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Highlights—March 20, 2010

Poughkeepsie Journal: Amid offshoring, IBM to stop reporting U.S. worker count. By Craig Wolf. Excerpts: IBM Corp., whose U.S. work force has been shrinking for years amid criticism that it's shipping work overseas, will not give out its U.S. head count any longer. It will only give a global number, saying it's a global company. There will be no more local numbers given out, either, IBM said. So, Dutchess County IBMers, local leaders and everyone concerned about Big Blue's impact on the local economy will apparently be left without new data. Reaction was quick and negative from several political leaders and a workers' group.
The last company statement was as of the end of 2008, when it said its two Dutchess sites employed 10,700 people. That number, based on IBM's recent patterns of reporting, includes some nonpayroll people whose jobs are attributable to IBM's presence. That was also two major rounds of downsizing ago. IBM wouldn't confirm the size of large-scale cuts in January 2009, either, but the Dutchess impact was as many as 900 jobs, employees said. ...

The decision to withhold the U.S. head count became clear in IBM's annual report, issued last week. It has routinely in past years given both global and U.S. numbers, but this omitted the American count. "You have to ask, what's the problem with reporting the numbers?" said Tom Midgley of Poughkeepsie, president of the Alliance@IBM. He works at IBM in Poughkeepsie. "If they're not doing anything wrong, why not report the numbers? "Second, if they're receiving tax breaks and government contracts to do work, they should report the numbers," Midgley said. ...

It's clear, though, that IBM has been growing its overseas divisions while shrinking its U.S. employment. The domestic work force of IBM has rapidly declined in the past few years to 105,000 at last public count. It was 133,789 in 2005. That's a drop of nearly 29,000 people in four years, or 21.5 percent. Growth in other countries has been strong since.

Downsizing and offshoring are big issues underlying the no-count move, critics say. "IBM wants to hide the information because of their constant offshoring of IBM U.S. employees' jobs to India, South America and China at the same time that they have their hands out for tax breaks for job creation in the U.S.," said Lee Conrad, national organizer for the Alliance@IBM. ...

Several multimillion-dollar grants have been made by New York state's government to IBM in the past decade, always accompanied by projections of job creation or retention and announced by political leaders. Assemblyman Greg Ball, R-Patterson, said, "This is absolutely ridiculous. If they're accepting taxpayer dollars, they have to be held accountable. "As a Legislature, we need to know, before allotting dollars to a multinational corporation, how many workers they have in this state at any time," Ball said. ...

Sen. Steve Saland, R-Poughkeepsie, also criticized the IBM policy shift and said head count data are important for policymakers. "To say that's disappointing would be a gross understatement. Notwithstanding their being a global company, their roots are in this nation and in this state and in our very backyard," Saland said.
Atlanta Business Chronicle: IBM looking at potential office consolidation. By Douglas Sams and Urvaksh Karkaria. Excerpts: Computing giant IBM is considering consolidating its Atlanta offices into one location, eyeing a single building, according to sources. The IBM consolidation would take the company from about 1.7 million square feet in metro Atlanta to as little as 500,000 square feet, marking a significant downsizing for the company but also one of the largest real estate projects in the city's history. IBM is still grappling with its consolidation plans, sources say. IBM also has a Smyrna call center, the former Internet Security Systems building, and other offices in the area, according to CoStar.
The chatter about consolidation comes as IBM takes the ax to its workforce. IBM’s workforce dipped to 437,776 in 2009, from 438,080 the prior year, according to the company’s annual statement. At the end of 2009, IBM USA had a workforce of 105,000, down 30,000 in just a few years, according to the IBM Employees’ Union CWA Local 1701. Last year, IBM laid off at least 2,900, according to the IBM union web site. For the past few years, there have been rumors that IBM wants to get the US workforce down to 70,000, the union noted on its Web site. IBM is also said to have consolidated 10 locations into one in Massachusetts.
Associated Press, courtesy of Forbes: IBM Japan to appeal tax assessment. Excerpts: IBM's Japan unit said Thursday it will fight an assessment by tax authorities, who reportedly investigated the company for failing to declare more than $4.4 billion in income. IBM Japan could be ordered to pay the Tokyo Regional Taxation Bureau more than 30 billion yen ($332 million) in back taxes, according to the Asahi newspaper.
The bureau suspects IBM Japan of underreporting 400 billion yen in taxable income in 2008 through an accounting scheme that allows a parent company and its subsidiaries to file taxes as a single entity, Asahi said without citing sources.
LinkedIn: The Greater IBM Connection. You have an Hour One on One with Sam Palmisano. What Would You Tell Him? (Selected comments follow).
- Sam, What do you think about a project to outsource CEO/executive jobs overseas? If we can outsource PMs, we can certainly outsource high level execs. Why have you not started looking at this? It would be in the best interest of IBM to eliminate the huge exec salaries and return that money to the stockholders.
- Re: Oursourcing executives -- this is one question I'd REALLY like to hear the answer to.
- Great idea Gary ! :) I have wondered that for years now. We are being told to document, and automate as much as possible. This, of course, makes it more convenient to "rebalance" these roles to other lower-cost/skilled nations. What I find interesting, is that dynamic technologies are not so easy to document and automate due to their nature of change, and constant refinement of how it all fits into the strategic business models. Moreover, what seems to be easier to document, and automate are today's management and executive styles and roles. Managers today seem to have very "scripted" roles stemming from required management courses, legal, and HR, so why can't these leadership roles be "rebalanced" to nations that simply follow the scripted procedures?
  My manager conducts "one on one" monthly meetings with me, and truly doesn't help me navigate my career, but more so, puts that responsibility on ME to define my personal career goals without any education funding provided by the company.
  
  I often feel more like a consultant, than a valued fulltime employee (asset). If I have to figure out how I personally will contribute to the company's goals, and also track down no-cost, online training classes, ensure that I keep my market valued skills up to date somehow.. what does my manager do for me?
  
  Outside of listening to me, but not being able to help me, coupled with making company announcements, conducting Resource Actions via phone calls, and giving me my Growth Driven Profit (bonus), and Base Salary Reviews, I truly don't know what critical factor a manager provides today?
  
  Maybe someone out there can support the manager's side, but I have manager friends, and they truly feel helpless having their hands tied. I cannot understand why company's need so many organizational levels of leaders, starting from Manager, Senior Manager, Director, VP, GM, (2) Senior VPs, then Chairman. Maybe this is required organizational structure/levels when your employees total 400,000 ?
  
  Back to your point Gary, it is a very good question ! I am a stockholder, and do not like to see the huge salaries going to members of the board from other companies too. Where is their value add here? If the company is not meeting targets, then leadership needs to be held accountable, and stop plucking the lower hanging fruits to make up for your lack of leadership and vision.
- "Hi Sam, nice to meet you and thank you for this opportunity to talk with you. How is your family? Well, that's nice. I have a question. With IBM making so much money from U.S. government business does it seem right to you that IBM has been at the same time laying off so many U.S. citizens and taxpayers and moving those jobs out of the U.S.? Yes, thanks for offering me your media relations dept. number, but actually I'd rather here it directly from you."
- I would ask why I and many of my friends, that have given so much to this company and made so many person sacrifices, are now finding that we have no jobs. In this hard economic time I am now trying to figure out how to feed the same children that missed me so many times while I was away on IBM business. How can we expect small and medium size businesses to help the economy when a powerhouse like IBM, who can afford to weather these hard time, is adding to the hard economic times instead of helping.
- The thing I have always liked about big business is that it was predictable, You always knew that the company would do whatever was in the interest of gaining the highest profit. It was easy to see where that interest lay when we were selling hard assets, (hardware and software) but it becomes a bit nebulous when we are marketing services.
  In the past 15 or 20 years most of our customers have hired or developed skills in programming and more recently business analysis and project management. In order to sell those kinds of services now they must cost less than a full time employee. We all know that no IBM consultant in the US or Canada costs less than our customer's employees. We priced ourselves out of the market. We had a really good run, with higher pay and more interesting work than our colleagues doing the same work for our customers.
  
  Now IBM is scrambling to keep the services business going. You cannot support several highly paid employees on the bench for too long. The difficulty is that the people who have worked on highly lucrative engagements in the past are not skilled in the services we can market today. In fact, our offerings of today will not likely be viable in the near future when once again our expertise is transferred to the customer.
  
  Lucky are the people who found themselves a niche that still has marketability. For the rest of us, there are certainly other opportunities to contribute and to earn an income. While I am not sure I will find any fun work in the future, I am still amazed, exhilarated and excited about how fast the world is changing.
  
  I do regret that IBM chooses to lay off staff instead of retraining. However I can see that our band level was too high for a person just learning the skills that IBM is currently marketing. I suppose they could have offered to lower our band and cut our pay instead of sending us on our way. How many of us would have taken that option?
- Given a choice, I would have gladly given up some pay rather than losing it all. I may have a different perspective since I was laid off in the '81 recession. Too bad there is not a "poll" function on facebook.
- I would have gladly taken a cut in pay to maintain my, or a peer's employment. I do believe the executives need to be role models for us, so they can go first !
- Another question for Sam: Why is the CEO's bonus 1100% of his base salary and the troops bonuses averaged maybe 8% on a good year (even less since they lowered the variable pay in 2006. I only knew of one person that even got variable pay in my last year with IBM)? After all, how much money would IBM make if all it had was managers and no workers?
Yahoo! IBM Employee Issues message board: "Why?" by "nyjints5". Full excerpt: There are some very smart people who post to this board. (Smarter than I anyway) Therefore maybe someone can help me understand something that I can't comprehend.
I think it's logical for a company in financial trouble to permanently lay off some of it's workforce. It's also a very cruel and brutal thing to have to do. While I think it's brutal, I can understand why it must be done. Can anyone provide me with a logical business reason why a company reporting record EPS would do something as inhumane as to continually lay off it's employees?

Can it really be true that the reason is as simple as executive greed? I want to believe it isn't, but I can't think any good business reasons why the execs think it's so necessary.
Yahoo! IBM Employee Issues message board: "Re: Why?" by "bits_bytes_and_bugs". Excerpts: The reason they are dumping people (well actually they're dumping expensive, experienced people) isn't because there isn't work to do - it's to cut costs. It's not because employees are redundant - it's all about boosting the short term stock price.
When your company's strategies cannot grow revenue (except for buying other companies that have revenue), to maximize profits the leaders have to minimize costs. Since one of the largest costs they can quickly discard is people, layoffs are the strategy.

The lack of revenue growth is a major fail for Sam P. It will be part of his legacy, along with over a 100,000 US layoffs before he's done.

What the execs are doing is dumping experienced and expensive people in expensive countries and moving jobs to low cost countries, using the cheapest resources available there. The company is pushing everything that can be offshored as fast as they can.

This leaves the remaining experienced employees remaining in expensive countries like the US horribly understaffed and assigned to cleaning up messes and disasters that the unskilled low cost labor create.

The big fail here is executive assumption that the cheap, inexperienced, unskilled labor can be trained in between 6 weeks and 6 months of distance learning and be equivalent in skill, experience, wisdom and discipline to those who have 20+ years in the business.

No matter what the executives think and how much they try, people and skills are not fungible and never will be.

The second fail to come sometime in the future will be when demand for IT services and IT skills become significantly higher due to eventual economic expansion. IBM will not have enough skills to handle the demand. If demand for IT skills grows with it, expect a number of skilled people to jump to other companies, compounding the shortage.

The third fail to cost even further out will be the inability to design and support new products. There is already a severe shortage of skilled labor in the development labs - not enough people left to be able to deliver on time with reasonable quality. So expect IBM product quality and functionality to drop over time and service quality and response to further erode.

For those of us still employed in the US, it's like you're on a death march. You keep moving as best you can knowing that you can be axed at any time regardless of how important your job in, how well you do it and how critical it is to the business. You look into the eyes of your coworkers and there's fear intermingled with sadness, aflame with anger, wrapped with feelings of futility and depression. You know that the dreaded day will come.
Yahoo! IBM Employee Issues message board: "Re: Why?" by "teamb562". Excerpts: It all started with an EPS commitment. Way before the economy took a crap, Mr. Palmisano made this commitment:
In May 2007 we shared with investors our 2010 Earnings Per Share Roadmap—which explains how we expect to achieve EPS growth of 14 to 16 percent and $10 to $11 in earnings per share by 2010. We did so to give our shareholders a clear understanding of the key factors driving IBM's long-term financial objectives. In 2007 we made progress toward our 2010 objectives by growing earnings per share 18 percent. (ref: http://www.ibm.com/annualreport/2007/higher_value.shtml)

Executives being the type-A, highly competitive personalities that they are will do whatever it takes to keep their non-contractual commitments to shareholders (never mind their broken non-contractual commitments to employees). They live in a very different world and cannot relate to the rest of us. Don't even try to rationalize or understand the way they think. For example it's quite likely that Mr. Palmisano had a bet with Larry Ellison on whether he could achieve this goal. That said, Mr. Palmisano did whatever it took to achieve his goal, even during the worst economic downturn since the Great Depression. It is all very unfortunate and well explains the growing ideological divide and class warfare that is fast approaching.

It's been very interesting to watch. Each quarter when ibm announced their mind-numbing record profits, employees are told quite another story. The story was/is always the same. "We did pretty good but not quite good enough, so we must all try harder". Typically layoffs follow shortly thereafter(not to mention no raises, dwindling bonus pay, no awards, increased benefit cost, etc). IBM is rather like the spoiled child, "it's just never enough". On the funny side, does IBM think that their "smart" employees cannot read the news and figure this all out?
BusinessWeek: India's Next Outsourcing Wave. To modernize after its crisis, the U.S. financial industry needs help from India's IT outsourcers more than ever, says Sudhakar Ram. By Sudhakar Ram. Excerpt: It's understandable that many in the U.S. are angry that workers lose jobs to offshore programmers. Despite the unpopularity of outsourcing in the wake of the financial meltdown, I am convinced that "Third Wave" Indian IT players—those outsourcing specialists that U.S. companies can rely on as strategic partners for high-end work—can help prevent future disasters. IT companies around the world have a huge opportunity to collaborate and join forces in the next few years.
Yahoo! IBM Employee Issues message board: "Re: IBM Executive Dr. Martin Sepulveda Wins Prestigious Award" by "bits_bytes_and_bugs". Excerpts: My doctor, from his many IBM employee patients, knows that working at IBM is very hazardous to your health, not to mention your sanity. He has observed that nearly all of his patients that have left IBM (either voluntarily or involuntarily) have able to reduce their medications and have become significantly healthier due to the reduction in stress, reduction in job demand. In particular he cites that blood pressures moderate, insomnia is markedly reduced and depression symptoms are reduced. He also noted that ex-IBMers are noticeably more relaxed and upbeat.
I tell him he should do a formal study and write a paper.

I, too, when I meet ex-IBMers, note that they are more relaxed, less stressed, more upbeat and look years younger.

I challenge Dr Sep to work on making the IBM work environment less toxic, less stressful, less emotionally devastating and more humane.
Wall Street Journal: New Skills, Few Job Offers. When Work Is Scarce, Retraining Offers No Quick Fix, Unemployed Find. By Justin Lahart. Excerpts: Training and education are said to be the best route to a better job, but Cynthia Motte is still waiting to see if that's true. Ms. Motte and millions of other jobless workers across the country are discovering that new skills can take you only so far when jobs are scarce. ...
For many workers, training opens doors—but it doesn't necessarily shorten the job search at a time of high unemployment. Nancy Eade, 55, of Charlotte, N.C., was laid off as a marketing program manager at IBM Corp. in December 2008. She then took courses at management-consulting firm Right Management, and then studied to get project-management certification at the nonprofit Project Management Institute. Early this year, Ms. Eade started taking classes in business analysis and quality control at Central Piedmont Community College. Finally, last month she landed a job as a project manager at Bank of America Corp. "I did everything right and it still took me 14 months," she says.

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Job Cut Reports
- Comment 3/12/10: According to http:www.stimuluswatch.org, IBM has received over $64M in stimulus money, while continuing to offshore American jobs. This is unbelievable! -Stimulus Money-
- Comment 3/13/10: TO: CA Alliance member- NO, NOT TRUE. You are eligible for COBRA for 18 months if you select it when RA'd - true for everyone with a severance. It is only the COBRA subsidy that you are not eligible for if you have access to the FHA retirement or any other health plan (even if you do not qualify for the FHA money due to having less than 15 years service). You do get the subsidy until the end of the month of your retirement date (and when bridged). This is true even if receiving the TMP benefit, which after to change to paying the full premium for COBRA. -anonymous-
- Comment 3/13/10: Two of my co-workers affected by an RA were extended for 2 months because their customers complained. -dun-4-
- Comment 3/13/10: 6 years-always a 2 or 2+, awards etc and they let me go, had 2 other job offers frozen on me and then they tell us to get a job at IBM-i am glad to be leaving this company and have other interviews already set up. -tomcat-
- Comment 3/13/10: Here are the cuts I've gathered from the Montreal, Canada, area. Not sure of the actual teams. ITD IMS mainframe support: 3; ITD zOS support: 1; ITD capacity/performance: 5; HW installation: 2; CSC: 7; PM office: 3. Of course there are surely more but I haven't heard about them. -Canonymous-
- Comment 3/14/10: For decision on 3 month improvement plan... hell no I would not go on that Improvement Plan and lose 6 months salary, but if you have 3 months of severance pay... or if your severance less than 3 months salary or equal, it might be worth the run. Just go for the best prospect on the $ and send some to Alliance while you are at it. They are the only way we can be treated fairly. RA is like a divorce and the grab rule. Calculate the best way to grab the most, the love is dead. -Annon-
- Comment 3/14/10: During the last three resource actions, the U.S. IBM people managers of the affected employees didn't even tell the co-workers or supervisors. They expected the RAd employee to tell the teams they had been working for. Half of them didn't say a word--just disappeared. I don't blame them. Go to hell IBM! No follow up on whether the RAd employees work would be covered and no replacements named. What chaos! IBM 1st line managers are CHICKEN. They are useless bean counters with no technical or business skills. IBM needs to get rid of the managers and keep the worker bees. Also, does Bob Moffat, Sam Palmisano's adopted son, count in the count of missing U.S. employees? He's not in jail yet so I guess he still counts... -smart t pants-
- Comment 3/14/10: ITD Shared, Security, & Contract-related services lay-offs were 246, not 216. -Maxed Out-
- Comment 3/15/10: Department let 4 long term employees go during the first week of March. Got notice today that we now have 4 hire tickets for contractors to backfill the positions (starting around $38K/year). -anonymous-
- Comment 3/16/10: To -smart t pants- IBM is just using the tried and true "Buffalo Bill Cody" method of thinning their herd. If you shoot the ones in the back of the herd the rest of the herd does not even notice and stands still and keeps grazing. Makes it easier to shoot more the next day and the next and so on if the herd never tries to protect itself. If a Manager addresses the remaining herd someone will ask Why? Then someone will ask is it over? Any answer given to these questions will be a lie and will eventually be recognized as one so if the manager says nothing the remaining herd may still trust him or her and just stand still for the next round of hunting. It seems to be working by the way as the remaining herd has certainly not flocked to join the union to try to protect themselves. It has just stood there for over 10 years and allowed the hunters free shots. Just meat on Sammy's table.
  Remember, if a manager communicates at all about firings, you may get the impression the manager could actually do something about them or has something to do with them and then you may treat the manager as an enemy or at least not blindly trust them to be fair. It may cause the manager to feel stress or pressure so do not expect it to ever happen. This is one of the main reasons IBM no longer has face to face meetings when they can avoid them. Its far easier to deny or lie on the phone and not feel the need to pretend to care about employees or care about their feelings. You cannot see the manager rolling their eyes or biting their fist to keep from laughing on the phone you see. If they ignore you long enough, voicemail when you call them, no response to emails, no return calls, then you eventually stop bothering them.
  
  Then if something happens they will hit you with a 3 rating because you failed to keep them informed. Its a win win for them. You become a self managing work widget that requires no supervision and just produces profits . Can be fired at will. Can be sold off in mass. Can be discriminated against behind closed doors and you simply have no say and no choice because you just accept it. "Was that a rifle shot Joe?" "Don't pay no attention John , it didn't hit you. Just keep your head down and graze..." And the life of the herd continues. -Exodus2007-
- Comment 3/16/10: I am in ITD as an AIX admin. I was told my new RA date is 5/31. Previously it was 3/31. I was given no reason for the extension when I asked. I am an internal support person and do not support outside customers. -AIXadmin-
- Comment 3/16/10: Things just keep getting weirder....I was called by my boss 3/1, and was told my last day was 3/31. I got a call yesterday, and was told I have a "stay of execution"....I'm still part of the RA, but my new termination date is 5/31. While at first this looks like good news....what it really means is that IBM has no intention of actually paying me any severance benefits. If I refused the new date, they could deny my severance because they had offered me a "comparable position". And the chances of my still being employed by IBM by 5/31 are close to 0%....why would I not hunt for a new job since I know they plan to get rid of me?.... -I B eMbarrassed-
- Comment 3/16/10: TO: IB eMbarassed: A number in the March 2009 layoff by GBS were given dates other than 30 days. One person's last date was October. You will get your severance. They are just keeping people to fulfill contracts or other needs they have. Go along with them or you may lose severance. -anonymous-
- Comment 3/16/10: Read the package real close and you will see the exit date can be June 30, 2010. Also, the number for Smart Money in your packet - call that number, they will give you the details on 401K, medical insurance, retirement, payout and all ..as they have direct access to your package information and employee information to give you situation advise and everything right there... based on many different factors (age, salary, years with IBM) I think it worked out to a grid and they already figured it all out. No Joke! You do have some options and can make the best selections for your family and life. But the $ part is already worked out 100%. If possible have someone with you during the call to help take notes and ask questions. -Annon-
- Comment 3/17/10: to -I B eMbarrassed- I think it would depend how much severance you're getting to decide whether to leave prior to 5/1. You can take the next couple of month to start looking for a job just put your start date as 6/1. Don't let IBM get away without giving you you're severance (Plus you accrue more vacation days) Oh, and don't forget you're entitled to take all your personal choice holidays. Unless you live in California, you don't get paid for those not taken. Without a union we have NO BARGAINING power. We are the mercy of power brokers. And as we all know, they have NO MERCY for us. Actually, they have contempt. **Join the Union** -Alliance Member-
- Comment 3/17/10: To -I B eMbarrassed- : Be smart. You now have more time while still collecting a pay check to look for another job. It's better than being out of work looking for another job. Spend every minute looking for something else and if you find it, run. Don't sit around and wait for severance. What if you're out of work and that severance runs out? I know a guy that is going on 3 years out of work now. Whatever work you are doing they are not ready to move it yet and need you there longer. Spend every minute at this point looking. You know what their intentions are for you. -Gone_in_07-
- Comment 3/17/10: -I B eMbarrassed- Not to sound like repeating myself again over and over and others who have made the following statement of fact: You are strictly an AT WILL EMPLOYEE! Without a union contract IBM can choose to treat you any way they want, when they want, and if they want. They can transfer you to another position, demote you without cause, extend your employment, shorten it, choose to not give you any severance, etc. You have to know now your employment is all on IBM terms. With a contract it is also on the employees terms to some degree. IBMers: when are you going to understand and do something about this? Every nanosecond you sit and wait and do nothing it will only get worse for you! -da_facts-
- Comment 3/17/10: To -I B eMbarrassed- Why not just keep looking for a job outside IBM, and tell them your availability date is 6/1? Tell them you're currently engaged on a project that times out then. You're being truthful, and you still get paid thru 5/31, get your severance, and start with a new employer. Also, where does it say in anything you signed with IBM that you will not moonlight? You could always start a new job before 5/31 as long as you a) continue to fulfill whatever obligations IBM continues to ask of you - likely not much since you're on the RA list and same thing happened to a friend of mine on last year's and she was never given any new work, just a later exit date... and b) There is no conflict of interest or other IBM BCG violations, which could result in (earlier) termination and loss of severance etc. No one says you can't do two at once if they want you to start, say May 1 or something, and considering we're getting close to April.. Well... -RAed last Jan-
- Comment 3/17/10: Also, where does it say in anything you signed with IBM that you will not moonlight? I'm pretty sure it says exactly that. If I B eMbarrassed moonlights and is caught, s/he'll certainly lose their severance, and if they went to moonlight for a competitor (which given the breadth of IBM's businesses, would be virtually any software or IT shop), likely will be taken to court. What you signed also says that anything you invent or build on your own personal time while employed by IBM, belongs to IBM. (I believe the relevant language is in the Business Conduct Guidelines, which you are required to "sign" every year. The language is purposefully broad and somewhat vague. Is it legal? Probably, since you signed it. Would it be upheld in court? I dunno; how many lawyers work for you, versus for IBM, to test that in court?) Is that unfair? Who cares -- it's legal, and you agreed to it. If we want clauses like this out of our employment contract, then we need the ability to bargain collectively for that. We'll never get it individually. -irRational-
- Comment 3/17/10: I work on the Wellpoint account, and on March 1st, at least 42 folks were cut form the account. I believe I have heard 2600 notified of resource action on March 31st, Rumor has it another 41,000 by year end. -Anonymous-
- Comment 3/17/10: This comment / observation relates specifically to iBM employees in Canada. It is quite evident from the RAs last year and in March that iBM has placed a very large target on any long term employee who is just under 55 years of age. These are reported as 'early retirements' in iBM Canada's official lingo. The reason, I think, for this targeting would be that iBM will owe these employees absolutely no post-retirement benefits and therefore saves iBM MONEY. Under post retirement benefit changes made a couple of years ago, an employee under 55 will get no PRB. If over 55 you get PRB until age 65 (but only if you have enough years of service). -"Kaputt @ IBM"-
- Comment 3/18/10: Rumor has it that June 1 there will be more lay offs (in GBS anyway). I've heard it from more than one person (financial ops/people in the know). We haven't even gotten through with the March 1 lay offs. This company sucks. **Join the Union** (Can Alliance Members post non-job cuts info?) -Alliance Member
- Comment 3/18/10: To - Beat Up - I believe that OSHA300A (annual) posting is required by law for each site and discloses average number of employees on site (and total hours worked). -anon- Alliance reply: The problem is that 45% of IBMers don't work at a site.
- Comment 3/18/10: To irRational - actually, it does NOT say you cannot moonlight, as that is against employment law. What it does indeed say is you cannot have conflict of interest, and inventions and other intellectual property is indeed IBM's while you're an employee. That does not say that you cannot own a business, work for someone, be a teacher, etc. If you're a SW developer for IBM, nothing in that says you cannot be a business consultant. Sure, you cannot use IBM confidential info in the new work, nor can you compete with IBM, but if it is not in conflict with your position, you most certainly CAN moonlight. I was told this by an employment lawyer when I was RAed last year. People should not be afraid to protect themselves because they think IBM might come after them. Use your own heads, people, an make informed and prudent decisions (e.g. SW developers, don't go start working for Oracle till you're out ;-) and remember, IBM is firing you. Protect yourselves now, because we did not have contracts to before (or still) -RAed last Jan-
- Comment 3/19/10: Here in GBS in Canada, we are getting screwed over every which way. I want to know how we can join the Alliance. I was spared from this RA, but, as I'm training my replacements, it won't be long for the rest of us. I can't believe in the midst of all this, we're not doing something to protect ourselves. -IBMCanadian- Alliance reply: Canada IBMers can join the Alliance. See our join form. Our parent organization has locals in both countries. If we get enough Canada members we can start a chapter there.
- Comment 3/19/10: I am a former IBMer, downsized in 1995. My wife is still there until june 2010. Her job is going to the Philippines. She works in payroll. Payroll travel and a few other dept's are already gone to the Philippines or will be gone by the end of june. I have seen no reporting on this action. The people from the Philippines were just here getting trained by employees that are losing their jobs to them (how nice).They said they are new hires and were not told they were taking away the jobs of people in the U.S. According to upper-level mgmt, it cost IBM $80k a year for a U.S. employee and only $18k a year for an employee in the Philippines. They also took away my wife's benefits. I'm tired of IBM sticking it to their employees. -Anonymous- Alliance reply: We wrote about this last year. We even had a poll for people to take on whether they thought offshoring payroll was a good idea. As you can imagine it was a resounding NO. Thank you for the update.
- Comment 3/19/10: Please don't post my name. I'm in "BTV" -- Essex Junction, VT. We lost a few recently, but I don't know how many. I know of at least two, personally. I just wanted to share that my co-worker, who's been here 34 years, remarked that it seems that they were targeting remote workers, when for the last few years, they were encouraging people to work remotely. Of the two I know about, one was mostly working from home, doing security (God help us now! Don't know who's going to do it in her place.), and the other was technically remote, out of Boulder, even though he supported Suns here in BTV and was in fairly often. -Anonymous-
Editor's note: Many more job cut comments are available in last week's highlights and the week before.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform

Urban Institute: The Cost of Failure to Enact Health Reform: 2010 - 2020 (Updated). By Bowen Garrett, Matthew Buettgens, Lan Doan, Irene Headen, John Holahan. Abstract: This report assesses the changes in coverage patterns and health care costs that will occur nationally if major reforms are not enacted. The authors find that by 2015, there could be 59.7 million people uninsured. The number could swell to 67.6 million by 2020, up from an estimated 49.4 million in 2010. As premiums nearly double, employees in small firms would see offers of health insurance almost cut in half, dropping from 41 percent of firms offering insurance in 2010 to 23 percent in 2020. Individual spending could jump 34 percent by 2015 and 79 percent by 2020.
Wall Street Journal: Is Socialized Medicine Bad for Your Wealth? By Brett Arends. Excerpts: To hear some people tell it, the health-care bill will destroy America and your stock portfolio. We will become a "socialist" country. You should sell everything, put your money in gold, cash or foreign stocks, and run to the hills. It's hard to get past the hyperbole and partisan hysteria on this topic. But if we take the calm view, what, if anything, would the bill mean for your investments? Take a deep breath. It probably won't mean very much. There's a good chance it won't mean anything at all. ...
Will the bill really "turn America into a socialist country"? It's easy to laugh at this notion, of course, but let's look at it from another point of view. Even if that were correct, should you really sell everything and flee?

Socialism, or social democracy, or whatever else you want to call it, doesn't seem to have hurt stockholders overseas too badly. Over the past 10 years, according to MSCI Barra, stock markets across socialized Europe have produced total returns of about 2% a year in U.S. dollar terms, according to MSCI Barra. The figure for France is just over 2% and for left-wing Britain and Holland nearer to 3%. Pinko Denmark has boomed by 10% a year.

Meanwhile, here in the land of the free, investors have made zero.
New York Times op-ed: Why We Reform. By Paul Krugman. Excerpts: One way or another, the fate of health care reform is going to be decided in the next few days. If House Democratic leaders find 216 votes, reform will almost immediately become the law of the land. If they don’t, reform may well be put off for many years — possibly a decade or more. So this seems like a good time to revisit the reasons we need this reform, imperfect as it is.
As it happens, Reuters published an investigative report this week that powerfully illustrates the vileness of our current system. The report concerns the insurer Fortis, now part of Assurant Health, which turns out to have had a systematic policy of revoking its clients’ policies when they got sick. In particular, according to the Reuters report, it targeted every single policyholder who contracted H.I.V., looking for any excuse, no matter how flimsy, for cancellation. In the case that brought all this to light, Assurant Health used an obviously misdated handwritten note by a nurse, who wrote “2001” instead of “2002,” to claim that the infection was a pre-existing condition that the client had failed to declare, and revoked his policy.

This was illegal, and the company must have known it: the South Carolina Supreme Court, after upholding a decision granting large damages to the wronged policyholder, concluded that the company had been systematically concealing its actions when withdrawing coverage, not just in this case, but across the board.

But this is much more than a law enforcement issue. For one thing, it’s an example those who castigate President Obama for “demonizing” insurance companies should consider. The truth, widely documented, is that behavior like Assurant Health’s is widespread for a simple reason: it pays. A House committee estimated that Assurant made $150 million in profits between 2003 and 2007 by canceling coverage of people who thought they had insurance, a sum that dwarfs the fine the court imposed in this particular case. It’s not demonizing insurers to describe what they actually do.

Beyond that, this is a story that could happen only in America. In every other advanced nation, insurance coverage is available to everyone regardless of medical history. Our system is unique in its cruelty.

And one more thing: employment-based health insurance, which is already regulated in a way that mostly prevents this kind of abuse, is unraveling. Less than half of workers at small businesses were covered last year, down from 58 percent a decade ago. This means that in the absence of reform, an ever-growing number of Americans will be at the mercy of the likes of Assurant Health. ...

But shouldn’t we be focused on controlling costs rather than extending coverage? Actually, the proposed reform does more to control health care costs than any previous legislation, paying for expanded coverage by reducing the rate at which Medicare costs will grow, substantially improving Medicare’s long-run financing along the way. And this combination of broader coverage and cost control is no accident: It has long been clear to health-policy experts that these concerns go hand in hand. The United States is the only advanced nation without universal health care, and it also has by far the world’s highest health care costs.

Can you imagine a better reform? Sure. If Harry Truman had managed to add health care to Social Security back in 1947, we’d have a better, cheaper system than the one whose fate now hangs in the balance. But an ideal plan isn’t on the table. And what is on the table, ready to go, is legislation that is fiscally responsible, takes major steps toward dealing with rising health care costs, and would make us a better, fairer, more decent nation.

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.

New York Times: The Perils of Pay Less, Get More. By David Leonhardt. Excerpts: As a society gets richer, its tax rates tend to rise. This idea is known as Wagner’s Law, named for the 19th-century economist who came up with it. Citizens of richer societies generally prefer more government services, Adolf Wagner explained. With their basic needs met, they want a military to protect them, good schools for their children, comfortable retirement for the elderly, medical care even when it isn’t profitable and a strong social safety net.
Sure enough, the United States followed this path for most of the last century. In 1900, federal taxes amounted to just 2 percent of gross domestic product. By 2000, the share had risen to 21 percent.

Over the last couple of decades, though, we have repealed Wagner’s Law — or, more to the point, only partly repealed it. Taxes are no longer rising. They fell to 18 percent of G.D.P. in 2008 and, because of the recession, to a 60-year low of 15.1 percent last year.

Yet our desire for government services just keeps growing. We added a prescription drug benefit to Medicare. Farm subsidies are sacrosanct. Social Security is the third rail of politics.

This disconnect is, far and away, the main reason for our huge budget problems. Yes, the wars in Iraq and Afghanistan, the recession and the stimulus have all added to the deficit. But they are minor issues in the long run. By 2020, government spending is projected to equal 26 percent (and rising) of G.D.P., mostly because of Medicare and Social Security. Taxes are on pace to equal just 19 percent.
Jim Hightower: Maybe We Could Form a Beer Party. Full excerpt: Would you have tea with me? I'm talking to you authentic tea bag folks – those who are not corporate-funded, Republican party spin-offs, and those whose minds are not nailed shut by a simplistic, anti-government, laissez-fairyland ideology. Let's talk. You tea partiers who are fed up with Washington and the leaders of both political parties – hey, count me in! And the target of our anger doesn't stop there, does it? Politicians are the face of our problems, but we all know that behind those faces is the real power that's stomping on us: Wall Street banksters, corporate downsizers, the 13,000 corporate lobbyists swarming our government, and the political consultants and media yakkers who exist only to segment and divide us.
Let's talk about it all – the whole corrupt insider system of moneyed elites who're systematically destroying the middle class and perverting the political process to shut out the voices of America's workaday majority.

Let's discuss this Big Theft, but most importantly, let's figure out what to do about it. Whether you call yourself conservative or progressive, what can we do together to decentralize and democratize our country's economic and political power, putting America back on its historic mission of trying to build a nation of, by, and for the people?

Another organization has suddenly sprouted across the country that might help get us together. It's called the Coffee Party – not meant to counter the Tea Party, but to engage it positively. Check it out at coffeepartyusa.com.

Who knows – maybe we can all merge into a Beer Party! Beverage preferences aside, the important thing is for ordinary grassroots Americans to reach across false divides, see what we have in common – and start acting like the bosses of our government, our society, and our mutual destiny. That's what it really means to be American.
Jim Hightower: Another Corporate Path For Buying Our Government. Full excerpt: Like the five-man majority of Supreme Court justices, perhaps you've been worried sick over the possibility that corporations just don't have enough power over our government. If so, let me soothe your fevered brow with a report showing that election spending is just one path that corporations take to buy our government – many other lanes are also open to them. There, feel better now?
One wide open path is through both the Republican and Democratic governors associations. Both outfits offer corporate "membership" packages that literally let drug makers, utilities, tobacco companies, and other giants buy their way inside these two powerful groups. For annual dues of up to $250,000, a corporation's executives and lobbyists not only get to hobnob with these top state officials, but also to sponsor, organize, and participate in periodic policy discussions with the governors.

Is this a sweet deal for the companies? "Absolutely," enthused a tobacco executive! After all, these corporations have big money at stake on everything from state taxes to regulatory policies, and buying their way into the groups' gatherings lets them bend the ears of America's governors – and bend the governors' policies. Regular citizens and public interest groups never get this kind of special access, so it gives the corporate powers a big jump on everyone else.

Last year, for example, some 200 drug industry lobbyists organized a forum on biotechnology for Democratic governors. In this cozy setting, the biotech corporations had a one-sided chance to plead for state subsides and regulatory favoritism – and practically every governor who attended followed up by pushing for what the industry wanted.

In so many different ways, corporate money doesn't just talk, it shouts – and drowns out the rest of us.

Vault Message Board Posts

Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Sample posts follow:

"Raises are effective 7/1" by "bigbertha92". Full excerpt: Don't expect a raise if you're a 2 performer. Only top contributors (1 & 2+) will receive a raise. The raise will most likely be around 1%. No kidding. Executives are not getting raises this year.
"IBM Just don't get it" by " Toa". Full excerpt: If you get the same money for a half ar*ed effort as you do for a good effort then why bother trying to do a good job! I've even seen 2+ being downgraded to a 2 because the manager didn't believe the 2+ was valid.
"Let's Go Global!" by "bigbertha92". Excerpts: Everything is "global" - from EO training to forced-by-mgmt-to-take IBM learning courses. Learn when no means yes, how not to be offensive, and watch slang!
We all have to play nice-nice with our GR (global resource) peers. and when your GR team lead sends notes to IBM US mgmt that they need MORE WORK from their US counterparts, IBM mgmt. rolls over and gives them more work. Reminds me of an old CCR song: Fortunate Son.

And when you ask them, how much should we give? Ooh, they only answer more! more! more. What a sad, pathetic, f'ng company.
"The Truth Can't Be Told" by "Frank_Reality". Full excerpt: Yes, even though the GRs in India can't handle simple tasks on time, with adequate quality and within cost, they are given more and more responsibility they cannot begin to handle. And of course when they screw up and fail as often happens, it's always the US teams' fault. It is pathetic (and clueless) to reward this incompetence with more work and more responsibilities.
What's more pathetic is how India is not held accountable since they are Sam's chosen ones and how anyone who reports problems with India are considered anti-team, racist and uncooperative.

The sacred cows over in India aren't cattle, they're the "office boys" pretending to be IT professionals working for IBM. What a sad, pathetic f'ng company indeed.

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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