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Highlights—January 2, 2010
- Hudson Valley Times Record-Herald: Big
Blue to cut jobs to save big green. IBM's 'work-force rebalancing' will trim $400M. By George Spohr. Excerpts:
IBM plans to trim $300 million to $400 million from its payroll in 2010 -- the same amount it cut last year,
when more than 9,000 of its U.S. workers lost their jobs. Through layoffs, attrition, retirements and firings,
IBM eliminated more than 1,000 positions in Dutchess and Orange counties in 2009. That brought the company's
mid-Hudson payroll to below 10,000 workers for the first time in a decade. The company refers to the shifting
of its payroll as "workforce rebalancing."
In a conference call last January, CFO Mark Loughridge said the company expected that shift to save IBM $300 million to $400 million in 2009. For IBM, that's "kind of the normal range that we run every year," Loughridge said, with 2010 being no exception. ...
Citing company policy, Shelton would not elaborate on where and when layoffs might occur. But if history repeats itself, job cuts are likely to begin in January. The longer the company waits to eliminate positions, the less time it has to recoup its payroll savings, and the more positions need to be eliminated. ...
Lee Conrad, national coordinator of Alliance@IBM, an employee union, said there's nothing new about IBM's strategy. "The Alliance believes that cost cutting and job cuts will continue in 2010 as IBM moves U.S. work offshore," Conrad said.
- ThisIsHampshire.net (United Kingdom): MPs
back challenge to IBM pension plan. By Matt Smith. Excerpts: Four south Hampshire MPs have backed a Commons
motion challenging IBM on its retirement plans. Nearly 100 MPs from all parties have now signed up to the parliamentary
motion calling on the US technology giant to protect the pension benefits of its employees. They include the Eastleigh
MP Chris Huhne, Romsey MP Sandra Gidley, Winchester MP Mark Oaten, and Gosport MP Peter Viggers. It comes after
mounting concern by IBM employees at Hursley.
IBM, which employs about 6,000 people in Hampshire at its UK research base at Hursley and its UK headquarters in Portsmouth, has provoked unprecedented internal strife over its plans to close the final salary pension scheme and alter the terms of its early retirement plan, despite posted record profits in 2008. IBM, which employs about 6,000 people in Hampshire at its UK research base at Hursley and its UK headquarters in Portsmouth, has provoked unprecedented internal strife over its plans to close the final salary pension scheme and alter the terms of its early retirement plan, despite posted record profits in 2008. 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. ...
IBM says the actions it is taking will enable it to maintain competitiveness in the marketplace.
- Washington Post: Aughts
were a lost decade for U.S. economy, workers. By Neil Irwin. Excerpts: For most of the past 70 years, the
U.S. economy has grown at a steady clip, generating perpetually higher incomes and wealth for American households.
But since 2000, the story is starkly different. The past decade was the worst for the U.S. economy in modern
times, a sharp reversal from a long period of prosperity that is leading economists and policymakers to fundamentally
rethink the underpinnings of the nation's growth.
It was, according to a wide range of data, a lost decade for American workers. The decade began in a moment of triumphalism -- there was a current of thought among economists in 1999 that recessions were a thing of the past. By the end, there were two, bookends to a debt-driven expansion that was neither robust nor sustainable.
There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well.
Middle-income households made less in 2008, when adjusted for inflation, than they did in 1999 -- and the number is sure to have declined further during a difficult 2009. The Aughts were the first decade of falling median incomes since figures were first compiled in the 1960s. ...
"This was the first business cycle where a working-age household ended up worse at the end of it than the beginning, and this in spite of substantial growth in productivity, which should have been able to improve everyone's well-being," said Lawrence Mishel, president of the Economic Policy Institute, a liberal think tank. ...
But beyond these dramatic ups and downs lies an even more sobering reality: long-term economic stagnation. The trillions of dollars that poured into housing investment and consumer spending in the first part of the decade distorted economic activity. Capital was funneled to build mini-mansions in Sun Belt suburbs, many of which now sit empty, rather than toward industrial machines or other business investment that might generate economic output and jobs for years to come.
- Glassdoor.com: Best Places to Work (2010).
Excerpt: Glassdoor.com is excited to announce our second annual Employees' Choice Awards for Best Places to
Work. Our Top 50 winners were selected by the people who know these companies best — their employees!
Editor's note: IBM did not make the top 50. However, Glassdoor does have information about IBM that may be of interest, including:
- Financial Times: India
mines riches as west’s back office. By James Lamont. Excerpts: The private sector business park is one of the
most potent symbols of the transformative power of a single sector of Asia’s third largest economy: information
technology outsourcing. Proficiency in the English language, technical skills and low cost helped Indian companies
over the past decade plug into the global economy and earn a reputation as the “world’s back office”. Big western
companies, particularly in the US, turned to Indian service providers – such as Infosys, Wipro, Genpact and Tata
Consultancy Services – to support IT systems, supply back office business processing and staff call centres.
The “new economy” prospered on little more than some computers, telephone lines and entrepreneurial spirit in the 1990s. But today India has about 50 per cent of the global market for offshore IT and business services. US companies such as IBM, Dell, Accenture and JPMorgan now employ thousands of professionals in India.
India’s outsourcing revenues are close to $60bn a year. In 1998 they were just $4bn. The sector employs about 1.6m people, many of them English-speaking graduates. With India expected to maintain its edge, these numbers are forecast to double over the next five years.
The appeal of Indian outsourcing to big global corporations also represented a significant shift of economic power from the US to India. Outsourcing’s stellar performance helped the Indian economy to break with decades of 4 per cent growth and reach 9 per cent, a feat that has allowed it to be identified, along with China, as a “pole of growth”. It also put Indian executives in the same boardroom as their US and European counterparts, and launched a wave of young people to study and work on the US west coast. ...
India’s abundant human capital is moving up the value chain. Promising new areas include research and development capabilities in biotech and pharmaceuticals, computer software and electronics, and the auto and aerospace industries.
Business processing is set to overtake IT outsourcing in terms of revenue as Indian vendors diversify into services such as human resources, payroll management and legal services. Moreover, leading Indian outsourcing companies are themselves opening operations in other countries, such as China, the Philippines and the US. Som Mittal, president of Nasscom, India’s outsourcing industry association, predicts a return to double-digit growth for the industry next year, after a dip this year, and sees no trend of US companies pulling back outsourcing activities. ...
He foresees Indian business laying claim to a rather larger slice of the US in the coming years, in attitude and social mobility as much as business revenues.“This Indian industry has carved out a route to the American dream for our workers,” he says.
New on the Alliance@IBM Site
- Job Cut Reports
- Comment 12/31/09: STG Timeline Layoffs coming: 1. Some STG employees needed to get their PBC results done by 1st week of December. 2. STG RAd list was finalized that last week of November. 3. Some STG were told on the 2nd week of December that their jobs will be moving to China. 15 minute meeting. 4. Some STG employees are getting emails for one-on-one 1st week of January for their PBC assessment year results (PBC grade). 5. STG will have the final list in place for layoffs for January 2010. *Note: Good luck for those having One-on-Ones the first week on January for their PBC result grade. -OneOfThem-
- Comment 12/31/09: I don’t know what’s taking IT professionals so long to see the light. Other professionals learned a long time ago – ask Sully Sullenberger or any other pilot for that matter. Sully is a national hero not only for saving lives on the Hudson but he’s also a champion for the pilots’ union/labor – he testified at House Aviation committee about older experienced pilots, protecting pensions, training, pay, etc. Pilot contracts aren’t immune from benefit & pay issues – but they don’t get fired without cause w/30 day notice either – recession or no recession. And, airline industry is much more competitive than IT industry!!! I don’t know about you – but I’d rather pay a higher fare & fly with 59 yr old Sully as Captain than with a pilot half his age, half his experience & half his pay. I bet lot of IT customers think the same way about their investments. -annonymous-
- Comment 12/31/09: Job cuts in Dallas at Diplomat location started yesterday. Some managers even called employees on Christmas Eve to bring them in for meetings (but most were out of town). We were told more to come next week. -anonymous- Alliance reply: If you have any emails or documentation on management in Dallas calling people on Christmas Eve, please send to ibmunionalliance@gmail.com
- General Visitor's Comment
page
- Comment 12/30/09: Congrats to all IBMers who survived all of 2009 as an employee. Enjoy your growth driven pay come March payment. Hopefully it is something. Please remember those 10,425 folks RA'ed (most were not PBC 3's) that will get zip growth driven payment for their contributions in 2009 and took the fall so the IBM greed machine run by pig executives can turn a profit with declining revenues. IBM doesn't pro-rate growth driven pay but says that the RA package"compensates" for not being eligible for the growth driven pay. (GDP) program. Cruel and cold spin by IBM. -never4get-
- Comment 12/30/09: Happy Holidays to all from Africa!.. I fired IBM when I hit 55 this year (under the old plan) and Joined Peace Corps. Like many of you, I lived in fear of the next RA - worked through most of each year's "vacation" - and prioritized IBM over important relationships with loved ones. While looking back I regret some of my choices, I also have fond memories of many good people I have worked with at IBM. I wish you all the best for the upcoming year - and while it seems clear our once great IBM has lost its way, I'm hoping that you don't lose yours. Good luck. -I-Fired-IBM-
- Comment 12/31/09: From an older " Attitude" case to all you new ones. May yourselves and your families have health and happiness throughout the new year. Keep fighting the good fight. Management used to say " If assholes could fly this place would be an airbase and he would be Wing Commander". We need more Wing Commanders. We need to fill the sky everywhere Management looks with employees demanding a contract. Keep it professional. Keep it legal. But keep up the pressure in the new year. Nothing would be greater then dropping a weapon of mass protection on the Ivory Towers of IBM. An organized workforce. Do not delude yourselves. We are at WAR. Be just as proud of joining the Alliance as you would be joining MENSA. They are both the intelligent decision. -Exodus2007-
- Comment 1/02/10: What are the real reasons that IBM RAs and eliminates USA workers and transfer their jobs
to the BRIC's? The USA politicians and executives are saying the reasons are because the USA corporate tax levies
are too high for companies and corporations to continue to do business in the USA with the global economy. This
is not the real reason. Yet most of you buy into it. The real reason is corporate greed. The USA has been giving
out liberal tax provisions and tax breaks (corporate tax reductions, PILOTs, tax rebatement, property reassessments,
economic development zoning, etc.) to companies and corporations, yet corporations like IBM continue to export
USA jobs to reap even more record profits and feed their greed machine.
About IBM saying they need to RA workers to continually rebalance their workforce since IBM is a global company competing in the global economy. Well this IBM is trying to sell everyone on this statement. IBM has always been a global company and always was in the global economy, but until Gerstner and now with Palmisano, they pit IBM countries against each other instead of having them work autonomously as the Watsons had done.
IBM under the Watsons did business all over the free world where it could. It didn't just do business in the countries it could make the most or biggest profits in. Now IBM favors the cheapest economic markets without regard to anything else. Why does IBM prefer to ramp up business in the cheapest economic environments? For GREED's sake to make the current IBM executives way reach beyond their dreams at the expense of the poor, exploited, overworked, and abused employees. -da_facts-
- Pension Comments page
- Comment 1/01/10: "...Plan's current interest crediting rate 1.4% for 2010...". Well, the interest crediting rate was 2.6% for 2009. I thought the economy was recovering (that's what they are saying) so why is the rate down so much? Nice to know this cash balance pittance is nothing more than a cheap as %$#@ savings account masquerading as a pension plan. Does that mean for 2011 it could be 0.0%? We're all gonna be screwed come retirement. We can take that to the bank. -PPA'ed-
- Comment 1/03/10: -PPA'ed- And you expected fair treatment and a fair pension without a union negotiated contract why?? Because your manager told you it was fair and a good thing for all? Just curious why you would expect a cost savings measure taken by IBM to not be funded by you losing something? The cash balance plan was just that, A cost savings measure. IBM saved a bundle. It cost you a secure retirement. That's fair isn't it? Had enough? Join the Alliance and Organize your co workers. Or don't join but get all your co workers to join. That works too. Do nothing and that 0 percent could easily become reality. It almost is. -Exodus2007-
- Raise and Salary Comments IBM CEO Sam Palmisano: "I
am pleased to announce that we will not only be paying bonuses to IBMers worldwide, based on individual performance,
but that they'll be funded from a pool of money nearly the same size as last year's. That's significant in this
economy -- and especially so, given the size of the 2007 pool. Further, our salary increase plan will continue,
covering about 60 percent of our workforce. As always, increases will go to our highest performers and contributors.
We should all feel good about the company's ability to invest in people in these very concrete ways."
- Comment 1/02/10: I have 8 years of experience in System Administration. Which Band Level can I expect if I join IBM India. What would be the salary package range ? Can I get 12 Lacs per annum (INR)? -Curious R2I-
- PBC Comments
- International Comments
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
- National Union of Public and General Employees: Medical bills cause 62.1%
of all U.S. bankruptcies. Excerpts: 'Our findings are frightening. Unless you're Warren Buffett, your family
is just one serious illness away from bankruptcy.' - Harvard's Dr. David Himmelstein.
Medical bills cause 62.1% of U.S. personal bankruptcies, up from 46.2% in the space of just six years and nearly eight times the level recorded in 1981, U.S. researchers reported Thursday. More than 75% of bankrupt families had some form of health insurance but were still overwhelmed by medical debts, according to a team of experts from Harvard Law School, Harvard Medical School and Ohio University. The findings are reported in the American Journal of Medicine. ...
As recently as 1981 - the year Ronald Reagan became president and launched a new era of government deregulation and free-market profiteering in health care - the level of medically-caused bankruptcies among U.S. families was just 8%.
"For middle-class Americans, (private) health insurance offers little protection. Since then, the number of un- and under-insured Americans has grown; health care costs have increased and Congress (has) tightened the bankruptcy laws," the study notes. ...
The vast majority of Americans - 170 million people - rely on private health care provided by employers but many have been clamping down on coverage for years and the trend has accelerated during the current recession. Many companies have gone bankrupt themselves and others are either cutting or dropping medical insurance for workers altogether.
"Nationally, a quarter of firms cancel coverage immediately when an employee suffers a disabling illness; another quarter do so within a year," the report reads. ...
Most medically bankrupt families identified in the study were middle class before their financial setbacks; 60.3% had attended college, 66.4% had owned a home and 20% of the families affected included a military veteran or active duty soldier. ...
Most had some private health insurance but it was not enough to protect them. Only 0.3% of Americans without medical coverage of any kind were in that situation voluntarily. ...
"For middle-class Americans, (private) health insurance offers little protection," says Himmelstein. "Most of us have policies with so many loopholes, co-payments and deductibles that illness can put you in the poorhouse. And even the best job based health insurance often vanishes when prolonged illness causes job loss - precisely when families need it most. Private health insurance is a defective product, akin to an umbrella that melts in the rain."
News and Opinion Concerning the U.S. Financial Crisis
"It is a restatement of laissez-faire-let things take their natural course
without government interference. If people manage to become prosperous, good. If they starve, or have no
place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility
of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better
hunger than dependency, better sickness than dependency."
"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.
- Forbes: Wal-Mart
401(k) Pays Retail. By Stephane Fitch. Excerpts: Wal-Mart is famous for squeezing suppliers. But in a telling
sign of what's wrong with many 401(k) plans, it took a lawsuit to make it equally exacting with its employees'
retirement savings.
Wal-Mart stores sells 140 different kiddie car seats, 110 TV models and 220 types of plus-size bras, all at the "everyday low prices" that have made it a retail colossus. How strange, then, that in a world of 8,000 mutual funds, for the 1.2 million participants of what is the world's most populous 401(k) plan, Wal-Mart assembled a measly selection of ten funds--most of them at everyday high retail prices.
That included two low-cost equity index funds and just one bond fund. Among the eight actively managed offerings, fees were discounted nary a penny from what a lone individual with no buying power would pay. It was as if the greatest retailer in history had consigned its employees to shop for retirement services in a Soviet department store. ...
Throughout its decade-long tenure, Wal-Mart's $10 billion (assets) plan has been run by Merrill Lynch, which is known more for its "thundering herd" of full-service securities salesmen than for low prices. But the Bentonville, Ark. company is the fiercest discounter known to man, and its senior executives certainly know how to drive a bargain. After all, these are guys who, for their own retirement accounts, negotiated hefty guaranteed returns.
Jeremy Braden, a Wal-Mart store employee in Ozark, Mo., alleges in a class action filed in March 2008 that by failing to demand institutional rates for the 401(k) funds, or to disclose details of revenue-sharing deals between Merrill and eight outside firms with funds on the plan's menu, Wal-Mart breached its fiduciary duty under the Employee Retirement Income Security Act. That breach cost him and his fellow employees $140 million in excess 401(k) fees in the six years through 2007, Braden's suit claims.
"Merrill Lynch, with Wal-Mart's blessing, was choosing mutual funds based on payments that the funds would make to Merrill Lynch," says Braden attorney Derek Loeser of Keller Rohrback in Seattle, Wash. "This explains the anomaly of a $10 billion plan ending up with off-the-shelf retail funds that just so happen to share revenue." ...
Wal-Mart has never explained how its 401(k)'s funds were picked. In fact, it signed a nondisclosure agreement with Merrill Lynch, preventing it from revealing details about revenue-sharing deals. Merrill, which is not named in the suit, declines comment. Braden's attorneys suspect that outside mutual funds not only rebated to Merrill portions of asset management fees but also tens of millions of dollars in flat fees that could create additional undisclosed conflicts of interest. Their suspicions surround a Merrill program set up a dozen years ago called GoalManager.
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