comment by me2 - January 25, 2008 at 7:36 pm
  • Has anyone stopped to think what it will do to retirement if you are eligible under the old plan? My understanding is the retirement is figured on the last five years’ pay you earned. Hmmm, let’s see, didn’t they just cut retirement pay too? By the way for those of you who don’t know, IBM no longer has a retirement plan - only the 401K.

    IBM will continue to cut and send jobs overseas until IBM is basically a front office for overseas jobs. Because we have no innovative leaders in the company, the only way they can figure out how to make money for IBM is to hurt their employees and be unAmerican and send the jobs overseas - but they will get richer and make a heck of a lot of people poor and probably throw our country into at least a big-time recession and who knows, maybe even a depression.

    I agree with the post that more jobs will have pay cuts in the near future. Once IBM is successful with this cut, then they will move on to another group. Oh by the way, watch out those of you in other companies. When your management sees IBM is successful in this new “cost cutting venture”, they will be jumping on the bandwagon and there will be pay cuts in your company. Comment by IBM (I've Been Mugged) - January 25, 2008 at 8:06 pm

  • This latest pay cut shows a brazen disregard for employees and the arbitrary way this cut is being implemented is idiotic. The current leadership is almost completely cost driven. American workers are being phased out in favor long term supplemental, contractors and Global Resource. Even some of the global resource are contractors. I am looking forward to leaving this company shortly. I would not recommend it to anyone with its current leadership. As a first job you might stay two years to get experience but if you stay longer than that you most likely will be wasting your time. Comment by dead end job - January 25, 2008 at 9:09 pm
  • Well, the company shills came up with yet another brilliant idea. “Lets send a message to all those who dare challenge IBM”. Great idea—piss off 1000s of people who didn’t sue you and didn’t want any overtime. You want to turn all these people into hourly emps? Watch and see what happens. In this day and age, salaried people are working from home, tied to cell phones, email, instant messaging, etc. You never really seem to be able to get away from your job. But, most salaried people will just take that as part of the job. Well, that was true before you cut their salary and make them hourly employees. Hey, IBM–guess what happens now? All those “freebies”–being called from work in the middle of the night, while out with your family seeing a movie–skipping lunch to attend a meeting, coming in early, staying late, working lots of weekends and holidays and even pulling all-nighters. Now, that's all finished. Now you are going to discover how much of their time your employees have been giving you for free–without complaints, without lawsuits. BRILLIANT!!! Comment by joebob - January 25, 2008 at 9:44 pm
  • I left about 14 months ago and my old group (IT security advocates and internal controls testers) is impacted by this ridiculous action by IBM management. I am talking about competent, LOYAL, hard working people! SMART people! This is totally outrageous. I really can’t believe it. My heart goes out to everyone! Lots of jobs for folks with your skills at better pay on the outside! Comment by Another former IBMer - January 25, 2008 at 9:53 pm
  • How can we be talking about sending $600 dollars to people as a wonderful salve for the middle class’ economic woes while allowing IBM to arbitrarily reduce these same people’s salaries while posting record profits from off-shore. Investigate IBM’s claim that they pay market rates - promise its not true - solving this would be a REAL answer for the middle class. Comment by former IBM'er - January 25, 2008 at 10:37 pm
  • If you work in the Global Services where they just cut 1000’s by 15%, also understand that the exempt employees still have to work enough overtime to be 100% billable. 100% billable means 40 hours a week 52 weeks a year. What that means, if you are out on the “paid” Holidays, if you take your earned vacation, you have to work enough overtime to pay that back to IBM. So as an exempt employee you have to work the overtime to pay back the benefit of 12 holidays (where’s the benefit), and if you get vacation, anywhere from two weeks to 5 weeks, then you have to work that many weeks in overtime to pay back that great vacation non-benefit IBM gave you. In hours they say you should work 2100 hours a year. If you worked 52 weeks (every week of the year) 40 hours a week that totals 2080 hours. Guess what that means no paid holidays, no paid vacation. For those with the 15% pay cut. You can be sure that in three months, when this pay leveling of overtime is over (5 hours per week to help make up the lost wages there will be reduced overtime for those who’s pay was cut, but even more overtime will be put on the exempts. So those of you who think IBM is such a great place to work, I’d like to know if other companies require you to pay back your benefit of vacation and paid holidays. Comment by No Benefits - January 25, 2008 at 10:38 pm
  • As a middle line manager at IBM, I must say I, as well as my management peers are embarrassed to say we even work for such a company. A company who cares nothing for their employees. Take it from me…I live this horror show every day.. Comment by Mad as Hell - January 25, 2008 at 11:00 pm
• InformationWeek: IBM Responds To Overtime Lawsuits With 15% Salary Cuts. Company will make affected workers eligible for overtime, but employees say they'll earn less. By Paul McDougall. Excerpts: IBM in recent months has been hit with lawsuits filed on behalf of thousands of U.S. employees who claim the company illegally classified them as exempt from federal and state overtime statutes in order to avoid paying them extra whenever they worked more than 40 hours per week.

  The good news for those workers is that IBM now plans to grant them so-called "non-exempt" status so they can collect overtime pay. The bad news: IBM will cut their base salaries by 15% to make up the difference, InformationWeek has learned. The plan has been greeted with howls of protest from affected workers.

  The payroll restructuring goes into effect Feb. 16 and applies to about 8,000 IBM employees classified as technical services and IT specialists, according to internal IBM documents reviewed by InformationWeek and sources at the computer maker.

  The plan calls for a "15% base salary adjustment down across all units with eligibility for overtime," the documents state. The move is a direct response to the employee lawsuits -- at least one of which has apparently been settled. "To avoid protracted litigation in an area of law widely seen as ambiguous, IBM chose to settle the case -- and to conduct a detailed review of the jobs in question," the documents state. ...

  IBM also plans to lobby state and federal officials for changes to employment legislation that would allow high-tech companies to escape current overtime thresholds, according to the documents. "IBM believes aspects of the wage and hour laws have not kept pace with the realities of the modern workforce. The company will continue to press the government to update and clarify the law in this area," the documents state.

  Under the salary adjustment, an IT specialist at IBM earning $80,000 per year would see his or her pay cut by $12,000 per year, the documents show. But IBM states it won't save any money because workers will gain back lost salary through overtime pay.

  Some IBM workers fear they'll end up working more -- for less money. "In one swoop, everything I've worked for the last seven years is gone. All the extra time and hours ... have done nothing but give me a 15% pay cut," one employee wrote on a job board maintained by an IBM workers' group called Alliance At IBM. ...

  Some IBM workers said they're particularly upset that the cuts come just days after IBM announced quarterly and year-end financial results that exceeded financial analysts' expectations. Referring to IBM CEO Sam Palmisano, one employee wrote that "Sam promised Wall Street a good 2008 -- that will come at the expense of more U.S. workers."

• The following are comments posted on InformationWeek's Web site commenting on the article:
  • They won't save any money by doing this??? They will save millions due to reduced coverage in life insurance benefits, reduced 401k costs, reduced profit sharing, reduced sick time pay, reduced vacation pay, and reductions in everything else that is based on base salary. Then around 3rd or 4th quarter, when IBM wants to make their numbers look better, they will send out an announcement to management that overtime needs to be cut. What happens to our ability to make up the pay cut through overtime then?
  • As one of the affected workers, it was all I could do to hold my tongue as our manager told us of this in a meeting this afternoon. You could have heard a pin drop in the room after this announcement. We were all stunned. We were part of an outsourcing a year and a half ago & had already taken pay cuts at the company we were outsourced from. Most of us haven't received anything additional in compensation in that time period & so were already below market for our positions; then this comes along??? ANOTHER 15% on top of already low pay? It's disheartening to say the least. This comes at a time when they just announced better than expected numbers for last year too. I'm sorry, but when did the price of my consumables go down 15% recently??? I guess I'm going to have to start hooking to make up the difference!
  • As one of the affected myself, I've got to say that while it's not a straight up 15% cut in all practicality, the OT offered will not make up for it completely and the OT is NOT guaranteed. I've not heard that employees should be tight lipped about it. I don't know how they can expect them to be? I think the above mentioned manager just doesn't want the headache.
• CNN/Money: IBM Riles Employees With Base Pay Cuts. IBM's Response to Overtime Lawsuit Has Some Employees Fretting and Fuming Over Base-Pay Cut. By Brian Bergstein. Excerpts: Even as IBM Corp. reports record profits, thousands of its U.S. employees are staring at pay cuts. It's the result of IBM's response to a lawsuit in which the company was accused of illegally withholding overtime pay from some technical employees. IBM settled the case for $65 million in 2006 and has now decided that it needs to reclassify 7,600 technical-support workers as eligible for overtime. But their underlying salary, the base pay they earn for their first 40 hours of work each week , will be cut 15 percent to compensate. ...

  IBM spokesman Fred McNeese said the move would not save the company any money, because the affected employees generally should find that overtime pay makes up for the salary cut. However, internal documents obtained by The Associated Press indicate that many workers will lose money.

  These documents, prepared for managers who have had to break the news to their underlings, say that one-third of the affected workers _ more than 2,500 people _ generally do not work enough hours to make up for the 15 percent cut in base pay. IBM is offering a one-time "transition payment" to reimburse affected workers for the losses they suffer in the first three months. ...

  One document, labeled a confidential "Q&A for customers," lists this sample question that an IBM client might ask: "What has been the reaction of employees who are being reclassified?" The suggested response for managers: "They understand this is something we must do under current interpretations of the law and to remain competitive within our industry."

  It is clear, however, that many employees are furious.

  They worry that opportunities to work more than 40 hours per week, the point at which federal law requires overtime pay for eligible workers, will be reduced now that IBM has an incentive to trim employees' time on the clock.

  One 20-year IBM veteran who usually works 50 to 52 hours a week, enough to come out ahead now that she can get paid overtime, expects to see her hours reduced. "Anybody who's been in IBM knows that when they look to cut costs, that's where they're going to cut it," said the employee, who spoke to the AP on condition of anonymity because she fears reprisals from the company.

  Even if they make enough overtime to compensate for the lower base pay, the IBM workers' now-reduced salaries will carry corresponding reductions in what they are eligible for in life insurance benefits and vacation or sick pay. "I was so angry I could hardly speak, and it takes a lot to make me angry," the longtime employee said. "I just don't know how IBM expects us to take this and just run with it." ...

  On the surface, it would seem a surprising time for any IBM employees to find their compensation going down. The Armonk, N.Y.-based technology company earned $10.4 billion in 2007 and just raised its profit targets for 2008. ...

  On the Net: Comments on union page about the cuts: http://www.allianceibm.org/salarycomments.php

• The Register (United Kingdom): IBM hits back against over-timers with pay cut. 'These people' get what they deserve. By Austin Modine. Excerpts: IBM's technical support grunts may have won the battle for overtime pay, but the company has cooked a major catch to its peace agreement. Big Blue is now conceding that about 7,600 IT specialists and tech support workers (about 6 per cent of its US workforce) need to be reclassified as being eligible for overtime wages. But the company is simultaneously slashing the base pay of those employees by 15 per cent to compensate. ...

  The company asserts that this "changing the mix" will be cost neutral to IBM. Affected employees will "basically be making roughly the same before the change."

  "That's a bogus claim they're making," said Lee Conrad, national coordinator for Alliance@IBM, a union that represents a small number of IBM employees. "They aren't going to be able to make it up." Conrad said the company has recently been pushing back on the amount of OT allowed. ...

  Conrad argues that the wage cut is unnecessary since IBM has been flourishing, even in a declining economy. The company earned $10.4bn in 2007 and expects earning per share growth to hit at least 15 per cent during 2008. ...

  The company, however, has relied on workers in low-cost centers such as Argentina, Brazil, China, India and Russia to achieve such results. Some analyst have even speculated that IBM conspires to squeeze out US employees through unfavorable conditions, rather than rely on massive layoffs. Idle conjecture, of course.

• Poughkeepsie Journal: Union creating action plan in response to IBM pay scale change. By Craig Wolf. Excerpts: In the next few days the Alliance@IBM, a local of Communications Workers of America, will release a plan of action following the company's decision to change its pay scale, Linda Guyer, president of Alliance@IBM, announced on its Web site.
• Comments from readers on the Poughkeepsie Journal article. The following are a few selected comments:
  • If they are taking 15% off of the base pay, then that is a pay cut. They are saying that in order to make what use to be a regular salary without OT, you now must work OT. I am sure that not "everyone" who works for IBM worked overtime. The union is correct about this and once again IBM only cares about their huge bottom line. Not to mention they have contaminated every neighborhood they ever set up shop in and do not want to take full responsibility for it.
  • IBM employees have been getting it good since the 90's. They better wake up and really organize a strong union or they will be gone in 10 years. Just like their country club and the summer fairs and rides they used to have., their decent jobs are next. I know it is hard to undo the anti-union brainwashing they got for years but unilateral cuts like this can't happen in a collective bargaining setting. Right now, they have collective begging, and their big daddy is shafting them. ( again)
  • IBM's treatment of wage earners is typical of most business models today. The abuse of the core workforce by managers, directors and board members to further their own careers or satisfy increasingly greedy share holders has gotten so bad the within the next 30 years I wouldn't be surprised if employees weren't "indentured" to companies. This is the path we seem to be on. Politicians at all levels are completely beholden to wealthy contributors and have little or no regard for America or it's people I wouldn't count much on the government for help. Unions have become so politicalized that their effectiveness in representing workers has become a glorious, well financed sham. I wish I had a solution to offer but like many working men I've become so distracted with just feeding and keeping my family warm, safe and insured that I don't have much time for creative thought anymore. Sounds like the plan doesn't it?
  • Even after a record revenue year, ibm’s Armonk gang of pension thieves, who’ll be getting record bonuses feel the need to cut the salaries of thousands of employees that they already cheated out of hundreds of hours of overtime. It’s not enough that they turn their back on America, exporting thousands of jobs, it’s not enough that they rob widows of their retirement, it’s not enough to have stolen billions of pension dollars from tens of thousands of their workers, now they add massive pay cuts as icing on the cake.

    One wonders if ibm workers are ever going to get it, are they ever going to figure it out, power doesn’t give in to weakness. Unless workers get together and organize against the anti America thieves that are destroying our financial future and weakening our nation, the path is only for further decline. Every decent benefit American workers have today is because workers organized from a point of poverty and near slave status to insist on decent treatment.

    Robber barons murdered early workers fighting for justice but once the battle was underway and they knew workers were determined to stand together, they began to negotiate for a fairer share of the wealth that workers were creating, it was just good business sense to negotiate once the odds were clearly in organized worker’s hands. Now today, with workers brainwashed into being some kind of foolish ‘army of one’ where they are like a flee on the back of an elephant, it’s just plain business sense to strip them back down to bare subsistence as long as they put up no resistance.

    If you’re working for the pension thieves down in Armonk and aren’t keeping track, they’ve reported over 50 Billion net profit in the last seven years, and what did 95% percent of you get the last seven years, no raises or 2-3 percent raises every few years? Either wake up and organize or start reading about what life was like before unions negotiated 8 hour days, sick days, health coverage, vacation time, retirements, workers compensation, and overtime pay, because all those things are going to be a thing of the past by the time your children are old enough for the twenty first century slavery being legislated day in and day out by billion dollar industrial thieves.

  • As long as the bulk of an executives pay comes from non salary ways then they'll continue to make decisions based on performance of the stock. Long range plans are next quarter to satisfy Wall Street. If we ran our corporations yesterday the way we do today, S360 would never have happened. That's why most of the innovation today comes from small startups and not the large companies. Their stock is pretty much worthless so they don't risk much where as an IBM executive can lose a lot if the stocks loses just a little bit of value. Blame the entire system, government(taxes), Investment community and the companies for what is
  • The fact that the pay cut comes only months after the lawsuit for cheating its workers is a sure sign that this is revenge. IBM was proven wrong in a civil court of law for denying employees their rightful overtime. The company can easily afford the lawsuit since it makes Billions in profits and spends Billions on stock buybacks. IBM is acting immorally again by collectively punishing an entire job class of workers who benefited from the lawsuit. If reclassifying workers is “cost neutral”, why bother doing it? Plus OT will be at the whim of the master. Regardless of its wrongful actions, IBM will continue to wage war on its workers unless the workers push back. IBMers have only 2 choices - silently support executive management by doing nothing, or take action by joining http://allianceibm.org/ and organizing your fellow workers. Which side are you on?!
  • After 20 years of service, working as hard as I can and always being a top performer, IBM has now presented me with a $10,000 pay cut. But - I can make it up with overtime! That's great, really. Except I don't get overtime for my 20 vacation days, or days I'm working off site for the company, or when one of my kids is ill and has to stay home (so I can't work beyond my regular scheduled hours), or when I'm sick at home from contact with the dirty keyboards and other surfaces at the offices of those I work for, or if there are no overtime hours available.
  • In the very same sentence which proclaimed our 15% "pay adjustment" our manager reminded us (while reading from the prepared charts) that employees should never count on overtime as part of their compensation, and overtime will be available as business needs dictate. In IBM, "business needs" means "we can say no whenever we want and you have no choice" - just as with the training we can't go to because "the business needs you where we are right now" and vacations and holidays we give up because "the business really needs you here in support of your team". Dollars to whatever pastry you enjoy, in 4 to 6 months there will be a hold on overtime due to "budget constraints" - as there has been repeatedly in the past for those previously eligible for overtime. Well, I'm off to call daycare to see if they will let me send my two children there for 85% of the regular cost. I'm sure they'll understand. Besides, they can make it up by working some overtime.
  • Ahh, the typical IBM numbers game, cutting pay while raking in millions. This is so typical of IBM, not only will contractors get their pay cut (hourly ones) but the Salaried ones will too, not to mention the 'Real' IBMers... IMHO this is so pathetically IBM.
  • That the article doesn't tell you is that all over time for the week needs to be approved PRIOR to that week (unless it is business need, like responding to on call pages or emergencies). I was told that for work that is not critical my time would be flexed so as to fit the 40 hour week. Basically, unless I get all sorts of emergencies or am on call permanently I have a 15% pay cut. With this new cut, I will be making LESS than when I started with IBM! I for one am going to leave as soon as possible.
  • I just joined IBM last year and moved to a different state to take the job. I work in the public sector and I can't work more than 40 hours a week, ever, because the government limits our overtime. I never wanted any extra money from anyone, I have never been in a union. I just received a gigantic pay cut and now I have to find a new job just to pay the high rent in this ridiculously expensive area. I just want my old paycheck back. I can't believe this is happening.
  • I made the mistake of signing with IBM when Global Services purchased technologies from my company of 7 years. It was the worst decision of my life. After three years working as a Corporate whore for IBM I walked out. This the best decision of my life. I joined the Overtime lawsuit and accepted the settlement with glee. I have one thing to say to the remaining IBM cattle, UNION STRIKE!!!!!
• Yahoo! IBM Employee Issues message board: Re: Conversion of IGS family 24A band 6 7 8 employees to hourly / non-exempt? by "mrnobody008". Full excerpt: And don't forget if you take vacation, you lose out on that OT unless you can be creative and make it up. And I just found out, to all you poor folks that setup a healthcare spending account, it's not considered a "life changing event" so if you need that money now you're screwed. And all the rebanding, your "career" is basically over.
• Yahoo! IBM Employee Issues message board: "More on the pay cuts" by Lee Conrad, president, Alliance@IBM. Full excerpt: To our co-workers, The recent announcement of pay cuts and re-classification from exempt to non-exempt has sparked outrage and anger among a large section of the IBM employee population.

  IBM over the years misclassified employees and did not pay them properly, was sued, lost, paid employees compensation and now is making pay cuts. IBM is able to do this unilaterally because they can. There is no union contract that says they must negotiate terms and conditions of employment and wages.

  Now the question is what do we do about it?

  First: If you are not yet a member of the Alliance we strongly encourage you to do so. Membership gives you more protection legally as we go forward and it helps build an organization that can take on IBM management. We have 3 categories: Subscriber (free), Associate member ($5 a month), Voting member ($10 a month).

  Second:: Our message should be loud and clear to IBM executives--NO PAY CUT!

  Third: Getting our message out and organizing around it.

  We need IBM employees to step up to the plate and be vocal and public. We need employees to sign petitions, get their co-workers involved in the campaign and the Alliance, hold picket signs at IBM locations and more.

  We will be rolling out our action plan in a few days. Many of you work from home and are all over the United States. Making use of the Internet will be important as we take on this devastating move by IBM executives. We need to contact all employees facing this pay cut. We need you to send us the names, e-mails and location of your co-workers.

  We would also like to hear your suggestions on how we wage this fight. If you are willing to talk to the Press, please contact us at: EndicottAlliance@stny.rr.com. Now more than ever we must organize and protect the standard of living of IBM employees.

• Gannett News Service, courtesy of the Burlington Free Press: Pension freeze brings uncertainty to IBM employees' retirements. By Julie Moran Alterio. Excerpts: IBM, a large and profitable American company whose reputation for providing blue-chip benefits was once legend, froze its pension plans on Jan. 1, saying the change would save the company $3 billion by 2010. Benefits accrued by Dec. 31, 2007, won't be touched, but the 107,000 U.S. workers enrolled in one of IBM's pension plans won't garner any more years of service toward their final benefit even if they spend another 20 years inventing microchips or selling services.

  While it was no surprise when General Motors, an ailing enterprise that lost $8.6 billion in 2005, decided to freeze its pensions, the new wave of freezes among healthy companies like IBM, Verizon and Lockheed-Martin has retirement experts predicting the era of the pension will soon be over for up to three-quarters of roughly 21 million workers enrolled in such plans.

  "These companies that traditionally did right by workers have given a green light to other companies," said Karen Friedman, a policy director at the Pension Rights Center, which has compiled a list of more than 75 companies freezing pensions in the wake of the IBM and Verizon moves. "Companies are getting out of the pension business," Friedman said. "They are backing out of promises to workers."

• Yahoo! IBM Pension and Retirement Issues message board: "Re: Burlington Free Press: Pension freeze brings uncertainty to IBM employees' retirements" by "bits_bytes_and_bugs". Full excerpt: Let's look at the math of the freeze. The article claims 107,000 employees are in the plan, IBM claims it will save 3 billion by 2010 (that's two years).

  That's around $14,000 saved per employee on average per year. Note the "per year". Also note that the savings for the company and the losses for the employee continue in perpetuity. That $14K per year figure is the savings AFTER the extra 4% match in the Savings Plan is factored in.

  Between now and the time I expect to retire, I expect the pension plan freeze to cost me at least $100K or around 25% of my expected pension, perhaps more.

  There is no way to make up for losing that much per year - no matter how much you put in the IBM Savings Plan Plus. Hopefully this exercise has brought home how devastating the pension freeze is for those impacted.

• Yahoo! IBM Pension and Retirement Issues message board: "Re: Pension freeze brings uncertainty to IBM employees" by "collbbfan". Full excerpt: No matter how you do the math, or who does the math, the bottom line is that IBM has screwed us. Yes, other companies may have done it, and others will follow. This sort of thing should not be allowed to happen, especially after Enron, While the executives get away with stealing, and the profits of companies goes up, I and 1000's more will suffer on the bread lines. After IBM let me go, I cannot make ends meet without many sacrifices (cannot get my pension until I turn 55 in 2010, all because of 30 days. While I enjoy reading these forums, I am very nauseous about the future, and feel I cannot keep reading.
• Yahoo! IBM Pension and Retirement Issues message board: "Re: Pension freeze brings uncertainty to IBM employees" by "aranala". Full excerpt: Don't you all realize that the problem is much, much deeper than IBM cutting off pensions?. What has happened is that every major industrial and technological company has transferred its production and development abroad so today and in the future there will be not enough US employees to contribute to either Social Security or the pension plans. IBM has now 73,000 employees in India alone.

  What we are witnessing is the disenfranchising of the US worker and of the middle class. Companies are doing this for short term profits, without realizing that they are committing hara kari in the long run because without a strong US middle class very few will be able to purchase what they sell.

  All of this is the result of the policies followed by every administration since George H Bush that pursued the benefit of the corporations over the well being of the population and shifted operations overseas as to exploit their cheap labor The Europeans, who may have suffered pains and pangs at the beginning with their Union took the right approach putting their people ahead of their companies, which in the long run benefited both, and went after market expansion, not after third world exploitation.

  Now and in the future they will have a market of 500-600 million with a strong middle class. The future belongs to them and to the Asian tigers.

• BusinessWeek: International Isn't Just IBM's First Name. Big Blue has built a global network for client services and in the past three years has hired 90,000 people in low-cost countries. By Steve Hamm. Excerpts: When Rogerio Oliveira strolls through the vast IBM service delivery center in Hortolandia, Brazil, the contrast between the old and new IBM is stark. What was once a factory for mainframes is now crowded with hundreds of Brazilians on a different sort of assembly line. Their output is information, and they sit in rows of cubicles that stretch the length of a football field under a soaring, metal-trussed roof. A few years ago, the factory work performed here was just for Brazilian customers. Today, 100 clients for the facility's services, which range from software programming to financial accounting, come from 40 countries, including Canada, Mexico, South Africa, and the U.S. ...

  In the past three years, the company has hired some 90,000 people in low-cost countries including Brazil, China, and India. These people, working in so-called global service delivery centers, provide a wide array of services for clients. The work goes beyond software programming to include data center operations, help-desk call centers, financial accounting, and benefits management. Initially, cheap labor was the big attraction of this move, with pay in India 70% to 80% lower than in the U.S. But these days, tapping the abundant talent pools—and new ideas—in emerging markets such as India and China is important as well. ...

  Palmisano had to transform how service work was done. He assigned Robert W. Moffat Jr., 51, a longtime IBMer, to the task. Moffat had already wrung $5 billion of annual costs out of IBM's manufacturing supply chain. For decades, IBM factories had focused primarily on one product and one geographic market. But by 2005 they made any number of products for a wide range of locales, so IBM was able to operate fewer plants and keep them running at higher capacity.

  Moffat figured that the same approach could be taken with services. His team surveyed countries for costs, available talent, educational pipelines, languages spoken, proximity to markets, and political stability. They used this information to choose locations where IBM would serve clients anywhere around the world. Moffat set up finance and administration back-office centers, for example, in Bangalore, Buenos Aires, Krakow, Shanghai, and Tulsa. ...

  By sifting through several personnel databases with sophisticated software, IBM's top managers can quantify the skills they have on hand worldwide and compare them with projections of what people they'll need in six to nine months. When they spot a coming shortfall, managers coordinate with colleagues in other countries to recruit or train people. In one case, IBM managers in Phoenix wanted to build a team in Brazil to test software for a large U.S. corporate client. After they put a request on Professional Marketplace, a manager in Brazil assembled a team in a week. Now IBM has 30 software testers working in Brazil. ...

  One of the major challenges in this setup is the difficulty of communicating by e-mail or even videoconferencing when programmers have never met one another. Strangers don't readily share knowledge. "A big problem is trust," says Dirk Wittkopp, director of IBM's Boeblingen lab. "It works better if you can go out to dinner with somebody and have a beer. But we can't put people on planes to visit each other all the time."

  So Big Blue is trying to bridge the gap with software that borrows heavily from social networking. A new program called Beehive is essentially a corporate version of Facebook. IBM employees create profiles and post photos, list their interests, and comment about company events or happenings in their private lives. Klaus Rindtorff, an engineer who works for Wittkopp, lists his five favorite places to revisit, such as Death Valley, Calif., and includes photos of IBM colleagues in Germany, Italy, and the U.S.

  Another program, called Small Blue, is a search engine for finding experts within the company. The software scans employees' blogs, e-mail, instant messages, and reports, then draws conclusions about each participant's skills and expertise. When other employees search by topic on Small Blue, the program scans its findings to get a list of experts. Currie Boyle, an IBM consultant in Vancouver, used Small Blue to find a specialist for a Canadian client. His initial search turned up people in the U.S. and Europe, who in turn led him to an IBM staffer in Haifa, Israel, who had just the information he needed to help his customer.

• CNN/Money: IBM Senior Vice President William M. Zeitler Exercises Options for 34,200 Shares. Excerpt: The senior vice president of software and technology services company IBM Corp. exercised options for 34,200 shares of common stock, according to Securities and Exchange Commission filings Wednesday. In two Form 4s filed with the SEC, William M. Zeitler reported he exercised options for the shares Tuesday for $51.16 apiece and then sold all of them the same day for $102.46 to $103.03 apiece.
• New York Times: Good Jobs Are Where the Money Is. By Bob Herbert. Excerpts: I think of the people running this country as the mad-dashers, a largely confused and inconsistent group lurching ineffectively from one enormous problem to another. They’ve made a hash of a war that never should have been launched. They can’t find bin Laden. They’ve been shocked by the subprime debacle. They’re lost in a maze on health care. Now, like children who have eaten too much sugar, they are frantically trying to figure out how to put a few dollars into the hands of working people to stimulate an enfeebled economy.

  They should stop, take a deep breath and acknowledge the obvious: the way to put money into the hands of working people is to make sure they have access to good jobs at good wages. That has long been known, but it hasn’t been the policy in this country for many years.

  Big business and the federal government have worked hand in hand to squeeze the daylights out of working people, stripping them (in an era of downsizing and globalization) of much of their bargaining power while ferociously pursuing fiscal policies that radically favored the privileged few. ...

  The peak income year for the bottom 90 percent of Americans was way back in 1973 — when the average income per taxpayer (adjusted for inflation) was $33,001. That is nearly $4,000 higher than the average in 2005. It’s incredible but true: 90 percent of the population missed out on the income gains during that long period.

  Mr. Johnston does not mince words: “The pattern here is clear. The rich are getting fabulously richer, the vast majority are somewhat worse off, and the bottom half — for all practical purposes, the poor — are being savaged by our current economic policies.” ...

  Forget all the CNBC chatter about Fed policy and bargain stocks. For ordinary Americans, jobs are the be-all and end-all. And an America awash in new jobs will require a political environment that respects and rewards work and aggressively pursues creative policies designed to radically expand employment.

• CNN/Money: Made in IBM Labs: First IBM Software Development Lab in Malaysia. IBM Draws on Skilled Workforce to Fuel Tivoli Software Development. Excerpt: "This knowledge-driven investment by IBM is significant for Malaysia," said Dato' Badlisham Ghazali, CEO of Multimedia Development Corporation Sdn Bhd (MDeC). "The benefits are tremendous in terms of the sophisticated software technology that will be developed locally, the skilled positions that will be created and the endorsement by an industry leader that Malaysia is providing the requirements for IBM's future in research and development."
• CCH Internet Research Network: Most Employers Will Maintain Executive Retirement Plans. Excerpts: An overwhelming majority of employers have no intention of terminating their nonqualified executive retirement plans as a result of final 2007 regulations under IRC Sec. 409A. This finding is among the results of a survey released by Buck Consultants. Buck’s study, 2007 Nonqualified Deferred Compensation Survey, was conducted after the Internal Revenue Service issued its final rules in 2007. The survey found that 95% of respondents will retain their executive defined contribution plans and 89% will continue their executive defined benefit plans.
• Financial Week: Even with tax changes, businesses still offering DB, DC plans for execs. By Mark Bruno. Excerpts: Don’t expect to see corporations shedding executive retirement plans any time soon. Even though the IRS last year changed the way non-qualified deferred compensation plans are governed, an overwhelming majority of companies will continue to offer such retirement benefits to their top executives. In fact, 95% of employers recently polled by Buck Consultants said that they intend to retain their executive defined-contribution plans. And 89% said that they would continue offering executive defined-benefit plans as well.
• Human Resource Executive: As GM Goes... Workers and employers can gain some insight from the settlement between GM and UAW -- mainly that the days of yore are gone. Forget retiring with a gold watch and a pension. It's every man, and woman, for him- or herself. By Dallas Salisbury. Excerpts: While defined-benefit retirement programs were always the exception for most workers, they were the rule for almost all large employers in the '60s and '70s, when those born prior to about 1930 exited the private workforce for retirement.

  As a result, the 65-plus population, as we crossed into the new millennium, found itself with the highest rates of receipt of pensions and retiree health of any in the history of the nation.

• The Register (United Kingdom): IBM snubs OS/2 open source plea. A Warped view of history. By Joe Fay. Excerpts: IBM has dashed the hopes of a bunch of software nostalgics by refusing to open source its coulda, woulda, shoulda OS/2 platform. Online OS/2 community OS/2 World.com first petitioned IBM to throw open the OS back in 2005, when the firm stopped selling the product. It gained just over 11,600 signatories. It followed up last November, with a letter reminding the firm that there were still OS/2 diehards out there who wanted to continue using the operating system for legacy applications (and presumably playing chess).

  IBM finally replied this week, saying, in short, “Thanks but no thanks”. Yvonne Perkins, vice president at IBM’s Enterprise Platform Software unit, told the holdouts that “for a variety of business, technical, and legal reasons we have decided to not pursue any OS/2 open source projects”. Just to rub salt in the wounds, Perkins added: “We would like to ask you to encourage any customers who are still planning their migrations or who have other technical requirements to contact their IBM representative to discuss how these assets and services could be leveraged.”

• insurance news net: Two-Level Benefit Rule Won't Be Last Word On Retiree Health Benefits. By Brent Hunsberger. Excerpts: Most retirees won't notice much impact from this week's federal rule effectively creating two classes of employer health benefits, for early retirees and all others, experts agree. That's because most don't receive them, and those who do have seen benefits erode for at least two decades. ...

  ...the powerful AARP, said that by allowing employers to cut costs more for the 65-and-older crowd than for younger retirees, the Bush administration policy would lead to less coverage for everyone. "The rule helps employers, but I don't think it helps older Americans, especially those who have worked through their lifetime with the promise that they'd get these benefits," said Paul Secunda, assistant law professor with the University of Mississippi. ...

  Meanwhile, health insurance costs continue to increase, and employers continue to pass increasing shares of those costs along to retirees. The proportion of large employers offering retiree health benefits has declined from two-thirds in 1988 to about one-third in 2006, according to the Kaiser Family Foundation and Hewitt Associates.