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Highlights—November 14, 2009

• Austin American-Statesman: Consultant: IBM data center contract unsustainable. By Kate Alexander. Excerpts: By Kate Alexander. Excerpts: A consultant hired to diagnose the ills that have plagued Texas’ $863 million data center consolidation project with IBM Corp. says in a report released Friday that the current deal is dysfunctional and unsustainable. “If IBM isn’t making money and (the Department of Information Resources) and the state agencies aren’t getting good service, it is not going to be successful,” said Glenn Davidson of the consulting firm EquaTerra.

  According to the agency's website, work on the IBM project began in early November 2004, and was expected to be operational by January 1, 2006. This is not the first time IBM has messed up Texas. In 2008, governor Perry suspended the transfer of state files to IBM systems and fined the company $900,000 for data lost through back-up failures under the same government contract. ...

  Right now, no one is happy with the effort to merge the data center operations of 27 state agencies into two updated and streamlined facilities. The agencies have been frustrated with equipment failures, poor service and higher costs. Meanwhile, IBM has endured a public flogging for many problems it attributes to poor conditions inherited from the state. Morale is low. Turnover is high. And the relationship was dysfunctional from the start, the consultant found. ...

  Davidson, whose firm vied for the job of negotiating Texas’ contract with IBM, was among the critics. He told Governing magazine earlier this year that “IBM really got squeezed on pricing, the solution and the time frame.” “They were all too aggressive,” Davidson said in the magazine, adding that IBM might have been willing to accept those terms to get a toe in the door.

• Austin American Statesman: Selected reader comments concerning the above article follow:
  • By Skeptical. November 13, 2009 1:49 PM. If the price tag on the project isn’t changing, (IBM won’t be making more $$$)only IBM’s responsibilities and deadlines will; then that means IBM will be doing less and taking longer. Those are the terms that will change. The state agencies no longer have the IT infrastructure to take this work back. Sound familiar? Outsource a program because politicians are promised something that sounded too good to be true, and guess what? It was! The state (us tax payers) lost money, IBM got paid, but inadequate service was provided. Why don’t the state agencies just cut checks to the various pet private companies that financially support the influential politicians and keep their personnel in place? That would be a lot easier and better for all parties.
  • By Civil Servant. November 13, 2009 4:03 PM. You bet the IBM contract is untenable. IBM sits on work requests submitted in a timely manner until they become emergencies. When they’re escalated, IBM gets to charge us—that’s we the taxpayers—for turning around the task in short order. It is ridiculous and whoever negotiated the state contract should be doing something other than contract negotiations. We have been taken for a ride.
  • By Common Sense. November 13, 2009 5:22 PM. If the current deal is dysfunctional and unsustainable why on earth renegotiate it - sounds like a case for cancellation/emergency reprocurement with a vendor that has a clue. The media around the state has only captured the tip of this iceberg. This has been a disaster for the State and taxpayers for two years and eight months. Put it out of its misery.
  • By donl_tx. November 13, 2009. The contract has been plagued from the first day by not having sufficient staff to perform all of the work required by the contract. This situation holds today and will continue into the future.

    IBM misjudged the scope of services for this contract when they bid in 2006. IBM applied their standard commercial cost model to the scope and were completely wrong in their estimates.

    IBM had been beaten twice in 2005 and 2006 by another firm for mega-million dollar contracts for state and county government and they were determined to win the Texas contract. If you make a FOIA request, you will see the other bidder’s price was significantly higher than IBM’s bid price.

    However, the former CTO of the State of Texas was adamant about the amount of money the State had to spend and IBM fell into his trap. Now the citizens of the State and the State employees that are stuck with IBM are paying for those mistakes.

    Is it time for real lawyers to get into the mix and force IBM to perform at any cost? I believe it is that time. No more studies are needed; no more “new approaches” are needed. The State of Texas has bent over backwards trying to make IBM a success and nothing has been accomplished. Get tough with them — that’s the last stand.

  • By Easy. November 13, 2009 5:58 PM. Hiring outside contractors and paying double or more what they pay their employees is the core problem. The State is Paying out Big bucks for high dollar programming and getting Beginners and folks that don’t have a clue in return. On the State side we have a bunch of folks that are more into empire building than getting the job done. The whole thing stinks. Texas Tax payers are getting the shaft. Texans in need of service are getting the shaft too. I’m sorry but the Taiwanese Completely computerized their entire state funded heath care system for less than 50 million dollars. Texas is still running Windows 2000 Servers.
  • By Outsourcing Madness. November 13, 2009 7:00 PM. Outsourcing is destroying the state agencies. This has been going on sense Bush was governor. Look and what's happening to DPS and HHSC. Not all outsourced jobs are going to American citizens. They don’t like to publicize this. I’ve seen programs outsourced to American businesses who in turn subcontract to Indian/Pakistani programmers who come in on H1B visas.
  • By austxmark. November 13, 2009 8:09 PM. I am a Project manager for the state now and was deeply involved in the IBM takeover at two different agencies. In both cases the problems are the same. Low job performance and no way to take action on it. IBM simply does not have to do the job, we can complain but that's about it. My IT dept totally hates the deal. Yet another poor contract by the state.
  • By HookmanBrown. November 13, 2009 8:41 PM. Yet another scam of tax payer dollars given to bribe-paying private corporations by bribe-taking elected officials. Privatization of public responsibilities never works.
  • By IBMer17. November 14, 2009 9:25 AM. The other casualty here are the workers who are stressed out and demoralized. Who speaks for them? Who cares about their working conditions. Maybe they should organize to protect their interests. www.allianceibm.org
• The Register (United Kingdom): Texas snatches voter system from $863m IBM contract. Fears for lost data. By Austin Modine. Excerpts: Texas has pulled its voter registration system from a $863m data center consolidation project being overseen by IBM, saying it distrusts the giant's ability to recover lost data. IBM is merging separate data centers from 27 Texas state agencies into two facilities under a seven-year outsourcing contract, to cut costs and improve security.

  But the Secretary of State office tells the the Austin American-Statesman it received a "wake-up call" in August after a major server crash resulted in a 13-day outage of its business records filing system. It infers that if a similar incident occurred during an election, the agency wouldn't be able to verify new voters in Texas. The state agency received permission to withdrawal from the IBM program and set up a data center of its own with two separate backup locations. ...

• Manila Standard Today (Philippines): IBM’s problems mount. By Jo jo Robes. Excerpts: If you’re one of the million-and-a-half of members of the Government Service Insurance System who’s having trouble with the processing of your claims and experiencing other latter-day problems, you’ve probably heard of the dispute between the pension fund and its IT provider, US-based giant IBM. GSIS and IBM have traded lawsuits after the state pension fund claimed that defective (and expensive) software that it had been sold by Big Blue caused its computer system to crash, thereby wreaking havoc on GSIS’ transactions with its members.

  It turns out that GSIS isn’t alone in its troubles with its data processing software provider. In the space of only a month, IBM has encountered similar complaints in the London borough of Southwark and the state of Indiana in the US—developments that lend credence to GSIS’ complaint against its database system provider.

  Once hailed the world over for its industry-leading IT solutions expertise and emphasis on customer service, IBM now seems to be the target of complaints from people and organizations who have been sold less than satisfactory products. Even former IBM officials and employees, in various Internet message boards, have accused their ex-employer of sacrificing long-term relationships with its customers for short-term profit—particularly by firing up to 90,000 experienced personnel and outsourcing most of its work to India and China.

  Last week, the Southwark Council filed a £717,061 damage suit against IBM in a dispute over a new computer system that the borough has decided was defective. The council said it has lost confidence in IBM’s credibility and integrity, and does not believe it will ever be able to have a workable business relationship in future, according to the Computing Web site (www.computing.co.uk). ...

  Much like GSIS here, the council said IBM’s system was unfit for use and of unsatisfactory quality, adding that IBM failed to use reasonable skill and care when designing and testing the system. IBM also claimed during negotiations that its system would meet the council’s requirements, but these claims were false because the system could not do so, the complaint read.

  Like GSIS, the borough also claimed that IBM failed to resolve the problems when told about them. Instead, the council said that when it tried to find a solution with IBM that would make the system work, IBM tried to absolve itself from any responsibility for the software even though the contract for ArcIndex was an essential part of the system. ...

  How did Big Blue react to the state government’s decision? Company representative John Buscemi told AP that “’IBM rejects the state’s claims and believes the state’s actions are unjustified.” Asked whether the company was considering suing the state, he said, “IBM will take action as appropriate to protect its rights under its contract.”

  For a company that used to be as proud of both its expertise and customer support as IBM, these reports are indeed distressing. But mistakes do happen in the IT industry, even to most reputable and expensive of them like IBM. But it’s how an IT provider like IBM responds to the needs of its high-paying institutional customers that should make it different from anyone else—especially customers like Southwark Borough, Indiana and, yes, GSIS, who provide critical services to their own clients. As one message writer said, commenting on the complaints against Big Blue, “IBM cannot continue to charge Ferrari prices for Hyundai performance.”

• Yahoo! IBM Employee Issues message board: "Re: IBM's Problems Mount" by "Bill and Barb". Full excerpt: There are consequences after you fire all your experienced help and replace them with inexperience, lower paid help. The people running IBM aren't stupid, they had to know things like this was going to happen. IBM's legal department should be busy over the next several years. I bet the brass didn't replace their high paid, experienced lawyers with inexperienced, lower paid lawyers.
• Yahoo! IBM Employee Issues message board: "Re: IBM's Problems Mount" by "finitewisdom". Full excerpt: We'd like to think IBM knew the consequences of firing their experienced workers. I suspect instead they were hoping they wouldn't get caught and have to deal with customer problems.

  We'd also like to think our own government would do due diligence before hiring IBM on any major projects. Unfortunately, it appears as if Sam Palmisano has greased the skids with Obama for many upcoming contracts that will take taxpayer dollars and send them overseas.

  My hope is that IBM has to deal with the cost of poor quality, not the US taxpayers.

• Socyberty (United Kingdom): Tell Us How Ibm Ruined Your Health and Ability to Earn a Living Due to Greed and Inhumanity. Excerpts: In a recent article called, "Sam Palmisano the biggest outsourcer of jobs out of the US to BRIC countries", we learned of the personal tragedies and lose of both physical and mental health. We would like to hear more of your personal impressions and stories that effected your families or those of people you know or care about. This must be stopped, what is wrong that this can continue in the name of greed and prosperity for wall street and Sam Palmisano’s stock options and bonuses.

  We have learned from a UK writer that these same draconian strategies are going on in the UK as well. That writer said that he must at a minimum rate 15% of his people unsatisfactory every year- who then go on a performance improvement plans that they never get well from and eventually let go. According to this UK commentary in the previously mentioned article- 50 UK Parliament representatives are trying to intercede on the practice to destroy these people’s pension plans as a result of these premature layoffs.

  What’s concerning is that IBM’s mentally abusive and destructive strategies go on even though people are well aware of how it has destroyed lives and killed many. That is no exaggeration. We are aware of people whose lives and health were so destroyed by their IBM abuse that they have been devastated by both mental and physical health problems(high blood pressure,heart disease, diabetes) as a result of what happened to them there. Its is almost impossible to stop as the legal system allows this to go on. In the US there are no laws that are enforced to stop the mistreatment of employees. There are a few weak EEOC laws but they are not enforced, even when people get attorneys and try to get their rights enforced. ...

  The economy makes it tough to just pack up and find another job and for those in their 50s it is a particularly brutal thing. They are too old in the US economy to find other employment, they have a pension to protect and they have kids in college. Yet these poor weak mice are the ones that Sam Palmisano and other executives set their trap for as they can be replaced by less well paid employees either in the China or India. Its comforting to know that a few of IBM’s worst executive offenders like Debra Thompson who mistreated employees for years were finally let go, and that selfish and self centered executive VP Mark Oulette who let his all male staff torture women staff out while he played his fiddle like Nero was finally terminated. Reports suggest he was walked out the door. None of it helps their victims but it is at least a small amount of justice.

• Yahoo! IBM Employee Issues message board: "Loss of accrued $25K FHA Benefit at separation" by "exsuccessfulibmsalerep". Full excerpt: IBM pushed me out at 25 years and just short of age 50. The FHA was the only retiree health coverage I had coming after working for IBM my entire life. I brought this up with the corrupt local management and HR as part of the separation discussions. They ignored it and said it was my problem.

  After months of not working for the company, I can see there is/was a defined class system, kind of like in the movie Titanic. The CEO to the first line managers are in First Class. Any non manager is in Steerage, whether a plant worker earning a modest income or a high flying sales person with high earnings years. This dividing line was crystal clear at separation. The company's management can stroke your ego and pay you to think you are in First Class but never forget you are not an officer of the company so you are in Steerage.

  I wonder what IBM's clients impression of the company's "stellar" reputation would be if they realized the experienced, professionals they work with will have to wait to age 67 for Medicare coverage? Or save an extra $200K to pay for premiums until age 67 or continue to work (at a menial or real job) until age 67? It doesn't depict the company as the Cadillac it was always know for. This is one of the reasons I'm behind the Health Care Reform.

  I bet Moffat left with retiree health care coverage or $200K to pay for it for his family. I bet Moffat won't be primary Medicare insurance at age 67.

• TechNewsWorld opinion: Betrayals: Obama's Hollywood Sellout, Tech Companies' Layoffs. By Bob Enderle. Excerpts: I've seen layoffs cripple companies, result in deadly workplace violence, destroy morale, launch unions and create competing companies. For instance, I think layoffs are largely the initial cause of Sun's death spiral. The reason is that they are surgery by chain saw; there is nothing elegant about most of them, which seem to assume people are closer to machines than humans. They are vastly easier to do than force management to maintain high quality staff and balance costs with reasonable revenues. ...

  You also learn that things like this should be planned heavily and executed quickly. Leaving people with no future intermixed with people who will have jobs creates lots of workplace tension, and there is little reason for the folks who know they have no more future to perform. You also learn to announce a higher number than you execute so you can appear to save jobs -- not execute a higher number than you announce, because that looks like you are putting your measurements ahead of your people. Beating expectations on layoff numbers destroys employee loyalty. ...

  Employees are the lifeblood of a company. Layoffs should be the last resort, and if they have to be done, the emphasis should be on the quality of the effort, the security of the company and employees -- and not just making the financial community happy. One final thought: Layoffs make getting rid of employees easy, but it should never be "easy" to get rid of employees.

• Yahoo! IBM Employee Issues message board: "Statistics for Active US employees at the end of 2004" by "makeyourignorancework4u". Full excerpt: These were taken from Schedule B Form 5500:
  • The total active US employees numbered 135,000 in 2004.
  • These number of still active "1st Choicers" was 11,864 or 8.8% of the total. The FHA does not apply to them. All of them except for those who opted out (there was at least one or two of the latter) were in the "Prior Retirement Plan".
  • There were also 26,439 "2nd Choicers" still active. The FHA applied to every one of them.
  • There were an additional 44,243 employees who were converted to the Cash Balance plan. The FHA applied to every one of them as well.
  • There were and additional 46,164 employees who were not employees on June 30, 1999. It is not clear if any of those were allowed to enter the Cash Balance Plan. However they all joined before the 2003 cutoff for FHA and thus the FHA applies to them as well.
  • Finally there were 6350 employees who joined after the 2003 FHA cutoff date. These were not eligible for the FHA.

  Of those FHA eligible and still active at the end of 2004, the following is true:

  • All those who had 30 or 30+ years of service were 1st Choicers and the FHA did no apply to them.
  • All the 2nd Choicers and Cash Balance converts still active were below age 55 at the end of 2004.
  • There were 140 CB converts who were between the ages of 40-44 and had from 25-29 years of IBM service. Assuming IBM doesn't hire anyone under 18 years old, that would mean that a few of these had 26 years of service and would be able to retire at age 48 and take all their FHA with them since they would then have 30 years service.
  • There were an additional 10,000 2nd Choicers between the ages of 50-54 with more than 15 years of service. Assuming a uniform distribution over age, that would mean that an additional 2000 would become eligible in 2005 to "lock in" their FHA. In addition there were about 5000 2nd Choicers between the ages of 45-49 with 24-29 years of service. Assuming a uniform distribution again, that would augment the FHA "lock-ins" by an additional 1000,bringing the total 2005 lock ins to 3000 or about 2.5% of all those eligible.

  Now acknowledging that all 135,000 US employees were eligible layoffs and thus "screwable", let's concede that some are more so than others. How about these 3000 above? Well given that if all of them were to be laid off in 2005, none of the 2nd Choicer's would lose their retirement eligibility since they would all be given a bridge. All the CB converts would be able to keep all their CB. Everyone of them however that is laid off in 2005 before their 55th birthday or not attaining 30yrs of service would lose their FHA. That leaves a max of 3000 FHA screw candidates. Of these we can probably assume half would attain their 55th birthday or 30 yrs of service and half would not. Cuts the candidate pool to 1500 for 2005.

  Next we have to acknowledge that not all 1500 of these will be laid off. So if we assume that IBM lays off 4% of employees as a yearly average but that that this affects older employees 2.5:1, that would mean that in 2005 IBM could screw 150 of these out of FHA. Of these, 50 would have obtained a bridge to 30 years. They could rightfully assert that they attained the 30 year retirement milestone but were screwed out of FHA nevertheless.

  That gets us close to answering nyjints5's original question which he actually didn't ask but should have based on the context of his original post, namely "How many IBM retirees attain the full 30 years of service and are screwed out of FHA? The answer to that seems to be the same number that are bridged to 30 years each year. And that could be as high as 50/year. Over the last 10 years of the FHA, the cumulative total could be as high as 500.

  That still leaves 250/year that were bridged to 55 or 15 years or both. All this leaves out countless others who were laid off w/o a bridge. Many of those had a lot more than 15 years service. But every one who is laid off and is eligible for the FHA is screwed out of it as well...just not as severely as those accounted for above.

• Yahoo! IBM Pension and Retirement Issues message board: "Re: Loss of FHA dollars" by "mrpieman1729". Full excerpt: Good luck on getting your FHA moneys that you think you are entitled to. I was part of a sell off to Qualxserv just a year before my 30 year retirement date and although I got my full pension for working past my 30th with the other company, I lost the FHA due to the fact that I didn't "retire" directly from IBM. I ran it up the ladder all the way to corporate and they held fast on their denials quoting some gibberish from the retirement plan. Other than spending a ton of my own money to pursue it through the courts, I gave up on that matter after 6 months of BS from the higher ups. I wish you the best!
• Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM pension" by "ranheimchas". Full excerpt: Take a close look at your pension statements. What looked like an increase may have been a reduction in your federal withholding tax, giving you more "take home" pay. But remember, because there was no decrease in income tax, you may have to pay back this "Increase" to the IRS at Income Tax time.

  I retired 15 years ago, and don't expect to see any COLA in the future. My retirement income is going down every year because of my increases in Medical Insurance costs.

  When I first retired, my medical insurance co-pay was close to zero. Now it is about $600 a month (for the IBM portion), which lowers my net pension by $7,200 a year. When I add up what I pay IBM for their insurance, the Medicare Part B payments, and all the co-pays after the deductibles, my net cost for medical care is about $12,000 a year, for myself and spouse.

  If one of us should get something bad like cancer, the $12,000 will look like pocket change. That is quite a change from the "Paid medical for life" differed compensation I was told I would get.

• Finance and Commerce (Minnesota): WARNing failure: Most laid-off workers not covered by notice law. By Scott Carlson. Excerpts: In theory, the federal WARN Act is meant to give communities and workers an early heads-up when local companies are going to lay off large numbers of employees. But in reality, the Worker Adjustment and Retraining Notification Act is a WARNing failure: Many workers in Minnesota and across the nation are getting inadequate or sometimes no warning when their companies lay them off. Companies complain that’s because the controversial WARN Act is poorly written and impossible to follow. It’s also full of loopholes.

  Under WARN, employers with 100 or more employees generally must give 60 days’ notice to their workers they intend to lay them off, if the business cuts 50 or more employees at a single work site. The statute also requires employers to notify their states of such layoffs, with the notices typically going to Dislocated Worker units. However, the real story: Only about 25 percent of all mass layoff and work site closures covered by the WARN Act are resulting in timely notice to workers, according to federal studies. ...

  In some cases, you can’t tell from the public record – or lack of it – where a company stands with its layoff activity. Martin Keech, a 30-year IBM veteran lost his job at the company’s Rochester plant in February. He knew from having attended an employee meeting that at least 80 other people were getting pink slips. Later, a Minnesota official estimated the number of IBM layoffs in Rochester at closer to 250 people. “People suspected they [IBM] kept the layoffs under 500 [last winter] at each site to avoid the WARN Act,” Keech says. (Under WARN, employers must give 60 days’ notice when they layoff 500 or more workers, even if that reduction doesn’t equal one-third of a site’s work force.)

  IBM spokesman Doug Shelton denies the accusation, then notes IBM isn’t publicizing all of its work force reductions anymore because the company considers them “ongoing adjustments to business.” However, IBM did provide official layoff notification in California, New York and Vermont when work force cutbacks in those states triggered their individual WARN acts, according to Shelton. Despite IBM’s secrecy, Alliance@IBM, a website of Communications Workers of America Local 1701, has estimated Big Blue’s total U.S. work force cuts in 2009 could top 16,000 employees.

  That includes about 1,200 U.S. employees who worked at IBM’s systems technology group in Rochester and a handful of other locations and were let go this past winter, according to union sources.

• Finance and Commerce: Faces behind the layoffs: Martin Keech. By Scott Carlson Excerpt: When Martin Keech received his layoff notice in late January from his employer, IBM in Rochester, what made it hard to handle wasn’t just that he’d worked there for 30 years. It was even more that just a week before, Big Blue’s CEO, Sam Palmisano, had bragged in a letter to employees about how IBM had posted a stronger-than-expected profit for the fourth quarter of 2008 and would be giving folks good bonuses in 2009. “That sounded like good news,” says Keech, 52, a computer programmer. “Then the next week I was cut. That was a shock.”
• Yahoo! IBM Retiree Information Exchange: "Re: recession in parallel to the great depression -- what gives?" by "scall0way". Full excerpt: Yeah, that is certainly my worry too. I'll be 58 in March. My work partner will be 58 next month. We've already been told that out entire department's workload is being "transitioned" to India by April 1. We've all looked but there are essentially no jobs out there, either inside IBM our out, for our skill sets (we are all old "big iron" mainframe systems programmers). At least I have a little luck. I'll have 36 years with IBM in December and am on the old pension plan. I'm trying to get my home fixed up to put on the market as I'll no longer be able to afford to live in it once my job ends - but I should be able to live *somewhere*, and could probably get by with my pension and a part-time job, assuming I could ever find something. I know odds are not great.

  But my work partner will only have 16 years with IBM when we get separated. He's in the "new" pension plan with the FHA. He checked on NetBenefits and found out that his pension will be $1200/month and his IBM medical benefits, for himself and his spouse, will be (depending on which plan he chooses) $1100-1500/month! And still 7 years to go before he is eligible for Medicare! That kinda cost will sure use up your FHA dollars fast! And he has a wife with a lot of health issues, so plenty of "pre-existing conditions".

  But he *has* to find another job! He's also fixing up his house to put on the market - but then where when you have no income? And certainly no job at our current pay scale. He was asking me this morning, and I didn't know the answer so I'll toss it out here...Does he HAVE to start using the IBM FHA money and plan right away? If he does find another job with health benefits can he hold off on using the IBM plans and money, and then maybe come back to them later?

• Yahoo! IBM Retiree Information Exchange: "Re: recession in parallel to the great depression -- what gives?" by "madinpok". Full excerpt: He does not have to use the FHA right away. If he gets laid off from IBM, he will be eligible for COBRA for 18 months (and probably some transitional medical benefits for a few months). COBRA will be cheaper than the full FHA rates. If he finds another job before COBRA runs out, that's great, he can postpone using the FHA coverage until sometime in the future - as long as he has other coverage in the meantime. Or, if he doesn't find a job right away, he could begin using the FHA and then later, when he does find another job, switch out of the FHA to his new employer's plan. Then, he can rejoin the FHA later when he really retires.

  One thing he needs to be aware of is that there are no guarantees that IBM will not discontinue the FHA sometime in the future. But that goes for the old retiree medical plan, too. Everyone who depends on IBM medical coverage is at risk, no matter which plan you are in.

  I am of the opinion that if you are using the FHA coverage, it is better to spend down the money in the FHA account in as little time as possible, as you never know when IBM might take it away. And as the premiums go up year after year, that money will buy you fewer years of coverage. But, you should leave some minimal amount of money in the account to allow you to rejoin the FHA plan should you ever drop out (because of coverage from another employer) and then want to come back later.

• IT Business Edge: Why Layoffs Should be Avoided. By Rob Enderle. Excerpts: If someone had told Carly Fiorina that the reason she won’t win the U.S. Senate seat in Congress is because she did a lot of layoffs as CEO of Hewlett-Packard, I’ll bet she wouldn’t have done them. Layoffs are typically done for the wrong reasons and to please financial analysts who couldn’t spell "strategic" if their lives depended on it. Those analysts are focused on quarterly results and, unfortunately, they force that same focus on chief executives. All you have to do is look at Sun to see the truth of this. ...

  What makes layoffs attractive is that they are relatively easy. Unless you have a lot of employment contracts or a strong union, it is vastly easier to tell people to go home than to close plant sites, get rid of equipment or eliminate perks (particularly executive perks). And going to the heart of the problem, which is typically poor revenue performance, that is really difficult.

  The other thing that makes layoffs easy is you don’t have to feel for the people. Getting rid of one person is tough, particularly if you know him or her, but with a layoff, you can numb yourself. It isn’t your fault as a manager; you are simply following orders and the top executive just sees numbers and will protect the people he or she knows and likes. It’s comparatively painless against actually doing the hard work of individual people management. But it's still hard not to look at a layoff as a betrayal. ...

  Wrapping Up: Layoffs Are Slow Company Killers. I used to call them the last resort of incompetent executives, but that’s not really true is it? There is a reason to use layoffs effectively and that is by a new turnaround CEO in order to get the firm’s attention and to build a team that is loyal and a company that can be managed. Otherwise, it is simply an executive going for short-term benefits by making a decision that has severe and largely unknown costs. Perhaps the best argument against layoffs is they are a betrayal of the trust between employees and management. Trust is so hard to build and shouldn't be sacrificed so easily. ...

  Granted top executives can spike their income by doing them. We just saw an entire industry (banking) make decisions designed to spike executive income and look how wonderfully that turned out.

• Jim Hightower: The Rich Worry About You. Excerpts: You'll be comforted to know that the rich are concerned about you. Not concerned about your joblessness, lack of health care, or anything else about your economic condition. No, no – it's your psychological state of mind that has them worried. In particular, they are troubled by what you think about them. With the rich, you see, it's always about them.

  They sense a disquieting psychological mood among the hoi polloi – an anger at what Wall Street has done, a feeling that the rich are greedy and get unfair advantages. To think such thoughts, they say, is unhealthy for you emotionally. After all, says a wealth management advisor for high-dollar bankers, "To revile the rich is to revile the American dream." So, turn your anger into appreciation and view the rich as your role models.

  Besides, your negative vibe is upsetting the extremely well off. "They feel mischaracterized," says a Merrill Lynch wealth manager. Many give to charity, and some even get buildings named after them, making donations to universities and cultural centers. As the Merrill Lynch advisor put it, "Then to be characterized as not doing their fair share begins to wear on them." See, you've made them sad.

  So lighten up on the rich, and just be happy. Otherwise, explains a financial psychologist, we'll create "a generation that distrusts investing and associates wealth with greed." Oh? And how irrational is that? Well, says the financial shrink, young people "have watched their parents lose their money, and now they think, 'you can't trust banks.' We need to do work around that,"

  Get real! It's not hard-hit, workaday folks who need to be stretched out on the psychiatrist's couch – it's the wealthy elites who've made a mess of our economy and now want to feel better about themselves by blaming us for being a wee bit angry at their narcissism.