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Highlights—July 3, 2010

• Courthouse News Service: Ponzi at IBM, Tech Investor Says. By R.M. Kramer. Excerpt: Four IBM vice presidents orchestrated a 5-year-long Ponzi scheme, demanding money from investors even after canceling the related development project, according to a federal RICO complaint. Devon IT claims the vice presidents, who worked in IBM's hardware division, the Systems and Technology Group, used part of Devon's $12 million investment to inflate the division's earnings and fund projects with other business partners.

  "The RICO defendants are responsible for orchestrating a widespread Ponzi scheme, in violation of the Racketeer Influenced and Corrupt Organizations Act ('RICO'), over a period of nearly five years, involving the direct solicitation of $12 million in investment money from Devon for two information technology projects," according to the complaint.

  "While leading Devon down this road of deceit and as part of their scheme, the RICO defendants improperly included the funding provided by Devon on the financial reports of STG, thereby exaggerating its performance," the complaint states.

• Triangle Business Journal: Lawsuit accuses IBM of Ponzi scheme, seeks more than $100M. By Frank Vinluan. Excerpts: Two IBM executives based in Research Triangle Park are among the defendants named in a federal lawsuit brought by a small Philadelphia-area technology company that claims IBM orchestrated a Ponzi scheme that defrauded the company of more than $12 million. The suit is seeking more than $100 million from IBM. ...

  In the complaint, Devon claims IBM took the money Devon invested in the partnership and used it to boost earnings figures for Big Blue's Systems and Technology Group. The complaint alleges that IBM continued the scheme by bringing in new partners to invest in projects. Thomas Bradicich and James Gargan, two RTP-based IBM vice presidents, are among the four individual IBM defendants named in the suit. IBM has not yet filed an answer to the complaint.

• Yahoo! IBM Employee Issues message board: "Raises?" by "trexibmer". Full excerpt: Why doesn't IBM management have the common decency to communicate pay raise information to their employees? If the raises are 0% or only 1% that is no reason to avoid telling the employee! Where is proper COMMUNICATION in this IBM? Life in this IBM is not good.
• Yahoo! IBM Employee Issues message board: "Re: Raises?" Full excerpt: The Alliance has been asking that question on the web site. Used to be raises were given out in May. then June. Now July. If employees had a contract there would be no uncertainty and no guessing game.
• Yahoo! IBM Employee Issues message board: "Re: Raises?" by "In Focus". Full excerpt: Of the two (2+) people that I know, who have gotten a raise, the highest one received was 1.4% increase. The other person received a 1% increase. As I was a rated a 2, I am not expecting an increase. I bet my manager doesn't let me know one way or the other, because he has been neutered. It would be interesting to see on this board, the number of 2 rated people that get an increase.
• Yahoo! IBM Employee Issues message board: "Re: Raises?" by "ibmretiree2006". Full excerpt: Well, of course. Those lazy 2's and 3' don't deserve anything even though their PBC was determined without anyone even bothering to look at performance. If anyone believes that for the vast majority of employees IBM is a fair minded employer I have a bridge in San Francisco for sale. I have been told, however, that employees in India got fairly decent raises. Even 2's and 3's!!!
• Yahoo! IBM Employee Issues message board: "Re: Raises?" by "trexibmer". Full excerpt: IBM still wants to keep most of the PBC 1 rated employees, if they can, so the PBC 1's can count on a raise. Not all PBC 2+ will get raises. IBM did not allocate enough of pay funding for this cycle so there might not be enough of pennies to go around to everyone who is a PBC 2+. I personally know someone who got a PBC 2+ and a whopping, fat 0% raise. Those PBC 2+ well above market based pay and those to be RAed as a PBC 2+ (they do exist) might not get a raise. Those that have a PBC 2 should just watch their back and forget about watching their paycheck now. RA's are sure to happen. Life in IBM is not good.
• Yahoo! IBM Pension and Retirement Issues message board: "Pension Rumors" by "zaciewskim". Full excerpt: I work for IBM and I have been hearing the rumors for a month now....apparently I was one of the LAST to hear the rumors, they have been out there for a while. I fully expect that some form of this rumor is true. I also fully expected to hear the announcement shortly.... Alas, IBM is not going to announce this until September...or so I hear from a source who shall remain anonymous. And, the scoop is 'no more pensions'....if you are eligible under the old plan, leave or lose it. This means even people who are not yet eligible to retire. Thanks, IBM, for letting us twist in the wind all summer.
• Yahoo! IBM Pension and Retirement Issues message board: "Re: Pension Rumors" by "art_vandalay_". Full excerpt: zaciewskim, I have already provided some points on why I don't see a package at this time with the PPA. Actually, you are somewhat correct in that there will soon be "no more pensions," and that date will occur on July 2014. At that point, everybody will have achieved "retirement eligible" status that is on PPA. The year before would require IBM to fund their pension at 100%. The pension will have no other "bumps."

  Frankly, the best long term strategy (in my opinion) would be for IBM to want to keep these employees on the PPA pension. First, the pension will have been paid for and any money they are able to produce will be cash that they can continue to use for layoffs, exec packages, or showing profit. Secondly, the employees are not drawing out of the funding and I believe they are getting high quality employees at a cheap price.

  A couple of posters have suggested that IBM will simply watch all of these senior employees walk out of IBM, and replace them with cheap replacements off the street. I don't think so. I look around and see that this group of employees (25+ years) are making up the directors, BUEs, and senior team lead talent in many groups that cannot afford this loss of leadership. I think 1999 was much different. We had a deeper bench and the targets back then were the "younger employees" that were viewed as mere cogs.

  I hardly think that business line executives with 30 years of experience will be replaced by $50K employees off the street. Us grunts, sure. IBM has had no qualm going after the troops, but we are talking about the ones that, in some cases, report directly up to these bosses.

  This also brings up another point that as far as I can determine, this rumor started on one specific message board. The board was the generic "IBM Corporation" group that discusses the financial aspects of the company. Based on those postings, I believe there was a good chance that IBM did take a look (or is looking) at the dollars behind a pension change. However, the same sources suggested that IBM booted the plan for one simple reason. Possible lawsuits.

  It has been discussed that IBM can certainly terminate their pension plan at anytime, but I wonder now that the people affected the most would all be over 40 (actually over 51.) This might be something that IBM is a little worried to step into at this time. You have unemployment at a high level, an Obama administration that is worker friendly, and a company that is trying to get stimulus funds and government contracts. Another lawsuit or bad press might not be what IBM needs presently.

  Plus, we're not talking the 10s of billions of dollars in savings that they were going after in 1999, but probably something, at most, in the $1 or $2 billion range. (Based on my understanding, the discount rate that IBM would need to offer would be 1/2 of the 30 year Bond rate and the 1/2 of the various corporate rates. I believe the 30 year bond is close to 4% and the corporate rates I have seen only fluctuate a quarter of a point higher.) The maximum they can net present value would be 13.5 years, but the average for the PPA class is probably closer to 7 or 8 years. This is significantly different than the original second choicers who in 1999 were initially "NPVed" with 6% over 25 years with a calculated pension that was only 48 months based on a 60 month total.

  Finally, let me state that I have no clue what will or will not happen. I have not heard from anybody in IBM talking about any rumors either. The only discussion I have been part of has been on these message boards. Normally I believe that everybody should feel free to state their opinions, but you posted this information under the guise as fact:

  "Alas, IBM is not going to announce this until September...or so I hear from a source who shall remain anonymous. And, the scoop is 'no more pensions'....if you are eligible under the old plan, leave or lose it. This means even people who are not yet eligible to retire. Thanks, IBM, for letting us twist in the wind all summer."

  By posting this, aren't you the one that is letting IBMers who read this board "twist in the wind all summer?"

• Yahoo! IBM Pension and Retirement Issues message board: "Re: Pension Rumors" by "zaciewskim". Full excerpt: So, don't go anywhere, now the management rumor mill says IBM has decided not to do anything about the pension plan, i.e., they have backed off. Who knows what will happen? Where there is so much smoke there is usually a fire, but I'm not going to trust ANYTHING I hear from ANYONE any more unless it's the head of HR making an announcement. This rumor mill is ridiculous. It's enough to make your head spin. Have a nice summer!
• Yahoo! IBM Pension and Retirement Issues message board: "Re: Pension Rumors" by "Mike Germano". Full excerpt: There are lots of reasons to spread rumors from the top. It may be to soften the blow or to get reaction to proposed ideas. It may also be to spread fear of something much worse than what is coming so that you consider yourself lucky for no increases, re-leveling, more overtime, reduced benefits, and higher employee contributions because you feel like you somehow missed a bullet.

  The stress of impending layoffs does, however, take its toll. I went through at least four or five before I finally got axed several years back and I had to take a job for less money, but the stress is so much less that it may add back a couple years to my life that IBM would probably have taken away due to the toll of constant stress and two or more layoff rumors a year if I had stayed.

  If it does come down to leave or lose it, though, take the money and run. The job market is tough, though, so start looking now before you do bolt out.

• Yahoo! IBM Pension and Retirement Issues message board: "Re: Pension Rumors" by Kathi Cooper. Full excerpt: It's not about Al Franken. Try President Obama and Rahm Emanuel (White House). Try George Miller and Bernie Sanders (House and Senate). There were many more, but these guys personally came to our aid during the Cooper suit. Now I'm not saying they would intercede again because players change. However, if IBM really did anything that even squeaked of screwing us, I feel confident we could gather the right politicians to do the right thing again. As one great attorney once told me, everyone has an agenda so make sure your agenda and their agenda compliment each other. And this time, we are no longer in a learning curve.
• Yahoo! IBM Pension and Retirement Issues message board: "Re: New Loophole?" by "art_vandalay_". Full excerpt: First, let me preface that I have no earthly idea if IBM will choose to do any alteration to the IBM pension plan. The only rumors I have heard have been floated on a couple of message boards.

  I don't think it is simply a "no brainer" for IBM to change the plan at this stage. It did make a tremendous amount of financial sense back in 1999. Further changes made even more sense when they froze the plan. I just don't see the same upside for making a change at this point. (However, I will agree that logical decisions and IBM executives do not always go hand in hand.)

  First, if IBM's goal was to simply go after the retirement "bump" that we all get when we reach either 30 years of continuous service or are over 55 years (with 10 years of service), then the horse has pretty much left the barn. By my calculations, there will probably be less than 5,000 IBMers that will not have achieved that goal by the end of 2010.

  That might seem like a lot, but if they would have done a forced conversion to a cash balance in 2006, then the numbers would have been greater than 20,000 to 25,000 of individuals who were still not retirement eligible. The youngest eligible PPA participant will be turning 51 this month. (This is someone who was 40 years old back in July 1999 and had at least 10 years of service at that time.)

  There is money out there that IBM will save by preventing these employees from reaching the "bump." Assuming it equals out to about $150,000 (pretty high estimate) per employee, then best case IBM would be saving is around $750 million. That might sound like a lot, but that is pretty much loose change when we are talking about pension dollars. When you add up all of the changes IBM made to the pension plan in 1999, then we are talking about $10s of billions if they could have avoided relenting to the second chancers. Three quarters of a billion is a lot, but not when you consider the consequences.

  Secondly, I still would wonder why IBM would choose to force these IBMers out (now) when they could easily continue to draw down the number by laying them off. IBM does realize that this set of employees contain a great number of first and second and third line managers throughout IBM. It was one thing to cull the herd in 1999 when we had backups of our backups, but I think this would be a pretty risky move at this point. I think that the IBM execs do realize this after their 1999 experience.

  Additionally, I would think it would be in IBM's best interest to keep the "retirement eligible" employees from leaving at this point. It is true that they are higher paid, but they are also very cheap employees in comparison. The reason is that as long as they are working, then that is a pension that IBM does not have to pay out. If my salary is $120,000, but my present pension value is $60,000, then I am actually a $60,000 employee. There is a better chance that the retirement eligible people will leave as compared to the one not eligible. The logic is that they are younger (non-eligible) and want to continue working.

  One final point is regards to how IBM would calculate the net present value. Again, in 1999, when interest rates were at least reasonable, IBM was able to get away with their 6% value. In today's environment, that might be a bit difficult to swallow. Of course, the rules now suggest that they don't even need to justify their discount rate.

  More importantly, back in 1999, the employees that IBM were truly targeting were all fairly young. The ones in their upper 20s and 30s that lost out on the pension (and a great deal left the company) and even the second choicers (most of who were in their forties.) The second chancers are now all in their 50's. And, it is one thing to "present value" back 25 years, but the impact is simply not as great if you can only go back 8 to 12 years. (This is one of the reasons that I have not included the wearaway amount in IBM's savings. It may still be significant, but I wonder if IBM would see a positive impact to the approximate 20K employees over the age of 55 still working.)

  Plus, if you believe that high inflation could be in our future, then maybe having a cash balance is not as bad as what 1999 might have offered. I assume we can pretty much rule out any COLAs in our future from IBM. IBM won't be able to hold onto the cash balance for very long, since participants that end up staying would have a much shorter stretch than what happened in 1999.

• Yahoo! IBM Pension and Retirement Issues message board: "Re: New Loophole?" by "Tom Logan". Full excerpt: That was an excellent response - and I'll have to agree with a number of your points. Here's my take on it: What made sense in the past - as to whether they could have done this or that and gained more money at the time is out of scope. They already had a number of employees pissed - and maybe they thought doing anything more would create a outcry too large to ignore. The people making these decisions never look back - the only game is - Where can I save, steal, or cheat to get money right now?' These are the guys that cut a 'Thanks' program, dropped the rental car size to compact (for those that don't travel, this amounted to less than $5 a day and is paid by the customer 95% of the time anyhow), cut one week of vacation on the top end, and on and on and on. As you pointed out - the total dollar number may look big to us, but it is just peanuts in savings for a corporation of IBM's size.

  Where/how did you come up with the number of employees affected (5000)? I'll admit that I did no calculation at all - I just assumed the number was larger. Either way - they will do anything for dollars as pointed out in the paragraph above. There are employees (assumption here on my part)Â that spend 40 hours a week doing nothing but looking for pennies to add to net income. Nothing is out of scope. They have already proven that anything legally in a grey area also will be tried - and they will let the courts determine the outcome. I am not even sure that is done fairly - with billions and billions of dollars at stake at large number of corporations,- the goal is simply to win. II suspect there is a lot more going on behind the scene that we never see - just look at the bailout program to see the pull Wall Street has on the government.

  As to any interest rate they would use - the answer is that it will be the legally established limit or the absolute best number they think they can get away with - whichever is possible. I would not be surprised to see a number even beyond what they think they can get away with used - and then conceding to improve it some to show how flexible they are and how much they care for their employees.

  I agree with your net cost of an employee being the difference in salary versus retirement - but I do not think the accounting works like that. I could be totally wrong as I have no knowledge in this what so ever. I think my retirement money is already in the retirement fund requirements either way - whether I am retired or not. So, pushing me out as an employee simply saves them money on the salary side - along with medical benefits, 401K match, social security, vacation and so on. Another bonus to them here is that the older employees cost them considerably more in medical benefits, vacation, and  social security than what our replacements will cost them.

  Another aspect of this often over looked - and this may have been already discussed at some time in the past, is the way they are making these changes. As you know, the first retirement plan change applied to all employees and triggered a major outcry and a law suite They have learned from that and over the years they have split the employees into multiple groups. Now they target the separate groups - and the outcry is too small to attract any attention or carry any weight. This was even highted by the "Â less than 5,000 IBMers " number used below. If you go back through the plan changes made in the past, I think you will find that all these changes only affected one or two groups - and this all planned. They established the group sizes by setting start date and age values for the applicable changes. These are the groups I see (and there could be more):

  • old retirement plan - eligible to retire - full medical for life
  • old retirement plan - eligible to retire - small bucket of medical dollars
  • old retirement plan - not eligible to retire - will get small bucket of medical dollars
  • new retirement plan (I have no idea how these employees are split up if at all)

  This rumored change would basically eliminate the top two groups listed above - paving the way for future changes with fewer employees in any retirement plan at all (contractors,off shore, or a void will replace the retiring employees). They can also provide a 'bridge' and control the percentage of employees they want to include from the third group listed above- from 0 to 100%. Just my opinion

• Yahoo! IBM Pension and Retirement Issues message board: "Re: New Loophole?" by "thekanck". Full excerpt: Art: Your analysis makes perfect sense but if I play executive's advocate, (a role similar to devil's advocate) I might say:
  1. $750M is perhaps the "savings", but at present IBM is on the hook to provide the annuity, so must have reserves to cover those in the future. By converting now, they save the $750M (for example) and ALSO get to recapture from the pension fund the surplus cash that WAS held in reserve to pay the future expenses (I have no idea how much that is, but I'm sure it's something...)
  2. savings of only $60k "net employee" cost ... ($120K salary vs. $60K pension in your example) even at only $60K that old-timer IBMers are expensive. Every executive knows we are are all interchangeable geek-cogs thus an off-shore geek @ $12K with modest if any benefits allows the company to book a lot of savings even if they hire 2:1. Typical salaries for the USA-GDFs are in the $30K range so still the old timers are not a "deal" at $60K. Medical costs are far lower, replacements would get only two weeks vacation(?), less 401k match, if any at all, etc...

  Also, the $60K pension is "sunk cost" pay you now, pay you later the money is there.

  Regardless ... of that ... IMHO, the most compelling reason to believe the rumor is that big-Sammy turns 60 and wants to wring every last nickel out of this years bottom line that is possible.

  Is there any basis for the rumor? Beats me, but like you said "executive logic" operates differently than "peon-geek-interchangeable-cog" logic. TK.

• Yahoo! IBM Pension and Retirement Issues message board: "Re: New Loophole?" by "Re: New Loophole?" Full excerpt: Good discussion on what may or may not happen with the Prior Pension Plan... Another point to consider is, although the immediate savings to IBM as a whole by converting everybody to a cash balance plan may not be that significant in the scheme of things, it would still be very significant for an older and smaller division like the Server & Technology Group. Having its roots in the mainframe era, it probably still has the highest percentage of employees that qualify for the Prior Plan. Getting these people to leave without paying a severance package would lower the cost structure, improve the division profitability and, therefore, increase its executive bonus pool!!! We all know division executives are handed out financial targets to meet and, short of doing something illegal (a la Bob Moffat), they're given free reign to choose the means and reap the rewards.

  Managing the Pension Plan is a headache and entails some financial risk that IBM can do without on the road to doubling earnings in 5 years.

• LinkedIn: The Greater IBM Connection. Full excerpts: Rumors afoot... Anyone have info on a rumored pay-out of pensions to those already "retired" from IBM and/or an "offer" for current IBMers on the "old plan" to take a buy-out of pension or retire? Not sure I have my facts straight, and it is JUST rumor, but as I remember my IBM days, when a rumor was winding it's way through the halls, something was usually afoot.
  • I've heard the second part of your comment from multiple sources. Huge discussions on this over at endicottalliance.org too.
  • These rumors are flying around the Rochester site also. A person hears so many different versions it is hard to know what to believe. Sure sounds like something is going to be announced regrading this.
  • Sounds like their actuaries have revised their estimates of life expectancy upward ... and a buyout would remove the requirement of providing additional funding into the plan to cover this!
  • No buy out...the issue is setting a deadline for the 'old plan' such that to be able to retire under that plan you would have to exercise your retirement option under this plan by year end. Should u choose not to do so u would be moved to the existing 'cash balance plan'. The financials would be significant for current 'retirement eligible' employees...but it is just a rumor and was also rumored several years back in the Tri-State NY area.
  • No buy out...the issue is setting a deadline for the 'old plan' such that to be able to retire under that plan you would have to exercise your retirement option under this plan by year end. Should u choose not to do so u would be moved to the existing 'cash balance plan'. The financials would be significant for current 'retirement eligible' employees...but it is just a rumor and was also rumored several years back in the Tri-State NY area.
  • I am 56. I called the folks who administer the plan. I cannot draw on the pension until I am 62. I asked about cashing out with a lump sum and the answer was "I wish we could do that."
  • I was laid off 3 weeks before my fifteenth service anniversary. If I had lasted another 3 weeks I could have drawn my pension starting at 55 instead of waiting until I am 62. What a coincidence that I was laid off when I was.
  • I was laid off 3 weeks before my fifteenth service anniversary. If I had lasted another 3 weeks I could have drawn my pension starting at 55 instead of waiting until I am 62. What a coincidence that I was laid off when I was.
• The Register: Big Blue sues exec for joining Oracle. 'Should have been on gardening leave.' By John Oates. Full excerpt: IBM is suing Joanne Olsen - a 31-year veteran of the company who used to be general manager of its services division. Olsen was tempted away to join Oracle by Larry Ellison after the purchase of Sun Microsystems - which put the two firms in more direct competition. Big Blue complains that Olsen was contractually obliged to take gardening leave - not work for a competing company - for at least a year. A spokesman for IBM told Reuters: "Joanne Olsen possesses valuable confidential information about IBM and our operations. As a result, she cannot undertake a senior position at Oracle without violating her obligations to IBM." IBM has filed against Olsen in a court in New York State. She declined to comment and Oracle spokespeople were unreachable
• Glassdoor IBM reviews. Selected reviews follow:
  • IBM IT Architect: (Current Employee) "IBM Global Services." Pros: IBM works on cutting edge technology. Excellent for initial exposure Cons: No opportunity for career advancement. Less pay. Too much travel. Mostly incompetent project managers. Advice to Senior Management While it is a great company to work for, it needs to provide more opportunities for career advancement.
  • IBM IT Specialist in Waltham, MA: (Current Employee) "Great job right out of undergrad." Pros: Great education, opportunity to touch tons of technologies and work with some of the best IBM professionals as well as exposure to work in multiple industries. Cons: Great educational training but not the best mentoring. Be ready to be thrown into the deep end and tread water or even swim laps right out the gate. Advice to Senior Management: You need a better approach to mentoring recent college grads.
  • IBM Hardware Sales Specialist in San Francisco, CA: (Current Employee) "OK if you're in Software or Services. Direction of the company is all software and services." Pros: Benefits are good, co-workers are professionals, access to a wide range of resources to assist. Cons: Lack of a decent compensation plan for sales and technical sales support. Company is being run purely by numbers. No investment in sales relationships. IBM has a track record of failed product launches. Customers do not like IBM. Advice to Senior Management: Good luck.
  • IBM Anonymous: (Current Employee) "Great people, poor management." Pros: IBM has some of the best people in the world. The pay is very attractive. Many employees are mobile with the opportunity to work from home. Cons: Commission is based on quota, so if you are doing well, IBM might raise your quota mid year so you won't make as much money. Advice to Senior Management: IBM has a cookie cutter approach to the sales process. Because management insists on following this approach, they sometimes require their sales team to have inappropriate or awkward conversations with customers. Management should allow their team to manage their own accounts without interference.
  • IBM IT Specialist in Markham, ON (Canada): (Past Employee - 2008) "Contractors heaven." Pros: Good for contractors, FTE always under pressure, You can make good money if negotiations are done are right time. Cons: Lay off master, one call from US and everyone is laid off for no reason. Advice to Senior Management: treat employees as if you want to keep them for long time.
  • IBM Software Engineer: (Past Employee - 2008) "Great place to work, But be aware: you are a small brick in this giant building." Pros: Very smart people to work with; good training opportunities; there are some really interesting projects. Be part of the big blue. Cons: Bad cafe. No gym. Some projects are boring. Need political skills. Advice to Senior Management: Improve promotion and rewards system. Allow employees to work on their most favorite projects.
  • IBM Anonymous: (Past Employee - 2010) "Have to be highly specialized to maintain or get a job at IBM." Pros: Name brand recognition. Being on the technical sales team is a great place to be to heap pocketful of money on the hard work of others. Cons: First level and most middle management are puppets...as they themselves are worried about their jobs. Old boys network phrase comes to mind as they look after each other. Advice to Senior Management" Make a major overhaul in your first level and mid management teams in the same way you keep moving upper management every 3 years or so.
  • IBM Software Engineer in Durham, NC: (Current Employee) "Software Engineer Review." Pros: The benefits are exceptional: free health insurance, dental insurance, disability, 15 vacation days, 12 holidays, 6% 401K matching, ability to work from home. Cons: I was frequently on call which meant I had to carry a pager for a week every other month The raises and promotions were pretty minimal each year I was not allowed to apply to other internal position even after deciding upon an availability date upon hiring. Advice to Senior Management: I believe the company should focus more on working as one unit that all departments working as individual entities not concerned with any other departments progress.
  • IBM Program Manager: (Past Employee - 2010) "Focus is on money, not employees or customer service." Pros: Average pay, some workplace flexibility, good benefits. Many locations around the world in which one might be able to work and at home, maybe. Cons: Focus on moving US jobs to "off shore" jobs to save money and reduce American head count. Corporate wide move to a shared services model which depends on fracturing the work into cheap assembly line components, with little or no contact with or appreciation of the customer. Savage cost cutting. Moving more work on fewer people. Advice to Senior Management: Fire the Scrooges and return focus to the customer and your employees. Get a long-term perspective and lose the short term financial myopia. Put your millions of dollars of bonuses back onto the company so that so many good people won't be laid off so easily. Taking huge bonuses while firing employees may not be illegal, but it is certainly shameful.
  • IBM Anonymous: (Current Employee) "Cost cutting our way to growth." Pros: Best in class in so many ways, you get to operate at the pinnacle of your profession. Truly committed to diversity and truly global in culture and DNA - you learn so much just from that alone. Does many things in the world to be very proud of. Cons: It's a complex operating environment so getting anything done is a major pain. As the pressures on employees mount because of cost cutting, they are treating each other poorly. Very high stress environment and not for the faint at heart. The climate has to be among the lowest in the industry...but it sure opens doors if it's on your resume. Leaders know this and are taking full advantage of it. Advice to Senior Management: Take the hit to earnings and re-size the company - and stop this 'death by a thousand cuts' business. You are poisoning the well.
  • IBM Managing Consultant in Atlanta, GA: (Current Employee) "IBM" Pros: Knowledge and experienced colleagues. Opportunities among various groups in IBM. Work Life balance. Exposure to new technologies and client facing exposure. Cons: No fair rating mechanism. Unfair compensation for old employees. Slow promotion process. No special incentives for hard and honest work. Advice to Senior Management: Adjust the salaries of old employees with consistent ratings 2+ and 1 ratings to current market conditions. Establish a fair rating mechanism.
  • IBM Analog Design Engineer: (Current Employee) "Good place to start and learn, but compensation well below market rate." Pros: Good place to start. Good place to learn. Good place if you want to move around and try different things. Cons: Outrageously low pay (in my case, ~30% below market for analog designers.) Constant fear of layoffs leads to generally bad morale (at least in Systems & Technology Group.) Upper management does not seem to understand the value of a high performance worker. Huge mess of bureaucracy. Advice to Senior Management: Figure out how to really reward your top performers (not just talk about it) -- they make your company tick. One good engineer is more valuable than two to three mediocre engineers, but doesn't cost nearly as much.
  • IBM Anonymous: (Past Employee - 2009) "Large and Bureaucratic." Pros: Benefits. A global company. Thought leader in technology. Cons: Very bureaucratic Many more no sayers and oversight (second guessing) than solution and enablers. Much of the organization is internal focused and not client or sales focused. Advice to Senior Management: Get control of so many reviews, controls and multiple audits and enable staff, not burden them. Train and support getting it right the first time - not the cheapest, so SWAT team efforts are not as needed or common (and less costly overall with higher client satisfaction).
  • IBM Inside Sales Representative in Dallas, TX: (Past Employee - 2008) "IBM inside sales (.com) representative. Software Group." Pros: Great opportunities for advancement. Excellent training and benefits. Competitive base. Starting salary right out of college $35k + commissions. Ability to relocate. Cons: Software quotas are nearly impossible to achieve on any given level of expertise. This is almost expected. Management creates obtainable quarterly challenges to suffice real commissions. These are you usually quarterly bonuses of $1500-5000. Territory changes can be frequent. Advice to Senior Management: Too much time spent on updating & forecasting sessions.
  • IBM STG Technical Sales in Charlotte, NC: (Current Employee) "been going downhill for the last 4-5 years." Pros: Good work-life balance. Great co-workers. Decent salary (not the best, but not the worse either.) Great technical community. Good place to learn about new technologies. Cons: too many levels of management (executives with no reporting structure?!?) very hard to get any straight answers from upper management. If you're on a technical incentive plan, you can kiss any incentive payment goodbye. (IBM will make sure you barely make your base salary.) Employee motivation is down the drain. Lots of very talented employees are fleeing the company because of the above-mentioned reasons. Advice to Senior Management: Restore *SOME* respect for the employees (remember, it used to be an IBM core value not so long ago) and it will go a long way. Stop making short sighted cost-cutting decision that make IBM look good to investors on a quarterly basis and start re-investing in longer term goals. IBM's current market position is great, but that's not going to last unless things change. 20$ earnings per share by 2015 is the only thing that matter right now, and IBM will do anything to get there. ANYTHING. Success isn't measured solely on EPS Sam..
  • IBM Project Manager: (Current Employee) "Shift in emphasis - Going the extra mile and being rewarded to punishing us if we don't." Pros: Lots of opportunity, interesting roles, opportunity for development, pay is OK, good tools to do the job, top of its field. Cons: The whole shift in emphasis. We all used to go the extra mile and were rewarded, now it is measured and if we do not do it we are punished. This has the effect of shifting motivation from high morale to low morale with resentment. The company talks about work life balance, yet we have little choice but to work away from home and work long hours. Little recognition is given to this and even the expenses we incur whilst away are penny pinching and ends up costing us. The company has pulled a clever trick in making us work 40 hours each week whilst only paying us for 37. I would have preferred it if they had been honest with us and told us we were having to work 40 and there would be no additional pay. The appraisal system has become a series of moving hoops assessed by people we do not work for and rarely see. Little care is given to ensure feedback we get from task managers is fair. There is no training given to task managers to help them become good managers, apply fair approaches to interviews and feedback. Advice to Senior Management: Seriously look at the above, virtually everyone I talk to are unhappy with this. Addressing these issues will not cost much, will protect the company from simmering resentment and possible litigation.... and.... this is the big one... we will probably work more and go the extra mile whilst once again being happy to do so.
  • IBM Software Engineer in Hairless, England (United Kingdom): (Current Employee) "No career/pay prospects but you do get flexible working." Pros: Can often work from home - can almost always work from home when you need (deliveries / children / pets or to get some quiet). - More than one day a week might require negotiation. Flexible hours - core hours of 10-4 but these are rarely enforced. Flexible contracts - Compressed hours - work 4 but do an hour extra each day and get 90% pay. - Term time only (all school holidays off) for 90% pay. Nice site. Nice, intelligent (if demotivated) coworkers. Cons: IBM wants to reduce its workforce and so has a deliberate policy to reduce morale and encourage people to quit: Very restricted pay rises. PBC 3 process - management are forced to label a fixed percentage of employees in every team as under performing and threaten them with the sack. No education budget. (IBM used to be good here). You are a very small cog. Execs may work you into the ground on a project they've already decided to scrap months ago. Each year a few new graduate starters are abandoned in a team that has no work for them and are ignored, until they either quit or find another team - pretty demoralising realising that IBM really cares so little about it's employees that it will leave them to rot. This also occasionally happens to whole teams of more experienced staff but they are better able to cope. Advice to Senior Management Management: Don't hire staff you don't want. Be honest - if you don't know something admit it - we respect you more for it. Respect technical staff to know their jobs, we know we don't want to and couldn't do your job, accept that we might know how to do our jobs - or al least we should have a right to express an opinion. Execs: You want to maximise share price by maximising profit by cutting costs and don't care about moral or the long-term future of the company. You'll have retired before the effects of demotivating and culling the workforce damage the profits. You don't care that it's the best people leaving first.
• Wall Street Journal: Warren Buffet's Latest Gift: $1.6 Billion. By Erik Holm. Excerpts: It has been quite a year for Warren Buffet, which means next year will be quite a year for Bill Gates. Every July 1, Mr. Buffet hands over massive chunks of Berkshire Hathaway Inc. shares to the Bill & Melinda Gates Foundation, which focused on global health initiatives and U.S. education projects. The latest donation, based on the closing price of Berkshire's Class B shares on Thursday, is valued at $1.6 billion, or 28% more than last year's $1.25 billion. ...

  The rise in Berkshire's stock present the Gates Foundation, founded by Mr. Gates and his wife in 1994, with an enviable challenge: They have to spend it all. One condition of Mr. Buffet's donation is that the group's annual giving must exceed his previous year's gift. Mr. Gates, co-founder of Microsoft Corp., has provided billions of dollars to the foundation, too. The group made grants totaling $3 billion last year to pay for vaccine research, farming projects, microfinance efforts, teacher training, and other charitable work, according to the foundation's website. The total value of Mr. Buffett's gift, including shares he has pledged to hand over in future years, was about $39 billion on Thursday. It is the largest charitable donation in history. Mr. Buffett's holdings are mostly in the more-expensive A shares. He has been converting portions of his holdings to the so-called Baby B shares since announcing the donation in 2006.

• ZD-Net: IBM moving to Firefox. By Dana Blankenhorn.
• The Hill: Top Republican: Raise Social Security's retirement age to 70. By Michael O'Brien. Excerpts: A Republican-held Congress might look to raise the retirement age to 70, House Minority Leader John Boehner (R-Ohio) suggested Monday. Boehner, the top Republican lawmaker in the House, said raising the retirement age by five years, indexing benefits to the rate of inflation and means-testing benefits would make the massive entitlement program more solvent. ...

  Republicans have made cutting spending and reforming entitlement programs a key part of their 2010 campaign message. "The choice this year could not be clearer. While Democrats are fighting to create jobs and stand up for seniors, middle class families, and small businesses, Republicans are fighting for Wall Street and to bring back the same policies that caused the worst economic crisis since the Great Depression," said Ryan Rudominer, the national press secretary for House Democrats' campaign committee.