"IBM has established Project Match to help you locate potential job opportunities in growth markets where your skills are in demand," IBM says in an internal notice on the initiative. "Should you accept a position in one of these countries, IBM offers financial assistance to offset moving costs, provides immigration support, such as visa assistance, and other support to help ease the transition of an international move."
Selected reader comments concerning this article follow:
I understand that many employees, particularly those in their fifties and older, may be aghast at the thought of uprooting their lives and living in another country. But this is a different world, and any opportunity is still an opportunity. An international relocation is not a life sentence - one might come back from two years in Dubai with an enviable work record and be a catch for any U.S. corporation. Many of the countries listed under Project Match are colorful, exciting and interesting places to live. The IBM workers salary (though less by dollar exchange rates) would still put them in the local upper classes in many of these countries, allowing them luxuries unheard of in the U.S., such as the ability to hire house staff, a cook and a driver, and many other perks. People with open minds might view this as an adventure and a big step up into a larger world.
I applaud IBMs Project Match for opening its employees up to these unexpected, exotic opportunities. Unless U.S. citizens learn more about becoming global citizens, partly by actually living overseas, we are not going to be able to adapt to the economic challenges ahead. Those who do not adapt, perish.
The sorry state of things is that Corporate America has been the only audience most politicians listen to. The money companies like IBM spend on union busting and lobbying politicians is outrageous. IBM like Wal-Mart has no tolerance of unionization efforts and will surely fire anyone suspected of such activities, as I am living proof. So as long as everyone does nothing while secretly hoping it's the other guy who loses their job to offshoring and not you, then IBM's intimidation tactics. Organize and write your politicians before it's too late.
I believe these relocation packages have terms to them requiring the employee to stay with IBM for a required period of time or they have to pay some of the relocation back to the company. I speculate that perhaps part of their visa assistance will make the stay in India (or other country) dependent on the employee staying with IBM.
This is not about the worker no matter what they say; this is about taking advantage of the current economic situation to attempt to stabilize a very shaky workforce in these developing countries.
I'd rather have an ounce of gold than a big truckload of mule defecation. Problem is, corporate leaders want to stuff their fat wallets and make things look good on paper. In the meantime they are undermining the talented US workforce for an extra bonus check.
But when it comes to jobs, IBM IS OFFSHORING JOBS. All types of jobs. It has nothing to do with the economy. Just pure profits. I was at a conference in India in December and an IBM representative was boasting how they are setting up high-end research and development centers in India and contributing to Indian economy. I wouldn't mind if they are up front about it -- "We don't care about US or India or China. We Care about profits".
But to hear IBM execs speak is to feel like puking. They are doing MASSIVE hiring in India right now. Highly skilled Indian IBM employees with PhDs are stampeding to move to IRL (IBM India Research Labs). As an Indian citizen, I should feel good for India, but I look at the big picture and think how long before they move the jobs next door to Vietnam?
And the thing is, its not just IBM. Every major US tech and non-tech company - Intel, Microsoft, Motorola, GE, you name it. Every one of those bas***rds is setting up big shops in India and China while laying off US workers. Its time for Obama to live up to his works and stop appearing on stage with the parasite Sam Palmisano.
I know that the article says that the employees would move to India to support rapid growth in India, but I dont think that is the ultimate goal. What they should do is give U.S. employees (citizens) jobs to support U.S. companies and keep them in the U.S.; then reassign those supporting U.S. companies from India to India based companies. But I think that makes too much sense.
It must be nice to be a CEO and get paid based on short-term short-sighted goals and quarterly profits; 2 years at the helm; 40 million dollar bonus and out! No wonder why the economy is failing and the U.S. lead in the world business arena is decreasing rapidly or gone.
Yeah, it's hard to believe. But IBM put it in writing: "IBM has established Project Match to help you locate potential job opportunities in growth markets where your skills are in demand," IBM says in an internal memo first obtained by InformationWeek. "Should you accept a position in one of these countries, IBM offers financial assistance to offset moving costs, provides immigration support, such as visa assistance, and other support to help ease the transition of an international move." [ Everyone from Bill Gates to prestigious
[ Everyone from Bill Gates to prestigious business publications such as the Wall Street Journal and the Economist has claimed that for every H-1B visa granted, between three and five new jobs are created. Read why that's far from the truth.]
Maybe India's not to your taste. No worries. IBM is also offering to send the newly unemployed to China, Brazil, the Czech Republic, Russia, South Africa, Nigeria, and the United Arab Emirates.
Pink slips at Big Blue
And in a touch that could only be called Dickensian, the IBM memo notes that Project Match, which sounds like a reality show on Bravo, is limited to "satisfactory performers who have been notified of separation from IBM U.S. or Canada and are willing to work on local terms and conditions." Right. The worthy poor who don't mind working for wages that are infinitely lower than what they've been paid in the United States.
The stunningly stupid memo comes amid a wave of firings that has cost the jobs of at least 2,800 IBMers, a move the company was unwilling to acknowledge until ousted workers and their union leaked internal documents to the media, including the Associated Press, which said that workers have reported layoffs in Tucson, Ariz.; San Jose, Calif.; Rochester, Minn.; Research Triangle Park, N.C.; East Fishkill, N.Y.; Austin, Texas; and Burlington, Vt.
Did I mention this came at the same time IBM reported strong financial results?
According to the Web site of the Communications Workers of America which represents some IBMers, roughly 1,400 workers in the software group and a similar number in sales have been let go. There are unconfirmed rumors that as many as 16,000 workers could eventually be let go, surpassing even the 13,000 who were canned in 1985. I suspect that number is too high, but we'll see.
The Associated Press reported recently that in 2007, the last full year for which detailed employment numbers are available, 121,000 of IBM's 387,000 workers were in the United States, down slightly from the year before. Meanwhile, staffing in India has jumped from just 9,000 workers in 2003 to 74,000 workers in 2007.
And of course, tens of thousands of workers are working for other companies, including such giants as Hewlett-Packard, Microsoft, Intel, and Motorola, not to mentions dozens of startups across Silicon Valley.
Take this job or nothing
Meanwhile, some IBM workers who still have jobs are being given a very tough choice: Move across the country at your own expense, or get fired with no severance package.
That information comes from an angry IBMer who spoke with a writer from the Silicon Alley Insider. According to the tipster, one of several who told similar stories, the workers are being placed at newly formed Global Delivery Centers in Colorado, New York, and Iowa. If they don't take the job, IBM labels them a "voluntary departure" and terminates them with no severance.
For those who are simply laid off, outplacement services aren't very good. One IBMer (I know his name but won't use it) gave this account in an e-mail to me: "The outplacement service is pretty bad, like calling the DMV. ... I called last week for a résumé review, left a message on the 800 number. 48 hours later someone calls back and leaves me a message -- they say they are returning my call, please call the 800 number if you would like to talk to someone. I call and get the same message."
Interestingly, this gentleman actually gave some thought to a potential IBM job in Malaysia, but as the pay was about one-third of his current salary, he rejected it. He also tells me that there's yet another catch in the offer to move employees to what we used to call the Third World. "The deal is that if you take the job IBM won't pay severance but will pay 'a portion' (undefined) of your relocation expenses, including tax and visa services. Not a good deal for many of my colleagues who have 20-25 weeks of severance under their agreement."
Sadly, with the economy in terrible shape, layoffs are sometimes necessary. But a company as rich as IBM should handle a downsizing better -- much better. At the moment, I'm ashamed to be an IBM shareholder. (I don't own much.)
I welcome your comments, tips, and suggestions. Reach me at email@example.com.
As Palmisano waxed pious in the White House, heat-seeking a $30 billion stimulus of projects that would benefit IBM, his company was laying off thousands of workers. Calling the firings a “resource action”. Doing it on the down-low at facilities in several states. Such tactics make the exact number of fired employees difficult to ascertain. IBM has a history of being secretive about job losses. Federal law requires companies to report mass layoffs (also called “material events”) to the Securities and Exchange Commission (SEC) but IBM claims that a few hundred here and a few hundred there are all in a day’s non-work. And given the SEC’s record of oversight on Wall Street, it’s easy to believe they might miss any number of material events. Layoffs are being more reliably tracked by Alliance@IBM, an affiliate of the Communications Workers of America. Alliance@IBM has been trying to unionize Big Blue for almost ten years. A tough job, but somebody has to do it.
In this recent round of firings close to 5000 workers have lost their jobs at IBM facilities in New York, North Carolina, Minnesota, and Vermont. Laid off employees plus those “who live in fear that their job is next” have been burning up the comments section at the Alliance@IBM website. Further layoffs are said to be looming. Posters who are still employed use pseudonyms. Some even post from libraries, out of concern their IP address will be traced. IBM has a rep for retaliation and for being rabidly anti-union.
That IBM should expect a generous slab of stimulus is no surprise. Federal, state, county, and municipal governments have been funneling corporate welfare to IBM for decades. Think tax breaks, public utility deals, real estate shuffles, low interest loans, etc. The rationale has been development and job creation– even as IBM was pulling out of the USA in favor of cheap global labor. Not that they’ve disappeared completely; in areas where IBM once employed thousands the threat of losing the last few hundred jobs has a powerful effect on pols who pull purse strings. And IBM has even expanded in some states– while simultaneously reducing overall employment. The primary focus of IBM development and job creation is offshore, not stateside. Nowhere has that fact been made more clear than in Endicott, New York.
Endicott was the birthplace of IBM. Where IBM flourished and grew into an industry giant. Endicott was a true blue company town and IBM was seen as a benign, if somewhat authoritarian, lifetime employer. IBM encouraged (almost demanded) employees to trust the company’s commitment to the social contract. By 1980, 14,000 people worked at the Endicott IBM facility. By 2005, IBM had reduced that number to 1600. The town was devastated. Economically and socially. Meanwhile, the number of IBM employees in India rose from 9,000 in 2003 to 74,000 by 2007.
If IBM could jettison its own hometown why should taxpayers believe the company gives a fig about the need to “reignite growth” in the country at large? Cynics ask if the real deal is the need to reignite IBM. They also ask where profits from stimulus projects will be invested.
No doubt CEO Sam Palmisano would answer “here”. Palmisano claims that a $30 billion stimulus injection would enable IBM to do what supporters of global sourcing (aka offshoring) declare to be impossible. Create large numbers of tech jobs in a country where the workers are just too darn greedy and lack high-level skills. And oh yeah– where government doesn’t do enough to help business.
Big Blue Slumdogs
Whether IBM gets stimulated or not, its recently laid off workers need not despair. They can sign up for IBM’s “Project Match” and do a tour of duty in the Big Blue Foreign Legion. According to an IBM internal memo Project Match is for “satisfactory performers who have been notified of separation from IBM US or Canada”. IBM will provide immigration assistance; possible outposts include India, Nigeria, China, Turkey, Mexico, and the United Arab Emirates. Only folks excited at “the prospect of contributing to a developing economy” and “potentially taking on different job responsibilities” need apply. And applicants must be “willing to work on local terms and conditions”.
Back in the 1950’s, comic and jazzman Jimmy Durante recorded “Dollar A Year Man”. The song’s refrain goes: “I’ll work for the government for a dollar a year, but I have to get paid in advance”. Substitute IBM for government, make it a dollar a day, and you get the picture of what those terms and conditions could be. However, the Project Match memo makes no promise about being paid in advance. Better wait before taking out a mortgage on a McHovel or making a down-payment on a pallet. Then there are the “different job responsibilities”. Could this mean hauling CEO Sam Palmisano and other IBM mandarins around in a rickshaw? If so, would IBM provide the rickshaw gratis? Or would employees foot the cost of leasing?
Finally, after serving for a set period (say 10 or 20 years) in a developing economy under local terms and conditions, will Project Match vets be rewarded with an H-1B visa so they can re-enter the USA as foreign guest workers for IBM? As H-1B workers the vets would make less than the skilled employees they replace. But they’d enjoy their jobs more. Anything beats hauling cans through a traffic jam.
Taxpayers shout “I hear ya!”
In 2007, Sam Palmisano made $24.35 million; $5.8 million of which was in bonuses. The better IBM does, the more Sam makes. The song “Dollar a Year Man” takes its title from the manufacturers, bankers, and other patriotic professionals who volunteered to serve in the federal government for a dollar a year during World War One. Imagine how much more credible Sam would seem when seeking stimulus if he offered to do likewise! Also imagine how much more compelling IBM’s job creation fever would be if they hadn’t been shipping out the back and keeping mass layoffs secret.
It could also create billions in revenue for Big Blue, which specializes in the technology and services used for health-care IT and smart-grid infrastructure, not to mention its recent $9.6 million contract to provide broadband service in rural America. “It is an imperative that business and government come together,” Palmisano said. “We know that $30 billion could create a million jobs in the next 12 months.”
As Palmisano trumpets job creation numbers, IBM regards job numbers as immaterial. The Armonk-based company has cut thousands of jobs over the past week and won’t release the numbers; the Securities and Exchange Commission requires companies to disclose only “material” events. The layoffs included hundreds in East Fishkill, one month after New York taxpayers paid IBM $45 million for not cutting jobs in East Fishkill. The layoffs were “material” only to the workers who lost their jobs, and to New York’s depleted unemployment fund.
To IBM, which reported record 2008 revenue of $103.6 billion, “Managing resources in this way keeps us competitive, while adapting to the evolving needs of our clients,” said spokesman Doug Shelton. It also enables the company to hire cheaper workers in places like India.
In 2007, 121,000 of IBM’s 387,000 workers were in the U.S., down slightly from 2006. Meanwhile, staffing in India jumped from 9,000 workers in 2003 to 74,000 workers in 2007. But for $30 billion, Palmisano promises a million jobs will come to America. “We help the president get the package through, and we get the work,” he said. “And we have a lot of work ahead of us.”
IBM has declined to provide any comment on its process of the numbers of people laid off in Rochester or its other locations, other than to say that it continually reviews its needs and makes adjustments as necessary to satisfy its clients around the world. One of our sources inside IBM who is angered by the massive layoffs in Rochester this week tells us "I believe, as they say, sunshine is the best disinfectant, and you are in the sunshine business. If IBM was not ashamed of this they would not be trying to hide it."
An analysis of the spreadsheet, a copy of which was provided to KTTC, shows that 722 of those dismissed were age 50 or older. This is believed to be the same summary accounting document seen by different IBM sources earlier in the week. ...
An inside source told the NewsCenter on Tuesday the number was as many as 800 in STG and other groups in Rochester. To put the number in perspective, the Rochester Chamber of Commerce says about 4,400 people work inside the sprawling IBM complex along U.S. 52 in northwest Rochester. ...
"At least he won't have to be looking over his shoulder any more," said the wife of one long-time IBM worker. What she was referring to was an environment of fear inside the ranks at IBM, perhaps widely known by those who work there, but rarely described on the outside.
One laid-off IBM employee told us that everyone is rated against other employees on something called "Personal Business Commitment" levels. A PBC-1 is outstanding on-the-job performance, for example, while a PBC 2+ is good, a PBC-2 represents a "solid contribution but not outstanding," and a PBC-3 is akin to "you need improvement." This laid-off worker said that IBM cultivates a highly competitive environment, and said he had never in ten years had he gotten anything other than excellent marks.
"I had never gotten a 3, this was the first time in ten years, when I was called in and given my review and laid off," he told the NewsCenter. "Years of service mean nothing."
My own personal observation of the work climate in IGS now seems to be moving from fear and apathy to downright hostility from folks still in IBM. Hostility from the management because they are trying to keep their jobs and have to cut people they still want to keep, and hostility from the remaining server support members because of the constant lack of bonuses, pay raises and abundance of layoffs.
And IBM needs to quit calling the workers in the global factories (especially in End User Services) "experts", when the only qualification they have is showing up at the front door of their office. The quality of work is taking a serious hit. Don't take IBMs word for it, look at the new customer signings and the current customers dropping IBM service contracts!
I'm not sure, but I thought that there was a federal law that stated if your employer was requiring you to move to a new office more than 50 miles away, they had to pay moving and living expenses. Can anyone verify or refute that?
As Lee stated earlier, everyone is just about SOL because you are NOT protected by law. The only way we can get help is from our union. What union you say? The Alliance! Have you joined yet?
I have ten years service of 2+ and 1 until this year when I got a 2 after some stellar work. I even got a VP award from our WW leader.
A combination of a change of managers and the current climate have led to the bar being raised on contribution.
Rather than make a fuss, I have just resolved to make sure I force my manager and other stakeholders into bi-monthly PBC compliance meetings with me so I do not only do what is right for IBM and our clients, but that all the right people know I am doing this. I have been very bad at this as I really do not value it.
I honestly think you should take this PBC 2 on the chin and just resolve to have better personal PR this year. I HATE IT but that's the reality of today's IBM I think. What we gonna do, go to the competition ? :)
"Layoffs are a fundamental form of betrayal by the organization to the employee," says Jamie Showkeir, partner at Henning-Showkeir & Associates, a Phoenix-based workplace consultancy co-founded by Mr. Showkeir in 1989. So what can managers do to better manage layoff survivors? We asked Mr. Showkeir and his wife and business partner, Maren, for their advice. The Showkeirs are also co-authors of the book "Authentic Conversations," about how to communicate well and increase workers' commitment to their
"Preventing misconduct begins by better understanding its root causes," the report says. More than 50 percent of respondents said that the following were factors that might cause individuals to engage in misconduct. They might:
A significant number of respondents (66 percent) said that the CEO and other senior management set the right "tone at the top" on the importance of ethics and integrity. Less than half (49 percent) said that senior management "knows what type of behavior really goes on inside the organization."
The H-1B program was started in 1990 to give employers a short-term fix for what they claimed was a shortage of highly skilled workers. In 2007 and again in 2008, Microsoft co-founder and then-Chairman Bill Gates argued in Congressional testimony that there was a severe shortage of U.S. science and engineering talent. He urged Congress to raise the cap on H-1B visas for highly skilled workers. ...
Terzano (a Microsoft spokesman) says that despite the worsening job market, Microsoft still has trouble filling such core positions as software development engineers, software architects, and program managers. Also, while the company will eliminate jobs in some business segments, it will continue to hire in emerging areas, including online services, search, and cloud computing.
Such explanations don't satisfy critics, who say employers are abusing the program to hire cheaper foreign workers who displace Americans, depressing U.S. wages and working conditions. Terzano says Microsoft is working with the U.S. Citizenship & Immigration Services on reforming the program to prevent it from being abused in this way, but critics want tough legislative reform rather than administrative adjustments. "Microsoft is laying off 5,000 workers," says Kim Berry, president of the Programmers' Guild. "Are we to believe that none of them would be qualified to fill these openings?"
Keeping jobs within U.S. borders proved a tall order for Obama's predecessor and may be comparably vexing for the current Administration. Poulk's job was part of an early wave of IT jobs headed offshore, but the trend has only accelerated since 2003. U.S. corporations will move at least 140,000 jobs offshore in 2009 and 2010, and more than 50% of those jobs will be in IT, according to a December 2008 report by the Hackett Group, a global strategic advisory firm that specializes in outsourcing. By 2010, about 25% of all IT jobs at the world's largest companies by market value will have been moved offshore, according to Hackett.
H-1B visas rarely go to exceptional talent and often are used by “body shops” that provide contract labor to other companies, said Ira Mehlman, media director of the Federation for American Immigration Reform advocacy group. “H-1B visas are not being used as they were intended,” Mehlman said. ...
Microsoft was among the top 10 firms getting approvals for H-1B visas in the year ended September 30, 2007, according to research by technology industry publication Information Week. The top 10 was made up largely of India-based firms that provide outsourcing services, including Infosys Technologies, Wipro and Satyam Computer Services. ...
Semiconductor giant Intel also ranked in Information Week’s top 10 list of visa approvals, while technology firms Accenture, IBM and Oracle made the top 100. Intel and Accenture did not respond to requests for comment. Oracle declined to comment for this story. IBM spokesman Clint Roswell declined to comment on Grassley’s call for prioritizing U.S. workers.
In a twist on immigration work matters, IBM recently began offering U.S. employees who have lost their job the option of working for IBM in a less-developed country, such as South Africa, India and China. Roswell said the offer includes help with visa matters and moving costs. So far, no IBM workers have taken the company up on the offer, Roswell said. “It’s not for everyone,” he said.
As healthcare costs for employers continue to soar, and as hopes fade for quick relief from Washington, a growing number of businesses are expected to stop offering costly insurance benefits and push workers instead into tax-free health savings accounts.
Proponents of the accounts, which operate like 401(k)s for medical expenses, say they give people more control over their healthcare spending. They also say people become savvier medical consumers when they're more aware of the costs of treatments and procedures. Critics of health savings accounts counter that the plans favor the healthy and wealthy, and can increase medical costs for everyone else by requiring people to take out high-deductible insurance policies that kick in only after thousands of dollars in healthcare expenses have been rung up. ...
In reality, would you want your healthcare nest egg to take the same beating your retirement fund took over the last year? What if, God forbid, you actually needed it? Just as most employers found pension plans to be unsustainable and have turned instead to 401(k)s to meet workers' retirement needs, so too will they increasingly move away from group insurance policies and adopt health savings accounts.
And, as with 401(k)s, they'll soften the blow by contributing to employees' accounts, at least for a while. "There's a seductive notion that some healthcare is better than none," Pollitz said. "But that's not really the case. You wouldn't say that part of an air bag is better than none. You need complete protection."
When you take into account Medicare, Medicaid, veterans assistance and similar programs, it turns out that more than half of all Americans are already receiving health coverage from the government.
Want to help working families and cash-strapped businesses? Extend Medicare to everyone, with employers and workers covering the tab with tax money, rather than premiums, deductibles and co-pays. It may not be a perfect solution, but it's a lot better than most of the alternatives out there. Whoever's next in line behind Daschle should make it a priority.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
But, no, the Ponzi-scheme superstar posted $10 million in bail money and was allowed to remain under house arrest in the $7 million luxury penthouse he owns on the upper East Side of Manhattan. In another mink-glove touch from authorities, Madoff didn’t have any gruff guards posted outside his door – instead, he was allowed to hire his own private security agents.
Excuse me, but why is this confessed scam artist still able to spend his ill-gotten money for bail, guards, and a luxurious lifestyle?
Meanwhile, investors he bilked are told they’ll have to wait up to three years to see if they can recover even pennies on the dollar they had entrusted to him. That’s because the court says it’ll take months for investigators to track what business funds and personal assets Madoff has tucked away. Excuse me again, but why not speed up the process by making him do that? Throw him in a cold slammer until he accounts for every dime.
Why have the authorities pampered this guy for so long? Because he’s a silk shirt crook who was not only a Wall Street insider, but has also been a longtime crony of Washington regulators, Even while he was running his scam, Madoff was serving on several advisory committees to the very regulatory agency that was supposed to be watching him!
It’s time for regulators like the SEC to start regulating again, and for the justice system to stop coddling the Madoffs of our country.
In the midst of this embarrassing collapse and bailout, what was CEO Thain doing? Redecorating his office. Nero might have fiddled as Rome burned, but Thain went shopping while Merrill imploded. He spent $1.2 million last year to spiff up his executive nest, including paying $87,000 for a rug and $68,000 for a credenza.
But he also focused on important personnel matters, such as trying to weasel a bonus of about $30 million for himself – a tidy reward for presiding over the demise of his bank and the loss of jobs for thousands of his employees. Board members balked at this, however, so Thain didn’t get the money, but he did rush out end-of-year bonuses to other top executives – just before the bailout money was paid.
Thain’s excesses were too much for his overseers at Bank of America, so he was forced to resign. As a pampered prince of Wall Street, however, his downfall will be cushioned by millions of dollars in severance and retirement money – and he still won’t have a clue about what a greedhead he is.
Mr. Obama was less bracing than during the campaign, when A.I.G. executives were caught going to posh retreats after taking an $85 billion bailout. He called for them to be fired and to reimburse the federal Treasury. Now that he has the power to act, Mr. Obama spoke, as his spokesman Robert Gibbs put it, “like that disappointed parent that doesn’t embarrass you in the mall, but you feel like you’ve let somebody down.”
That’s not enough, not with the president and Geithner continuing to dole out what may end up being a trillion dollars to these “malefactors of great wealth,” as Teddy Roosevelt put it. USA Today wrote about “the A.I.G. effect:” executives finding ways to spend more discreetly, choosing lesser-known luxury hotels and $110 pinot noir instead of the $175 variety. ...
Senator Chuck Grassley urged the administration to snatch back the bonuses. “They ought to give ’elm back or we should go get ’em,” the Republican told me. “If this were Japan and a corporate executive did what is being done on Wall Street, they’d either go out and commit suicide or go before the board of directors and the country and take a very deep bow and apologize.” ...
Rudy Giuliani resurfaced Friday to defend corporate bonuses, telling CNN that cutting them would mean less spending in restaurants and stores. Stupid. Even without bonuses, these gazillionaires can still eat out. It’s like Rudy’s trickle-up Make Work Program: Make Leisure.
That certainly was the case this week when Main Street learned that, despite the craters of a down economy, Wall Street bonuses were more than $18 billion last year — roughly what they were in the fatty, solvent days of 2004. The media hollered, the president scolded, and ordinary people checked their wallets. But downtown, in the caverns of finance, the moneymakers shrugged and took it on the chin. ...
“I think President Obama painted everyone with a broad stroke,” said Brian McCaffrey, 55, a Wall Street lawyer who was on his way to see a client. “The way we pay our taxes is bonuses. The only way that we’ll get any of our bailout money back is from taxes on bonuses. I think bonuses should be looked at on a case by case basis, or you turn into a socialist.” That, indeed, was a recurring equation: Broad strokes + bonuses = socialist.
If you’ve never worked on Wall Street, it is hard to wrap your head around the idea that a company that lost nearly $19 billion in a single year, as Citigroup did in 2008, could still pay its employees billions in bonuses. It is probably even harder to believe that some of those employees grumble about it.
“I feel like I got a doorman’s tip, compared to what I got in previous years,” said a 30-something investment banking associate at Citigroup’s offices in Lower Manhattan. ...
Granted, bonuses are down from the heady days of the bull market. According to an estimate released this week by the New York State comptroller, which set off the recent uproar, payouts for 2008 at New York financial companies fell about 44 percent from the previous year. But bankers are still taking home about as much as they did in 2004, when the industry was flush. ...
Of course, many Wall Street employees never expected the good times to end. They lived large, believing bonuses would always arrive, so they are ill prepared, both emotionally and financially, to cope with a sudden drop in income. “Without a doubt, $18 billion is a lot of money, but it’s a drop in the bucket on Wall Street,” said Gustavo Dolfino, president of the WhiteRock Group, a headhunter for the banks. “These bonuses are down, and the salaries are not enough for these people. They can’t live on $150,000 to $180,000, so they haven’t saved any money. They put it on credit lines and at bonus time, they thought they’d pay it off.”
Am I being unfair? I hope so. But right now that’s what seems to be happening.
Just to be clear, I’m not talking about the Obama administration’s plan to support jobs and output with a large, temporary rise in federal spending, which is very much the right thing to do. I’m talking, instead, about the administration’s plans for a banking system rescue — plans that are shaping up as a classic exercise in “lemon socialism”: taxpayers bear the cost if things go wrong, but stockholders and executives get the benefits if things go right. ...
Meanwhile, a Washington Post report based on administration sources says that Mr. Geithner and Lawrence Summers, President Obama’s top economic adviser, “think governments make poor bank managers” — as opposed, presumably, to the private-sector geniuses who managed to lose more than a trillion dollars in the space of a few years. ...
Meanwhile, Wall Street’s culture of excess seems to have been barely dented by the crisis. “Say I’m a banker and I created $30 million. I should get a part of that,” one banker told The New York Times. And if you’re a banker and you destroyed $30 billion? Uncle Sam to the rescue!
This is America," the president declared at the White House. "We don't disparage wealth. We don't begrudge anybody for achieving success. And we believe success should be rewarded. But what gets people upset -- and rightfully so -- are executives being rewarded for failure, especially when those rewards are subsidized by U.S. taxpayers."
"We're going to be taking a look at broader reforms so that executives are compensated for sound risk management and rewarded for growth measured over years, not just days or weeks," Obama said yesterday. "We're going to examine the ways in which the means and manner of executive compensation have contributed to a reckless culture and quarter-by-quarter mentality that in turn have wrought havoc in our financial system."
Understandably, pay is a touchy subject for financial executives these days, with reports last week that total bonus payments at New York financial companies last year reached $18.4 billion. But with tighter regulations on risk-taking and greater public scrutiny, the pay for top bankers could fall into line with pay for other professions, like doctors and lawyers. ...
In executive pay, Wall Street set the tone for other industries, as the compensation of senior managers rose far faster than for most workers. In 2007, the total compensation of chief executives in large American corporations was 275 times that of the salary of the average worker, estimates the Economic Policy Institute in Washington. In the late 1970s, chief executive pay was 35 times that of the average American worker.
The administration and Congress should move quickly to determine whether new rules could be applied, using the tax code or securities regulations, to encourage all banks to pay their executives in a way that tempers the destructive lust for risk that has brought the financial system to this cataclysm. Critics of pay caps and other restrictions claim the limitations will make it harder to find new talent. But the economy has not been well served by the arms race in pay. The country needs executives whose remuneration is tied to the long-term success of their strategies — not just the immediate payoff of their latest risky bet.
Then, the next time a chief executive earns an eye-popping amount of money, we can cheer that half of it is going to pay for our soldiers, schools and security. Higher taxes on huge pay days can finance opportunity for the next generation of Americans. ...
Perhaps a starting place for “tax, not shame” would be creating a top federal marginal tax rate of 50 percent on all income above $1 million per year. Some will tell you that would reduce the incentive to earn but I don’t see that as likely. Besides, half of a giant compensation package is still pretty huge, and most of our motivation is the sheer challenge of the job anyway. Instead of trying to shame companies and executives, the president should take advantage of our success by using our outsized earnings to pay for the needs of our nation.
Reed Hastings is the chief executive of Netflix.
As the economic collapse worsened last year — with huge numbers of bank employees laid off — the numbers of visas sought by the dozen banks in AP's analysis increased by nearly one-third, from 3,258 in the 2007 budget year to 4,163 in fiscal 2008. The AP reviewed visa applications the banks filed with the Labor Department under the H-1B visa program, which allows temporary employment of foreign workers in specialized-skill and advanced-degree positions. Such visas are most often associated with high-tech workers. ...
Foreigners are attractive hires because companies have found ways to pay them less than American workers. Companies are required to pay foreign workers a prevailing wage based on the job's description. But they can use the lower end of government wage scales even for highly skilled workers; hire younger foreigners with lower salary demands; and hire foreigners with higher levels of education or advanced degrees for jobs for which similarly educated American workers would be considered overqualified. "The system provides you perfectly legal mechanisms to underpay the workers," said John Miano of Summit, N.J., a lawyer who has analyzed the wage data and started the Programmers Guild, an advocacy group that opposes the H-1B system.
Not only is IBM cutting US IBM employees jobs, they are also shifting the work offshore to low cost countries. At a time of rising US unemployment I find this totally unacceptable.
As IBM CEO Sam Palmisano seeks billions in stimulus money I believe you should be aware of IBM's "firing here and hiring there" practice. I am asking you to enact or support legislation that requires any company like IBM that receives Federal, State or local public money to be fully transparent in job cuts, where the jobs are being eliminated and if the work is being shifted offshore and to where. .
On top of the need for openness and transparency, corporations like IBM that offshore work from the US and terminates a US worker should face financial penalty.
I wonder how the military and Govt buyers will feel about IBM products that are built and supported by some countries that are not exactly friendly to the US... Losing large contracts is about the only thing that will get the attention of SJP, but by the time that happens, he won't care and will be laughing all the way to the bank.
To Laid-0ff-and-turned-over, I'm not sure what band your in, but looking for something else inside your division will likely be a waste of time. There are zero postings for my band/division/location. The only openings are for intern/new hires that start in July. Keep looking, things do pop up, but then you're likely to be first to go when the next round of RAs hits. As for your situation with the hard ass manager, start taking your optional holidays and if you have enough vacation, take that till your last day. Your job right now is to find another job and off load tasks to those that remain, not work stupid amounts of hours to finish things up. -gettin-hosed-
It sucks that you are not getting a paycheck any more. The economy is at a low right now. It will brighten up. If I could, I would be looking for employment else where. I am looking, but not overly serious. I am in the degree program. If I leave prior to 2-years after I get my masters, I have to repay the tuition. If the right job and right pay comes along, I will take a 2-week vacation and give my 2-weeks notice the same day.
The current issue for employees remaining is that the work does not go away. We are going to get screwed by having to pick up the work, fix the problems the offshore people create, and get nothing in return but lower ratings. The one way to solve this problem is send the IRS against anyone in a US company making over $200k a year. Then, all these "decision-makers" will be in prison for tax evasion. Start of with SJP and Thain. -Not RA'd-
The Lotus group (also known as WPLC) had an RA on January 27 that hit 20% of Notes/Domino, and including most of its best people. After that, it didn’t seem possible for morale to sink further. But two days later, it did. On January 29, Lotus General Manager Bob Picciano led a quarterly all-hands meeting, with an upbeat tone that was a slap in our face. Below are a few highlights.
Bob led off with a 30-second “comment on the SWG resource action. This was a very difficult process, but one we need to better match our resources to our process” [actually, the loss of these key people has destroyed Lotus’s processes]. Bob added that “2008 was a very strong year for IBM and an exceptional one for Lotus. We had a very strong 4th quarter. I really think that 2009 will be a great year.” [bullshit!] Bob followed with 50 minutes of statistics showing what great results Lotus had had and saying no more about the RA. At the end of the meeting there were a couple of questions about the RA:
Q: “What is the commitment to North American workers. We have no entry level positions and in the Resource action, we lost many very qualified people.” Bob: “We are, of course, very committed to North America. It’s the home of our corporation. 40% of our revenue is from North America.”
Q: “With the latest RA, how do you see that impacting Domino delivery?” Bob didn’t give a direct answer to this; it sounded like they’re still working it out; but Alistair Rennie (VP of Lotus Development who reports to Bob) was kind enough to add that “We’ve seen some amazingly strong people affected by the RA.” [thanks, Alistair] Bob closed the meeting by saying: “I want to thank everybody again. Obviously we delivered a tremendous set of accomplishments for 2008. I want you all to reach out and let everyone know the success of the Lotus team." [OK, Bob. This posting is my way of reaching out.] -Gorya-
Folks, I can honestly say that I realize now how screwed up IBM management is. I am getting good performance reviews from my new manager and I love my job. IBM has the worst management I have ever seen. Abusive, arrogant, deceitful, lying, etc.. these are all words to describe an IBM manager. I am convinced that their bad management will be the downfall of the company.
I believe a union will force IBM to clean up their management practices. Right now IBM manages by fear and you can do nothing about it. So stick together, support the Alliance, and get a union going. If you feel you are not getting treated fairly, MOVE ON. Either in another position in IBM or leave for another company. Don't let your bad manager abuse and mistreat you. To my previous management at IBM, go screw yourselves. You are lower than dog shit. -ex IBMer -
Don't forget Lou Gerstner\'s robbing pension fund profits when wall street was booming and reporting it as vapor profit; They continue to co-mingle Executive retirement funds in OUR pension accounts. SOUND OFF and be heard. This is our opportunity. TELL WASHINGTON EVERYTHING YOU KNOW...IF IT'S LEGAL AND ETHICAL, IBM WON'T MIND EVERYBODY KNOWING. IT'S TIME FOR A LITTLE FORCED TRANSPARANCY !!! -Fed Up-
Alliance Reply: Yesterday US labor leaders met with President Obama and VP Biden. Biden said "welcome back to the White House". Why do you think he said that? If you think McCain was a friend of labor you are naive. IBM IS unionized overseas and has been for decades. We don't have blinders on, and will pressure President Obama just like any other politician.
Like other people on this site still employed by IBM, I am very scared for my job. I have moved into a more profitable department, but I am not sure if that will make a difference. I am still learning the ropes in my new department and am worried I may be a target for a future RA. Does anybody know if more lay offs are in IBM's future this year??? Also, what can I do in my new department to make myself indispensable??? Also, where can I find information to write my senators or congressmen??? Oh, one last thing...has anybody thought about having a nationwide IBM strike to try to get the union going? Or to protest the unjustifiable layoffs???
I am fairly new in the technology industry and the work force in general...but it seems to me that the only thing corporations care about is making a profit. If you watch the documentary "The Corporation", you will see the disgusting things corporations do to people, animals and the environment to turn a large profit. The heads of these corporations couldn't live without their big houses and flashy cars. While we, the people actually doing the work and making the products, get pushed around like maggots.
I think the idea of "job security" is gone in the USA. I fear that if the gov't doesn't start regulating corporations more and making them keep jobs in the USA, we'll all be working in retail and food industries at minimum wage! I went to college for six years, busted my butt to get this job...and it doesn't count for anything. I'm just another drain on IBM's bottom line! It's sucks!!! -Scared_IBMer-
A game changer may be they hire new college kids for their cheap labor as part of the "landed resources" portion. But the sad fact is that there is a massive reduction of American students majoring in computers and engineering because there are no jobs after the massive costs of years of education because the jobs go to foreigners. And what happens to these sources of cheap labor onshore after a few years of pay raises? They will become expensive and will be laid off. No one can blame American students for not pursuing these careers. That sure leaves our country vulnerable.
Can Obama keep the good jobs here? And on the other end of the scale - can the stimulus package jobs like construction be guaranteed to Americans and NOT to the millions of illegal aliens here? Unless Americans have job guarantees, there will be no good middle class nor lower income jobs for us. .They will all go to foreigners right under our nose. While they, certainly for most illegals, get free heath, education and other services thanks to those of us losing or not getting jobs who pay for it all. -anonymous-
The thin veil of adding 1,300 by 2010 in the new GDF in Iowa is a net loss of jobs in the US, and diverts our attention while he hires 10 times that in the BRIC. Maybe you can post the idea among your activist your members, to purchase a full page add in the Wall Street Journal, or somewhere to make national news along with a coordinated, day of mass e-mailing, at the same time of day, to get national attention. Include a short catch phrase subject line intended to make the 5:00 news, that brands Sam and IBM as "Shamefully Un-American" or "IBM prefers to Fire American vs Hire American". Their image is one of their few Achilles Heals. -luvintheafternoon-
Alliance reply: We would love to take out a full page ad in the WSJ but we simply do not have the money. An appeal for donations from the posters on this comment section gained us $50. We did get 28 new members but at $10 a month we still are just keeping our head above water. So the appeal for donations and membership is raised again. Do you want to take on IBM? Then it's time to join or donate. Thank you for your support.
Alliance reply: We keep all our membership names confidential unless the member wishes to be public (and we always ask). The database is at CWA headquarters in Washington DC and is secure. CWA and Alliance staff have access to the list. The list is broken down by Voting member (dues), associate membership and subscriber. The voting members list is given to Alliance officers by Alliance National Coordinator Lee Conrad. Alliance officers are bound by confidentiality. That list is used for contact in regard to conference calls, notices, information confidential to members and meetings. IBM does not see the list and we certainly would not share it with the company or any other entity.
Alliance reply: There have been many organizing efforts in the US that have taken years to take hold. Here's the deal. If 70% of the manufacturing workers in BTV and Fishkill signed up tomorrow we would know we had enough support to go for an election. The only thing holding us back are the employees not signing up with the Alliance and building organizing committees. Same with other divisions. It could happen this year if you are willing.
Alliance Reply: We have 1 full time staff person and a part time webmaster. We had to cut one other staff person due to lack of dues paying members. We also cut back on expenses for the same reason. In the past we sent an organizer around the country. In Boulder for example only a handful turned out for a publicized meeting. Last year our 1 staff person with Alliance volunteers regularly visited Burlington and Fishkill to hand out flyers and get people signed up. We have had stockholder actions every year where staff and volunteers demonstrate. We have also had picket lines at various sites. As mentioned we currently have 300 members who pay dues. Now more than ever we need to build membership so we can be more effective. Will you join today and help out?
You will learn to be wary of the drinking water, and to be skeptical about fresh fruits and vegetables. Laws will be different, too, and you haven’t been learning them all your life, so there could be some surprises; for example, a disparaging comment about the president might land you in jail. This sounds like a grand adventure! Since your wage is lower, you might discover that your pension accumulation is commensurately less. It might be enough for retirement there, but what about here? Being out of the US, you would not contribute to Social Security or Medicare for the duration. The current Social Security calculation considers your highest 35 years of contributions, so if you were out of the system for several years, you might ultimately have less than 35. This would mean a benefit calculation with a denominator of 35 but a numerator of something less, i.e. a fraction smaller than one. For example, if you only work in the US for 20 years your potential benefit is multiplied by 20/35 or 4/7, so you get 57% of whatever it might have been. It is true that some countries have arrangements that give credits back and forth, so you might benefit from that, depending on the country you went to. Be sure to ask. -Cyclops-
This is the problem. If SAP consultant from IBM US get 120K , they wont hire him, instead they would get someone from India to the US and pay him 60K bucks. The federal govt should stop this. L1 visas are to get people because there are no resources in the USA, not to get cheap labour from India. If they really need someone from India they should pay them on par with IBM US resources. That way only genuine (read rare skills) people will come to USA and will not have impact of locals working here. The policy of cheap labour is bad, and I do feel bad working here as cheap labour, when I know someone is paid double for what I'm being paid. If they can find someone with same skills in IBM US, I am happy to go back, otherwise they should pay me same salary as my counterparts. -India Landed resource-
Alliance reply: We don't like what IBM is doing to American IBMers or any other IBMers. There is a caveat in your comment that you should consider: The skills that IBM claims are not here in the USA is a lie. Yes, we know that there are some "rare skills" outside of IBM US; however, the majority of workers hired through L1 and H1B visas are hired BECAUSE they will work for half or less pay. The USA has PLENTY of skilled IT people available. IBM simply chooses to fire them and hire someone for the same job at half the pay.
Again, we know that there are some skills that are the exception; but it is clear that many many IBMers from the US had to TRAIN the people that would get their job AFTER they were gone. It is simple logic. Yes, IBM is taking advantage of you and your countrymen and women....and they are meanwhile taking US taxpayer dollars in their pockets and throwing US taxpayer jobs away, like trash. Why not start a union in India when and if you go back? Why not try to unionize IBM India? Could it be any harder to do than it is here, in the US? IBM is a Global Company; which calls for a Global Union. IBM is unionized in several other countries. Why not India? Think about it.
How much longer do you think the ALLIANCE is going to hang around waiting for you? With only 300 paying members I am amazed it is still here. This is for those of you bashing the ALLIANCE about it's visibility in the workplace.Now that you know about it have you joined?? -Tom Watson III-
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:
In a much earlier life, I was at GE when Welch was really pushing "work-out" hard. A benefit was it increased the span of control of managers. This made a lot of sense. We got to the point where there were 5 levels from an engineer designing power plant parts to the CEO. It made communications a lot clearer, and managers didn't spend as much time on political games - less people to fight with.
In my little part of GBS, we are at 9 levels from client-facing consultant to Sam. Strange part is that in general only the first level both manages people AND works for customers. The levels above all "manage the business." This generally means playing political games, tracking stupid metrics like completion of mandatory "how to flush a toilet" training, and fighting with other managers with no project responsibility over who gets to have their people work on a project. Usually this is all done by a mass of redundant spreadsheet files prepared by a whole other overworked staff of non-client facing support.
I would love to see 3-4 levels just eliminated. In consulting, you could take out levels 2-6 of 9 and most customers would never know. Most customers have no idea who these line management leaches are. They just wonder why our rates are so #$(&^% high compared to the competition.
Eliminating these non-work layers would align our structure with our more nimble competition. No idea if IBM could even begin to conceive of this, but it could be fun to watch if they do. The political battles over who stays and goes would be legendary.
Since accountants run the place, the one thing that could drive this would be the need to keep increasing margin to meet the "IBM model" touted on every earnings call. Once you've moved a huge portion of the client work to low-cost providers offshore, the proportion of management costs gets way big - blows your leverage model. Even a first year accountant realizes that capping growth on an already low Tech Services salary doesn't deliver nearly the savings as axing one or two executive layers who have very few reports anyway.
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