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Highlights—September 12, 2009

• EE Times: IBM continues to mislead. By Mark LaPedus. Excerpts: IBM Corp. has cut nearly 10,000 jobs this year, according to reports, although Big Blue still refuses to fess up to most of the layoffs. The Alliance@IBM/CWA Local 1701, an IBM union, claims IBM has implemented 17 separate layoffs for a total of 9,308 jobs this year, according to the Poughkeepsie Journal. That's been known for some time.

  Here's what is new: Big Blue is expected to cut a total of 16,000 jobs this year, many of which are in the United States, according to the union. This comes at a time when IBM is thriving despite the downturn. A spokesman for IBM dismissed those claims by that group. He confirmed that IBM has taken various ''resource actions,'' but he said the company cannot comment on the size or specifics.

  Defending Big Blue, the spokesman also made the following data points: 1) IBM is the largest hi-tech employer in the U.S.; 2) IBM has added jobs this year, including in the U.S.; 3) 60 percent of its workforce got raises; 4) IBM is not misleading the public and is transparent about its "resource actions"

  IBM also discredits the union, saying that its information is false. "When the Alliance says 10,000, that can't be accurate. People have opportunities to look at jobs elsewhere" inside the company, the spokesman said.

  IBM declined to elaborate on how many jobs are offered to axed workers. And to a degree, Big Blue still won't fess up to the size of the job cuts. This is when I believe that IBM has credibility issues. I'm not the only one. For some time, the union has charged that IBM is cutting and outsourcing U.S. jobs, while quietly hiring in India. As expected, IBM did not comment on the cuts in the most recent report. That article can be read here. ...

  But as a result of the ongoing trends, I'll take our editorial a step further. In my opinion, IBM should not only fess up to the layoffs but it must stop misleading the public. Big Blue must address the charges about outsourcing U.S. jobs. It must also become more transparent about its activities in India.

  Another issue: Over the years, IBM has received public funding to expand its fab and chip-packaging activities in New York state. However, in recent times, the company has reportedly cut jobs at the fab site in East Fishkill, N. Y. and been somewhat slow to expand the plant. Some believe that the signs point to a stunning event: IBM could go fabless one day.

• Selected reader comments concerning the above article follow:
  • From within the Blue Walls, I have to say that IBM is nearing the point of being unable to execute our ambitious plans. The cuts have been deep and painful, and on top of the cuts we have lost some senior technical folks who've left due to low morale and a pervasive feeling that we are all on borrowed time.

    Looking at what you've been told: 60% received raises, and that there are jobs available internally. Sixty percent receiving raises does not clearly state whether that's 60% of the US workforce of 60% of the worldwide US workforce. It certainly isn't 60% of the pre-2009 workforce, since raises are awarded in June. Of the folks I've talked with, virtually everyone who received raises received symbolic raises (roughly 1%). Apparently those raises only went to 2+ and 1 performers, and that should have been about 25% of the workforce.

    There is no internal job movement. When folks are told they have 30 days, they find that the internal job bank is either empty or contains positions that are flagged "not for internal transfers." One manager said that she can tell when a layoff is coming because the internal job bank is closed up so that no one can move to a new job.

    One of IBM's principles is supposed to be "Trust and personal responsibility in all relationships." I have a hard time reconciling symbolic raises and stealth layoffs (many small layoffs that are seemingly deliberately done in a way that prevents public scrutiny) with that principle. The statements IBM representatives have made have been technically true, but misleading. Raises, job availability, hiring. Every one of them true, but not true.

  • There are three groups with an interest in what a company does: employees, customers, and stockholders. What are a company's obligations to the employees? At the minimum, telling the truth. If the company is not completely straight with the employees, why should the customers and stockholders think that they are getting the straight skinny?
  • IBM is digging its own grave in a long run. People in India are smart and love to be independent and both are a catalyst for number of today's IBM engineers in India that will in future become IBM competitors. milosb55
• The Register (United Kingdom): IBM reaffirms bright profit picture. Sam Palmisano has to wear shades. By Timothy Prickett Morgan. Excerpts: When IBM posted its second quarter financials in July, while sales declined by 13.3 per cent to $23.25bn, net earnings were still up 12.2 per cent to $3.1bn. Given its cost controls and discipline on doing deals that bring in profits, IBM at the time raised its guidance, saying that it could hit $9.70 per share earnings in 2009.

  EPS is a bogus metric, but IBM is obsessed with it, presumably because a lot of bonuses within the company are tied to it. Real earnings growth is what matters, especially when you are talking about a company like IBM, whose share buyback programs are akin to a crack habit. Investors like to see revenue growth when they see profits because then they believe, rightly or wrongly, that the profits are not just a one-time belt-tightening that will come back and bite a company later on.

  Anyway, with its filing to the SEC today, IBM is reiterating its guidance for $9.70 EPS for 2009, which is the newsy bit. The company is even doing the math for Wall Street, showing that in the first half of 2009, the company has posted $45bn in sales, down 12 per cent, but has raised gross profits by 2.1 points to 44.5 per cent. It has also ratcheted up net income by 6 per cent to $5.4bn, and has achieved $4.02 in EPS, up 11 percent. That leaves $5.68 in EPS to go for the second half.

  Wall Street basically yawned, with IBM's shares wiggling around $118 a pop on the news. It is hard to get excited by revenue declines and financial engineering on Wall Street these days, I guess.

• Southern Daily Echo (United Kingdom): IBM staff at Hursley and Portsmouth 'betrayed' over pension scheme shake-up. By Gareth Lewis. Excerpts: “SHOCK, anger and betrayal” are the feelings of IBM staff faced with drastic changes to their pension rights, according to confidential documents leaked to the Daily Echo from inside the IT giant, one of Hampshire’s biggest employers. Marked “IBM Confidential”, the letter to chief executive Brendon Riley from the firm’s Pensions Consultation Committee (PCC) warns that staff are flocking for union representation, hundreds of unhappy, experienced workers are being targeted by headhunters and customers are concerned about the impact on their business.

  It’s the latest indication of internal strife at IBM, which employs about 6,000 people in Hampshire at its UK research base at Hursley and its UK headquarters in Portsmouth , over plans to close the final salary pension scheme and alter the terms of its early retirement plan.

  As previously reported by the Daily Echo, the Unite union claims hundreds of angry IBM workers have been joining-up in readiness to fight the proposals which they say will have “a devastating effect” on future pensions. It calculates that people in their mid-50s could typically lose up to £200,000 as a result of the changes. ...

  “IBM UK is in danger of using pension changes as a short term lever to improve the company’s profits, while undermining the future financial security of many employees in the process and turning many of their life plans upside down.” ...

  “All trust has been lost with the company because they promised three years ago that the final salary scheme would be kept open until 2014. There are record revenues and earnings and the company is awash with cash. They’ve got billions but they want more billions. It is driven by greed.” Another worker said the row had seen even senior staff turn on each other.

  “There is widespread anger and resentment even among low level managers towards senior managers. I have never known IBM’s management break ranks before.”

• Selected reader comments concerning the above article follow:
  • I have experience as an IBM manager and much of the following can be deduced from http://www.amipp.org .uk/phorum5. The truth of the matter appears to be that IBM UK is controlled by IBM US and the change in the pension scheme is a vehicle to save costs, increase profitability, issue the increased dividend promised to shareholders and manipulate the share price.

    No doubt that this proposed change in the pension scheme is being driven by IBM top executives so that they be will be able to award themselves more $millions in bonus payments.

    IBM top executives appear to have little interest in keeping IBM a long-term truly profitable and progressive company. Some of the current IBM top executives are here today and will be gone tomorrow. (Remember Lou Gerstner IBM CEO from 1993 to 2002. He was somewhat of a longer termer. He was appointed when IBM was an ailing company.

    However, “upon his departure from IBM, Gerstner received a 10-year consultancy contract worth up to $2 million annually, plus expenses and full use of IBM facilities and services, such as office, cars, aircraft and financial planning. He is only required to work one month out of the year.” See http://en.wikipedia. org/wiki/Louis_V._Ge rstner,_Jr.).

    It is likely that the current IBM UK top executives are in charge just for the short term and are being used as hatchet men. A shocking part of the pension scheme changes proposed is the alleged plan to increase the percentage per year that pension scheme members leaving IBM have deducted from their pension from 3% to 7%.

    So for example: Today if a 55 year old leaves IBM UK they will lose 24% of their final salary pension. The proposals will mean that they will lose 56% of their final salary pension. IBM UK is being forced to downgrade the pension provision with a linked forced scheme to lay people off and ship their jobs to less costly job markets such as China and India.

    The lay off of people will not be done by making people redundant as that will cost IBM UK in redundancy payments. It is being done by the means of artificial quotas being forced on managers to downgrade their assessments of their employees’ job performance. IBM UK will then be able to claim that those employees do not perform satisfactorily and will sack them.

  • The early comments here are out of touch with the reality on how IBM has changed in the last 10-15yrs. The latter comments are closer to the reality. Also it appears it is not the closure of the Final Pension that is the main issue here, though I am sure those who work in IBM may disagree, but the punitive terms surrounding the changes making IBM workers so angry.

    How would you like the Govt to close all forms of Redundancy payments for losing your job, or that companies can change your Pension terms as they like (which they can do now anyway) so that the situation is so bad you have no choice but to leave. Like being fired for doing a great job but as you're over 45 yrs old and you have carefully scrimped and saved for a pension you have to loose your job, or loose more of your pension if you retire early.

    How would you like to be forced to leave your job when the company you work for is not only Very cash rich, but revenues are increasing year on year. So there is no excuse other than profit at cost of employee trust, loyalty, and total loss of faith while the company tries to sell the world as being a good corporate citizen and a socially responsible company.

    Maybe this is why so many IBM employees are joining Unions. If this method of pension changes becomes the norm to increase profits (Financial crisis is a good reason to do this now) as HR executives watch what other companies do, then Redundancy payments are a thing of the past, replaced by making major punitive pension changes so you force your older and loyalty workforce out at no cost, other than eventual impact to the UK tax payer.

    Remember the Consultation process also means nothing, any company can make changes, they are required by law to listen to employees, explain the changes yet still implement as they wish, their legal responsibility is to listen and explain, hear the employees views,wishes and desires. Then do what they want. This is the reality.

  • I currently work for IBM. My father also worked for IBM, so I have known the company and the way it treats it's employees all my life. IBM and IBMers have a core set of values. The company is built upon trust and integrity. IBMers pride themselves on not just designing great products, but on the ethical way our company carries out it's business. This is what really differentiates IBM from other companies.

    Four years ago, there was a pensions shake up in IBM. At the time the IBM UK director, made a promise to employees that the 'C plan' (final salary plan) was fully funded and safe until at least 2012. A few weeks ago, the company entered a legally required consultation phase, with a mind to closing the final salary plan. The consultation phase is legally required. However IBM are not required to pay any attention to the consultation, it's just a rubber stamping process.

    The employee representatives taking part in the consultation are being denied access to independent legal advice and are not being told under what criteria IBM would decide to halt their plans to close the final salary pension scheme.

    Personally, I would benefit from the closure of the final salary scheme. I am not in the scheme, my pension would see an uplift as a result of the closure. However, I am wholly opposed to the proposal. I regard this proposal as a total betrayal of IBM's staff by senior management. It goes completely against the ethics upon which IBM was built. My views are echoed by every single member of staff I speak to.

    IBM may plead poverty, but that is not the case. I cannot disclose figures, but the company is healthy financially. Let's just say that we were rumoured to be in talks to purchase the computer company "Sun" recently (Suns yearly revenue is about $13billion). Had we gone ahead with the purchase, it is said that we would still have $6 billion of cash in the bank. That's enough to buy a cheeseburger for every person on the planet (but not fries too!). Morale in IBM UK is at an all time low. I predict that as soon as the job market improves, there will be a mass exodus of talent from IBM.

    I was once proud to be an IBMer, now all I feel is shame. Thomas Watson, IBM's founder must be spinning in his grave."

  • It's a shame that petty jealousy has crept into this. Remember that IBM has been a leader in many ways, and where IBM leads, many follow. Final Salary Schemes may be on the way out, but there are many other aspects to this that are brutal and unnecessary given the very healthy state of IBM's finances. The truth is that the company is now driven by Executives who are paid the same sort of bonuses as the Bank employees, and therefore it is in their interest to increase share price. Doing this by managing out the most loyal and experienced staff is very shortsighted.
  • IBM is not unique in this respect; I have worked for another IT Consultancy for 36 years which was taken over by Atos Origin a few years ago. As a French company, it had a company policy of defined contribution pension schemes only, so our generous final salary scheme was closed to all members last year and it was only by the strong intervention of our scheme trustees that adequate provision and compensation was made for people who stood to lose the most (principally those in their mid-late 40s with over 20 years service). At least I am close to retirement, but I find myself in a scheme which will no longer increase the pension paid in line with inflation, for which we only got a whole 5% uplift "up-front". This country has gone from having enviable private pension provision for many people to a situation where the only way to get a decent pension is to be a civil servant.
• Bloomberg: IBM and Procter & Gamble's 21st Century Workplaces. By Rosabeth Moss Kanter. Excerpts: Job insecurity is increasingly true of all companies and in nearly every country. Statistics for employment and unemployment hardly capture the variations in employment status. Discouraged job-seekers might find refuge in self-employment, printing business cards to get short-term consulting assignments - sometimes having the ironic effect of making it easier for companies to lay off employees and replace them with contract workers, which now include senior executives. ...

  Hitting that sweet spot - keeping people employed in good jobs - is a goal of the vanguard companies I describe in my new book, SuperCorp. Companies such as Procter & Gamble, IBM, and others are trying to create innovation and profits through values and principles that enable them to have a positive social impact. They are thinking their way out of twentieth-century assumptions (e.g., that a job must be performed in a facility at specific times and assigned by a boss who observes performance) to create twenty-first century dynamic workplaces.

  The Super-corporations want to be employers of choice. Their leaders prefer not to talk about insecurity but instead invoke flexibility. That semantic distinction might be scorned by the uneasily employed, but it conveys a new reality that can have positive as well as negative consequences.

• Selected reader comments concerning the above article follow:
  
  • This article is VERY misleading and completely distorts what IBM has become (in 2009) vs. what IBM WAS (before the financial crisis). Here are some facts you should consider and REVISE / ALTER your article accordingly:
    • Anyone who can work remotely, from home is now a much greater target for outsourcing. Outsourcing is where a US worker is fired (aka "laid off", "resource action-ed", early retirement) and the work is then given to someone in India or another country where the costs are significantly less.
    • IBM has laid off over 10,000 US workers in 2009. This is a CONFIRMED number based on formal documentation from IBM. See http://www.endicottalliance.org/allianceibmsimplefactsheet2.htm for details.
    • IBM has hired almost twice that amount in India alone in 2009: Asia/Pacific: 13,376; CEEMEA: 3,988; Europe: 2,923; India: 18,873; Japan: 868; Latin America: 7,112; USA: 3,514; Canada: 820
    • In 2002 there were 240,000 US employees = 80% of it's Global workforce. Today, in 2009, The US workforce has shifted from 80% to a mere 29%. Offshore jobs have reached 283,000, or 71% of IBM's 398,000 total. And IBM isn't done offshoring - the tally is estimated to grow to 16,000 by year end.
    • An overwhelming majority of the 10,000+ confirmed US workforce (there are thousands more let go for which we don't have any official, formal headcount) are over 40. Age discrimination?
  • I agree with KC's comments. I recall a senior IBM executive speaking at a conference in Ottawa, Canada a few years ago. His message was this: ANYTHING can be outsourced. I realize that some American companies have repatriated some of the production to the US, the result of such factors as rising transportation costs (due to oil), crappy quality in offshore plants, and backlash from American consumers. I would add that what needs to be realized is the new reality of skills mobility. It's less an issue of human beings being mobile but more that of work being done anywhere thanks to technology. There's a danger in falling for the sales pitch by IBM and thousands of other companies that would like to have us believe that they have the best interests of the United States (or little Canada for that matter) at heart. These are transnationals who have NO loyalty to national boundaries, and will always operate in THEIR best interests.
  • This article was obviously written with absolutely no research into reality. Re: "Hitting that sweet spot - keeping people employed in good jobs - is a goal of the vanguard companies I describe in my new book, SuperCorp. Companies such as Procter & Gamble, IBM, and others are trying to create innovation and profits through values and principles that enable them to have a positive social impact." IBM is working toward EXACTLY the opposite goal - firing highly competent Americans and hiring overseas labor, cheap and completely incompetent. People are fired (called "Resource Action") and distorts the numbers by spreading them across states, and classifying a lot of them as "retired" -- without their knowledge -- until they receive the paperwork. If any of these firings were actually due to there no longer being a need for the particular skills these people have, the company would not be hiring overseas replacements and forcing the fired Americans to TRAIN them - train them in skills the company no longer needs. And if you care for accuracy, you should also try to find out how this management-bloated business is spending US stimulus dollars - our tax dollars. Here's a hint: follow the money - to India, Malaysia, Romania....
  • Thanks to KC for posting the facts below. I think I laughed out loud when reading this article. Obviously the author didn't speak to any U.S. employee for this other than a P.R. person.
  • Okay. Classify me as the "uneasily employed" or "overemployed". I'm one of the few IBM'ers left that still has a job (for the moment). I have consistently received exemplary performance reviews but even a moron knows that won't make a difference in the grand scheme of things. Palmisano and his minions have the singular goal of removing (not laying off, but FIRING) countless stellar performing North American employees with the goal of elevating the stock price and increasing their ungodly bonuses, and to hell with the US economy or the future of America.

    As a result of IBM's settlement of the 2006 overtime lawsuit, I was saddled with a 15% pay cut in early 2008 because my duties were deemed as being consistent with those of a nonexempt factory worker (no offense intended). I now have 26 years with the company.... in order to "make up" the difference in salary I work overtime. Sure, I worked overtime before, but now I have to work even more to compensate for any vacation that I take, plus the fact that I have to accumulate as much extra savings as I can in order to compensate for everything that is based on "BASE" salary... such as retirement, or if I ever want to qualify for a loan....... Plus, at the end of the year when the 4Q results are coming up, overtime gets frozen so I have to work extra NOW to compensate for that...

    And don't even TALK to me about IBM's supposed education plans. In my experience, I can spend my own money and my own time on furthering my skills but IBM has *ABSOLUTELY NO INTEREST* in me having those skills.... If I don't already have the EXPERIENCE in these skills they will not even TALK to me if I want to be considered for a position that would actually USE these skills.

    I am just fed up with all these journalists that see the magical IBM acronym and interpret it as being the GOD of the corporate sector. Why don't they come and spend some time talking to the *REAL* IBM. Come and talk with the employees that do the real work... and talk to us about what it means to be constantly in fear of your manager contacting you via instant message "Can we talk?" Chances are, the topic of that conversation is going to be the next resource action... ummmm, FIRING...

    Some of you may ask me why I stay with this god forsaken company.... well, I'd like to last long enough collect some of that retirement that I've earned.... Oh, wait.... they took that away too.....

  • All of these posts are accurate. I work for IBM in a position where I have access to global employee survey data. Morale in the U.S., Canada, and Western Europe is in the tank. Everyone fears for the next layoff and is for the most part paralyzed in their tracks that their job will be sent to India any day now. You call this the 'sweet spot' Ms. Canter? Please.... do your homework next time!
• Yahoo! IBM Employee Issues message board: "Re: IBM and Procter & Gamble's 21st Century Workplaces" by "bits_bytes_and_bugs". Full excerpt: OMG, if she's that clueless about IBM and she's equally confused about P&G, I think I'd better dump my P&G stock. IBM is not just a job shredder, it's a people shredder as well. This article says more about Harvard's lack of due diligence and intellectual honesty than it says about IBM and P&G.
• Yahoo! IBM Employee Issues message board: "Re: IBM and Procter & Gamble's 21st Century Workplaces" by "ibmretiree2006". Full excerpt: Ah, I love those academics who have never worked in the real world in their lives. I wonder how much consulting she has done for IBM or the other firms in her life? Oops, just found this.

  She has received 23 honorary doctoral degrees, as well as numerous leadership awards and prizes for her books and articles; for example, her book The Change Masters was named one of the most influential business books of the 20th century (Financial Times). Through Goodmeasure Inc., the consulting group she co-founded, she has partnered with IBM on applying her leadership tools from business to other sectors; she is a Senior Advisor for IBM's Global Citizenship portfolio.

  She advises CEOs of large and small companies, has served on numerous business and non-profit boards and national or regional commissions including the Governor's Council of Economic Advisors, and speaks widely, often sharing the platform with Presidents, Prime Ministers, and CEOs at national and international events, such as the World Economic Forum in Davos, Switzerland. Before joining the Harvard Business School faculty, she held tenured professorships at Yale University and Brandeis University and was a Fellow at Harvard Law School, simultaneously holding a Guggenheim Fellowship.

• Washington Post: Wall Street's Mania for Short-Term Results Hurts Economy. By Steven Pearlstein. Excerpts: It's been a year since the onset of a financial crisis that wiped out $15 trillion of wealth from the balance sheet of American households, and more than two years since serious cracks in the financial system became apparent. Yet while the system has been stabilized and the worst of the crisis has passed, little has been done to keep another meltdown from happening. Even the modest regulatory reform effort launched with much fanfare back in the spring is now bogged down by bureaucratic infighting and special interest lobbying. And back on Wall Street, the wise guys are up to their old tricks, suckering investors into a stock and commodity rally, posting huge profits on their trading desks and passing out Ferrari-sized bonuses. The Wall Street Journal reports they've even cranked up the old structured-finance machine, buying up claims to life insurance proceeds and packaging them into securities.

  All of which makes it particularly disappointing that so little attention was paid this week to a report by a panel convened by the Aspen Institute on the "short-termism" that has now become hard-wired into the culture of Wall Street and corporate America. ...

  Their complaint is that the focus on short-term financial performance by investors, money managers and corporate executives has systematically robbed the economy of the patient capital it needs to produce sustained and vigorous economic growth. And while their recommendations may not be as sexy as a cap on Wall Street bonuses or a ban on high-frequency trading, they get to the root cause of the financial crisis in ways that other reform proposals have not...

  The roots of this short-termism go back to the 1980s, with the advent of hostile takeovers mounted by activist investors. This newly competitive "market for corporate control" promised to reinvigorate corporate America by replacing entrenched, mediocre managers with those who could boost profits and share prices. In theory, the focus was on increasing shareholder value; in practice, it turned out to mean delivering quarterly results that predictably rose by double digits to satisfy increasingly demanding institutional investors. Executives who delivered on those expectations were rewarded with increasingly generous pay-for-performance schemes. ...

  It is all well and good to vow that compensation schemes will be changed so that executives and money managers sink or swim with their investors, but there is a limit to how far those incentives can be aligned. While these new and improved financial markets promise greater efficiency and liquidity -- except, of course, when they don't -- it's now clear that the benefits of all that efficiency and liquidity are captured largely by the Wall Street middlemen rather than their customers, or the economy as a whole.

  The more fundamental problem, as the Aspen panel reminds us, is that the components of modern finance -- the securities, the trading and investment strategies, the financing techniques, the technology, the fee structures and the culture in which they operate -- are all designed to work together to maximize short-term results. And, in such a self-reinforcing system, it is very difficult to change any one feature without changing all the rest.

• Yahoo! IBM Pension and Retirement Issues message board: "Retirement Planner Alert" by Lee Conrad. Full excerpt: Recommend CAUTION when using the Retirement Income Planner on NetBenefits The intent of this note is to alert people who have an IBM pension as part of their retirement income to be aware of a setting in the tool that is very important.

  If you are using the Retirement Income Planner, available via NetBenefits for IBM, be aware that this tool has a default setting that sees your pension as income that will grow year to year. It assumes a cost of living adjustment for your pension unless you reset the value of the field to NO. As we know, the IBM pension does not have a cost of living adjustment.

  For people using this tool independently, this is an important field to change. But even those who use the tool with a MoneySmart Coach need to check to make ensure that the field has been updated from the default value. An employee who was working with a MoneySmart Coach had the coach set up the tool. The employee challenged the very positive numbers that the tool was generating 2 or 3 times but the Coach did not catch his error and neither did the employee. Fortunately that coach went to another job and the employee started working with a new coach who found the error.

  Check screen 3. Income, for the question: Adjust Income to future dollars? The default is yes and the current value being used is 2.3%. You can also check the "Income and Expense details" table in the tools report. The pension value should remain constant through the years.

  Note: While the heading is Fidelity NetBenefits for IBM, the tool is not customized for IBM. It is used by Fidelity for other companies as well.

  Another tip: If the tool gives you an Action Plan to purchase International Stock, be aware that it does not recognize these funds from our 401k plan as international investments: "Intl Stock Mkt Idx", "Pacific Stock Idx", "European Stock Idx". You may already have appropriate international stock in your portfolio.

• Yahoo! IBM Retiree Information Exchange message board: "Re: United Way and other campaigns ( was Re: [IBM Retiree] Intelligence and kindness" by "Bart Bartholomew". Full excerpt: I hate to dispel a belief that some of you may be harboring. I was very fortunate and made it to third line management ... woo-woo! But I never, ever saw any secret handshake, secret 'society', wink & nod, or any other shared secrets that management at 1st, 2nd, or, 3rd level had. The decisions were all made way above us and we, like good soldiers, announced, supported, and implemented them.

  And, we also harbored the same disappointments as those not in management as we saw a deterioration of what IBM had stood for in prior years.

  As layoffs began and my organization (I was back in a staff role at the time) was hit not once, but twice, and then a third time, I related to relatives/friends outside of IBM and colleagues inside that I felt like one of the little yellow plastic ducks circling around in a water trough at a town's annual carnival as those who paid their dollar lined up BB guns to shoot me. I never did get hit ... came close but survived. Did my dedication to IBM falter then? Sure did. It was plum scary to be in my 50s and think that I could wind up on the street.

• eWeek: How Offshoring May Be Hurting U.S. Technology Employees. By: Don E. Sears. Excerpts: Cost cutting is the name of the game. But at what price for the country? That appears to be the central argument of public policy professor Ron Hira from the Rochester Institute of Technology. Hira is an outspoken opponent to major offshoring trends in higher-paying technology and financial jobs. His argument? It's not only about low-paying manufacturing and distribution jobs. In the long run--it's about a shift from becoming a rich to poor nation. ...

  "Hewlett-Packard, when it took over Electronic Data Systems, announced it was going to lay off about 24,000 workers as part of the restructuring plan. That work is not going to disappear. At least half of those jobs will end up in low-cost countries somewhere. They'll be basically offshored."

  IBM has gone from a 6,000 headcount in 2003 in India to, they won't say exactly how many, but estimates are more than 90,000. That's a 16-fold increase in six years.

  People say these are kind of the lower-wage, lower-level jobs within IBM, within EDS. But that's not true, either. There are a number of R&D centers that are being opened up in India and China. Boeing just recently announced an R&D center opening in Bangalore (India). Google has a facility in Bangalore. Microsoft has cutting-edge basic research being done in China. The offshoring of R&D and innovation is clearly happening. Clearly, high-skill, high-wage jobs are moving offshore.

• The Register: Axeman cometh: Microsoft lays off 27 staff. By Kelly Fiveash. Excerpts: Microsoft plans to axe 27 jobs at its Redmond and Bellevue sites. The latest cull in Microsoft’s Washington offices is expected to hit workers on 1 November, according to the Seattle Times. The software giant had notified the Washington State Employment Security Department about the job cuts. "I can confirm that part of our effort to reduce costs and increase efficiencies involved 27 job eliminations here and in other regions across the country,” Microsoft spokesman Lou Gellos told the newspaper. “While job eliminations are always difficult, we are taking these necessary actions to realign our resources against our top priorities."
• Linked In: The Great IBM Connection (IBM's alumni program for past and present IBM employees): Why companies discriminate based on age and what to do about it. Excerpt: We know age discrimination is illegal. We know it's wrong. We know it doesn't always bring in the best candidate for the job. But let's take a look at some of the reasons why employers seek to avoid older workers. I ... Read more at Examiner.com. Selected reader comments follow:
  • Very interesting article. Being an older employee I never thought about including in my cover letter that I have no small children and willing to work whenever. I've been the oldest or one of the oldest employees for the past 3 jobs. Perhaps I am interviewing correctly but I wish this was a "non" issue.
  • Therefore (based on the article) it is better to look good than be good. Experience does not matter as long as you look and act like a supermodel. Is it any wonder beggars in three piece suits are crying for bailouts?
  • Of source looks are the most important thing, by far. MUCH more important than intelligence, technical experience, knowledge, industry contacts, ability to remain calm under pressure, ability to multitask, ability to think through complicated issues, quality education, credentials, licenses, certifications, professional demeanor, ability to communicate clearly via both verbal and written communications. So it's OK if you are not smart, overreact, are hard to understand, write poorly, use improper grammar, have little or no education or credentials in the technical material you will be managing/selling/developing, have no experience in the industry, don't use valid reasoning, Just make sure you look good and act enthusiastically.
  • This is a really pitiful commentary for major corporations. They are all guilty of age discrimination but they avoid punishment by using their high dollar legal teams to manipulate themselves around the laws. I was a victim of this (a reorganization of my department where I was the only one reorganized and asked to move across the country and also the oldest person in the group)and tried to fight it unsuccessfully.
  • I think IBM discriminates systemically buy pushing people out -- especially people who rat out bad management; that is it specialty. I ratted out some bad management, the management got the boot and I got ignored, no reward, no promotion, disrespected, and cornered into retirement at 30yrs+2wks. I'm happy to be gone but feel like a rape victim. Pharmacological induction of amnesia might help. Otherwise do your weeping and get over it. Remember that demons never die and all that you can do with them is to educate them. It may take a long time to rebuild your sanity and self esteem. Understand that you were socialized, and duped; and perhaps you trusted them. You may have lots of introspective work to do. Try to keep yourself so busy that you don't have time to think about it; and tell your wife to kick you out of bed whenever she encounters you screaming at Gerstner in your sleep. You might make it.
  • Gregory I'm sure you are right. Don't spend any more time in self doubt. Move on and let new successes be the best revenge. I'm happily retired now, but memories are bittersweet. Enjoyed working with great people, but always suspected that my final 5 years without a raise were not just because of bogus "economic" conditions. They knew I couldn't leave and or want to move to a new hill to climb, so didn't have to give anything.
• New York Times: Pensions, 1980 vs. Today. By Catherine Rampell. Excerpts: I have an article today that discusses how a retirement system based on private savings is affecting the job market. In short, when the economy is contracting, and employers are trying to shrink their payrolls, older workers cling to their jobs because their nest eggs have shrunk. In other words, as Prof. Teresa Ghilarducci at New School put it, 401(k)’s act as a sort of “reverse automatic stabilizer” for the economy.

  This wasn’t always the case. Once upon a time, defined benefit pensions were the norm and helped employers gracefully ease more employees into retirement during downturns (potentially by sweetening the pension deal a little). It was not until 1978 that Congress first set up 401(k)’s — private, tax-favored savings vehicles intended to supplement traditional pensions. Over time, as companies decided to shake off some of the risk associated with supporting their retirees, the defined contribution pension system grew to largely replace the defined benefit system. ...

  Unfortunately for workers, having control over their own pensions doesn’t always end up so well. A recent study from the Employee Benefit Research Institute found that at the end of 2007, about a quarter of Americans ages 56 to 64 had 90 percent of their 401(k) account balances in stocks, instead of more conservative investments. (It seems English-speaking countries in general like to invest their private retirement savings in the stock market more than their non-English-speaking industrialized peers.) High administrative and investment fees can also erode privately managed retirement benefits.