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Highlights—May 22, 2010

  • Triangle Business Journal: State of Indiana sues IBM for $1.3 billion. Excerpt: The state of Indiana and IBM have slapped each other with lawsuits related to a canceled 10-year $1.34 billion contract that called for the technology company to automate the state’s system for food stamps, Medicaid and other benefits, The Associated Press reported Thursday. The Indiana Family and Social Services Administration wants IBM to return the $437.6 million that the state says it paid Big Blue for work on the project, The AP reported. Gov. Mitch Daniels canceled the contract in October because he wasn’t satisfied with its results. State law allows the IFSSA to seek triple damages in the case, meaning that IBM is facing a $1.3 billion lawsuit.
  • Associated Press, courtesy of Forbes: IBM to open Columbia data center, add 800 jobs. Full excerpt: IBM says it's opening a data center in a Columbia office park that could create as many as 800 new jobs in central Missouri. Gov. Jay Nixon and other state officials joined company leaders Monday afternoon for the announcement at City Hall. The data center could emerge as one of Boone County's largest private employers.

    The state is offering IBM more than $28 million in tax incentives to come to Missouri. The technology services delivery center will be the company's third new U.S. site in the past 18 months. The others are in Lansing, Mich., and Dubuque, Iowa.

  • Columbia Daily Tribune: IBM package outlines deal on city’s end. Council gives unanimous OK. By Jodie Jackson, Jr. Excerpts: The Columbia City Council last night officially became a contributor to the hefty incentive package used to recruit an IBM technology service center and as many as 800 jobs to the community. The council last night unanimously authorized giving $500,000 as a down payment for the building at 2810 LeMone Industrial Blvd. that will be renovated for IBM. The ordinance that appropriated the half-million amount to the Columbia Area Jobs Foundation also established a lease agreement with IBM.

    Economic incentives for the IBM deal offered by state, city and county governments total more than $30 million. Officials with Regional Economic Development Inc. and Mayor Bob McDavid responded to residents’ concerns by saying that the state’s offer of tax credits is directly related to the number of jobs IBM creates. “We’re getting a good agreement that protects the citizens of Columbia very well,” McDavid said. “We’re getting a company that’s not going to go away. It’s got a worldwide presence.” ...

    In last night’s public hearing, First Ward Councilman Paul Sturtz and a handful of residents quizzed local economic development officials about the reliability of financial impact estimates, how IBM’s job creation process will be monitored and verified and whether there are strings attached to the economic incentives. Sturtz also pointed out that IBM has been cutting jobs in the United States and shifting them to other countries. “It doesn’t seem to me like job creation,” he said. “It seems like job shifting.”

  • Bloomberg BusinessWeek: IBM, Business Groups Oppose Job Bill Over Tax Raisers. Excerpts: International Business Machines Corp. and trade groups for major U.S. companies are pressing Congress to defeat a jobs bill containing billions of dollars in taxes on their global operations. The effort is led in part by the U.S. Chamber of Commerce and an alliance of companies including IBM, Microsoft Corp. and General Electric Co. They are targeting a measure that extends aid to unemployed workers, promotes bonds for infrastructure projects and renews more than three-dozen business tax breaks, including a credit for experimental research that many of the companies support. ...

    IBM reduced its effective tax rate by 9 percentage points in 2009 because it was able to defer U.S. taxes on money earned in lower-tax countries, according to filings with the Securities and Exchange Commission. The value of its research tax credits wasn’t specified. IBM, in a June 2008 policy document, said it has been “unable to derive meaningful benefit” from the research credit for “many years.” ...

    IBM and the business groups are protesting eight provisions in the bill projected to raise about $14.5 billion by making it harder for U.S.-based companies to claim credits for taxes they pay to other governments. The tax credits are intended to prevent double taxation and can only be claimed when those foreign profits are repatriated to the U.S. U.S. lawmakers, including House Ways and Means Committee Chairman Sander Levin, a Michigan Democrat, say companies are using a variety of techniques to reduce their U.S. tax bills without ever bringing their profits to the country. Some “have used techniques to maximize the amount of money they leave overseas at the same time they’re claiming” the foreign tax credit “to avoid U.S. taxes on other income sources,” Levin told reporters on a conference call today. He called the technique a “manipulation of the tax code” that is “tilting the playing field in favor of investment overseas.”

  • IEEE Spectrum: IBM Denies That It Will Cut 75% of Workforce by 2017. By Robert Charette. Excerpts: There is an interesting little flap brewing in the IT community. Back in March, IBM announced that it would no longer be breaking out information on the number of its US employees, according to this ComputerWorld report. IBM finished 2009 with 399,409 employees, with US employees numbering some 105,000 the same ComputerWorld article noted. Speculation was that IBM made the move to avoid scrutiny by Congress and others about how many of its US jobs were being shifted overseas.

    Then in April, a story appeared in Personnel Today that quoted Tim Ringo, head of IBM Human Capital Management, as saying that IBM could - notice the word could - reduce its workforce to 100,000 by 2017 by firing 300,000 of its workers and then rehiring them as independent contractors using a crowdsourcing strategy. Under this approach, IBM would hire only to staff specific projects as necessary.

    "There would be no buildings costs, no pensions and no healthcare costs, making huge savings," Mr. Ringo was quoted as saying. In the article, Mr. Ringo "stressed the firm was only considering the move, and was not about to cut 299,000 jobs, as staff would be re-hired as contractors." ...

    Update and Correction at IBM's request: In my original blog post, I stated that one could reasonably assume that IBM had likely considered crowdsourcing internally, and that IBM was actively suggesting the idea to its clients as part of its consulting practice. Mr. Doug Shelton, Director, IBM Corporate Media Relations, sent an email today - Monday, the 10th of May - taking issues with these statements, stating that they were "misleading and inaccurate." Mr. Shelton said that, "Categorically IBM is not considering a 'crowd sourcing' plan." With that clarification unequivocally on the record, I apologize to IBM for reaching these inaccurate conclusions.

    Still, I wonder how soon it will be before the US Congress holds a hearing on IT employee "crowdsourcing" and calls high technology companies - including IBM - as witnesses to see how seriously they are considering implementing the idea. IBM says it isn't - but have or are others considering it for more than start-up ventures? The idea is no doubt attractive to some high tech (and other) companies and its time may be at hand. Who would have thought five years ago that the airlines would start charging for carry-on luggage either? And as for other witnesses, I would suggest it be the US Department of Education Secretary Arne Duncan. Congress might ask Secretary Duncan to explain exactly how such a move by high-tech companies to fire and then rehire their employees as contractors would encourage more US students to take up computer science and engineering as a profession.

  • IEEE Spectrum: Selected reader comments concerning the above article follow:
    • David Sault 05.07.2010 This is the same kind of short-term, to-hell-with-the-future, kind of thinking that wrecked the world's financial health. And the solution is the same: regulate the mafia executive class at major companies.
    • Quint 05.10.2010 Congress should call the 50,000+ workers IBM has let go in the U.S. over the past 8 years. By day 7 or 8 of that exercise, maybe Congress will get an idea of the impact this is having on the US economy.
    • Angela 05.10.2010 Excellent article! We need the media to continue printing more of these articles which will eventually bring more attention to this problem. This only the tip of the iceberg because IBM has already been doing this for so long and it's really only now that press is bringing it to the public's attention. IBM has a huge PR team to do damage control when press write unfavorable IBM articles. Nice to see not all reporters are on the IBM smooze take.
    • Quant 05.13.2010 This would be in line with IBM practices of the last many years. "Optimizing the shareholder value" is the name of the game. Hell with the people to create that value, with their livelihoods, health insurances for their children, etc. What IBM execs need is the taste of Greece...
    • Tom 05.13.2010 In 1993, IBM Federal Systems had a large buyout (pre-retirement bridge, etc.) to reduce the size of its staff in that subsidiary. At the same time, IBM said that there were no plans to sell FSC. Soon after, it was sold to Loral. Plans can be made quickly. To paraphrase former President Clinton, it depends on what "plan" means.
    • Tom 05.13.2010 ieee, you too may soon be crowdsourced. Engineering will be engineered right out of business! Study engineering? Where's the future in that? The question you've got to ask yourself is: Can you trust the IBM's out there to tell you the truth? Oh, and E is no longer equal to MC**2 and neither does F any longer =MA. Why? Because M got a more lucrative contract doing something else.
    • IBM is full of lies 05.17.2010 This latest update by Doug Shelton is just a bunch of lies. IBMers have been getting used to the legal and executive lies from IBM over the last 5 years. They guarantee or pledge or promise something and then after a year they do exactly what they said they would not. This kind of misrepresentation by executives and management has been running rampant through IBM Software group. Now it is inspiring an environment of paranoia and misery. IBM only cares about EPS and I even had a manager say that directly to my team. If there was a decision to be made, that is their #1 (maybe only?) priority. They will use lawyers and PR people to twist the truth and hide the facts. They have become professionals at it. I wouldn't be surprised if they had patented a method for lying and deception of the public just like their patents for sending US jobs elsewhere.
    • Wallace Douglas 05.18.2010 IBM needs to think twice about which employees would even come back as contractors. IBM has NO respect for its workers. They are bleeding them dry and then dumping them for cheaper wages in South America, India, and other non-American countries. Good luck with re-hiring IBM. Most IBMers know how bad the company treats their employees. IBM used to be the company to work for. Now its the company to RUN FROM!
    • Disenchanted Techie 05.23.2010 Is anyone really surprised IBM, or any other US company for that matter, would be considering such a thing? If so, where have you been the last 10 years? This is just more of the same disease that has been systematically taking over corporate America. Its called unbridled greed. Nothing was learned from Enron, the sub-prime mortgage melt-down or the bank bail-out and our government has done nothing little or nothing to address their root cause.

      The company I've worked for the last 17 years, once part of a fortune 100 high-tech company and touted as one of the 50 best companies to work for in the US for a number of years, was spun off as an IPO (so a handful of rich folks could get richer), then after a few years was sold to group of investment bankers (so a different handful of rich folks could get richer) and has been a privately held company ever since. These investment bankers have no future vision for the company other bleeding us dry

      Ours benefits have been steadily and methodically curtailed employee benefits - elimination of our pension plan, suspension of matching 401K contributions, and shifting a higher proportion of health/dental care costs to the employees. They've cut-back office cleaning and janitorial services (employees are collecting and hauling the office trash). Other than printer paper and printer consumables, no office supplies of any kind have been provided for several years (how pathetic is that?).

      The company only just "upgraded" to MS Office 2007 on our 4-6 year old computers and if we need our computer repaired, we have to personally drive it across town to another facility to have it repaired.

      Our internal R&D organization, once one of the best in the world, was gutted. Our new owners have instead chosen instead to sell our hard earned technology and manufacturing IP to the highest bidder and to pay competitors and off-shore companies to do our future R&D for us (how does that make our company competitive?). All this has been done in the name of cost-saving measures to increase profit margins.

      Our company hasn't been hiring new employees when needed for the past several years so work loads, and as a result work hours, have become oppressive while salaries have remained flat or been reduced. I suppose we could quit our jobs, but where do we go to find jobs for which we are trained and experienced that pay as well and don't abuse their employees like this? The middle-class and American Dream are both well on their way to extinction. Indentured servitude and work houses appear to be our grandchildren's future.

  • PR Insider (United Kingdom): Sending jobs to India and China is so 2003. Excerpt: With IBM are reportedly considering reducing their global workforce from 400,000 permanent employees to 100,000 by 2017 by “ crowd sourcing “ or hiring sub-contractors, leading Black Country law firm George Green LLP warns local employers to tread carefully when looking at alternatives to employing people. Tim Lang, Partner and Head of the George Green Employment Team said “Businesses are increasingly looking at ways of avoiding employing people and taking on atypical workers instead. Crowd sourcing is the act of taking a job traditionally performed by an employee and outsourcing it to an undefined group of people on a project by project basis in the form of an open call. There are advantages in terms of avoiding buildings costs, pension and healthcare payments etc, so this trend is set to grow in the current climate, as employers look to squeeze people costs.”

    Mr Lang commented “It is reported that other well-known employers in the oil, manufacturing, IT and service industries are also considering downsizing their permanent employee base, but this could be to the detriment of staff retention and morale and could have serious implications for quality of work. This is part of an increasing trend for employers to look towards taking on atypical workers rather than employees in order to avoid the high costs associated with employment. Employers need to be aware of the potential pitfalls. For example a contract with a “self employed” contractor will be scrutinised by an Employment Tribunal to determine if it is a sham that obscures the true nature of the relationship. If the contractor is required to carry out the work personally and is subject to a degree of control exercised by the organisation and there is an obligation on the organisation to provide work and on the individual to accept that work then it is likely that the contractor will be regarded as an employee by an Employment Tribunal and will therefore have employment rights notwithstanding what any contract says.”

  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Inside Sales in Westford, MA: (Past Employee - 2008) “Stay Away.” Pros: I naively thought there would be the prestige of working for Big Blue... boy was I in for a surprise. ConS: It's just not "your father's IBM" anymore. Found that IBM really means: "I'm By Myself." Managers seemed to enjoy being abusive to the people who reported to them. While theoretically selling a collaboration product, the spirit of working together & collaborating was crushed on a daily & consistent basis by the managers. Advice to Senior Management: If there is such a thing as leadership at IBM, it's far too removed from the daily grind of inside sales. The idea that IBM is going to swing back into software is laughable.
    • IBM Sales Manager in New York, NY: (Past Employee - 2008) “Big company with even bigger politics.” Pros: IBM is a company struggling to find its identity. It has purchased many companies over the past few years but it doesn't seem to know if it is a software or consulting company. If you are a rep and get a good commercial territory you can make money. Cons: Very political. If you are part of the insiders club, and are willing to be a yes man, then this is a good place to work. Fly above the radar and have original thoughts and you will get your wings clipped, regardless of how smart or successful you are. Advice to Senior Management: Loosen up and let your people do what they do best, sell!
    • IBM Anonymous: (Current Employee) “BIG and SLOW.” Pros: Name recognition and prestige I guess. Lots of resources to pull from if you can find it. Things get done quickly if management turns it into crisis. Lots of smart people. Cons: Offshoring at an increasing rate from the states to BRIC countries. Never feel safe in the States. Bottom line is the most important thing. Advice to Senior Management: Have less micro management and allow more freedom for employees to be creative and feel part of the bigger picture.
    • IBM Public Sector Senior Consultant in Washington, DC: (Current Employee) “Don't work here.” Pros: Having the IBM name on your resume is still looked upon favorably. IBM still hires good people. IBM is a good place to start your career. Cons: IBM management looks solely at utilization rate when determining things like promotions and raises. Competency in your actual job is not considered. If you would like a job where you're graded solely on how many hours you bill the client, then IBM is the place to work. Advice to Senior Management: Evaluate people based on what they do, not how many hours they bill. I do not need to work 44 hours a week in order to do a good job for the client. Unfortunately, this seems hard for IBM management to understand. IBM management only cares about the bottom line, not about its people.
    • IBM Technical Sales Engineer: (Past Employee - 2010) “IBM - Increasingly Bad Management.” Pros: If you choose, the chance to work with a mind bending number of different technologies. Cons: Relentless cost cutting since you can't increase the move the needle of $100b a year company and with a CEO that bows to Wall Street, not its customers or employees. Advice to Senior Management: Refocus on your customers or employees
    • IBM Project Manager in Atlanta, GA: (Past Employee - 2009) “Once great company, aging and sneaking out of US borders.” Pros: Extremely talented and motivated workforce. Access to a vast array of potential markets for project work. Cons: US employee pool is on a 'shelf-life' as 'Profits' are posted year after year though the off-shoring of jobs to India disguised as 'Reorganizations' and 'Resource Actions.' Salary Increases are simply pathetic, if they occur at all, given a company that has done 'so well' during the downturn. Career Advancement opportunities are anemic at best. Advice to Senior Management: Stop offshoring US jobs to AP in the 'dark of night' masked as Resource Actions.
    • IBM Business Analyst in Budapest (Hungary): (Current Employee) “Good atmosphere, nice colleagues, but poor compensation package vs. long overtimes.” Pros: Good atmosphere, nice and skilled colleagues. Good reputation of the company. Networking: wherever you go in the world there's a good chance that you will find an ex or current IBMer around. Cons: Compensation package is far below what you can get in other companies, additional benefits are already close to zero. No work/life balance, long overtime hours. Hard to get promoted above a certain level, even if you are performing very well. Advice to Senior Management: Do not save money only by reducing benefits for employees.
    • IBM Senior Financial Analyst in Toronto, ON (Canada): (Current Employee) “IBM Finance in Canada is a shrinking organization.” Pros: Work at home flexibility. Looks great in your resume. You learn a whole ton. Cons: Too much work, too little pay. Promotion means nothing - except for more work and less effective hourly pay. Squeeze every blood out out you. Flexible = come in whenever you want but you have to work for as long as you need to get the work completed. Very greedy company. Advice to Senior Management MgtZ: take a pay cut and recognize the hardworking employees.
    • IBM Advanced Software Sales Specialist - WebSphere in New York, NY: (Past Employee - 2009) “UGH! Stop looking over my shoulder...I'm a PROFESSIONAL.” Pros: Paid time off - vacation, holidays, personal Name recognition - (You'll never get fired for buying an IBM solution.) Good to Excellent Software Products. Benefits Package (Health Insurance). 401K Matching, Choices Security (depending on the job, been a lot of resource actions lately.) Real commitment to embracing diversity in the workplace. Cons: Management no longer smart, instead MANY are focused on moving to next job. 2 years and gone. No one cares about you, BUT you..(which is fine, just don't tell me you do.) Name recognition (You MIGHT get fired for having IBM implement the solution you bought.) A home grown system called CAT (Customer Activity Tool) to track WHERE, WHAT, WHY, WHO,ETC ETC ETC so that management can decide if you are working hard enough. In reality, most of the information is completely made up, just to keep the FL manager off your back. It's an insult to professional sales people...big brother has emerged, and he's a cat. Getting cheaper by the minute...reducing reasonable expense reimbursement, soon you'll need to install a pay phone in your car! Forget about travel. Pay - imagine getting a quota increase ONE WEEK before the end of the quarter and going from 200+% of quota to 89.3% with no opportunity to challenge. What happened to Marketing??? Business Partners do more than IBM SW Group. Some customers think we are out of the Notes business. When was the last time you saw an ad from IBM that would cause a customer to really consider a purchase? i.e., "I'm an IBMer"? SO WHAT?? (Yeah, I get IT, but do the customers you are targeting ..??) Advice to Senior Management: Hire the right people, and trust them to do their job. Stay out of their way, and listen to their logical rational feedback. Take action, don't just make a chart or schedule an EI. Be prepared to deal with honest, hard-working people in dead territories, who know their portfolio, but whose customers can never support the quota you've defined. Limited the amount of roll-up quota boost. Geo gets quota, region adds 10%, bus unit adds 10%, FLM adds 10%..by the time it gets to me, it's pure pie in the sky. Introduce the left hand to the right hand. Maybe buy it a coffee. Bluebirds do not just fly over the rainbow, they occasionally land in someone's territory. It doesn't mean they worked harder, smarter, faster, etc than anyone else. It's often dumb luck.
    • IBM Systems Engineer in Bangalore (India): (Current Employee) “Cant stay for long duration.” Pros: Work from home or any near by IBM office, no strict timing. Good technical people. Branded. Shift from project to project is not so difficult. Cons: Pay and appraisal are very low. lots of cross cutting. Rating system is not good, visibility is more in writing down the points and stuff to higher management telling i did this and that. Managers are supposed to know the strengths and skills of employees under him/her. Advice to Senior Management: hike is very bad sometime nil. by this you loose skill full and talented employee.
    • IBM Manager in Portsmouth, South East England, England (United Kingdom): (Current Employee) “IBM - oh dear.” Pros: Work from home, though this can leave employees isolated. A lot of highly-skilled colleagues. Cons: No work-life balance. No, or minimal, pay rises (3% max). Staff go for 7, 8, 9 years with zero pay rises. Very low morale. At an all time low in the UK. Zero training budget. No job security. Jobs in the UK are being shipped to India/Hungary/South Africa/Poland. This has gone on for years, and is continuing. This has led to the.... CULTURE OF FEAR - i.e. I must work every hour God sends, and must work longer than the next guy, otherwise I might lose my job in the next round of job cuts. Crazy appraisal system, with forced quotas for PBC 2 / 3 ratings. PBC 2 and 3 means zero pay rise, and probable redundancy. At least 50% of the workforce get these ratings. Abuse of disciplinary process to "manage poor performers". (i.e. disciplining people who were given poor appraisals because of forced PBC quotas). Eroding benefits. The UK final salary pension scheme has just been closed for people who have paid into it for decades. Greed of upper management. Sam doubled his pension pot to $40M in 2009. Ineptitude - process is king in IBM, and the processes often don't work. No vision. IBM is boosting profit at a time of decreased revenue, by cutting costs. Through job cuts, it is hacking away at its skills base and eroding staff morale. IBM is heading for a big fall. Advice to Senior Management: Apart from all the cons listed, you're doing a fine job. Keep it up.
    • IBM IT Specialist: (Current Employee) “GOOD PLACE TO WORK.” Pros: flexible in working Hours good learning capabilities High Technology company more exposure on different technologies can work on variety of projects across domains. Cons: promotions are not easy once joined difficult to get right jobs to right people Pay Hikes are almost nil after joining. Advice to Senior Management: create more opportunities for right people. should have reasonable pay hikes. Variable pay should be given not by performance alone.
    • IBM Anonymous: (Current Employee) “IBM” Pros: great benefits, good work life balance Cons: Lack of job security, offshoring, communication, overworked. Advice to Senior Management: stop cutting jobs in the US and shipping them overseas. It never works with US clients. All the work eventually comes back but by then there are no qualified people left to handle it and the ones that are left end up working 60 - 70 hrs per week.
    • IBM Consultant: (Past Employee - 2009) “We add little value to our client for what we charge.” Pros: Great support system and cultural legacy. Cons: We offer mediocre services at outrageous prices and schedules for our customers. BCS has no interest in faster/cheaper/better for clients. Senior managers sell big strategic projects to large customers and then let the rank and file drag it out forever as long as we keep billing. It's an embarrassment how small companies outperform IBM at service and value. Sad for a brand such as this. Advice to Senior Management: As far as BCS goes, IBM needs to realize that this ERP-type consulting model is both outdated and a disservice to customers of the long run.
    • IBM Anonymous: (Current Employee) “Good compensation and benefits, but be prepared for the travel and lack of career control.” Pros: Overall, the compensation and benefits packages are very good. There are many different directions you can take your career at IBM. People are generally pleasant, and you are virtually assured to have a large variety of experiences Cons: Pros are also the cons. The vast majority of IBMer's will work in a "virtual" environment. This means that you will likely work from home when not on-site at a client location. And you should expect to travel 100%, for most delivery consultants. The nature of work is different depending on the job - there are literally thousands of different job types at IBM, but a large majority are travel jobs. Also, IBM is such a complex organization, that it is almost impossible for an average employee to comprehend the org structure in place. It is a matrix environment, so you will have several bosses, but IBM behaves more like 3 or 4 matrices on top of on another, and it is extremely confusing to know who is setting direction, what that direction is, and how to deliver against it. Also, it is approaching impossible to explain that to anyone outside of IBM - comes across as consultants making things complicated. Advice to Senior Management: Provide a career path for your top talent. Good people will leave if they feel that you are just trying to keep them billable, and don't care how exactly that takes place. Over time, you need to develop the future leaders that will run practice areas and own client relationships, or else you will risk losing those people and lose traction in the market while your key people try and wade through the big blue mess.
    • IBM Anonymous in San Diego, CA: (Current Employee) “Bonus / Review” Pros: Coworkers are great to work with. Cons: Yearly Bonus is not guaranteed. You can do a great job the whole year and not be rewarded. They will use economy as excuse. However upper mgmt seams to be always getting theirs. Advice to Senior Management: Give feedback to employee throughout the year. Change bonus to quarterly.
    • IBM Anonymous: (Past Employee - 2010) “IBM has a lot to offer its employees if you are self motivated and have a strong internal network.” Pros: Plenty of opportunity to explore new areas of interest. A community of highly intelligent individuals. Relatively good path for advancement in certain areas of the organization such as in consulting services. Good skills development programs in place. Many perks and benefits as an IBM employee. Cons: Easy to get lost in the numbers in such a large organization. Many employees work from home, this can be a pro but can also be a con due to lack of community. Career advancement can be a challenge particularly in internal positions. Firm is highly motivated by the bottom line so staff reduction is yearly occurrence and is part of standard operation procedures. Advice to Senior Management: I worked at IBM for 11 years and in that time I dedicated the majority of my time including many weekends and late nights to meet the expectations of my managers and clients. Then, I gave birth to my son and needed to ease up on work requirements to dedicate time to my new baby. I was disappointed to find that in my case, IBM did not stand by "work/ life balance" message that is promotes to employees. I was penalized in my performance rating and then laid off from the firm. So my advice would be to "practice what you preach!" and consider individual situations more then you do in yearly review cycles.
    • IBM Advisory Engineer in Austin, TX: (Current Employee) “IBM employee review.” Pros: lots of opportunities if you chose to pursue. Cons: too large a company and ur just a number focus only on short term deliverables benefits being systematically reduced every year career growth or job changes practially impossible. Advice to Senior Management: take a slightly longer term view of things
    • IBM SSE in Gurgaon, Haryana (India): (Current Employee) “IBM nothing works without manager.” Pros: Only Brand Name Nothing else. Con:s very low package IBM nothing works without manager support U can achieve anything in IBM if ur manager in ur favor Manager No work satisfaction for employee... Cost cutting too much Infect tea and coffee also paid No value of experience guys.. value here only for those guy who are working here from fresher level .... Advice to Senior Management: Management Please do something
    • IBM Advisory Software Engineer: (Current Employee) “Corporate employment means corporate values.” Pros: IBM is huge - which, in theory, means there are opportunities in diverse areas for growing or changing your career. The benefits package, while no longer great, is still better than many companies can offer. The rest depends significantly on your department - some offer a great deal more flexibility than others. Cons: Once known as a family and employee valuing company, IBM has completed the transition to a bottom line $ corporate mentality. People are no longer valued anymore than a piece of hardware on your desk. The company offers no loyalty to employees, and expects "work-life integration" from them -- which basically translates to the employee will be available around the clock to meet IBM's global needs. Advice to Senior Management: To survive, IBM must make a profit - we all understand that. What we don't understand is how IBM can tell stockholders we are making great profits and turn around and tell employees that we aren't making enough profits to even cover the cost of living, let alone compensate people for all the extra hours and work they give to the company. As an employee, I have seen my income relative to the cost of living decrease each year for the past 10 years -- and that was as a top performer. As a stockholder, I find the company practice of offshoring jobs to less qualified, lower performing people overseas and expecting the remaining to put in more and more hours supporting and doing the work for these people without compensating them for the extra work/hours and dedication with salary increases and job security abhorrent.
    • IBM Anonymous: (Past Employee - 2010) “They simply don't care.” Pros: there are a lot of good and dedicated people here and there, and talking and working with them is a great pleasure and an opportunity to learn many valuable skills for career growth and doing the job right, and* you get to know everything your manager doesn't tell you. Cons: they are making a profit. every year. so far. but at least part of those profits come from off-shoring. if you are a corp. ladder climber and you don't care about your employees, your product's quality, and your customers (b/c after you move on someone else gets the blame). its good place to be. Advice to Senior Management: good luck
    • IBM Consultant in Denver, CO: (Past Employee - 2009) “Entry Level Consultant at IBM Global Services.” Pros: Great Benefits. Travel Exposure to different Fortune 500 Clients. Variety of work. Cons: Lack of management caring to place you in a field of your interest. Travel> Always someone around with more experience, less opportunity to take on new responsibilities. Little new of year feedback. Manager do not know employees. Advice to Senior Management: Managers should take time to get to know employees more. Management should take yearly reviews and goal setting more seriously.
    • IBM Software Engineer in Guadalajara, Estado de Jalisco (Mexico): (Current Employee) “IBM is ok... as a start point.” Pros: IBM at Guadalajara has several areas. It depends with which area you are working. The good thing is that you have a secure work: It's really really hard to get fired. We have 12 free days/year, medical and dental insurance, food vouchers/month, paid vacations. It depends, but it's possible to travel abroad for training. It's easy to get hired if you're a new grad (as a contractor). Cons: IBM takes your life. Several of my friends and me, work more than 8 hrs/day, as average10 to 12 hours per day. IBM does not pay you that time. Also, IBM it's pretty demanding and your money compensation is not as good as other companies in the area. It's incredible the high elitism and sometimes it's difficult to get the information yo need. Also, there is some people who doesn't like to share their knowledge. Too much bureacracy If you're a new grad you will start as a contractor. You will need about 2 years to get hired as a "regular" employee (my case). Advice to Senior Management: You too are people, you were not "created by IBM", help your employees to succeed.
    • IBM IT Architect: (Current Employee) “Mixed place to work.” Pros: Great place for quality minorities, women, etc. Very equal opportunity. Competitive, but not exceptional benefits for new hires. Three weeks vacation, 3% 401k match, 6 "floating holidays", lot of health plan choices. Very high tech, IBM is chasing big problems. It's cool to work for a company with Nobel Awarded scientists. There is a career path for technical people besides management. Cons: Hard to get promoted. Pay plan changes yearly, as much as 35% based on what the executives decide. It's a huge company, almost impossible to make a difference or to be heard. Executive management is often only marginally competent. Many of them are exceptional, most of them are not. IBM Marketing is horrible, and makes it difficult to sell products. Advice to Senior Management: Ideas at the top, and overall financial success are great, but the rewards are no longer being shared with the technical community. You are losing your best people to our competitors. This is not sustainable.
    • IBM Software Engineer in Austin, TX: (Current Employee.) “Good place to work, could be hard to stand out.” Pros: Great work life balance, the IBM culture respects personal and family priorities. Hard work and good job will be recognized. Cons: Internal transfer is not as easy as it should be. Your visibility depends on your manager's relative power among his/her peers. IBM evaluate employee's performance relative to all employees in a larger organization. Your relative contribution depends on how well your manager promotes you. Advice to Senior Management: Announce layoff when there is a layoff. The term "resource action" is more demoralizing than layoff.
  • Bloomberg BusinessWeek: IBM’s Moffat, Chiesi Were ‘Intimate,’ U.S. Says. By David Glovin. Excerpts: Robert Moffat, the former International Business Machines Corp. executive who pleaded guilty in the Galleon Group LLC insider-trading scheme, had an “intimate relationship” with accused tipster Danielle Chiesi, prosecutors said in court. Moffat admitted to securities fraud and conspiracy in March and is scheduled to be sentenced in July. He faces six months in prison at most. Today at the sentencing of Mark Kurland, a co- founder of New Castle Funds LLC and Chiesi’s former boss, a defense lawyer said Kurland deserved no more prison time than Moffat. ...

    Kurland, who was sentenced today to 27 months in prison, and Moffat are among 21 people charged since October in two waves of insider-trading arrests. Among them are Galleon co- founder Raj Rajaratnam, who is charged with using confidential tips to earn millions of dollars on illegal stock trades, and Chiesi, whom Kurland supervised at New York-based New Castle. Both Chiesi and Rajaratnam deny wrongdoing. Moffat, who also isn’t cooperating with prosecutors, will seek a sentence of probation, said his lawyer, Kerry Lawrence. ...

    At IBM, the world’s largest computer-services company, Moffat oversaw the personal-computer business and helped sell that unit. Before his arrest, he was among the candidates to succeed Sam Palmisano as chief executive officer, according to people familiar with IBM’s thinking.

  • Urban Institute: Social Security and the Budget. By C. Eugene Steuerle, Stephanie Rennane. Abstract: In contrast to rising health care and interests costs, Social Security's growing benefits relative to taxes received represent only a modest part of the nation's major fiscal problems. Nonetheless, Social Security serves as the flagship of social welfare policy, and it places increasing demands on the economy as annual benefits grow, life expectancies increase, and the baby boomers retire. Social Security reform, moreover, has far-reaching implications. Done the right way, it can generate higher national output, personal income, and revenues for Social Security and other purposes—helping the nation achieve budget sustainability and a stronger Social Security system.
  • Duke Today: A Piece of Internet History. Duke to shut Usenet server, home to the first electronic newsgroups. By Cara Bonnett. Excerpt: This week marks the end of an era for one of the earliest pieces of Internet history, which got its start at Duke more than 30 years ago. On May 20, Duke will shut down its Usenet server, which provides access to a worldwide electronic discussion network of newsgroups started in 1979 by two Duke graduate students, Tom Truscott and Jim Ellis. Working with a graduate student at UNC-Chapel Hill, they came up with a simple program to exchange messages and files between computers at Duke and UNC using telephone modems. The “Users Network,” Usenet for short, grew into an international electronic discussion forum with more than 120,000 newsgroups dedicated to various topics, from local dining to computer programming languages. Each group had a distinctive name such as soc.history or sci.math. ...

    Many social aspects of online communication – from emoticons and slang acronyms such as LOL to flame wars – originated or were popularized on Usenet.

New on the Alliance@IBM Site
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  • Reality Check! 800 IBM jobs to be “created” in Missouri What about the 14,000 IBM jobs lost?
    • IBM is marching into Columbia, Missouri with a promise of creating 800 jobs. Oh by the way, $28 million in tax incentives please. This for a company that has billions in cash.
    • The Alliance@IBM is certainly all for job creation. We are also for job retention. But that is not what is happening in IBM.
    • In the last year and a half IBM has terminated almost 14,000 US employees and moved much of their work offshore. Where are the jobs for them? Will they be re-called and offered jobs in Columbia? Sorry, IBM doesn’t value its employees enough to do that. Of the 800 jobs to be “created” how many will be new hires? In the case of Dubuque, many IBM employees from around the country were told—move or be gone.
    • What of the wages for Columbia’s new IBM employees? The example of Dubuque and other US Global delivery centers is enlightening. Average salary in the older sites at East Fishkill and Boulder is $70,000. In the newer Dubuque it is $50,000. That is factoring in the higher paid IBMers that transferred to Dubuque. And that won’t last because as employees have told us, band levels and pay scales are dropping for the transferees. Let’s face it: job “creation” in Columbia and Dubuque is also about lowering wages in IBM.
    • So while there may be some IBM glitter in the eyes of Columbia residents right now it is important to ask IBM questions on job creation and what will happen when the contract runs out. Above all taxpayers must demand transparency and accountability from IBM. A link to an excellent article “IBM’s trail of broken promises” is here.
  • To Alliance@IBM supporters: The Alliance is the only organization that advocates and supports IBM employees and ex-employees. In fact, there are few like it in the Information Technology field. It is always difficult to keep an organization like this alive, but as a supporter you know how important it is that we exist. We are calling on you today to help keep us alive another year by joining as a member or associate member. See our online forms below. As our membership has dropped, it is imperative that we gain new members or this organization and web site will cease to exist. Help us keep our organizing and advocacy work alive!
  • General Visitor Comments: Due to a lack of membership growth the comment sections will be closed until we see sufficient growth in full membership, associate membership or donations. Many of you that visit our site have not yet joined, but seem to value its existence. The only comment section that will remain open will be Job Cuts Reports. If you have information that you want the Alliance to know about please send to ibmunionalliance@gmail.com. Information of importance will be put on the front page of this web site. To join go here: Join The Alliance! or here: Join The Alliance!
  • Tell-A-Friend! Take action! IBM must employ US workers on ALL Government contracts! Pass your message on to your friends and colleagues, and invite them to sign up for Alliance@IBM.
  • Job Cut Reports
    • Comment 5/16/10: I wanted to take a moment to validate everyone who is advising the person asking about being hired internally. What they are saying is the truth. To the person who is asking about getting hired internally - please don't make the same mistake I did and waste your time hoping to get a new appointment. I was originally scheduled for termination in October of 2009. Because I thought I might have a chance, I searched the Lotus Notes database of temporary positions and found one that stretched me out for one month. I did this to give myself more time searching for internal permanent positions. In the end - I screwed myself. If I had accepted that original termination date, I would have been eligible for 46 weeks of unemployment. Working that extra month made me miss the cut off for emergency benefits. 23 weeks later, I have yet to find another job, and my unemployment benefits run out in 3 weeks. I know it's so hard to accept, but please believe what they are saying. Once you are selected as an RA, you will not get a new position within IBM. I'm sorry. -Anonymous-
    • Comment 5/17/10: When I was RAed I was told by my manager that I had 30 days to find another job within IBM. I found around 10 good job fits but could not even get a reply from the hiring manager much less an interview. One particular job was in an area where I knew an adjacent 1st line quite well who reported to the same 2nd level. I had worked for this 1st line for several years and got excellent reviews. I called him at home in the evening and asked him if he would put in a good word for me. He was very sad and told me there was nothing he could do. He basically said I was wasting my time looking for a job in IBM. No one could hire me. In hindsight I wish I would have never wasted my time looking for another job in IBM. It falsely kept my hopes up. -RAed
    • Comment 5/19/10: I can't imagine after how this company has treated me, wanting to find another job with IBM. I am done at the end of the month, and right up to the end they expect me to be training my offshore replacements. IBM Canada is a sinking ship, and while I'm not happy to be out of a job, I couldn't stay in good conscience. The way they are "rewarding" their most talented and loyal employees is appalling -Ra'ed in Markham-
    • Comment 5/19/10: How Other Workers Compare to Your CEO. How many workers could be supported by S. J. Palmisano's pay package? S. J. Palmisano made $24,313,795, which is equal to:
      • 14 Nobel prize winners
      • 60 average university presidents
      • 60 U.S. presidents
      • 89 AFL-CIO presidents
      • 129 Chairmen of the Joint Chiefs of Staff
      • 758 average workers
      • 1,612 minimum-wage earners

      How long would it take to equal S. J. Palmisano's total compensation for 2009? A Nobel prize winner would have to work until 2024 A.D. An average university president would have to work until 2070 A.D. The President of the United States would have to work until 2070 A.D. AFL-CIO President John Sweeney would have to work until 2099 A.D. The Chairman of the Joint Chiefs of Staff would have to work until 2139 A.D. An average worker would have to work until 2768 A.D. A minimum-wage earner would have to work until 3622 A.D. Now you know your worth... -IchBinMuede-

    • Comment 5/19/10: Not to be redundant, but I have to sadly reinforce the sentiments expressed here about getting another position in IBM after being put on an RA list. I figured it was futile, but I also decided that despite that, I would kick myself if I did not keep trying to find another IBm spot till "death". I knew deep down that it was indeed a fool's errand, but felt that I had invested so much over the years, I could not go without a fight.

      I had a couple of senior VPs as well as some other very well placed people try for me and then tell me they could not help me, but no one said to give up (wish they had). I did have a few interviews, and a very supportive 1st line who really did try to crash down doors trying to keep me in IBM, and the hiring mgrs even said they wanted me, but as soon as they tried, I got back from them a polite "there is another candidate that..." but I could tell by their words that it was because I had the scarlet letter(s) on me. (not to mention they told me I was by far their top candidate.)

      In two cases, the job req I was applying for mysteriously disappeared as soon as they tried to bring me on board. In hindsight, it was a waste of time and emotional turmoil, but if it happened to me today, I don't know if I'd do anything different, as that is the kind of person I am - go down fighting. But the reality is (and I've seen a number of colleagues "get it" after me - all with the same results) that out of every 1000 people in a RA, I'd estimate 3 get other jobs in IBM. Cruddy odds. To those of you still in IBM, I have only one piece of advice. Organize or get your resumes and LinkedIn profiles squared away. And if you do get that wonderful RA, just accept it and move on that day if you can. -RAed Jan 09-

    • Comment 5/19/10: I was given an end date from IBM a number of years ago when the account I was working on was terminated. I had more than 30 days, and I was able to find another position. Even so, it was extremely difficult to get approval to move into another department/tower/division at that time. I had to fight to get it to go through. This time, with the RAs of 2009-2010, there is no hope of moving to another position within IBM. They dangle the possibility in front of you, but you have been selected. Sure, there are stories of some folks getting saved, and there will be a few exceptions. Mainly I believe that they just like to state for PR purposes that affected employees have the option to find something else in the company. It sounds good in press releases. -PurplePeopleEater-
    • Comment 5/19/10: To RAed: Hopefully most people got the message by now that if you are RA'd, you are marked and nobody will hire you. People have posted this for years, I have posted it with my own experience. Managers will NOT help you. I did the same thing. I knew managers, asked for help, got nothing. My own manager would not even answer my emails that last 30 days. There are ways to get them though. I am now in charge of the IT budget where I work, a million dollars a year. Most of that was going to IBM, servers, desktops, laptops, AS400 and support, maintenance contracts. No more. I switched all our hardware and support and IBM no longer gets that 1 mil a year from us. They cut my measly less than 70k per year pay, and I cut almost a million going to them. Who got the worst end of that deal? IBM workers need a UNION or there is no hope. Oh yeah, I make more now too. -Gone_in_07-
    • Comment 5/20/10: There is a much better life after an RA from IBM. Always been a top performer and I am much happier after my RA and not having to work for an idiot manager who was PMP certified but had NO CLUE about anything and had no respect from anyone on my team. I have zero stress anyone and it is only a matter of time before I get a new job as companies are contacting me. I am back in school and enjoying every minute of it all. -happytobeanexibmer-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
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  • New York Times: Health Insurance Companies Try to Shape Rules. By Robert Pear. Excerpt: Health insurance companies are lobbying federal and state officials in an effort to ward off strict regulation of premiums and profits under the new health care law. The effort is, in some ways, a continuation of the battle over health care that consumed Congress last year. Insurance lobbyists are trying to shape regulations that will define “unreasonable” premium increases and require them to pay rebates to consumers if the companies do not spend enough on patient care. For their part, consumer groups say they worry that their legislative victories could be undone or undercut by the rules being written by the federal government and the states.
News and Opinion Concerning the U.S. Financial Crisis
Minimize "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.

  • Investment News: Bill Gates' father: 'Rich people aren't paying enough' in taxes. Software billionaire's dad spearheading state tax initiative in Washington; 'not fair'. Excerpts: Bill Gates's father wants the Microsoft Corp. co-founder to pay more in income taxes. Bill Gates Sr., a retired Washington state lawyer, supports a proposed ballot initiative that would require the state's highest earners including himself and his son to pay an income tax. Washington now collects no personal income taxes.

    “Poor people and middle-income people are paying too much to support the state and rich people aren't paying enough,” Gates Sr. said in an interview yesterday in Seattle. “That's the starting point for me.”

    The proposed tax on individuals earning more than $200,000 a year and couples earning more than $400,000 would raise $1 billion a year to fund education and health care. While targeting the highest earners, the measure would ease the burden on homeowners with a 20 percent reduction in state property taxes and eliminate the business-and-occupation tax for 80 percent of enterprises in the state, backers say. ...

    People in the bottom fifth of the state's tax brackets pay 16 percent of their income toward state and local taxes, while those in the top 1 percent pay only 2.5 percent, he said. “It's just not fair,” he said.

  • Jim Hightower: The Biggest Bank Heist You've Never Heard About. Full excerpt: Has your banker stopped by to thank you yet? Thanks are due, of course, for your share of the $700-billion bailout that we taxpayers provided for the giant banks after their greedy and reckless behavior imploded our nation's financial system and crashed our economy. But bankers are also wallowing in a much bigger, much more lucrative bailout that has received practically no media attention.

    This involves the low, low, low, extremely-low interest rates set by bankers who control America's monetary policy through the Federal Reserve System. In a point-blank giveaway, big banks have been allowed to keep borrowing billions of dollars from the Fed, paying interest rates of a mere one-half of one percent. But that's not the half of this flim flam. Having gotten these public funds practically for free, the banks can instantly, with a click of their computers, lend the money right back to the government at an interest rate of three percent or more.

    Yes, this means they are handed a 2.5-percent profit for doing nothing! They take public money from the Fed, immediately zip it over to the treasury department, collect their windfall profit, and brag about how "they" have restored profitability to America's banking system.

    Anyone with the brainpower of a turnip and the gumption of a bank robber could make money doing this, but top executives at Bank of America, Chase, Wells Fargo, and others who are flipping federal funds for their own fun and profit are now hailing themselves as financial geniuses. Also, they're treating themselves like royalty – the $140 billion that Wall Street executives paid themselves last year is the highest on record.

    These "geniuses" are mooches – their profits and their paychecks come from you. You might want to send a note to them, saying: "You're welcome."

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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