This is my promised column about IBM — the first of several on the topic, all to be delivered this week. The last time I wrote at length about Big Blue was in 2007. I have been asked by readers many times to revisit the subject, something I haven’t wanted to do because it is such a downer. Writing the last time I hoped the situation, once revealed, would improve. But it hasn’t. And so, five years later, I turn to IBM again. The direct impetus for this column is IBM’s internal plan to grow earnings-per-share (EPS) to $20 by 2015. The primary method for accomplishing this feat, according to the plan, will be by reducing US employee head count by 78 percent in that time frame.
Reducing employees by more than three quarters in three years is a bold and difficult task. What will it leave behind? Who, under this plan, will still be a US IBM employee in 2015? Top management will remain, the sales organization will endure, as will employees working on US government contracts that require workers to be US citizens. Everyone else will be gone. Everyone.
Now industries and businesses change all the time because they have to or want to. Big companies and small have to adjust to the realities and changing reward structures of their markets and cultures. Or they change to better adapt to new opportunities. But what’s happening at IBM is different than that. It’s different because this incredible American success story, if it continues to follow its current course, will utterly fail. It’s different, too, because neither IBM management nor Wall Street seem to have the slightest notion of the peril facing the company. My deepest fear is they simply don’t care.
The first question we need to answer is why this is happening? I think much of that answer can be supplied by Apple co-founder Steve Jobs. In my film, Steve Jobs — The Lost Interview, here’s what Jobs had to say about IBM, circa 1995. It applies just as well today.
“If you were a product person at IBM or Xerox, so you make a better copy or a better computer, so what?” Jobs asked rhetorically. “When you have a monopoly market share the company is not any more successful. So the people that can make the company more successful are sales and marketing people and they end up running the companies and the product people get driven out of decision making forums. And the companies forget what it means to make great products. Sort of the product sensibility and the product genius that brought them to that monopolistic position gets rotted out by people running these companies who have no conception of a good product versus a bad product. They have no conception of the craftsmanship that’s required to take a good idea and turn it into a good product and they really have no feeling in their hearts usually about wanting to help the customers.”
This is the first thing to understand about the IBM of today: the company is being run by executives who for the most part don’t understand the products and services they sell. The IBM of today is a sales organization. There is nothing wrong with sales if you can also deliver, but increasingly IBM can’t deliver.
The reason IBM can’t deliver is also explained well by Steve Jobs. It’s IBM’s maniacal fixation on process, once a strength but now a cancer.
“Companies get confused,” Jobs told me. “When they start getting bigger they want to replicate their initial success. And a lot of them think well somehow there is some magic in the process of how that success was created so they start to try to institutionalize process across the company. And before very long people get very confused that the process is the content. And that’s ultimately the downfall of IBM. IBM has the best process people in the world. They just forgot about the content.”
In this instance content means the deliverable, whether a product or service. IBM smugly thinks it knows so well how to do things that they can export their entire business model to cheaper labor forces in less expensive places to do business. While this is correct to a very limited extent it has been embraced as religion in Armonk.
IBM seems to believe it is cheaper to replace a skilled worker with two or three unskilled workers to do the same job. That is like hiring nine women to make a baby in one month. While it looks good on paper it is not practical and is not working. The language barrier for IBM’s Indian staff is huge, for example. Troubleshooting, which was once performed on conference calls, is now done with instant messaging because the teams speak so poorly. Problems that an experienced person could fix in a few minutes are taking an army of folks an hour to fix. This is infuriating and alarming to IBM’s customers.
IBM’s five year plan ending in 2010 was supposed to double EPS from just under $5 to about $11. (Today it is closer to $13.) During the last five years there was an accelerated push of jobs offshore for cost reasons, high attrition rates, and longer product release cycles. The next five year plan for 2015 is to again double EPS to about $20. Can this be done? Probably, but the particular way they are going about it is also likely to destroy IBM.
IBM’s biggest money maker is its Global Services business, which also employs the most people. Ten years ago Global Services was an even larger part of IBM but the company is now making a lot less on its contracts, and the turnover of business is brisk. It is in Global Services where you see the most jobs being shipped offshore But the problem is the offshore teams often lack the skill and experience to do the work, problems mount, customers like (most recently) The Walt Disney Company get upset and leave.
I’ll be providing more details in subsequent posts today and tomorrow but I want to end here with a point about how patently unfair and simply stupid this is. When I wrote about IBM five years ago the cost reduction program was called LEAN and it was supposed to mold from Big Blue a hyper-efficient business machine. Yet today IBM has more layers of management than it had in 2007. These extra layers come at a cost both in dollars and in accountability. Those extra layers insulate IBM’s top management from responsibility for their decisions. At the highest levels in Armonk they think things are going beautifully because they are out of touch with the reality of their own company.
Today at IBM the US workers who try to save the business are the first in line to lose their jobs. Management accountability is gone. The people who mess up get to keep their jobs; and those trying to retain the business lose their jobs.
How fair is that?
Wow! You nailed it Cringe. Massive downsizing & outsourcing – that’s the “road to profitability”? Obviously that’s the mantra.
I miss Wang.
First Comment!
Wheeeeeeeeee!!!!!!!!
Agree, as Cramer says, pigs get slaughtered
I retired several years ago after over 40 years with the company. I think it was about the early to mid 90’s, maybe earlier, that IBM dropped the longstanding “IBM’s theree basic beliefs”. One of them was “Respect for the Individual”. In my opinion that was the beginning of the downfall of the company.
Their chainge from the Three Basic Beliefs to focusing on the dollar is what has ruined the company.
During the Geat Depression IBM kept thier people busy manufacturing Tabulating Equimpent and stored them in warehouses. Then because IBM had equipment literally waiting in the wings, IBM was awarded contracts to provide that tabulating equipment at the beginning of Socicial Security. IBM had kept its people working and was rewarded for doing so.
Being in what eventually became Global Services for my entire career, I saw many changes.
My last 6 years with the company was as a first line manager. It was the worst part of my career. I started that period managing nearly 60 people at one customer. Marketing wrote that new contract knowing that the only way to make it profitable was to drastically reduce head count. During those 6 years we went through countless RA’s, whittling my workforce down to a total of 18 people. Sure, a few were low performers, but once those few were gone I was releasing good an excelent performers. Less that a year after my retirement, IBM was NOT rewarded renewal of the contract, so what good did it do to cause grief in the lives all those people.
I agree with 150% I worked for IBM for 31 years. The last 10-15 years progressively got worse and worse. Incompetence reigns supreme. Bottom line is I decided that after going for 6 years without a raise, my last raise was 1.5 percent, and having more and more work dumped on my desk and being told outright that I was not going to see another promo or another raise, I decided…OUT! I do not miss the stupid frenzy of rampant stupidity going on. The top mgmt do not know what the real deal is and could care less. The people who really make the company run are leaving or left. Then you get all those people at the top who require everybody to sign their Business Conduct Guidelines to walk to and talk as a professional, but then you have people like the former heir apparent, Bob Moffat (a/k/a 20% Bob) who sold his soul to the devil to enrich his own coffers. I feel betrayed by IBM management over the years. But I have my dignity and I am glad I am out of that hell hole! Good luck to anybody who can tough it out. That place has gone to hell in a handbag. If I were to write a book, nobody would believe me. They would think I was writing science fiction. Thanks for reading this far. I moved on quickly after I left IBM. My best move ever was to leave that place.
News on IBM actions in the UK. There have been 2 cases in the High Court of England so far: Correction of the Trust Deed – IBM UK vs IBM Pensions Trust and Employees, Allowing the employees to be represented at IBM’s cost in the hearings, and current an action in the High Court where the Pensions Trust, Ex employees and IBM UK are reviewing if IBM was in Good Faith in its pension changes. Briefly IBM change its defined benefit plans in such a way as to force almost all staff over 50 to leave IBM to retain the pensions earned to date. Very unfriendly. More new from me if you want it
IBM headed downhill in 1995 when what we had been promised in writing every year of my career simply vanished. I resigned and walked away in disgust after Gerstner and the board decided they deserved our pensions more than we did. (Pocketing pensions to drive the stock price up so they got bonuses was what cash pensions were all about.)
Even before that IBM clearly wanted to eliminate CEs (later called SSRs). They thought they could have us simply dump our knowledge into a database and then anyone could fix anything.
When they claimed they were going to get customers to change out their own parts (in live mainframes) I knew they really had no clue at all. Even we did not feel comfortable pulling 440V power supplies out of running machines and they thought they could get customers to do it? That’s nuts. Truly insane.
They seem to forget that the reason they sell equipment is because “IBM Means Service”. Silly us – we actually believed that. Get rid of service, and the next contract is not automatically yours.
We routinely broke contracts sold knowing full well there was no way we could meet the terms. We went into accounts requiring secret clearances because there was only one person who actually had one and he had to sleep sometime.
When I left it was primarily because they had downsized us from 18 to 3 and my phone rang almost every single night. I was so exhausted I was falling asleep driving. First my manager avoided me for a week, and then he offered me MORE WORK for the same pay to stay. Hysterical. And clueless. They never replaced me.
I accurately predicted that he would retire shortly after I left because HIS phone would then ring almost every night once I wasn’t around to answer. (The other two guys hated overtime and relied on me to cover everything.)
IBM hasn’t made their own equipment in I don’t know when. Then they outsourced to VARs. When I asked if I could be a VAR I got dirty looks. Made sense to me at the time. I can not imagine what they think their long term plan is unless going under is part of it. I suspect they just have no clue at all.
Wow. Can’t wait for part 2. Amazing.
Absolutely true and the insane thing is that as an IBMer from a Business Partner in 1990-91, those old “processes” are once again destroying IBM from within just as it was during the Akers time frame. As an IT consultant, outsourced OUT of a major insurance firm in 2005, I have nothing but contempt for India and the supposed technical excellence of support there. It is awful. But at $2 an hour, management cannot beat those reduction costs, plus not health care benefits too. Beyond Disney, the loss of the Texas data center project was a knife into the HEART of IBM. They could not build and control a damn Data Center!!! If anything else, that is what IBM should do great and do it well. They did not and now Texas is with ACS and that will be a disaster too. IBM management is blind and deaf to everything else except profit and shareholder value.
That’s not the only disasters. I’ve been on the customer side for two seperate IBM engagements where they took over all of operations (SO). Both were utter disasters. I’ve never seen such incompetence. All these relationships have ups and downs – but this was APPALLING. Cost was, in one instance, nearly 3 TIMES what was budgeted (with the help of IBM). IBM was then surprised when the customer resisted any kind of extension.
In the government orgs I do most of my work for, IBM are regarded as “budget disposal experts”, and they’ve lost most of their large contracts.
At least Akers had a real plan to address the problem. His plan was to break the company up. This would have given the product people the freedom to develop and refine superior products without the politics inherent in large bureaucracies. It would also have produced shareholder value through the spinoffs. The first step was Lexmark. Out of a stagnant, money losing personal printer division sprang a successful competitor to the then juggernaut HP. Had Lexmark remained within IBM, the aparatchiks in Armonk would surely have found a way to sabotage it.
Gerstner came in and reversed Akers’ direction. While proclaiming publicly he would leverage IBM’s size, he sold things off by stealth and claimed the proceeds as “earnings” to goose the stock price for executive options. As a result of not breaking things up quickly, bureaucratic battles ham-strung OS/2 development, leading to its failure. Other highly profitable products like AS/400 were starved of adequate development and marketing. IBM had a skunk-works small disk unit that was years ahead of competition in development. They had a 1 inch drive long before the competition but the aparatchiks said there was no market for it. Gerstner bragged how other disk manufacturers wanted to buy the skunk-works, but it wasn’t for sale. Instead, internal politics closed it down and IBM competitors snapped up its engineers and programmers for free.
Wow. I can’t verify any of this, but that disk drive story sounds scary enough to ring true. It’s said that the difference between fact and fiction is that fiction needs to be believable.
IBM used to ‘advertise’ them, 1inch 100MB, then 1GB later… of course you couldn’t actually buy them… I’m pretty sure the offshot of these disks found their way into the 1st gen ipods.
Was this the IBM Microdrive? I actually got one with my first digital camera back in 1999 so it did make it to market. I believe it was then sold off to Hitachi with the rest of the drive business.
I was doing a reverse engineering project at the Texas Attorney Generals office around that time.
Heard some rumors.
So sad, but what do we expect when we replace our masters with the first day apprentices?
Nicely done. I can see why you waited 5 years to cut lose.
78% in 32 months would be 2,200 a month that’s not impossible. But they cannot replicate overseas many of the functions currently performed in the US. Unless they also sell off STG. The rest is software/services, research locations are also probably mostly safe.
Actually there is no real way for ANY Fortune 50 company to grow internally that fast. IBM has and MUST grow its earnings by acquisition. Instead of firing everyone it’s entirely possible that IBM, with its enormous pile of cash would simply buy all comers in every useful sector. Moreover, ’emerging markets’ is where their growth actually lies so it makes more sense to simply allow US staffing to drop organically through attrition while staffing up where the growth business IS.
I worked for IBM’s over seven years ago, soon after they bought Rational Software and that was the division I was hired for.
I was there about a year, when they took many of the Rational Products and over night moved software development for the “older” products to India and fired the developers.
Soon after many other IBM changes happened to Rational, I never worked for either before that time, but to the original Pre-IBM Rational Employees the changes were drastic, regimented and usually counter productive.
Not even Research is safe. Several years ago, everyone in IBM Research USA was required to have a “buddy” in an overseas research lab – China, India, Brazil, or Israel; all places where they were busily hiring. Projects in Research are primarily staffed by off-shore researchers these days.
Love the Steve Jobs quotes, they are so insightful and applicable.
Related to Jobs observations seems to be a real risk averse nature of large institutions of all kinds. This leads to the kind of incrementalism and cost-cutting-your-way attitude for success, rather than a true gamble on something new.
I imagine human societies don’t want a gambler at the top of a large social pyramid. We do want to maintain the status quo.
I once had a boss that lamented a management change saying “accountants-in-charge means a slow death scenario”. They’ll cut costs, but create nothing. He was right and the slow death ensued.
It’s a pity. Sounds like IBM is destined to follow Montgomery Ward as an anachronism, a great franchise of the past that goes down the tubes.
Having worked at both Montgomery Ward and IBM, I’ve got to say you’ve hit the nail on the head. The similarities are uncanny.
IBM is another example of what is wrong with American business today. Outsource until you are only a company of managers in the US producing nothing.
Absolutely true, but IBM also set many trends, including the outsourcing AND the dismissal of full employment, pensions, employee benefits and all the things that made IBM a great company (done to the employees, but not the execs, BTW). There was a need to course correct, but the long term plan that Palmisano started was to do just what the author suggests – slowly chip away 1k-2k employees every few months, under the SEC radar and get that stock up another dollar. After 17 years of watching people disappear and the employees taking it in the rear, I got out of there.
Bob, you are spot on. Having been at IBM for many years, the rank and file in the company like myself simply cannot believe the poor executive leadership exemplified every day at every level. They have systematically killed any and all morale that existed within the company. Everyone fears for their job and the mentality has become “why bother, I’m eventually going to be resource-actioned (fired) anyway.” No matter the outcome, the execs still get their big compensation every year and the workers lose their jobs, or worse, remain only to get yelled at in endless meetings. Many in the company watch the big February executive stock giveaway each year only to become extremely nauseated watching these jokers get handed small fortunes while the workers get the shaft. You are correct, it is not your Dad’s IBM anymore. And Wall St. hasn’t a clue.
“resource actioned” is some pretty impressive corporate doublespeak.
The SS called their death squads “Action Groups” (einsatzgruppen).
So yes, calling reductions in force “actions” is, um, creepy.
Another term they like to use is “skills rebalancing” when doing workforce reductions.
Unfortunately this trend continues to spread, and not just in IT. I’m a consultant at McGraw-Hill where many of the staff – IT, HR have to live with an impending split of the company and outsourcing of major infrastructure ans services to 3rd parties. Meanwhile these same employees and consultants read every day on the corporate intranet (which is the default page) about how great profits are and what ***a great corporate citizen*** the company is being.
You really are left wondering what corporate citizenship is all about these days, probably nothing to do with social citizenship
IBM’s problems have been long-standing, and certainly not a surprise to those in the industry. The biggest problem that IBM has is that there is little, if any, organic growth of the company. IBM has entered lines of business by buying successful startups, but it has exited just as many, if not more. You name the IT technology…PCs, storage devices, networking, printers, semiconductors. IBM has either downsized those divisions, or sold them off to other companies. There are hot and heavy rumors as to which line of business will be next…strategic outsourcing, or perhaps the hardware business (STG).
As you can imagine, this does not make for a optimal business environment, much less one that is pleasant for the employees. The resource actions, LEAN, cost-cutting atmosphere, etc. are all symptoms of the bigger problem, in that IBM cannot maintain high value for the business. To put it bluntly, management has run the company into the ground.
For its part, the top executives have focused on financial engineering — preserving stock value while they themselves cash out at opportune moments. IBM’s 2015 plan is just another example in a long line of financial tricks.
The real “crime” in this whole scenario is that people are confused about what IBM actually is. At its heart, IBM has become a financial engineering operation masquerading as a technology firm. The corporate emphasis is not on product or services (“content” per Steve Jobs), but on EARNINGS PER SHARE. Once you understand and accept that fact, everything starts to make sense.
You don’t have to like it…but that’s the way it is.
>>The corporate emphasis is not on product or services (“content” per Steve Jobs),
>>but on EARNINGS PER SHARE. Once you understand and accept that fact,
>>everything starts to make sense.
absolutely SPOT ON.
IBM is mutant form of capitalism that would be alien to the likes of Carnegie and Ford. Zombie capitalism does not even understand the meaning of “growth”. This is what you get when capital is devalued, and “growth” is the depletion of any remaining company assets such as customer good will and the company operating expenses.
This is not capitalism. A good capitalist knows how to run a company and is building an empire to leave to his/her heirs. How would it be possible to jump start capitalism in our country? How would the laws have to change in order to benefit capitalism instead of enabling a company like IBM?
Nine Yarder thanks for the reference to Ford.
Henry Ford had genius on 2 fronts: 1.) efficient manufacturing in his development of the assembly line. In modern terms this may be understood as “Just in Time” for inventory management or “Cell Manufacturing”, the new new “assembly line”. 2.) paying his workers the salary to afford his products.
Back in the day according to IBM, who would ever want a computing device in their home? Well, we all know who won that argument then and now. The Steves then and Steve Jobs now.
This is not just an IBM problem. The people at the top of large companies today are driven more by short term gain than long term health of the organization. As has been discussed before, this is the result of the corporate focus on so-called ‘shareholder value’. Ultimately the problem is that ‘craftmanship’, and ‘customer service’ are intangibles, that can’t be measured directly….until the customers leave. Once the revenue stream dries up, it is too late.
The only thing in these large company’s favor is most of them have large amounts of free capital they can use to shore things up – but I’m getting the sense that they don’t even know they’ve hit the iceberg yet. Ultimately, the world is changing, and these moves are really signals telling us that large companies must contract to survive – but they don’t know how to do that in the business culture that prevails today. The example of IBM keeping people employed during the Great Depression is unfathomable today – because the bean-counters in control would never allow money to be spent on salaries without a clear business plan that shows the value/payback — and that won’t happen because they are not looking out far enough to be able to make that plan a reality.
The current level of EPS was reached by a combination of two things: (1) offshoring jobs and (2) killing the pension fund (IBM stopped contributing to its pension fund in 2007 – all subsequent benefit dollars have gone into 401k plans). Lots of other shenanigans too of course, documented well in the book “Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers” by Ellen Schultz.
Since (2) has already been done, to redouble EPS again to $20 per share will require an even greater rate of US job elimination than we have seen in the past.
They have also done other little things. Yes, retirees can purchase health insurance through IBM, but retirees are placed into their own insurance pool rather than being co-insured with all employees. Result: (much) higher rates. Result of higher rates: retirees cannot afford health insurance ==> retirees die sooner ==> lower pension costs for IBM ==> higher EPS!
I’m amazed that IBM offers former employees health insurance at all. The trend is not to insure anyone who isn’t currently employed, and then offer only scant overpriced difficult to collect insurance. 40,000 Americans die for lack of health care every year in a health care system ranked 37 in the world after all other developed countries. So ex-IBM employees seem to have it better than most.
If the US is ranked 37, why do people from almost every other country come to the US for health care? Doesn’t make sense to me.
There are certain clinics that cater to the megarich that provide “the best” care. Corrupt elites from all over the world come to get treatment there for certain conditions. Other such clinics exist for other conditions in other parts of the world. Average people in your country couldn’t afford them even with insurance. I think most Americans understand that they are going to be getting the 37th in the world treatment…or worse. It’s well recognized that most rural areas in the U.S. have treatment standards lower than many third world countries.
The clinics exist because they are allowed to exist and thrive. That fact pushes medical progress forward which eventually benefits others just like any other technology.
That ranking of 37th is based on the WHO formula of ‘consistency over quality’. Since the US has the greatest healthcare in the world, when you can afford it, yet offers only minimal coverage for it’s poor, the disparity gives the US a poor ranking. IOW, a country can have very poor healthcare, but if it’s consistent for all of the population, the country will receive a high rank.
The WHO ranking takes into account such factors as %insured, infant mortality,life expectancy, etc. The US does not rank in the top 5 in any of these categories, yet has a cost per individual and percent of GDP allocated to health care much higher than other developed countries. The health care most middle class Americans receive is no better, but more expensive than their counterparts in Europe and Japan. The care provided to the poor is well below the standard in developed countries.
IBM employees! April 24! Picket lines at IBM in response to offshoring and job cuts at IBM.
See picket line locations here: http://www.allianceibm.org
It is time to fight back against corporate greed.
Your jobs and livlihood are at stake.
Organize!
Really? You haven’t succeed at anything since 1999. Why should we trust you now?
I trust the Alliance more than I trust Ginny and the other execs.
We are just liabilities to corporate.
currentIBMer:
At least the Alliance is trying and has exposed IBM on headcount and outsourcing issues. So what are you doing? Do you really think you will be one of the 22% that will be around come 2015? I bet your gone and probably before 2015 since you are the typical current IBMer who just sits and does nothing to try to save IBM USA which the Alliance has been trying to do since 1999.
I’m pushing 60 and will be retired in a year or so anyway with a decent pension and 401K so it really doesn’t matter. I wouldn’t put any trust in a group that hasn’t accomplished anything in about 12 years for any reason.
What if you get RA’d between now and next year??
Well glad you got your pension, and R/A’d or not you will have enough money. But what about the younger folks with almost no pension or just the cash-balance? What about the next generations of Americans? The schools are still turning out computer science and engineering graduates. We protest because we want a future for our children and grandchildren with benefits and a decent salary. It’s not just about us older folks, and we still have a duty, even if you don’t quite see it that way. Unionize now, to stop the wholesale destruction of American jobs at IBM.
I was RA’d with the the March 28th group after 17 years of 1 or 2+ PBCs. I am 18 months away from retirement age. You should be very worried if you get the boot before you reach your official retirement point. Even with the bridge they gave me I am 2 months short and the result isn’t nice.
So you are just greedy and care about nothing else than your little pile?
This attitude is why the US is turning into a backwater. Reminds me of bonehead [re]publican logic. This is why I left IBM for a company that treats people with respect and pays better to boot. Enjoy your hanging on world. BTW I am over 60 and learning and having fun.
Those of us who are younger have saved as well through our own investments. I’m in the cash balance plan and I have saved plenty. I fully expect to be RA’d at some point and I am quite ready for that day. Any IBMer who claims to be surprised to be laid off in this day and age and who hasn’t planned for it is an idiot. I don’t need a union to “help me”. I’ve got my own exit strategy and it includes wealth of my own making.
How much of your retirement is invested in IBM stock? Consider how many workers at IBM are retiring with large IBM investments. Top management is reaching its goals quicker than planned. They have everything calculated by an entire Finance Department. They will sell their IBM stocks at peak value. Do you know what your stock will be worth when you sell? They do!
@SalemRose I have $0 of my retirement in IBM stock. Only an idiot would tie up his retirement in the stock of the company that he/she works for.
The Alliance helped 30,000 ibmers have a ‘second choice’ option to select the old pension plan. They also were instrumental in congress halting all cash balance conversion plans for many years until a well known corrupt 9th circuit judge sold out and said go ahead corporate america steal away! That same corrupt judge was recently quoted saying corporations “should break the law”, such is life in the worlds biggest banana republic. To claim the Alliance has accomplished anything is just a sign of the successful brainwashing our monopoly media is able to accomplish in weak minds. Oh and they also assisted in the 300 million dollar payout, (pennies on the dollar) lawsuit, though many key members of the Alliance were against the settlement as it was just another sellout where the corporation bought off the legal team. A sign that neither courts, nor government, nor corporations can or should ever be trusted, only the workers acting in their own behalf are a force that can be trusted. The Alliance gets quoted regularly around the country and across the world, brainwashed fools who can’t see the forest for the trees are ignored and milked like the sheep they are. The ibm board of director’s won’t hold their yearly meeting within a thousand miles drive of Alliance strong points, the bod are such cowards despite their money they make a joke of themselves holding meetings now attended by 100-150 people, where corporations of similar financial size have meetings with thousands or even tens of thousands.
Of course the BOD and executives are big fans of communist china, gerstner even slept in the president of china’s bed, a big honor for one so dedicated to communism/totalitarianism, something planned for the US soon. The only thing proven to overthrow communism was the independent workers union: SOLIDARITY, just another reason, Sam, Ginni and the bod hate the alliance. You can have rulers and slaves when working stiffs refuse to submit to corrupt, lying, cheating dictators, which these days describes big blew exec’s perfectly.
UNIONIZATION is the ONLY Way to stop the corporate downsizing that IBM has planned. ONLY with a collective voice to stop management now will there ever be a shot at some kind of worker defense. HR is completely impotent and unwilling to help good employees keep their jobs. Executives point to HR and HR points to the executives. The workers are caught in a cross fire. The Union has not been able to do anything since 1999 since YOU won’t join them. Join NOW like I did – and get a clue! Warm Regards, LAR
Because all those other unionized industries did so well.
Germany seems to be doing well and it is mostly unionized.
The problem with American unions is the Taft-Hartley Act which gives control of union pension funds to the company or a third party if the employer contributes anything to the pension fund even though the union pension funds provide a large amount of the capital of companies.
Even workers in China wonder why US workers are so powerless.
https://www.law.upenn.edu/journals/jbl/articles/volume4/issue1/Fogdall4U.Pa.J.Lab.&Emp.L.215(2001).pdf
Ah, you must mean those poor Hollywood types. Unionizing sure did NOTHING for them.
Congratulations at nailing exactly what is wrong with IBM and the doomed path it is following. It is very sad to see IBM’s greatest resource — a talented, hard-working, and once extremely loyal pool of employees be demoralized, torn apart and kicked to the curb. By the time IBM realizes it has destroyed it’s business model, it will be too late.
It is a modern-day example of killing the goose that laid the golden egg.
I plan to print a copy of your article each day and mail it to Armonk. Time to go find the address.
P.S. Is there any ability for other publications to republish this if they give you credit?
IBM HQ
NEW ORCHARD ROAD
ARMONK, NY
There hasn’t been a union at IBM-US and never will be. Unions are successfully implemented when (a) working conditions are bad enough, and (b) where a broad will to act collectively is present. In IBM, (a) exists but (b) does not.
Because of Losers like your self is why…you won’t be there much longer either dude!
Well.. the union would be more of a success if IBMers would stop being chicken-s** and join the union, actively picket and let their voice be heard. The number of IBMers that I talk to that read this and do not believe remind me of my relations in Germany who didnt think concentration camps existed. I for one am looking for a job.. someplace else. I am waiting for creditors to make credit ratings for loans based on the layoff behavior of the employer stated in the credit app. When that happens.. you guys won’t go along so nicely.
@DT:
I’m an IBMer as well – since when did IBM (or any other company) *owe* us jobs? That’s much too socialist to my liking.
Going on with your recommendation (unionize, picket, strike, sickout) – If IBM’s goal would be to eliminate all rank-and-file US jobs, how do those actions make sense? Withholding services is only effective if they are needed; if IBM is looking to move off-shore, then those actions would only accelerate the trend. If “everyone” walked out, and if the column is correct, then what’s the logical next step?
Having retired from IBM in 2005, I feel fortunate that I don’t have to put up with all this nonsense anymore. However, unionization helps only ONE group….the union bosses. Just look at the auto industry, where everything is moving from the rust bucket states to the right-to-work states. With Indiana going that way, Ohio, Illinois, and Michigan will be hard-pressed to maintain ANY jobs. So much for the “success” of Detroit! I also don’t believe that anyone who pickets and complains about their jobs will be a productive employee. As others have said in these replies “why bother”. THAT is the status of the country with the entitlement mentality of the liberal left. Nobody promised you a job, let alone with IBM. Bad things happen to good people. America and our Constitution promise you the “opportunity”, not the “guarantee”.
I agree that the situation the country is in right now is dire. However, if the idiocy of Washington would get OUT of the way, companies like IBM could probably do better with keeping jobs here. Obamacare? Give me a break! That alone would scare ANY company from hiring OR keeping people. Stop the spending and unleash the American way again, something that has been lost since Reagan.
Thanks, Steve M, for recognizing the government’s tendancy to get in the way. Companies have to hire tax accountants and tax lawers just to figure out what they can legally do and when they do it there are proposals for even more laws that contradict the earlier laws. Now that the tax code is longer than the complete works of Shakespeare, it’s time to discard it. It should be replaced with something fair and short.
“I’m an IBMer as well – since when did IBM (or any other company) *owe* us jobs? That’s much too socialist to my liking.”
Again, another victim of successful brainwashing. What you’re saying is that offshore financial interests should be able to dictate how America operates, (this is essentially what new world order/one world government aka: global socialists are advocating. Yes it’s been repeated so often in the press, many have swallowed this brainwashing whole. This is an argument of keeping or eliminating nation states, if American can’t as a whole say who will do business and how, within our borders, then we aren’t an independent nation, we’re a province of some greater financial state and undeclared, unelected rulers. Why do you think MARX was a free-trader, because it lets world financial interests break up the nation states is why. Wake the F**K up!
If there was a nation wide walk out ibm would be forced to negotiate IMMEDIATELY, or they would be financially crippled. Unfortunately the coordination of such an event is technically not possible. The company will instead slowly wipe out the US workforce, selling off pieces large and small and the people who work there will be screwed. The retirees are also quite screwed as the greedy scum running the place won’t give them a penny of cost of living increase and medical costs will bankrupt many if not a majority of them. A lying, thieving, some would say crew of murderers is running the place now and employees, retirees, and even tax payers will end up getting screwed in order to make a few thousand corporate executives rich as kings.
It’s called the race to the bottom, but could just as well be called the race to slavery or the race to poverty.
Right! ! If you want to send what’s left of IBM down the old porcelin fixture, then go ahead, unionize. (By the way, that is what “Organize” means, but a union organizer will never use that term.)
Unions usually help the company stay in business long-term. Most savvy managers know this but are looking to run the company into the ground by focusing only on short term profit to themselves.
That’s why I say don’t unionize. You’d only help IBM get better.
well the offshore workers may not be as good at the onshore ones at the moment, but they are on a learning curve and will get there. and they’ll be both cheaper and better.
no one has a right to a high paying job; it’s something that must be deserved.
what should IBM do? keep all the onshore workers? how will that fix the dominance of sales and marketing and the lack of product focus in the company? it won’t.
and if Steve Jobs was such a guru, then why are most of Apple’s workers in China? was it a case of do as I say, not as I do?
Obviously you are one of the shareholder value crowd. IBM is cutting jobs NOT because of skill set lack but often age and the COST of an American worker when India can get by at $2 an hour. FAIR???? Try living in this country for $2 an hour, OH WAIT, MINIMUM WAGE???? IBM and many other firms just LOVE the expense reduction of that low hourly wage, which is one reason why Disney and AstraZeneca (a $1 billion account) went elsewhere. Texas dumped the Data Center contract. Why? Texas does not speak Hindi very well. IBM is gutting smart staff for cheap staff. What does this tell you.
Well aren’t most of IBM’s customer in Asia too? Perhaps they like the Hindi accent.
Fake resumes invented in India? Give me a break. 🙂 Most resumes I’ve seen here are fake.
I don’t own any IBM stock, but the company does have a fiduciary duty to increase shareholder value.
Do you believe that IBM will definately increase shareholder value by losing Disney, AstraZeneca and Texas? Why did these three projects leave? What got them angry enough to dump IBM? Particularly Texas, galling as it was a DATA CENTER MANAGEMENT job and IBM could not even do that!!! If that fails, then what can IBM do today?
My company told me the reason they were cutting me for IBM is because IBM could hire 5 poeple in Argentina for my salary.
Once working for IBM I wondered how any company could accept the service IBM was providing. Told by IBM management was how IBM was offering a total package with software and services (which made it an attractive package). And that IBM provides services not as bad as the other outsource companies.
Funny thing though, a lot of the clients are willing to accept the under staffed, under trained, and incompetence to make their bottom line better.
I am still scratching my head.
Add CapitalOne, and ING to your list
Francis — I think you are naive about the employees being cut. Within IBM we are now having situations where we want to ask someone for assistance because they know a product or a procedure and we find out that person whose expertise we valued and sought was part of the last Resource Action.
I can verify that this happens *all the god damn time*.
@francis
People like you are a cancer on American society.
Francis just made 3 statements that are quite logical and hard to refute. Other commentors have pointed out additional factors indicating that IBM may be harming itself in the long term. Let’s try to understand both sides.
Francis..think about what you just said…”learning curve”??? Really?
You call 15 years of offshoring services and call centers to India, including the training itself, a “learning curve”??? You couldn’t even sell that BS to a low level sales or marketing manager in IBM; let alone anyone here. You know nothing about IBM, if you believe that’s why they went to Brazil, Russia, India, China, Bulgaria, Chile, The Philippines, Vietnam, and Argentina….to name a few. None of those moves offshore were designed to have a 15 year learning curve…NONE of them. On top of that, you’ve just contradicted and exposed the “lie” that IBM has been telling about US IBMers “lacking” the skills to compete in the global market! It can’t be both ways, Francis! Cringely has nailed this and you should re-read his column.
I work for IBM in training. There is a learning curve for employees in developing countries, and once they start up it they leave IBM and get better jobs with other countries. We are constantly training new people in the developing markets. Average tenure for employees in Asia and Central America is probably less than 5 years now. But that works to Ginni Rometty’s advantage — and the advantage of other executives and share holders — because they can continue to pay entry level wages. Another strategy is to hire “consultants” rather than employees because you don’t need to give them benefits, and when you let them go it doesn’t show up as a “reduction in force.”
I have joined Alliance@IBM, and I am appalled by the number of people who haven’t. The union is only as strong as its membership. And working in a dispersed organization makes it harder to band together. Like most of my colleagues, I work from home (thereby saving IBM a bundle on infrastructure), and I wouldn’t even know where to go to picket on April 24th.
Ah, Francis. Let me tell you about that myth of “they are on a learning curve and will get there. and they’ll be both cheaper and better.”
As they learn, they get better, and walk out the door and get hired at a higher salary. Even call centre workers who have mastered the American mid-western accent go for a premium. As the workers get better, they can get hired for more money elsewhere until they reach equilibrium with us in the developed world. The ones who are paid crap will _deserve_ to be paid crap. They are the ones who couldn’t climb the learning curve.
Offshoring for cheap labour a short term fix with no long-term sustainability.
The thing is, they’re not on a learning curve. At HP Enterprise Services we’re in the same situation as IBM Global Services, upper management has been offshoring thousands of jobs to India to cut costs. The big problem with this is that EVERYONE is doing it, so there’s a situation where there aren’t enough qualified people to fill the jobs, and people who have no business working in IT are getting hired and are not able to do the job. Those who can do the job will get offered better salary/benefits at other companies so they tend to move on quickly, but the people who don’t know what they’re doing and don’t learn stick around.
This is very similar to what happened in the Silicon Valley during the DotCom boom. We have tens of thousands of tech workers in Mumbai/Pune, and the quality of the work they do is abysmal. Every once in awhile I’ll work with someone that is qualified for that job (or at least has a good base set of skills and can learn the job), but we don’t pay them enough so they end up moving on to a company that will pay them better, usually in less than a year of joining us.
This is a result from a fundamental flaw in upper managements thinking about labor, it’s viewed simply as a cost, not a valuable resource. Sure, they may give lip service to the idea that workers are some of their most valuable resources, but talking doesn’t do any good when they lay off experienced workers for cheap unskilled labor in India. And this type of thinking especially comes through when they can’t even hold on to skilled, or even semi skilled, labor in India at rock bottom prices.
Not only are IBM, HP, and the like replacing professionals who have acquired very valuable skills through years of experience with people without those skills, but they aren’t providing the training and career paths to those junior people who don’t job-hop. These companies are in effect downgrading not only the IT professions, but also professions such as Project Management. Innovation and business development through acquisition are not sustainable, and processes are only as good as the people executing them.
Indians businessmen are busy minting money . You take the top IT companies like TCS etc and check out who gets paid what . Top management consists of people with skills required by lawyers and accountants. Those with formal software training and who are part of the delivery team get paid a pittance. Most of them have never seen a piece of software code for the past twenty years and have no idea of what’s happening in the trenches …
It’s fascinating what happened with jobs outsourced to IBM Brazil.
Some went up the learning curve quite quickly.
They now work elsewhere because even academia pays more than IBM in Brazil. Those that don’t move at all on the learning curve stay at IBM.
This post SCREAMS ignorance. The Foxconn employees are in manufacturing, not design, not development, not IT, not…
As for this “learning curve”, haven’t seen it yet and I’ve dealt with multiple off-shore contracts. The struggle is always cost vs. quality. As a hands-on IT guy in the US, my contract rates haven’t been going up because off-shore crews are “better and cheaper”. Get some real world experience…
And you can’t whine about “xenophobia” and then make comments about off-shore people being “better”. You’re doing the same thing
Those folks in India may be somewhat cheaper now, but that isn’t going to last. On linked-in I see offers for engineers in Inda in the $75K range – there’s lots of competition for employees, lots of turnover, and rapidly increasting pay. They may end up remaining worse (that turnover really hurts in areas where you need 5 years to become competent), but more expensive!
They’ll get better. Sure. 😉
Hey Francis, it’s true the peons are not entitled to anything, but don’t lump management in with them.
Can’t wait for the next installment. The Jobs quote about “IBM’s maniacal fixation on process, once a strength but now a cancer” rings more true than ever in my head. I was part of the March 28 resource action from IBM and am looking forward to vigorously competing against them, because if there’s one thing I can do, it’s beat them at their own game.
IBM US employee population is now at 95,000. 2500 workers cut in February as management ranks increase. More cuts on the way.
We need to have a voice, power and a union contract now!
http://www.allianceibm.org
Roadmap 2015 is being called Roadkill 2015 by employees.
That number is an estimate without any confirmation from IBM whatsoever. Let’s argue on validated facts instead of union guesstimates.
In other words . . . this piece is just a xeonphobic rant against offshoring, the equivalent of a “man bites dog” headline.
There is nothing wrong with job creation offshore, but that is not what IBM is doing. They are Job SHIFTING and firing US workers.
Semantics. There are over 1,000,000 workers making Apple products at Foxconn, a Taiwanese company that happens to the China’s largest single employer.
So they’re not Apple workers, they just make all Apple’s products . . . semantics.
Foxconn is a town in mainland China, not Taiwan. Second, we are discussing IBM here, not Apple, not HP, not CSC, not SAIC, not Accenture, not Dell, not Acer, not ………………….
Ha ha,
Foxconn also does manufacturing for IBM.
Cheers
Cringely’s column brought up the subject of Apple and Jobs. Also, offshoring, business, economics, and unionization are the real subjects with IBM as an example of the need to discuss them.
Foxconn is in fact a Taiwanese company, with very extensive manufacturing operations in mainland China.
Spoken like a true company man. Xenophobia is defined as “a fear of foreigners or strangers or of that which is foreign or strange.” Neither Cringe nor any other commentators have mentioned any fear. The issue, whether you choose to understand it or not, is that the people providing the services are of lesser skill. I have experienced this first hand. I’m not afraid of Indian tech workers. I’m afraid of their lack of skill. IBM has a reputation of hiring a large number of ‘freshers’ and they stay just long enough for IBM’s name to dry on their resume, then they’re off to another company who pays more. If you were Disney, AstraZeneca, State of Texas or a bank, how well would YOU sleep knowing that your systems and software was supported by novice technicians that knew nothing about your environment and business? This is about money. IBM is willing to sacrifice integrity and customers’ well being for the sake of money. No matter how hard you or anyone else wants it to be true, you can’t buy 20 years’ IT experience and skill from a 21 year old Indian.
You are absolutely correct. They are not up to snuff, and I think the largest contributor is turnover. This is a problem not exclusive to IBM, in the least, though. Basically, there are so many of these outsourcing companies in India, people get hired at IBM or another US company that provides them with training (whether or not it’s effective is immaterial), and then jump ship to another outsourcer that will pay them more now that they have said training.
Also, if one were to think India is bad in this regard, Singapore is about 10 times worse. The government of Singapore declared they’d pay 50% (maybe more, but it was at least that) of all IBM salaries for five years if they opened a lab there. Tivoli Security (part of SWG) sent many jobs over there, and every single project failed or was cancelled, because turnover was absolutely insane. Which, I mean, makes sense when you’ve got a 1% unemployment rate and a government willing to subsidize salaries. The outsourcing is clearly ultimately a very short sighted decision that will lead to huge negative consequences for customers, but this is IBM, not Amazon. The executives are thinking about how they can get the stock up so they can cash out, not about the company’s long term strategy or viability.
If IBM wanted to reduce turnover, it would pay its foreign workers more. But then that would defeat the purpose wouldn’t it?
Francis,
Are you trying to say people should be above being Nationalistic? or that U.S. workers are too nationalistic? I suggest you take a better look at the rest of the world. It exists and it’s completely understandably and for you to rail against it is simplistic at best.
More to the point, IBM is a US based company, it gets huge federal and local tax breaks because of that, using various techniques to huge the loss of US workers while protecting these Us benefits should cause rage for US tax payers and US IBM workers.
Beyond that from a macro economic perspective for both the U.S. and the world, it is Such poor short sighted policy. I see workers from India and other BRIC locations RAIL when US workers complain about offshoring, but what you don’t understand and what the short sighted US corporate heads don’t care about is that the U.S. economy and higher wages and consumer spending is what turns the world economic wheel! As these wages are lost and that wealth is transferred and held by a veryyyy small group of investors & C level employees, both the US economy and then the world economy will continue to falter…..no one should want that.
Francis,
Do you have kids? Do you have kids with degrees in a STEM field? It’s never a good thing when 100,000 STEM jobs are on the chopping block. There’s no amount of education or skill that our children an acquire that can head off currency manipulation in India, China and greed in the USA.
$2 an hour will not get you a good engineer or even an average engineer in India. You could make that much just working at a call center. The good salaries in India are about $30000-$40000 a year. The problem is there are so many workers who just provide fake resumes, even having someone else do their phone interview.
Very good article, and accurate comments about fixation on process and offshoring. If you’re not doing research and are not in upper management, your goose is cooked. If your company is acquired by IBM, after a few years your product will be stagnant and the jobs will be in Brazil and India.
read what employees have bee saying for YEARS here:
https://www.endicottalliance.org/jobcutsreports.php
A good source of information about the frustration IBM employees feel worldwide is
http://ibmemployee.com
Alcatel-Lucent does the same thing with it’s help desk. When I call for support on one of their switches, it’s “bob” from India. Which we all know is probably not his name. It’s hard to communicate with them and even harder to tell them they are wrong or that I can’t reboot the switch right now because I waited an hour to talk to them in the first place and now I’m at a point where I have to wait an hour or three to restart the switch. It’s infuriating. It’s why I’m looking to Pica8 and the Google methods of SDN. Hopefully this crap matures faster so I can just get out from under horrible support contracts.
The problem is that IBM is the people who work for it. The numbers of IBMers who join the Union, the only organization or method that can help them is pathetic. It is one thing to gripe about it.. but IBM employees are complicit by keeping their heads under the sand and pretending that it all just isnt true. Like my ancestors in Germany, they refused to see the disaster looming on the Horizon, and just like them, they will go likes sheep to slaughter.
If IBM employees would stand up, strike- have sick outs and fight back. .Ms. Genny could not get away with the path to destroy IBM and turn it into India Business Machines.
Except IBM US is NOT unionized, and IBM would just as soon shut down a project and lay off those workers that did strike. Using “sick outs”, if IBM could prove they were an orchestrated event you could be sure they would use absenteeism against you performance review and drop you a level, one step closer to firing you. Oone less employee on the payroll.
IBM has a plan to significantly reduce the US head count by shifting jobs over seas, they claim there was no overall head count reduction since they only moved the jobs.
And our State and Federal leaders keep giving them money with no condition of retaining or increasing US jobs.
it is that thinking that keeps you a slave to the Blue Engine. If enough people decided to call out.. stop working.. trust me.. grind this engine to a halt and management will listen. You are right on one thing. our government paying IBM to take our jobs is.. INSANE. It is an absolute betrayal.
This begs to the question why anyone would want to help IBM by improving conditions there. Wouldn’t it be easier and infinitely more profitable for whole divisions to quit and start competing companies that are not encumbered by bad management?
Except IBM would sue the crap out of you for taking intellectual property.
Then don’t take it. It’s not like IBM’s solutions are so great.
Loved this article and cannot wait for the next installment. Spot on !!! The comments are also interesting. I work in the Global Services organization – we just lost US jobs in Atlanta to Brazil, who is our ‘outsourcing’ arm for customer service and operations. English is a second language there to Portuguese and it took me 3 tries today to explain a simple billing problem we need to fix. Oh yes, they fired thousands of IBMrs in the USA to offshore to Brazil years ago and the dirty little secret that the company does not want to get out is that we actually did not realize the expected gains overall since thousands of customers have bolted and won’t do business with us any longer due to poor customer services. Further due to the robust Brazilian economy TURNOVER is a huge problem.
When you used to talk to your local Customer Account Manager in Oshkosh Wisconsin and may have actually met them versus a nameless faceless email or 1-800 “help #” to help with a problem – how would you react?
“Further due to the robust Brazilian economy TURNOVER is a huge problem. ”
Thank you for saying what needs to be said! Hiring workers overseas is not a problem. Google hires talented people in China to make a good Chinese Google. Microsoft hires people in Ireland to make good software and QA. It’s the DISRESPECTFUL attitude of off-shoring that’s the problem: viewing the foreign worker as “lesser” and not deserving of the full value of their labour.
And if that economy is booming, the worker becomes experienced, and if they are smart, they shop for a higher paying job. This turnover problem is big in India to the point that a top engineer or computer programmer can make almost as much as a North American programmer. In relative purchasing power terms, they are actually paid better than us. But IBM is not hiring these top-flight people; they are hiring what the can find for $2-$5/hour. And those are NOT the best & brightest.
Don’t go overseas for cheap labour — go overseas for _quality_ labour. And if you do that, you’ll still find North Americans competitively priced.
Seems to be that dear Francis is the lone shill on this one. He’d better read the many intelligent and well written responses, and learn how to use spell check while he is at it. Gotta love the shills.
What Francis doesn’t understand is that there is no learning curve. By the time the new employees can hit their behinds with both hands, they have either –
1. Jumped ship to a different company. (This trend of companies offshoring to the cheapest labor source creates a temporary boomtown, similar to our dot com bubble. There’s very little labor stability or company loyalty)
2. Been dumped in favor of the newest cheap-labor-du-jour, as IBM packs it’s bags, and all its jobs, and skips out to the next labor force willing to work for less. Having been privy to a number of these offshoring projects, I can tell you that there is always major discussion of which country’s labor is currently the new cheap target. I’ve even seen the target change in the middle of an offshoring project, where one country’s name is crossed out, and a cheaper one substituted
This is bad for the customers, bad for the employees in any country, and ultimately bad for IBM..
Lastly, don’t even try selling that ethnocentrism crap, Francis. Have a look at the IBM Alliance website, where there is an area set aside for a global alliance. Nobody is blaming some poor schmoe in another country for this. This is corporate America’s race to the bottom. Go have a look at all the tax breaks and other taxpayer incentives given to IBM at the federal, state, and local levels. Have a look at how IBM lobbies our government, especially for things like stimulus money, while creating negative job growth. Do a little bit of real research, and then come back here and tell us how these actions benefit anyone at all, except the IBM executives, who will grab the money and get the hell out before the house of cards falls over.
“The next five year plan for 2015 is to again double EPS to about $20. Can this be done? Probably, but the particular way they are going about it is also likely to destroy IBM.”
Reminds me of a similar situation:
I thought it would be good to blow out my fireplace with a leaf blower. Worked great for the fireplace but the result on the rest of the house was very bad.
Tricyle Michael — you made me laugh with your leaf blower/fireplace comment!
Didn’t you claim they’d lay off 150,000 back in 2007? How did that one work out?
They are well on the way to 150000 dear lady, I think 2007 slowed them down a bit, but the ultimate aim it so wreck US headcount and SAVE MONEY on those salary costs!!!!! WOW, THAT WILL DRIVE SHAREHOLDER VALUE!! Tell me, whenever you call Tech Support for almost any company these days, do you hate dealing with India? Should not IBM be better than that?
Just saying that something was claimed last time that never happened. And now he’s at it again, with no new evidence, sources, or information. Just conjecture. Hey, I love a good story too. Just wondering what the new info is that he’s using, because I don’t see it here. I see a lot more actual information in the responses than in the post itself.
Ethel,
Read this: https://www.cringely.com/2012/04/watch-out-IBM/
Per Cringley, his prediction actually influenced IBM’s course back in 2007. They put the brakes on after Cringley exposed their plan. Whether that was indeed the case or if he was wrong in his prediction can be debated. What is not up for debate is that IBM has steadily reduced US headcount by about a third since 2005.
Never happened? Gee, I guess the employee count of 2007 is precisely what is today 5 years later!!!!! So all those resource actions over the past few years never happened and IBM INDIA is still at 2007 headcount too.
If all the ‘complainers’ are IBMers, try spending more time on improving YOUR work situation rather than trying to destroy it. If they are NOT IBMers, what’s the motivation from you people? Union hacks?
who are the people who hold ibm stocks ?
how many of them are pension funds, 401K plans etc..
Just wondering
I work in one of the outsourced arms of IBM in Eastern Europe.
It’s crap.
Management is feeding naive little “first workers” with dreams of careers and grandeur. Meanwhile, most employees are simly too dumb to contribute anything beyond their daily work, and management is a clusterfuck. Literally.
I’m leaving ASAP. I just pity our customers and Business Partners who get shafted with our piss-poor work (due to processes and the need to engage 50 different IBM organizations to get anything done).
The IBM rot is visible globally across IBM and at every level. Get out while you still can.
🙂
Do not forget with the lack of budget control in congress the US dollar is losing 10 – 15 percent a year in value to Indian and Chinese money. How long is it before the USA is low cost producer of everything. We are already the cheapest place to make cars. Computer nerds will get their jobs back soon for the same reason India gets them now. This is a sad thing to say. Thank god we have the skills.
True, with any luck, you yanks can be living in the next banana republic.
What everyone forgets is that America WAS pretty much a banana republic for most of its life until that little fluke called WWII destroyed most of the world’s manufacturing capability and left the USA pretty much alone as the source of production for several decades. What you are seeing now is companies that were spoiled by the profits we had then gutting their businesses to try to keep those insanely high profits when it simply can’t be done with so much competition. Funny how Lenovo doesn’t seem to be having a problem with IBM’s former PC business, then again they are happy to take 6% profits. the problem is all these companies dream of “iMoney” and the simple fact is Apple is about branding, like Nike and Prada, and there simply isn’t room for more than a handful of “elite” brands at the top.
In the end the USA will fall, just as the sun once never set on the British empire, because short sighted leaders simply can’t see the reality that is in front of their face. you can’t have free trade with countries that dump toxic waste into their rivers (more than 10% of Chinese farmland is toxic to life) or who dump so many chemicals into their air it can actually be detected across oceans. India and China will learn soon enough when their land is toxic like our superfund sites and their employees are sick and these corps abandon them for Malaysia or some other hellhole they can exploit. as long as the leaders of each country are short sighted and greedy enough to bend to the coprs will this trend will continue. USA collapse by 2020, mark my words.
You hit the nail on the head. What you describe is what I saw when I first started with IBM in 1979. I also had 9 levels of management between me and the CEO.
While he is rightly disparaged for what he did to the employee retirement plan and benefits, Lou Gerstner did recognize that IBM needed to change the way it did business. He took care of the hemorrhaging and allowed the product technical folks do what they did best. That was create products instead of spending all their time managing and creating processes. When he left I had 5 levels of management between he and myself (I was always a worker bee). When I retired there were 11 levels of management between myself and Sam Palmisano. Unfortunately Sam Palmisano and the current executives do not understand that a company needs creative, dedicated employees to excel and be able to service it’s customers.
I lay part of the blame on the changes many business schools went through in the late 60’s and 70’s. Around this time they started teaching that the only duty of a company was to the shareholders. Prior to this the common thought was a company needed to balance the needs of the stockholders with those of society and employees. So how best to align executive needs with those of the stockholder? Provide executives with income plans that included large number of stock options. This has also resulted in the executives becoming more powerful than the lay stockholders as their shares increased. Another philosophy that popped up around this time was the idea that management was the company and a company was nothing more than a brand. As long as management could
sell the brand the underlying products were unimportant. Much to my chagrin IBM has embraced both of these business philosophies. The end result is while IBM saw it’s 100 year anniversary it will not see its 200th.
Bob, amazing article, and sadly not even surprising. I’ve been through so many of these “resource actions,” the last one just this past month. You could sorta see how the deadwood was getting cut years ago, but by now the only people left are the survivors who’ve somehow found a way to do the work of two people, then three, then four… Some days it almost feels like The Hunger Games, I swear. (Some of my mission did go to China, but the results were kind of a disaster, so it had to come back. So now it’s just a few of us doing the work of dozens.)
We all know about these earnings-per-share targets, believe me. We’re reminded every time we hear from upper management. What I have to ask you, though, is did you actually see a written-down internal plan that lays out this specific 78% reduction in US headcount? I realize that you probably need to protect a source here, and like I said, it’s not even remotely surprising, but please humor me and tell me that you had a real piece of paper in your hands. (Okay, a PDF on your screen. Or a Lotus Notes presentation. Or whatever.) Frankly, that would be almost as eye-opening to me, that they’d actually write this stuff down and then proceed full steam ahead like there’s any chance in hell most of us will even be here in 2015.
(But nothing should shock me anymore. I know this.)
Looking at it purely from a management science perspective, don’t you think it’s pretty good for management to be able to extract four times the work from one person?
Among the advertisement tags at the top of this screen, they rotate, is now a listing for DOWNLOADING THE FREE COGNOS BOOK FOR IBM PERFORMANCE MANAGERS………….oh, the irony of it all!!!! I wonder if it is available in English and Hindi!!!!!!!!!!!
My dad worked for IBM for 38 years (’55-’92)…all those years in sales. And me, I’ve worked for IBM since 1981…10 years in sales, the rest in Marketing. I can tell you from first hand knowledge, this IS MY FATHER’S IBM. While the business and technology environment changes, we remain committed to the customer first. Yes!! We are a sales company…always have been and always will be.
Anyone who has been around IBM for years, knows of our great sales heritage, Go read “A Business and It’s Beliefs” by Watson Jr. or read up on our current values at https://www-03.ibm.com/ibm/history/exhibits/valueone/valueone_intro.html You make it seem like IBM is in business to serve it’s employees. That is something IBM does very well, but that is not this company’s first mission. Our mission is to serve our customers.
And guess what? Our customerr outside IBM in emerging and under-developed countries are growing. As an employee (and stockholder) I want us to serve those customers…they represent a big part of our future.
As far as your prediction of the great demise of the U.S. employee, I have no doubt that our leadership has been and will continue to serve our customers first…and that may mean moving jobs to be closer to those customers. I go back again to the book “A Business And It’s Beliefs” and pull out this quote “I firmly believe that any organization, in order to survive and achieve success, must have a sound set of beliefs on which it premises all it policies and actions. Next, I believe that the most important single factor in corporate success is faithful adherence to those beliefs. And, finally, I believe (the organization) must be willing to change everything about itself except those beliefs.” (A Business and Its Beliefs, Thomas J. Watson, Jr.).
I have complete faith in our senior leadership that they will remain focused on serving our customers first. If they do that, then the company will not only survive, but thrive. That is what I want as an employee…and if you ask my father, he’d agree. Yes…it is my father’s IBM…and it is my IBM too.
I would expect nothing less than this from someone in the marketing function. You’re a professional spin doctor and are talking at arms’ length. I’ve been across the table from the customers, in their shoes, where the rubber hits the road. The hardware works, I give you that. The software’s bloated, has been since it all went java and development moved out of the US. Services is hanging by a thread due to the cost cutting measures and offshoring. Not sure where the eye doctor is that fills your rose colored glasses, but I’ve seen the truth with clear eyes. You’re stuck in 1981 or with your dad in 1955.
Like the bit about sales and sales serving the customer. Its the same hype I used to hear in India.
The truth is that the sales guys are the ones that lead the company down the road to ruin, due to bad contracts negotiated at top,(facilitated by wheeler dealers smart business leaders with political links ) which simply cannot be delivered by the delivery folks.
Didn’t Watson write that IBM should never lay off workers?
That’s pretty funny. Look in your company history book to see what the Watsons established as the company’s basic beliefs. Then continue reading to see that they were subsequently downgraded to “practices” and then dropped altogether.
You’re no IBM history expert if you don’t know that.
I moderated the language of my reply to you, as I still retain some “Respect for The Individual”.
and Neville Chamberlain had complete faith in Hitler…..just sayin.
There are about 400k employees at IBM. You’re probably the only one with this perspective. If you are correct, I want a job in your team.
IBM priorities are stock price and EPS, not the customer and certainly not it’s workforce. This was not the case in the 80’s.
Have another glass of that blue corporate Kool-aid as you sell another set of the RSUs you traded for your soul… Do YOU really believe what you say? I am in a client-facing position at IBM and I can tell you I often have to fight my management in order to do the right thing for the client!
Wow you really got into the Koolaid! IBM has Zero moral values…
Bill,
I am truly sorry to hear that you drank the Koolaid.
Interesting that there’s no one named Bill or William Chamberlin in the IBM employee directory (https://www.ibm.com/contact/employees/servlets/lookup).
It felt like a religious preach.
You forgot to use the phrases “synergy” and “the sky’s the limit.”
“Bill Chamberlin says: our mission is to server our customers”
Well that’s a nice bit of marketing theory but not something executives are particularly concerned about. I personally saw them bring in a 100 million dollar operations deal where the customer was shown staff who would be running the operation, the room full of mainframe specialists had easily a combined 100 years of experience, a quite impressive array for the ‘customer’ to be confident in. By the time the contract came a few months later that crew had been hacked up and fired off and replaced with contracted new hires so that those running the systems had in some cases just a few months of experience, a big profit for the company via a ‘bait and switch’ tactic and a big screw job for the ‘customer’, but since the ‘customer’ was a gub’mint operation takeover, the victims would keep silent rather than reveal themselves as dupes to big blew’s shafting. Of course the later Texas deal, (where likely similar events took place) didn’t work out so well, but who cares about customers except for making shiny brochures and marketing slogans is the way executives see it. Bob Moffatt exemplifies the typical big blew exec these days, it’s buyer beware and worker wake up and get organized time.
Would you care to comment on how ‘respect for the individual’ and cheating tens of thousands out of the pensions they worked decades for line up? You are clearly lying or delusional to even hint that big blew executives think of the basic principles are anything other than slogans for fools inside and outside big blew.
They, big blew execs’ value one thing and one thing only, personal gain. Take a look at how they sell the shares they give themselves year after year, that’s what people running a ponzi scheme do, they aren’t long term growth managers, their stock bailouts show that CLEARLY. Those at the top are cowards and thieves, just look how ginni caved on the masters membership issue, money before integrity ginni just like you were trained, good gurl, sit in the shade and sip your tea but don’t try to play golf at agusta, that’s for the big boyz’.
Bang on and accurate. IBM also has difficulty competing for net new customers that fall outside it’s core base so revenue will remain flat and profit will continue to be ‘engineered’. The layers of process you describe are repetitive, inconsistent, very time consuming, and often conflict with other existing processes. Sellers spend 20-30% of their week selling, the rest is taken up with layers of meaningless nonsensical management reporting. The processes don’t scale well to affect or manage change, or impact the outcome of sales activities. The one thing I would say is that I have met many passionate and capable managers and employees who are tenured and deeply experienced but politics ensures the cream never rises to the top. If you want to understand the culture go watch https://www.youtube.com/watch?v=6MWpxH-RlFQ
Bill Chamberlin would you like another glass of Kool Aid?
I come from an IBM family, my dad, my inlaws.I myself did 25 years. For the first 20 years of my career I was proud to say I worked at IBM…It meant something special. The last 5 years when I would tell people I worked at IBM they would ask me…’aren’t you scared of getting let go?
The company has changed…it is no longer the prime example of what a company should be. If everyone would remember what ‘At Will’ means then it levels the playing field. It means they don’t owe you…and you don’t owe them!
nuff said!
I left IBM in 2010 of my own volition after eleven years working as corporate staff based in NYC. The final five years of that tenure…roughly corresponding to the last time Cringley wrote on the topic…were a train wreck of U.S employee firings for no cause (lay offs), abysmally low morale in the rank and file, the strangling of any creative or inspirational spark (aside from the unfettered success of the Smarter Planet Marketing campaign) and a complete and irreversible disconnect between the messages that management communicates to its employees and the reality of how it actually views and values them. Against this backdrop the IBM stock price has reached an all time high.
I don’t have a lot to add to Mr. Cringley’s comments other than to say he makes some very good points and, If I were an investor (sold my position when I left) holding the stock for long term value…I’d be VERY concerned about an approach to managing for shareholder value that is predicated of divesting the corporation of American workers. If I were a client I’d worry about the very same things…
What I will comment on is the appalling lack of balanced press coverage on this topic. The majority of IBM-focused press coverage in leading business publications (Forbes, Fortune, WSJ, NYT, Economist) and trade magazines alike uniformly reflects the whitewashed view of management, fails to appropriately question the company’s strategy and NEVER EVER tackles the central issue of why a corporation with such a proud American heritage…a company that literally would not exist were it not for the effort and toil of generations of U.S. workers…is permitted to receive an outrageous host of U.S. tax breaks, cheats and dodges while it pursues a business strategy of firing most of its existing American employees.
In part the answer to the question on the lack of balanced press coverage is that Armonk is a bully…and more than willing to use a big stick on any journalist who dares challenge the status quo.
But it’s also a general comment on the spineless nature of big media.
Kudos to Cringley for giving the Armonk flacks the middle finger. I wish more so-called journalists and editors had his balls…
You Rock
Hmmmm…
Well, I suspect that the people remaining on the IBM payroll after a draconian RIF will all be paid well enough to make contributions to political campaigns, right? And to play in the stock market, too?
You have hit the nail DEAD ON! I am a 25+ year veteran of IBM working in the technical field within GTS. There is too much process in this company – It can take approx 2 hours of administrative (process) work in order to perform a 10 minute technical change. The process to get any sort of change done on the servers involves multiple groups and management teams approving every step of the process. If any one of those groups doesn’t like what you’re doing, they REJECT your change and you have to start all over again going through the motions to get everyone onboard once again.
I’m not talking about massive environment altering changes. I’m talking about making a small minute change that isn’t even service affecting and would not have been noticed by the customer unless you specifically told them what you did.
On top of that, due to the number of people involved, you also need an extra group specifically assigned to “coordinate all that coordination”. Add another group of 10 people on a team.
It’s just ridiculous!!
Excellent article. I look forward to the next article in this series.
I am currently employed by IBM. Process, too many layers of management and the lack of respect for the US workforce are destroying the company from the inside.
IBM had the most loyal workforce for years. Each time management made changes the employees were the ones who held things together, made the changes and worked hard to make the customers happy.
Now, most of those employees are gone. The workers who have replaced them don’t care about the company. They are there to do a job and collect a paycheck. The drive for customer satisfaction is gone amongst the contractors and off-shore workers.
Now, the new workers have the type of attitude as follows: “Perform tasks 1 and 2 but not 3. It’s not my job to do 3. Matter of fact, I don’t even care who does 3 because it’s not my job”.
You are correct! It’s the attitude of the people that make or break the company.
This story is not much different from the 2007 report. IBM is a bad company, they outsource everything, customers are leaving, house of cards, their system will collapse.
But since 2007 IBM has been running extremely well. All the negative talk that their strategy won’t work and that it will backfire has not come true.
–> Henning your statement “But since 2007 IBM has been running extremely well”
I disagree with. This is not the same as the stock doing extremely well.
Stock price and EPS is inversely proportional to running the company well and directly proportional to offshoring American jobs. Knowing this, IBM has made a rational choice.
I retired from IBM over 4 years ago. I plan on telling my manager very soon. Oh, wait a second, maybe I’ll just wait for the next resource action….
I’m executing the same retirement plan. My payback for all the pension cuts over the years.
IBM is built on a house of cards, and run by a bunch of penny-pinchers, who have artificially inflated the stock, at the expense of the US worker. Sammy, Ginny, and Warren will undoubtedly have inside information and cash out long before the stock crashes. The remaining US workers, if there are any left in 2015 will get to enjoy their 5 whole shares of vested IBM Stock that were issued in 2011. Can’t wait. It’s going to be a helluva pizza party!”
IBM philosophy:
“Install a major customer system system from offshore” – 10 minutes.
“reboot a server” – 2 days.
Bravo, bravo, bravo! I haven’t seen such an accurate depiction of historical context from you since the Three Mile Island reports. You have successfully and dramatically once again crossed the legendary Rubicon from industry raconteur to business reporter, maybe even become a serious historian of the failings of morality in US business.
The big question for me, since IBM now has no employees, just owners and resources, why anyone not at the executive levels is not sitting down, taking it easy and waiting for the inevitable ax that will come? I know the Indians on the whole, don’t work that hard and have no allegiance.
I guess the executives are counting on the continuance of IBMers hard work and professionalism until they realize in the next 32 months that they’ve been had.
Bob is back!
First he nails Best Buy, now scoops IBM. Great to see the old Cringe back in action.
One other angle to the IBM story Bob. We purchased Cognos for BI five years ago. They were superb with support, maintenance, training, etc. Then IBM wrote a big check and bought Cognos.
Once Cognos was assimilated into the IBM machine, they tried to double my annual support saying the product was now priced by “value”, eliminated most of the convenient training, and support dipped.
Want to talk to IBM about support costs? You get to talk to their global support sales staff that knows nothing about Cognos.
Their business model is close to the mafia.
And Cringely used the “nine women can’t make a baby in one month” saying from Brooks’s Law / The Mythical Man-Month. Back when that came out IBM owned the computer industry, nice…..
good one.
Great article. 100 percent accurate except for the part about the Indian skills. As a current IBMer, I work with team members from India daily. Some are good and some are bad, just like everyone else.
I can speak a bit on the HR side. The crappy things I see done to employees on a daily basis is disgusting. Age discrimination in RAs, completely false performance reviews, laying off/firing people right before they can retire and/or get their FHA benefits and it goes on and on.
I hope someday a really good lawyer gets his claws into a good lawsuit and can bring some justice to ex-employees. They deserve it.
Oh, the off shoring of payroll, etc to the Philippines is major fail. The icing on the cake? HR Partners in te US are beyond useless and have to call the Employee Services Center to get answers (which are usually wrong / varies on what rep you get
Randy Mac Donald is disliked throughout the entire HR community. And dislike is a kind word.
Why are all these honest hard working people working for bandits?
I think the best possibility is that some of the laid off IBM’ers start companies offering similar services, hire their fellow ex-IBM’ers, and build businesses without the insane clueless management, then compete with and kill off whatever’s left of the old IBM.
U.S. customers do not like the substandard Indian tech support, and would most likely prefer a more quality American offering if it were available.
The problem Haywood is that a US employee gets fired in a heartbeat – the India employee just get shuffled around. I’ve seen it happen often.
As a high time Beemer, it breaks my heart to see what’s happening to this company. We changed the world with our innovations! I do need to make one point regarding the way the company is being run right now – and thats simply that if you were running the company, you would make some of the same decisions…
The simple fact is that the server market has fundamentally changed. Servers are now commodities.
Don’t believe me? Answer this… Do you know who’s server is running this blog? Or who’s server google runs on? Or Facebook? More importantly, do you care? NO! As long as its cheap and reliable, you could care less.
Given that reality, IBM has to change to survive…
And please move Armonk to Bangalore while you are saving the world.
Sorry, but who said anything about saving the world? Don’t misinterpret my point. If you don’t understand the reality of the server market, you loose your job just as fast when IBM goes under.
As a current Beemer, what breaks my heart is that none of us – from Sr management on down to lowly pions like me – have been able to show a clear way to apply what I think is the best technical team in the history of the world to new problems in a way that keeps us profitably employed.
Fred is correct…quit the sarcasm.
That’s cute. Some free blog with few features that I visit in my free time is the model for how Fortune 100 Corporations should behave. “Bob can run a blog for free, so if it works for him then the rest of the world shouldn’t expect anything better.”
Fred, if that’s your real name, IBM isn’t running free blogs. They charge customers tens of billions of dollars every quarter, telling them that their work is important, deserves to be handled better than Bob’s blog, that they can provide that level of sophistication. And then they run it like Bob’s blog.
You mention that the “server market” has changed, and it has. But servers, or even managing servers, is not what being challenged here. This is about Global Services, the talent that’s designing, building and maintaining huge amounts of software for thousands of companies who are paying vast sums of money and need for it to be done well. These customers are relying on IBM to do what they promise so that their business can be successful, and IBM is doing a worse job of it every year.
To your first point, yes, it’ll be sad when this finally catches up to them and there are no more things to cut or outsource, because the dessicated remains of IBM will blow away leaving nothing but memories for those that worked there. But there’s a world of difference between you and I making “some of the same decisions” and what’s happening here. This is awful on a number of legal, ethical and business levels.
Jobs’s comments were mostly, but not not entirely valid.
IBM was almost always led by sales, not engineering. The only engineer on top was Jack Kuehler. http://en.wikipedia.org/wiki/Jack_Kuehler
IBM used to have the customer’s best interests at heart. Two of the three commandments of IBM’s Old Testament were “Best Possible Customer Service” and “Excellence in All Things.” They were taken very seriously as guiding principles. But then again, so was the third commandment, “Respect for the Individual.”
These three commandments were replaced in 2003 with new ones, including, “Trust and personal responsibility in all relationships.” Sadly, bothof these seem to be missing to the degree that I would not trust any commitment made by IBM unless it is signed by a VP or higher who has the authority to make it happen.
I am interested in the savings that will result from IBM dropping working health insurance and throwing us all into the state exchanges starting in 2014. Anyone who doesn’t think it will happen is dreaming….
You’re also dreaming if you think for a minute you aren’t completely fungible. Why insure a workforce that can be replaced at will?
I”ve got a great outsourcing plan. Why don’t we export all those executive management jobs offshore? Those guys get paid millions. I bet you can find people in India and China who’d be glad to run a company into the ground for just a few thousand a year.
I think this just might be the most sensible and insightful comment I’ve read yet! We need to find the contact info for the IBM board members and seriously propose this. 🙂
Bingo! And how corrupt is an American business philosophy in which boards of directors approve these ridiculous pay packages? How is that good for shareholders?
IBM likes to talk out of both sides of their mouths. They need to grow the workforce in BRIC companies to better serve their customers where they are. True enough, but then why is our internal help desk answered by Indians? Regardless of what your problem is, they offer to reset your password, since that’s what they know how to do.
Some IBMers have been targeted for layoffs because they work remotely. Supposedly, they aren’t as effective when they aren’t face-to-face. At the same time, we are asked to stay up late for conference calls with China, India, Russia, and Australia, and for some reason, that’s supposed to work just fine.
My favorite is how they gut internal support organizations (workstation support, build groups, help desk, development tools) to “save money”, then make highly paid engineers do it individually, while not slipping any dates, with fewer people to produce the products. Then they can point out how unproductive American workers are, further bolstering their case for offshoring.
Some executives are going to make a bundle of money meeting their 2015 targets. I’m not sure how there will be a business beyond that date, however.
That would violate the bipartite nature of US law: the laws that apply to you must be kept separate from the laws that apply to them.
Sad, sad, sad. I was a union organizer in another industry for 15 years before I went into IT. Since then I’ve worked for CSC, EDS (prior to HP), and IBM. I’ve worked with Siemens and Accenture and others in the business of outsourcing. Rather try one of those hats on? They’re even worse.
I sympathize with Lee and the Alliance. I’m even a member. But get real, please. The Marlboro Man individualistic Western ethos is rampant among IT workers. It’s never easy to unionize, and if you decide to try, you’d better be ready for some real shit to come down on you and everybody who stands with you. The professionals (yes) I organized were typically making less than 20k/yr with no benefits whatsoever, and they still were terrified to fight back. Good luck organizing people who make 40k on the low end and 100k on the high end by warning them that they might get laid off.
The real bottomline here is that America is finally feeling the pain that comes with something like 13% of the world’s population consuming 40% of the world’s resources. There is a world-wide process of equalization going on that ultimately will make it impossible for any company to go anywhere else to find cheap labor. IBM and all of the other major corporations in the world are making this happen–not by design, of course; Cringely is right that EPS is the only design focus. But happen it will. It’s a slow-motion revolution, with all of the heartbreak and hope that revolutions bring. As I reach retirement age, I just hope that this revolution, because it’s not so abrupt as so many in the past, will not lead down the twin paths where, at one end is the tragedy of the pathetic Czar and all of his family shot dead in a basement room in Yekaterinaburg, and at the other, the horror of 30 million shipped off into the Gulag.
Try again on the salaries… The AVERAGE for my job band & family is approximately $138k ranging upward to $200k (and to be fair, downward to something like $50k). Check it out on glassdoor.com, anyone can look… Compare it to other big tech companies too while you are there… Anyone who has been at IBM since about 1999 is making more than your “top end” or they aren’t being paid fairly relatively to the guy/gal across the hallway… Kind of explains why we bitch about it but don’t really do anything, doesn’t it? Also explains why paying an Indian worker $30k sounds like a good idea to a bean counter…
Remember, IBM revised the salary plan in the US to adjust for “cost of living” differences in various parts of the country. So if you make 138K, good for you…that is nowhere close to the average salary of an IBMer who lives in the southern US or anywhere outside of NY. I do vote for politicians who want to keep my taxes down, so I’ll take the lower pay and opt to not live in the nanny state of NY.
I don’t know where you work or where you got those numbers. As a 1st line manager ( for 6 years), retiring after 40 years with the company, my salary was only a little more than half that amount.
To be fair, you are voting for politicians who represent foreign interests and hence shipping your jobs off. Not that I’m complaining.
Very prescient article. As an employee of 14 years I can only say that I am appalled every day at what I see taking place in the company, and everyone around me is in a daze. The rot is accelerating. I work in IBM Research, once an organization that has been admired worldwide, but this will soon not be the case. All research is being scrutinized as to short term profitability. Anything that doesn’t come up with green dollars this year will be cut next year.
An array of overseas ‘research centers’ has been established. All IBM intellectual property is being transferred to China, India, Brazil, and anyplace that’s cheap to staff. I don’t believe anything anyone in IBM says anymore. Nobody should.
I’m an IBM employee of over 15 years, as part of an acquisition, is about the only way IBM knows to “make” software products. Everything Cringely and everyone else has said is true. Our product is going to be offshored within the next few years, which will basically kill it. What will our installed customer base think then? What would potential customers think?
Even more interesting, what would the American public think of IBM moving 78% of the workforce to foreign countries.
I gotta find a job somewhere else.
Bill Chamberland- you have great Ibm management potential. Make sure your ER profile is up to date.
Do they hire their own PR people into management?
I was employed by IBM for ten years. In that time frame I realized that most of the IBM technical people were untalented and process wonks. Maybe the India workers suck but the IBM US employees sucked too for the most part. So if you are gonna have a crappy untalented employee, might as well pay him two bucks an hour.
Anyone who joins a union is a fool. The unions have nearly bankrupted the airlines and auto companies. I can’t believe anyone would be dumb enough to pay dues to someone who isn’t doing jack for them.
Amen!
They did get things like the 40 hour work week, high wages, benefits, safe working conditions, and fairness in treating workers but don’t let that stop you from hating them.
Right on the money and sad to watch. I also noticed that 45+ posts of insight, concern, and truth have disappeared. That’s one thing IBM has a lot of, lawyers and accountants.
While the employees and most managers would be considered normal Americans with concerns about where the country is going, the executives are a different creature. As Thomas Jefferson noted: “Merchants have no country. The mere spot on which they stand does not constitute so strong an attachment as that from which they draw their gains.”
Of course big blew exec’s take that to the next level, I’ve come to think of them as stone cold psychopaths who care only of wealth and power. If they can employee slaves in the communist gulag for a cost savings, they’re all for it, and they do it in vast numbers. They’d obviously like to have they same system here or they wouldn’t be degrading our country to build up communist China. Yes China is still very communist in the practical sense, ie: it’s a dictatorship of wealth and power, something big blew exec’s are quite enamored with. If American workers and the American people don’t start standing up to these sick immoral people in positions of power they will find themselves just as enslaved here as the communist slaves are over there.
Too late.
Bravo for saying this. I grew up in an IBM home. I am third generation IT; my grandfather was one of IBM’s early techies (nobody famous, just a guy on the team) and you can find his patents in Google. Back then it was an American company. Since then it has ceased to be. No wonder they are bungling and losing contracts left and right. Did you see on the union Alliance’s job cuts board, how IBM gets around customers’ insistance on work being done in America by Americans by adding foreign workers to their business directory in a way that makes it look like they are located here? I feel there’s little to do now but stand back and watch them sink like Titanic. Thier bow is already inundated.
I work in the dreaded offshore part of IBM. and I agree process and focus on EPS has changed the culture and will have a long term disservice to the company.
But the reality is what is going on with IBM US versus the rest of the world is just a subset of your national situation. From afar, American culture, once described as “everyone can get ahead” , has morphed into one of greed. The delta between the haves and the have-nots in the US is woeful. Whole chunks of society (including some IBmers citing themselves above) have checked out. American cars are not internationally competitive; American airlines are not competitive (in fact a global disgrace) etc etc. I am not a socialist in any sense but too many mega wealthy are not paying for the education and the infrastructure America needs. The centre of the world economy is shifting and will continue to. China moans it is losing manufacturing to Bangladesh in todays newspaper. English is the national language of India and everyone in China learns it. They will soon have the skill of a Dane or a Dutchman. Could we run an outsourced call centre for China in America. Of course not. Americans dont have the language skill or even the plan to get the skill.
anyway, IBM needs to do much better getting people to stay… as some one said, the good ones in the new economies dont stay long. .
Not only are your mega wealthy not giving back, but you are subsidizing your mega wealthy with corporate welfare even as you cut food relief to actual people.
This article obviously explains why top executives including the ceo continue to sell the shares they are issued year after year. Even when they get millions of dollars of stock for free they dump it rather quickly, they don’t even seem to wait for the 1 year mark to reduce taxes from 50% down to 15% (or whatever current long term taxes are). The company probably pays the tax for them anyway. Sam has sold the vast majority of his holdings and the most obvious reason is that he can’t even wait of the final three year countdown to company implosion or it would be too obvious. Shortly after Ginny (or shortly before) was announced she did a big unload, keeping with tradition.
http://finance.yahoo.com/q/it?s=IBM+Insider+Transactions
The bottom line, don’t listen to big blew executives, watch what they do, and the main thing they do while singing blue skies, is sell like the place is on fire…
Damn right it’s not you father’s IBM. Customers and Employees come last these days. It’s all about the stockholders now. Below are responses to employee questons pertaining to the 2015 road map which supports my statement above. The word ‘Customer’ is nowhere to be found.
2015 Strategy Roadmap Rollout
Questions and Answers
Page 1 of 6
Overall
1. Why is important for IBM to have the 2015 Roadmap?
Answer: The 2015 Roadmap articulates IBM’s overall financial objectives to investors.
Internally, the roadmap provides a framework within which we can execute our strategy,
with specific parameters by which we can measure progress along the way. Enabling
STG & ISC line managers with this information, information that managers can then
expand on and help their teams interpret, is empowering. The goal, ultimately, is for all
of our managers to help all of our employees better understand their role and related
contributions to the company’s achievement of the 2015 Roadmap.
2. What are the biggest risks or inhibitors to the success of the 2015 Roadmap?
Answer: The biggest risks to success are in areas such as a) new business areas, where we
must develop new product capabilities and skills, b) areas of aggressive growth which
require significant share gains, including acquisitions which must be integrated, c)
economic risks which impact our clients, and d) competitive risks such as unforeseen
strategies or breakthroughs.
3. Are we achieving our transformation goals, what are the key measurements you are paying
attention to, and what should we be focused on?
Answer: Key measurements include revenue and PTI, share vs. competition; specific
focus on growth initiatives, and shifts in our revenue mix (such as the ratio of SW/HW,
increase in proportion of Growth Markets/Major Markets, as well as platform mix). For
example, storage is a growth area for us, and we expect storage revenue to lead our
platform growth at 12% CGR.
4. How can we use this 2015 Roadmap information to empower line managers and employees to
do their jobs with less bureaucracy?
Answer: The 2015 Roadmap is a framework to describe how we will achieve the financial
targets we have set for ourselves by 2015. Knowing the details of the strategy will help
employees to better understand the business opportunities we are pursuing and the
challenges we face. This in turn will help employees to recognize the importance of the
investment decisions we make and subsequent trade-offs. With this insight, managers
and employees will become more empowered to align their work and deliverables to
achieve our strategic goals.
5. Many employees are confused because they believe there is a disconnect between strong
business results and record earnings being reported by IBM and the constant cost-cutting and
lack of investment in employees and capital for STG and ISC. Why does there seem to be such
a disparity?
Answer: Our 2015 roadmap calls for PTI growth as well as revenue (or top-line) growth.
To achieve PTI objectives we must be efficient, and that means controlling costs. This
allows the funding of future investments. While investments will be stable or reduced in
some areas, increased investments are targeted toward growth areas (such as the IBM
growth priorities of BAO, Cloud, Smarter Planet, and Growth Markets).
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Organizational
6. How will ISC be integrated in the 2015 Roadmap? How will it impact ISC employees?
Answer: ISC will be integrated into IBM’s 2015 Roadmap by helping provide solutions
that delight clients and IBM shareholders. This will be achieved by Creating Smarter
Value Chains, Driving Effectiveness and Enabling Growth with a series of big plays to
enable these strategic areas. This strategy will support IBM’s Operating Leverage by
continuing to drive $6B in Product and Services cost take-out (in support of margin)
annually; contributing $1.6B of Value Services Productivity through radical
transformation, workload prioritization, smarter Supply Chain analytics, and increased
productivity. Lastly, ISC will contribute to balance sheet improvement through cash
optimization initiatives, driving inventory turns improvement of 7% (2011-15); improve
days sales outstanding by maximizing collections thru O2C / Blue Harmony and
optimizing accounts payable terms. ISC will be a showcase for implementing
transformation and supporting key IBM growth initiatives. ISC employees are
foundational to this framework. Through leadership development programs, like talent
accelerators, the enhancement of global experiences and learning, we are building broad
and deep (T-shaped) skills. ISC is ensuring employee development is part of the everyday
thought process, and not just a once a year skills assessment.
7. Blue Harmony has caused many problems with paying sales commissions in 2011. How can
we prevent it from happening when we implement it in fulfillment systems?
Answer: The commissions’ related defects seen with the initial release of Blue Harmony,
can, for the most part, be attributed to late testing with data that differed from
production. The interfaces were delivered late in the cycle and the test environment for
R0.5 did not contain the range of data that would have allowed the team to first test each
component in isolation, and then test the complete solution. Specifically, the limited time
available for test meant that each component had to be tested individually in parallel.
We tested that the interfaces selected all the data elements from the total test universe, as
designed. We also tested that the data was sent to and received by the FMS system.
What caused the defects was the inability to include end-to-end test scenarios where the
data sent and the data received and interpreted were examined to ensure the business
rules and conclusions drawn from the interface results were accurate. Had that been
done, the majority of defects related to converted invoice and customer data, as well as
middleware mappings for marketing code indicators, would have been exposed in test,
rather than in production. There simply was not sufficient time.
These issues have now been identified, corrected, and implemented in production. As we
move to subsequent releases, we are using these valuable lessons learned. Our process
integration team is ensuring true end to end testing with better data, and where possible,
real data, to ensure this doesn’t happen in future implementations for Sales Commissions
or other areas.
Employment Outlook
8. Will the STG employee population grow as a result of continued business success and revenue
growth? If yes, where will that growth take place?
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Answer: IBM and STG will continue to invest in resources in areas that are driving
revenue and profit growth as well as investing to attract and maintain critical skills that
support our technical and growth initiatives. Due to the future revenue and share growth
coming from the emerging global markets, we anticipate that we will have the majority of
the hiring and population growth occurring in the growth markets.
9. IBM’s global resources strategy is to grow the employee populations in the Growth Markets.
This is causing a lot of fear and uncertainty about layoffs or, at a minimum, no career
opportunities for employees in the Major Markets (in other words globalization is putting our
jobs and careers at risk). Does the 2015 Roadmap provide any clarity or sense of direction for
long-term career growth in the Major Markets?
Answer: As you see in the Roadmap, the STG Major Market revenue plans to grow by
2% while the Growth Markets revenue plans to grow by 11%. The Major Markets
continue to be a substantial revenue source for STG so although the greatest growth is
seen in the geographic area of the Growth Market countries, employees in the Major
Markets should plan to develop their skills to be competitive to support the 2015
Roadmap plans.
10. There has been very little vitality hiring in the Major Markets and the signal this sends is that
in the future IBM will no longer locate jobs in the Major Market countries. Is this a fair
interpretation and how does this affect the long-term career planning for the current
employees?
Answer: IBM will continue to locate jobs in the Major Market countries. Through 2015,
70% or more of IBM’s revenue will continue to come from the major markets. This will
require us to maintain a level of strength in the major markets to successfully deliver on
our business commitments.
11. In the Growth Market countries the labor markets are tight and attrition rates are high, many
IBM employees feel their best opportunities to get ahead (promotions and salary increases) are
to leave IBM and go to work for another company. How can we stem this trend? Do you think
sharing the 2015 Roadmap will help employees better understand their long-term career
opportunities?
Answer: Sharing the 2015 roadmap will highlight both the expansion in the growth
markets and the strength and contribution of the major markets, hopefully helping
employees to understand the business strategy and realize how their role fits in. We will
continue to focus on retaining our best performers through all vehicles at our disposal;
including superior management practices, skills and career development opportunities,
and differentiated compensation.
Expenses
12. Tight expense controls have helped bring our costs down, but have built up a lot of
bureaucracy and red tape. Is there any concern about the frustration and wasted time this has
created? Is anyone doing anything about it?
Answer: There is a team, being lead by Elizabeth Baker, currently looking at our expense
controls and processes across all brands. The purpose of the team is to propose a
consistent, better defined and streamlined process for expense controls and approvals.
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13. Travel expenses have been tightly controlled for a long time, with little to no discretion
allowed for line managers, is there any let up in sight?
Answer: Travel in IBM will continue to be focused on Customer facing, Revenue
generating events. Non-Customer travel will not return to levels that employees were
accustomed to a couple of years ago. We will continue to have an exception process to
review requests for Non-Customer / Revenue generating travel that makes business sense
and supports our initiatives.
Product Strategy
14. It appears that we’re decreasing our investments in the System z Brand, does that mean it has a
lower priority in our technology portfolio?
Answer: System z is still very important to the STG portfolio. The point of having a
portfolio is that each element plays its own role; System z makes an important
contribution in terms of PTI (including the rest of the IBM stack). The investments made
over 40+ years have made this possible; we are leveraging those investments and making
the incremental investments needed to deliver continued customer value.
15. What is the future strategy for the Power platform?
Answer: The Power strategy is to drive revenue growth through aggressive share gains
vs. competitors (HP, Oracle/Sun), expansion of the target market with Power Linux, and
alignment with key IBM initiatives (Smarter Planet, BAO, Cloud).
Workload
16. Many employees have high workload levels with no let up in sight and no recognition of how
hard they are working. With more aggressive deadlines and a push to do more work with
fewer people, employees are feeling like they’re pushed to the brink. Do the executives
recognize this and are there any plans to address the workload issues?
Answer: IBM’s senior leaders recognize that today’s business environment is more
competitive, globally integrated, and faster paced than ever before. The incredible effort
and hard work of our teams around the world is recognized, as are the workload and
engagement concerns. We hope, and expect, that all employees continue to look for new
ways of doing their work to streamline processes, improve efficiencies and increase
productivity. There are teams of managers and employees throughout STG & ISC who
are working on transformation initiatives with these very objectives in mind; such as the
STG/ISC Climate Council.
Over the past century, IBM’s greatest achievements have arisen from the contributions of
committed and energized IBMers. If you see a way to evolve the way things are done or
have ideas how to improve the way we work or lessen a burden, speak up and share your
ideas.
17. Major market employees feel pressured to pick up the slack for the major market employees
who have been let go while the growth market employees are not up to speed to fully trained or
ready to take on the workload. Are these issues being addressed with the 2015 Roadmap?
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Answer: Yes, a key element of the strategy now through 2015 consists of training and
mentoring of employees in the growth markets, as well as establishing centers of
competency and support systems to get them up to speed and productive.
Skills/Professional Development
18. Employees seem concerned that there’s minimal investment for their skills development and
career growth, does the 2015 Roadmap help us clarify where we should be investing in skills
development and career vitality?
Answer: Yes, this is one of the benefits of having such a framework for execution of our
strategy. It identifies the growth areas (e.g. IBM growth priorities, as well as STG
growth such as software, storage, networking…) so that we know where to focus our
efforts.
19. How much are we investing in the skills development for our employees?
Answer: The WW STG / ISC combined budget for education for 2011 is approximately
$25M. Our current expense guidelines specifically identify key education initiatives that
are supported.
20. What are the plans to address a potential skills, experience and leadership gap that is likely to
occur when employees in the Mature Market geographies start to retire in large numbers?
Answer: In STG, as we work on our skill development plans, we will include actions to
be sure to transfer knowledge and skills where necessary. We will also plan to utilize the
workforce flexibility programs available in IBM.
21. What steps are we taking to improve the productivity of our sales and technical sales
management teams?
Answer: Improving sales and technical sales productivity is a critical enabler to free up
capacity that can be deployed to competitive and growth selling. We are optimizing our
sales coverage across STG and IBM, and also leveraging our extended sales team (BPs
and ibm.com) through continued destacking. As we increase the ratio of technical sales
to sales, we will also shift the focus of technical sales more in the direction of pre-sales.
The Sales Transaction Hub is a major productivity aid, as it frees up seller time by
allowing them to offload several back office functions (e.g. pricing, proposals, contracts).
And finally, skills continue to be of major importance in improving effectiveness and
productivity, with a continuing emphasis on solutions which is consistent with our
strategy.
Compensation/Recognition
22. With continued business success, will we be able to invest more in employee recognition and
rewards programs?
Answer: Our 2011 Budget for employee recognition and awards is $4M, which is at the
appropriate level given our financial model. Our financial performance will continue to
be the deciding factor for what is affordable.
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23. What are we doing to recognize top performers so we don’t lose them to competitors?
Answer: We continue to strategically invest in retention to ensure we can retain key
employees. This year we funded additional investments worldwide in the STG employee
salary program with particular focus on key countries. Managers had flexibility in the
delivery of TCR to put more focus on lower paid contributors. We made significant
investments in 2011 in our sales plans, particularly the PSP plan, to help retain sellers,
and announced new recognition programs which should help to retain our top
performers. Additionally, we continue to invest in skills development and career growth
opportunities. The IBM Career Framework allows all IBMers to identify the
competencies and skills required to succeed in their current role, as well as what expected
for future career growth, and to locate learning opportunities to develop those skills and
competencies.
24. There is no recognition (monetary or non-monetary) for employees who get a “2” PBC rating,
but they are still being told they’re valuable contributors. Most employees who get a “2” rating
feel there are too many mixed messages and feel dejected about the rating. Is the line
management or HR team doing anything about this?
Answer: Our business is only capable of succeeding to the extent that ALL of our
employees continue to contribute and drive it forward. As a company, we have to make
difficult decisions related to the optimal spend of limited funding. There are programs
specifically designed to apply to all of our solid performing employees – GDP, the MBA
program (when we’re able to fund, like in 2010 for most job families), Eminence and
Excellence recognition, career development, etc. There are other programs (TCR, sales
recognition, etc.) where we have chosen to more strongly differentiate and recognize the
contribution of our top contributors. All in all, there is a blended approach that, as a
company, we feel is appropriate and what we’re able to effectively manage.
WOW. This roadmap is very telling. Do they really think that the US employees reading these responses will be satisfied with their job situation? They basically say that they have no use for “2” rated employees which is the majority of the population. They have a whole $4 million set aside for employee recognition. The company earns $15 billion per year and they set aside $4 million for employee recognition?!? Look at the stock options that management is given. One senior level manager cashes in more then $4 million per quarter. What a joke! There is $25 million set aside for training WORLDWIDE. Guess where most of those dollars are going! They dance around the question of dealing with the incompetence of the global hires. Luckily I am retired and no longer need to deal with these working conditions. Good luck to all who remain.
Nail and Head are one!!
I respectfully disagree with your statement that … “Management accountability is gone” as that implies there was accountability? From my perspective, accountability has always been IBM’s achilles heel. Executives were always successful maneuvering themselves outside the line of fire, so they didn’t have to own or pay for their mistakes.
A personal example? When my new manager in IBM’s mainframe engineering lab of 4,000 people asked if I should get an award when ESCON (fiber architecture) was announced in the fall of 1991, I said no! I told him that the ESCON project was among the most poorly managed projects (and it was many millions of dollars) I had ever been part of and NO management should be rewarded. I was sickened when more than 25% of the awards went to management.
The ESCON announcement fairytale had more than 250 products but no real hardware products shipped besides the mainframe, the Channel-to-Channel adapter (CTC) implemented in microcode, and my product, ESCON Manager (configured the hardware). Instead I had a nightmare hiding all the hardware products.
Funny to look back today but the ESCON fiber architecture failure is typical of IBM’s attitude and resulting failure. IBM shipped hardware but failed to recognize that the fiber optics to leverage the hardware didn’t exist anywhere except for one insurance company in Texas with a campus. Even one of the phone companies in beta test, couldn’t access black fiber because it was owned by a different company.
the less productive you are.. the worse your decisions. the more money you lose for the company.. the safer your job.
Caveat: this only applies to the C-Suite.
Reminds me of this article.
https://www.huffingtonpost.com/william-lazonick/how-american-corporations_b_1399500.html?ref=tw
is there a project name for cutting the 78%?
You don’t have a Print button on this page??
It’s hidden. You can access it by hitting CTL-P.
How True, I could not have explained it better.
This statement:
“The primary method for accomplishing this feat, according to the plan, will be by reducing US employee head count by 78 percent in that time frame.”
is provably untrue. It is simply, demonstrably, unequivocally, false. The roadmap you speak of isn’t internal, it’s a public document that can be viewed here (https://www.ibm.com/investor/events/investor0311/). In it are the details on where IBM expects to achieve EPS growth by 2015. Even a quick glance shows that growth couldn’t happen if the picture you paint above were true.
That you would imply that the reason that IBM (and Google, and Microsoft, etc) hire in other countries is for wage arbitrage shows your hand. Wages have little to nothing to do with it. It’s about talent. IBM isn’t hiring in China to manufacture phones for $1 hour. It’s hiring in China (and India, and Brazil) because that’s where the engineering talent is. You’re looking at a services company through an Apple/product lens. It clouds your argument.
In that sense, you’re right, but not for the reasons you say. It isn’t my dad’s IBM. My dad’s IBM would be obsolete (see: Dell, Gateway, HP, Sun, etc). IBM today is the envy of the business technology industry precisely because it takes the global view.
Clearly all the employees posting here are incorrect then? I left in 2005 after 13 years (ITS to an Innovation Center). In parting I knew there were more interesting places to be. I feel sorry for those left behind because all that has happened is a palpable deterioration in the work environment.
Oh, of course! This is why all the employees are being asked to train their offshore replacements, and why outgoing employees are frequently courted as contractors a year later.
Nobody who has participated in these offshoring projects is going to believe that it’s about better skills, especially when these offshore locations often try to turn down the work, saying they do not have the skills, cannot find the skills, and are told they must take the work anyway.
It’s all about the benjamins, and driving EPS.
This is a lie. Anyone in the IT business who has dealt with overseas workers knows it’s a lie. Heck, anyone who spends a half-hour perusing the proposals they put on freelance programmer hiring sites knows it’s a lie.
It’s about cheap labor, pure and simple, period. It’s no different from what’s happened in the meat packing and fruit picking industries, except that IT doesn’t require bringing actual bodies over the border.
The new America, full of shitty third world thinking shit heads.
Nice article, and a great read. IBM is not alone, several IT companies are on the same path all of them large and all of them massively shipping jobs overseas to please share holders short term.. forgetting the long term impact. CSC (Formerly Computer Sciences Corp.) is another off the top of my head.
HR lackeys write bogus review on ‘Glassdoor’ to keep the rating steady at 3.00 sat
They are pretty easy to spot.
I’m guessing the same thing might apply here.
Exactly my thoughts when I read some of the recent reviews. Style, length, and choice of words are too often strangely similar.
I could not agree more. Back in the late 80’s or early 90’s (memory not so good) IBM went thru a Span-of -Control process to get management levels down to
5 from 9 with 5 (5 being the norm for large international companies in other
nations i.e. Japan, Germany, etc.. ). IBM actually did it
1st lines went from 7-10 employees to 20-30 employees
2nd lines went from 3 1st lines to 6-7 1st lines
etc. up the ladder.
That begets the question: “What did they do with all those managers that were no longer manager?”
Answer: “They must have found new jobs for them because they sure didn;t resource them!”
Over the next 15-20 years, they found a way to get them back into management
as IBM is now back to 9 levels of management again!
There are second line that are Director level. 3rd lines that are VPs.
And when they resource folks, it’s the guy making $60K a year that goes.
Not the middle manager who’s making $250K and no one can tell what he/she does for a living. It would be a great big joke except for the $60K guy who is out
on the street with very few options.
Upside is that management makes their PBC goals and gets their bonuses
and stock options. They understand what is really important. grrrrrrrrrr
It’s enough to get make me physically ill
Some of the issues at IBM are:
CLAIMS: Project managers can cap hours at 40/week even when the worker is putting in 50-60 hours in a week, even on a green-dollar project. Subsequent projects size based on CLAIMS reports and therefore are under-sized. GIGO.
Priorities: “The fours goals of IBM are first quarter, second quarter, third quarter and fourth quarter” — an IBM VP announced this back around 2000 at a big group meeting. I should have looked for an eject handle at that point. IBM’s once standard setting for customer service has decayed because, to a bean counter, “Customer service does not add to share-holder value this quarter”.
Off-shoring only works when the skill/experience levels are even but the labor costs vary greatly. Where I work now we’ve got a competent team in Bangalore, but, 5 years ago, it didn’t look like IBM chose as well from what I was seeing. Granted, in the last 5 years the labor costs have narrowed given the revolving door on the HR departments in India.
I was caught in the RIFtide of 2007 at IBM and, as near as I can tell, the bean-counters only considered the lowest-value hat I was wearing… out of the 5 hats.
“You don’t have to kill millions of people to turn them into statistics, all you need is a spreadsheet” – me.
Somehow the intangible values of each employee never seem to be considered– inventiveness, enthusiasm and teamwork… and a lot can be seen in how the PBC (Personal Business Commitment) categories changed when Palmisano took over: “Win, Execute, Team” became “Win, Execute”. The “High Performance Workplace” tended to reward those good at writing memos and flushed out the team-players since everyone was in competition to hold a job. Those of us who felt that we *all* needed to succeed together as a team were amongst the first to go.
When your employer tells the rank-and-file to “think of share-holder value” there is a problem; I’ve always believed that, when you take care of your customers, they will continue to buy from you… which automatically takes care of the share-holders. Of course, with the “fiduciary responsibility” rules for institutional investors, share-holder loyalty is an obsolete term.
Perhaps the best thing IBM can do for their share-holders is to liquidate the company, providing one big pay-out, and then no more worries when it comes to servicing current– or pre-existing– customers.
Spot on with your remarks about shareholder value:
“We have to consider three profits in IBM. The first goes to the users of our machines. The second goes to our employees. The third goes to the stockholders who entrust us with their money. From past experience we have found that when we take proper care of the first two profits the stockholders always have been satisfied with what we had left for them.” T. J. Watson Sr. (from 100% club speech delivered in 1949)
This is utter nonsense.
As a younger IBMer (I’m 30) with experience now in STG and SWG, I’m amazed at how embittered every old guy seems to be in the company. It’s like you guys buried your heads in the sand in the 80s and don’t realize that the company almost died because of all of that “job for life” garbage they used to guarantee. Wake up!
Maybe we SHOULD be getting out of hardware businesses. The margins suck and the competition is fierce. We’re making money hand over fist these days in other sectors anyway, so obviously that’s where the focus goes. Our India team is fantastic – always been happy with the quality of their work. This “derp derp they took our jobs!” bullshit just reveals how sheltered and naive you guys really are.
Wake up. The author here is up to his eyeballs in BS. IBM isn’t laying off 78% of anyone, and senior management is a heck of a lot smarter than y’all realize. All I’m seeing here is a lot of bitterness and resentment from wannabe execs.
Don’t worry Thomas, just keep drinking the kool-aid and soon enough you’ll get that 8am call from your manager saying ‘Appreciate your efforts Thomas, but your job has been selected for elimination…’
Under or around 30? You are safer than the older guys, but do not worry sir – you are getting older every single day and as an AMERICAN worker, you will eventually show up on the radar. 40 is not that far away and when that comes and your salary too, there will be an eager Indian graduate tech baby waiting to take your job from you too. It need not be at IBM by the way, you may move on by then to another firm but eventually you will be outsourced OUT. Trust me.
Thomas,
Wake up and smell the coffee. It may not be your turn now, but believe me it is not that far. I felt the same way for years at this place. After spending nearly 28 years and gave everything I had to this company, I was RAed last month. And as many people have said, there is a hidden target to identify people over certain age. I would have qualified for retirement and balance in my health account next year. But by letting me go now, IBM gets to keep all that money. As a matter of fact, I told the people in HR that please consider that amount (around $30K) as my gift to Sr Executives greedy bonus pool. You are just a number on Randy McDonald’s Excel spreadsheet.
But everyone – where’s the beef? Why SHOULDN’T your job be outsourced? Does IBM owe you employment just because you’re American or something? All I see here is sour grapes.
You guys are living 30 years in the past. We live in a global economy now, and IBM is a global firm. The moment your job can be done just as well (or even 75% as well) by a cheaper workforce abroad, it’s only natural that it probably will be. And frankly, if your job is such that “75% as good” is still acceptable, then it was just a matter of time.
The RSS sale was a good move. And if I were running the company, most of the US STG business would be gone in the next 5-10 years – the margins suck and it doesn’t make as much strategic sense for us to be there as it once did. (Now, in the GMU? Different story.) But, of course, all the grumpy old guys will just kvetch about how IBM owes them for all their time at the company and how stupid senior management is or whatever, while IBM goes on to keep doing great things. Wake up, gentlemen.
I like the borderline racism in this forum about Indians, by the way.
You are ignoring all the valid comment about how IBM management cares less and less about quality and true commitment to the customer’s success. If you can’t see that this is impacting projects across the board and will ultimately cause great problems for IBM, you are blind.
“75 % as well” is not nearly enough when you want to have a 120 % price level compared to the competition.
IBM is cutting not only into the flesh, they have arrived at the bones already.
I left in 2011 and I can tell you from personal experience that what goes on e.g. in Global Services is not the norm. It is way, way below any sensible norm.
Thomas my lad,
This is an adult discussion that you have obviously don’t have the emotional intellect to participate in. You need to go sit at the kids table with the entire HR spineless team or call Uncle Randy to find out what other BS he wants you to plant
The author is spot on and so were Jobs comments.
IBM has the stats on where all their employees are located and they should be brought before congress. The president with his executive power has the right to make IBM force these records to be opened to reveal the obvious: they are laying off Americans at an outstanding rate;therefore use of IBM in government contracts and tax breaks should be carefully scrutinized resulting in significant reductions or outright terminations of tax breaks and federal contracts. . This panel should be led in an expeditious manner by a congressional panel consisting of those reps who have been most vocal about IBM US layoffs. Lets leave out all th paid IBM lobbyists and lawyers.
If Obama is really concerned about American unemployment and getting US price back, he should make this session a priority, place an immediate moratorium on hb1 visas to halt chinese indians, etc from being permitted to come into this country to be trained by the Ibm Americans to slow down the rate of layoffs. IBMers in America are being bullied into training these no ops or threatened with being placed on performance improvement plans. If they are so talented and have comprehensive communication skills and technical standards comparable to the skills the US IBM employees are required to hold and grow why is IBM forcing US employees to train them. These foreignes are also given unfair advantages by having the opportunity to go to additional training which IBM US employees seldom can attend, this can be validated in IBM’s Global Campus data so its clear IBM is giving these workers unfair advantages over US employees. If these resources are equally skilled, let them train each other in country to handle in country contracts exclusively.
During this session also lets settle the matter of :
1. S.1747 the bill that takes away overtime pay for computer workers. Sen. Franken and Rep Waltz in MN and Rep. Rush Holt in NJ need to have the courage to oppose this bill .
2. The questionable business practices between IBM and ATT which appear to be blocking fair contract bid for smaller companies
Lets stop IBM from participating in a second holocaust event( I certainly do not wish to diminish the horrors sustained by those souls injured by the first holocaust however , there are some interesting parallels. Everyone is aware IBMers have 6 digit numbers assigned globally, we are very lucky IBM has not made it a condition of employment for these numbers to be tattooed on our our arms, There are many examples of barbed wire mind control techniques in effect, executives tear down employee morale, I hear constantly from those still there particularly long term employees who should be protected by age and ADA discrimination….., the environment has become quite psychologically toxic.
I recommend the panel and IBM(I Bully and Mistreat) employees represented to testify should be thoroughly investigated to make certain IBM has not participated in campaign contributions or hiring panel relatives by the IBM Alliance organization.
I vote for Hilary to chair the panel with Mr. C.
Well Mr President, here is your opportunity to make a real difference and take down this corporate bully, bring these jobs home and restore American pride. Lets roll!!!
Nice. Keep it classy, pal. With that attitude, I would’ve RAed you too.
I hate to break it to you, but there isn’t a politician in office today who wouldn’t offshore your job for a dollar.
Ah, youth. It’s just a matter of time until he wakes up…
Presumably he’ll be used up and tossed out the day before his retirement benefits vest. He can hardly complain though with his attitude. In the subsequent lawsuit, IBM will take his posts here and read them to the jury.
Aw, cute. Look, everyone, grumpy old guys who don’t get it anymore! You guys are adorable. Never change. Tell me more about these “pension” things… they’re so funny!
You’re railing against the wrong windmill Sancho.
If I was the one paying you to troll this board I’d fire you for incompetence.
Unfortunately I’m not surprised. I have high regards for IBM and their products, but moreso for the wealth of capability and intelligence represented throughout the company. As someone who joined IBM through the acquisition of PwC Consulting in 2002 it took me less than a year to realize how out of phase the IBM culture and approach to business was with my own beliefs. Moving to the Systems Technology Group introduce me to better leaders who were prevented from being effective by constant rotations and changes in role. I had six leaders in 18mo and had to start relationships over each time including performance and career planning. Yet my leadership was surprised and concerned when, simply due to a lack of consistency in my career options, I left to join a strategy consulting firm.
It is easy for leaders to delude themselves and I can only hope that although I too see many of the points you identify that their connection by IBM paints a different strategy then you articulate. As you say, a plan to eliminate people in a relationship driven business is by definition doomed to fail.
Bob – How does it feel to have finally published a post in which the replies are 98% in consensus with your observations ? 🙂
As the loyal customers run for the exits in droves, the key factor that escapes IBM is that getting that customer to come back requires 2 to 10 times the effort as keeping him happy to begin with. This will be the biggest mistake that IBM will make.
You are so right – this is an obvious fact yet IBM continues to think that they will not lose customers and won’t have to spend the dough to get them back! They are in dream land!
I posted this on the IBM Pension board several weeks ago. – it applies to the ‘elite’ in IBM::
No one hates anyone for making money. And no one has any problem with the
fact that people are making a great deal of money that the market will pay them
if they are contributing to the economy and are worth the money they are making.
That has nothing to do with demanding economic justice, fair taxation, and that
people who are making big money invest it in the economy that does so much to
sustain their wealth, so that the economy can get stronger for all of us and
bring people back to work.
What we have a problem with is people who only care about making big bucks for
themselves and a few cronies at the expense of everyone else. People who will do
anything to make a buck including cheating their workers, cheating the people
whom they owe fiduciary responsibilities to, including their investors, and
people not giving a shit about firing a great many people whom are dependent on
jobs in their corporations if it means huge profits for a handful of people,
thereby putting people out of work at the expense of the economy at large and
the taxpayers; at the same time the profiteers aren’t even paying – and oppose
paying- their fair share.
Apparently they can get away with it.
[…] There is a 78% chance of you being laid-off (or whatever they’ll call it) by 2015, predicts Cr… […]
This is so sad but entirely a true story for many Big Business in the US today. The American dream is slowly slipping away more and more everyday and we can’t do anything about it. I am so glad I found the business opportunity I have today. I hope the US can get it together for my future children….I’m not hopeful they will at all.
But isn’t the new American Dream to live paycheck to paycheck in a demeaning 80 hour a week job without job security?
Cringely, why on earth do you feel there is a language barrier in India. English is a global language of Business, the generation you are referring to having so called language barriers is gone and mostly dead now. Am not sure your article reflects the ground reality. You refer to skills and experience, i will tell you my experience with an American with all skills, experience & certifications who went to install a Cisco router for one of our clients, he just didn’t have the basic CCNA skills to configure an ip address on a router interface. An Indian had to guide him to get this done. The Indian could help him get the work done within minutes for which he was beating his head for hours.
Although, being an ex-ibmer, i do agree with most of your statements on IBM.
Am not a supporter of them but they do not employee only Indians, South East Asia has a huge pool of experience and skilled labor hailing from various countries.
Just a request don’t let viewers hate all indians or any other race for that matter. Indians do work really hard to earn their living and support their families just like every other American or for that matter any person employed in any part of the world.
If companies are sticking with employees that don’t deliver quality why do you blame an Indian for that? For that matter any person in any part of the world could be a liability for the company.
Take care…
Suraj, I’ve been gone from IBM for almost 5 years, now.
In my current job, I interact on a daily basis with a team in Bangalore and have few problems– except that their accent tends to render their speech into gibberish when talking fast due to anxiety. When the pressure is off I don’t have much of a problem communicating.
That being said, the company I currently work for– and my manager, who has done most of the hiring of the group I deal with– has done a good job in finding people who are reasonably well trained. Technically, they’re well trained and I get along well with them and rather like a few of them.
You get what you pay for… or you’ll pay for what you got… and sometimes these price-tags aren’t in dollars. The company I’m in right now didn’t go for the *cheapest* labor they can find, though the company didn’t staff our group in the USA for 24 hours like the group in India.
Off-shoring isn’t the whole problem; The REAL problem is rather more insidious.
Henry Ford only made *ONE* innovation… that changed the world. It wasn’t technological. It wasn’t something *about* an automobile, either.
Henry Ford’s *ONLY* real innovation was a “living wage” where the worker could see a way to afford to purchase what they were making.
In the current “global economy” this concept has been lost and seems to be more and more considered *wrong* by those who wish to be oligarchs.
(sighs)
I should apologize for going into the “Stand Up Philosopher” mode with no need to visit the “Vnemplyment Insvrance” window.
You are right on the mark. As a former Big Blue refugee from an outsourcing initiative, I saw the process and ‘metrics’ became the real product and not the creation of useful information. Troubleshooting did indeed become a nightmare, as the ‘dedicated’ (ie on site legacy) staff was left to handle everything due to language and skill set issues. And the disdain with which the new managers treated the existing workers was astounding – Like colonial nations treating their new subjects as heathens that were finally going to be civilized (they dismissed our expertise as ‘tribal knowledge’)
I think IBM is banking that the US will continue to diminish in importance, so closing up shop and shifting to overseas makes perfect sense to them – the language won’t be a problem.
Been working in the mainframe world most of my 55 years. Seems like the mainframe and I are brothers. I can understand the behemoth factor, since working for EDS, and others. Large corps are hard to make a change. There’s a culture, a methodology, and a process, etc.. for everything. Remember Office Space and the TPS Reports….lol. Very similar. Companies like the government have sacrificed loyalty, expertise, trust, and honorability, for cheap, unfamiliar, uncultured, amateurs, who have ruined the thread of ingenuity, and accomplishment people look forward to in their careers. The end result has been the erosion of the fundamental understanding of work and gratification of a job well done, and compensation towith. God Bless.
@xboy as a fellow Mainframe guy I couldn’t agree more – wise words indeed!
It is / was the same when I was at HP (EDS at the time). All they care about is selling things to customers. There was no concern about delivering the product much less a quality product. My company outsourced us to EDS.
I was in a group of 10, me in the U.S.A. the fired the other 9 and hired replacements in India. I spent half my time arguing with India in the middle of the night about trying to deliver a product, the other half of the time getting my butt chewed by the customer because I was the only one on site. Of the 9 overseas only 3 or 4 were working. They billed for all 9 programmers though. 17 months was enough of that for me.
The whole thing makes you sick, especially if have a conscience.
That’s true. A conscience is a real liability in corporate america.
Its not fair of course, but it is happening everywhere, even China is not cheap enough for manufacturing it is being farmed out places less expensive such as Vietnam and India. Jobs doesn’t really care either though talks a good game but manufactures in China as well where if you need a change to the assembly line you just call up the workers from their beds at 4am since they stay in house and off you go. Oh and pay taxes no way corporations are global citizens try a nice dutch sandwich it will save you billions in corporate tax!
I started working with IBM in 1966 in the FE division. If you notice I did not say working for IBM. From the very beginning I felt that I had a stake in the success of the company. After basic and advance schools I was given a territory to run. It was made clear that it was “my territory” to run to the best of my ability and management was there to assist me. I was expected to ask for help when I needed it. Other than that management would not tell me when or how to do my everyday work. I ran my territory the way I felt was the best and eighteen months later was rewarded with the first of my six IBM Means Service awards.
By the late 1980s things began to change and I felt it was time to get out of the field job I had so much enjoyed. I asked what the qualifications for management were. I was told IBM would require any future managers to have a collage degree. During the next four years I completed a BS and MBA in Information Science degrees with the IBM Tuition Reimbursement.
In 1993 IBM formed a join venture company, TSS with Kodak. I tried to make suggestions on what was going wrong and how to improve the new operation. For my efforts I was demoted. We no longer had any real management but bosses who micro-managed everything. After, what I consider six years of chaos, TSS was disbanded and the remaining workers transferred back to IBM.
Unfortunately the micro-management continued. The bosses also got worse. I applied for the manager’s job in my area citing my collage degrees and experience. When the boss was appointed I was told he was “much better qualified than me”. The last boss, Art, was the worst. He micro-managed everything to the great determent of the work.
His main mantra was, “You will make the on-site time”. This was even if the call was 45 minutes away and it was only 10 minutes to the OS time. Once on a conference call my wife heard him say, “We folkes, maybes wese goin do better since wese runin lots lighter now” She asked who is that idiot. The reason we were “runin lots lighter” is we were losing customers. This was “better qualified”? The only thing he was “better qualified” at doing was telling people to lie on the reports It was no longer to do what was right for the customer and IBM but “make his numbers” look good.
On March 29, 2002 I explained to Art that I felt that putting OS times on calls when we not yet there was falsifying records and cheating the customers and did not want to do it. On April 2, 2002 I was laid off from with IBM.
Good article…
You should mention HP which is going the same way…
Yes – you are right on – having watched the crumbling of IBM from the inside during the last 10 years! The drive to satisfy shareholders and not customers is felt internally every day and most front line employees are miserable and only stay becuz they need a job and fear venturing out on their own as they often have never worked anywhere else in their careers. The management people have no clue how to run the business – all of the credit goes to the sales people who are selling solutions that are often marketing dreams but not implementable solutions. It reminds of rats on a sinking ship that have no idea that the bowels are filling with water while they enjoy their cheese on deck! I’m no longer employed there and enjoy my life better each day!
IBM is currently 71% foreign Indian workers. They have several multi-million lawsuits going including one from the State of Indiana for $867 MILLION. The fact is, IBM as a service and development organization has been RUINED by India, Inc. Goldman Sacks (pun intended) is now 50% foreign Indian workers including Managine Director VP Kunil Shah. GS’s modus operandi is to take control of large companies, gut their assets, collapse them, and move on. The Wall St. boys know EXACTLY what they are doing. Do they care? Most certainly not.
The fact is, IBM’s service and quality have dropped so low because of the cheap labor mania that they are losing business and can no longer sustain such a massive workforce. They have to shrink because the business volume is simply no longer there.
IBM is just another company that has been gutted by India, Inc. just like Sun, PeopleSoft, Bell Labs, etc. One more company invaded and taken over by these people and ruined.
HP will probably be next thanks to the same mentality. Every company that follows this cheap labor nonsense goes under – eventually. Even Microsoft may go under in a few decades once its billions have been siphoned out.
It’s simply FAR easier for the greedy Wall St. types (and India, Inc.) to simply plunder big companies’ assets than it is for them to actually do the work of making a profit in a stock market they know little about.
Companies ruined or almost ruined by imported Indian labor
Adaptec – Indian CEO Subramanian Sundaresh fired.
AIG (signed outsourcing deal in 2007 in Europe with Accenture Indian frauds, collapsed in 2009)
AirBus (Qantas plane plunged 650 feet injuring passengers when its computer system written by India disengaged the auto-pilot).
Apple – R&D CLOSED in India in 2006.
Apple – Indian national and former Goldman Sachs board member Rajat Gupta charged with leaking Intel and Apple secrets over the phone.
Australia’s National Australia Bank (Outsourced jobs to India in 2007, nationwide ATM and account failure in late 2010).
Bell Labs (Arun Netravalli took over, closed, turned into a shopping mall)
Boeing Dreamliner ES software (written by HCL, banned by FAA)
Bristol-Myers-Squibb (Trade Secrets and documents stolen in U.S. by Indian national guest worker)
Caymas – Startup run by Indian CEO, French director of dev, Chinese tech lead. Closed after 5 years of sucking VC out of America.
Caterpillar misses earnings a mere 4 months after outsourcing to India, Inc.
Circuit City – Outsourced all IT to Indian-run IBM and went bankrupt shortly thereafter.
ComAir crew system run by 100% Indian IT workers caused the 12/25/05 U.S. airport shutdown when they used a short int instead of a long int
Computer Associates – Former CEO Sanjay Kumar, an Indian national, sentenced to 12 years in federal prison for accounting fraud.
Deloitte – 2010 – this Indian-packed consulting company is being sued under RICO fraud charges by Marin Country, California for a failed solution.
Dell – call center (closed in India)
Delta call centers (closed in India)
Duke University – Massive scientific fraud by Indian national Dr. Anil Potti discovered in 2012.
Enron, WorldCom, Qwest, and Tyco all hired large numbers of foreign workers from India before their scandals.
Fannie Mae – Hired large numbers of Indians, had to be bailed out. Indian logic bomb creator found guilty and sent to prison.
Goldman Sachs – Kunil Shah, VP & Managing Director – GS had to be bailed out by US taxpayers for $550 BILLION.
GM – Was booming in 2006, signed $300 million outsourcing deal with Wipro that same year, went bankrupt 3 years later
HP – Got out of the PC hardware business in 2011 and can’t compete with Apple’s tablets. HP was taken over by Indians and Chinese in 2001. So much for ‘Asian’ talent!
HSBC ATMs (software taken over by Indians, failed in 2006)
IBM bill collecting system for Austin, TX failed in 2012 written by Indians at IBM
Intel Whitefield processor project (cancelled, Indian staff canned)
Intel – Trade secret stolen by Indian national Biswamohan Pani in 2012.
JetStar Airways computer failure brings down Christchurch airport on 9/17/11. JetStar is owned by Quantas – which is know to have outsourced to India, Inc.
Kodak: Outsourced to India in 2006, filed for bankruptcy in Jan, 2012.
Lehman (Jasjit Bhattal ruined the company. Spectramind software bought by Wipro, ruined, trashed by Indian programmers)
Medicare – Defrauded by Indian national doctor Arun Sharma & wife in the U.S.
Microsoft – Employs over 35,000 H-1Bs. Stock used to be $100. Today it’s lucky to be over $25. Not to mention that Vista thing.
MIT Media Lab Asia (canceled)
MyNines – A startup founded and run by Indian national Apar Kothari went belly up after throwing millions of America’s VC $ down the drain.
Nomura Securities – (In 2011 “struggling to compete on the world stage”). No wonder because Jasjit Bhattal formerly of failed Lehman ran it. See Lehman above.
PeopleSoft (Taken over by Indians in 2000, collapsed).
PepsiCo – Slides from #1 to #3 during Indian CEO Indra Nooyi’ watch.
Polycom – Former senior executive Sunil Bhalla charged with insider trading.
Qantas – See AirBus above
Quark (Alukah Kamar CEO, fired, lost 60% of its customers to Adobe because Indian-written QuarkExpress 6 was a failure)
Rolls Royce (Sent aircraft engine work to India in 2006, engines delayed for Boeing 787, and failed on at least 2 Quantas planes in 2010, cost Rolls $500m).
SAP – Same as Deloitte above in 2010.
Singapore airlines (IT functions taken over in 2009 by TCS, website trashed in August, 2011)
Skype (Madhu Yarlagadda fired)
State of Indiana $867 million FAILED IBM project, IBM being sued
State of Texas failed IBM project.
Sun Micro (Taken over by Indian and Chinese workers in 2001, collapsed, had to be sold off to Oracle).
UK’s NHS outsourced numerous jobs including health records to India in mid-2000 resulting in $26 billion over budget.
Union Bank of California – Cancelled Finacle project run by India’s InfoSys in 2011.
United – call center (closed in India)
US Navy F-18 jet crashes into Virginia apartment building on 4/6/12 after outsourcing F-18 work to India’s Tata.
Victorian Order of Nurses, Canada (Payroll system screwed up by SAP/IBM in mid-2011)
Virgin Atlantic (software written in India caused cloud IT failure)
World Bank (Indian fraudsters BANNED for 3 years because they stole data).
I could post the whole list here but I don’t want to crash any servers.
Indians are smart hardworking people and need jobs too. If you don’t like what’s going on, don’t vote for the free trade bozos who are ruining your country.
The data is right but the inference is wrong.
Lots of TOXIC work is outsourced to India…to spare the American Employees.
Have you seen the working conditions that Indians have to put up with.
It cheaper to send old ships to be decommissioned at Alang.
The same holds for software. If you need to decommission and piece of software send it to India.The truth
is we always get the crumbs. Have you seen any plum job being outsourced to India.
I beg to differ with those of you that say that the skills are not here in the USA. I am the one that was in your high school and college class that busted my butt to make sure I learned the material not only well enough to get the A in the class and screw up the curve, but I also made sure I fully understood how to apply what I learned. I’ve been with IBM for some time now and even if you young ‘uns consider me an “old timer”, I still have the same work ethic that I’ve had all my life, and I take pride in knowing that whatever I do is the right thing and benefits the company. I’ve also adapted to the changing times. I have made sure that I continue keep my skills up, on my own time and dollar since IBM refuses to invest in employee development here. (And, by the way, I am a consistent 1 performer.)
Does that mean I feel I’m safe from the resource actions? No way. Even though my colleagues and my first and maybe second line management recognize that I contribute greatly to IBM in my own small way, as far as Ginny and Sam and Randy are concerned, I’m just another disposable cup that can be replaced with a cheaper piece of cardboard that was manufactured overseas. It’s a guarantee that I’ll be one of the 78% because I’m just a couple years away from being eligible for retirement. It’s age discrimination, it’s illegal, but IBM will spin it so I got fired for performance reasons, not because they want to save a few bucks by not allowing me to retire.
You may ask why I don’t leave… I’ve considered it very seriously. Fact is, the current project I’m working on is THE BEST JOB that I’ve had my entire career and I really am having fun with it in spite of all the uncertainty. Do I feel entitled to my job? Well, maybe I can explain it to you this way. I am a citizen of the United States of America, which was founded on the premise of its people having the rights of “life, liberty and the pursuit of happiness”. I’ve busted my butt all my life in the pursuit of happiness and in this country, you really do need to have some type of gainful employment in order to avoid having the constant worry (and its resultant UNhappiness) of how you’re going to feed your family.
I also have a social responsibility as a citizen of this country. I pay my taxes, I volunteer, I try to make sure that my kids have the same ethics and personal responsibility that I was raised with. Our government has ensured that corporations now have the same rights as individuals. Therefore, any corporation that operates in this country and benefits from tax incentives should share the responsibility of contributing its fair share back to the country for the good of ALL (not just its executives and shareholders). Otherwise, those tax incentives are just another form of welfare being paid out to someone that doesn’t qualify.
Guess what? They get welfare and you don’t. Don’t like it? Vote for someone who cares.
And that would be whom? None of the candidates appear to be representing the point of view of the majority of those middle class Americans who are affected by this nonsense. It’s not changing under the current administration and it certainly won’t be addressed by the opposition.
https://www.jillstein.org/
IBM is being cannibalized for profit. What we’ve been watching is the long goodbye. Soon, IBM will be little more than a brand name with a sales force. In time, that too will disappear.
This kind of insanity must run it’s course as there is no stopping it. It will stop only when it’s all gone.
And? So what? Businesses fail all the time and no one sheds a tear.
Let’s talk a bit about GBS and the services that it provides…
Much of what GBS does is analogous to the services that were provided by Xerox Copier Service Reps in the 1970s. If you recall, back in those days a Xerox rep came out to your business to replace ink and paper and fix paper jams.
Needless to say, no customer wants to pay for those services any more.
As SAAS increases in popularity, which it will, and the Cloud takes over, which it will, the idea of an onsite person to install and tune your applications will be as foreign as the idea of having a Xerox rep come out to service your copier.
Just something to consider
Whoa Wakjob – that’s some eye-opening post.
Very interesting perspective. I think the formula is quite possible but not necessarily in the time-frame discussed. This is a problem with big American Business. We’re selling our future to China. There no incentives to stay here and every incentive to leave.
There’s an easy solution: stop buying Chinese goods. You’ll be healthier for it too.
Although I agree with almost all the posts/replies here regarding IBM, I still cannot fathom that 78% of the IBM USA workforce will be let go by 2015. Even if the USA workforce is 200,000 out of the 433,000+ worldwide, 78% would be almost 160,000 people to be let go. Not to mention the infrasture that was needed to support them (computers, buildings, HR, personel, systems, etc) would now need to be thrown out too. And that would be about 50,000 people let go a year. Not to mention the shell shock to IBM cusomters that the company is downsizing by such a vast percentage. And what would be there reason for throwing out 78% of the force? “We realized we just didn’t need them?” I could understand some incredibly bold business game changer…but getting rid of 78% of employees seems like the sign of bankruptcy. And what will IBM tell the world it’s going to do with the remaing 22%? What are their job functions? What new products/whatever is IBM going to release? You don’t just fire 78% of your workforce unless a)you have real-world master plan or b)you are going bankrupt and just trying to stay afloat. I could see, however, that IBM cuts 25% by 2015 and blames it on the economy and becoming more “lean and agile”
IBM’s US workforce is only 95,000. Down substantially over the years.
By the way, read up on “liquid portal”. That is an IBM plan to do away with regular employment and have people work as contractors on specific projects in specific time frames.
So what happens when you don’t have a project?
Why do you care? If you don’t like the working conditions, start your own company.
They’re already independent contractors, so it wouldn’t take much more work just to get the business directly from the source. That’s what one poster further down did and he’s making the big money. Where is the enterprising spirit in America gone to?
Your numbers are wrong, George. There are only around 95K US IBMers remaining. In 2009, there were about 135K. So, 30% is already gone. 48% to go.
hmmmm…ok, but even at 95k, 78% would be roughly 74,000 people…over 3 years that’s basically 25k people a year. And as I mentioned, customers are going to wonder why all the downsizing…and BIG downsizing. Lastly, what USA customer wants to own software/services/hardware from a company whose employees are 10% in the USA and 90% non-USA?…I’m not talking about pride or honor…I’m talking about real-world, “get the heck over here and fix my problem!” topic.
I believe a high percentage of the posts here regarding what it’s like to work at IBM, but the 78% just seems far too high to make this prediction believable. Unless IBM is going to do something hugely drastic as a company such as “we’re now in the lawn garden business which requires far less employees”. 🙂 If you/folks here would think about what/how the IBM customers in the USA would interpret this 78% news, that alone, in my opinion, dispels Cringley’s number at 78%. 20% reduction over 3 years? Yeah, I can see that for any company. And IBM has been doing quite well the past 5-10 years…what magic bullet could they possibly do/invent that requires them to cut 78%?
Ok, George, so how about downsizing the US labor force via divestiture? Like this weeks sale of RSS? Or, say, sale of US mfg sites in Rochester, Poughkeepsie, etc? Or the sale of STG? Don’t think for a minute that it can’t or won’t happen!
My company actually had a SAN-A-Gedon event. Where an IBM Services rep came out to service the HBA(Host Bus Adapter) controller in our SVC (SAN VOLUME CONTROLLER). Well the guy who they sent made the mistake of copying the bad configuration to the good HBA bringing down email, our e-commerce web site that generates 40% to 45% of our revenue. Needless to say I’ve lost my confidence in IBM’s hardware and they’re Global services group.
When I was at EDS they were our biggest competitor. No HP gobbled them up and Perot systems was gobbled up by Dell. At the time I was fairly impressed by the IBM folks I met.
[…] Not your father’s IBM (Cringely, April 18, 2012): This is my promised column about IBM — the first of several on the […]
Wait Bob, you said “IBM’s five year plan ending in 2010 was supposed to double EPS from just under $5 to about $11. (Today it is closer to $13.)”.
Doesn’t that one statement say “THIS WORKS!”. Maybe it will fail soon, and they are running on borrowed time, but hey EPS is up more that planned. CEO gets bonus. No kidding he is all for more of the same.
The day 1BM files for bankruptcy, I will be drowning in schadenfreude.
Yep. These days IBM is like Computer Associates of the 1990s and you can’t get worse than that.
I’ve worked for IBM for 25 years, and your article is completely accurate. I really don’t understand why IBM’s behavior has not caught media attention. On 3/28, at least 3000 US IBMers were laid off. A year ago, it was the same. 6 mos before, even more, and more before that. Since around 1Q2009, about 30K US IBMers have disappeared through stealth layoffs. IBM does the dirty work in small batches, below the radar, to avoid media and government attention. They are chipping at the workforce, and it’s likely to escalate in order to meet this 2015 Roadmap of US workforce elimination. These US IBMers are high performers and are losing their jobs for one reason – there are highly educated engineers in India, China, and Brazil who will do these jobs at 30% of what the American counterpart is paid. These are white collar middle class jobs, disappearing forever at a time when Americans desperately need jobs. In 25 years, I have yet to experience a more demoralized, miserable environment, and I honestly do not have a single colleague in IBM GBS (Global Business Services) who does not feel the same way. Everyone is walking dead around here. Thank you, Bob Cringely, for your attempt to put the spotlight on the issue.
You certainly aren’t helping your case by walking around as if you were dead.
I call it “shampoo bottle management”.
Rinse (outsource) and repeat.
It’s the only philosophy these business school fuckers know nowadays.
Hey it works, so why knock it? If you have a problem with it vote for someone who cares.
Although I agree with almost all the posts/replies here regarding IBM, I still cannot fathom that 78% of the IBM USA workforce will be let go by 2015. Even if the USA workforce is 200,000 out of the 433,000+ worldwide, 78% would be almost 160,000 people to be let go. Not to mention the infrasture that was needed to support them (computers, buildings, HR, personel, systems, etc) would now need to be thrown out too. And that would be about 50,000 people let go a year. Not to mention the shell shock to IBM cusomters that the company is downsizing by such a vast percentage. And what would be there reason for throwing out 78% of the force? “We realized we just didn’t need them?” I could understand some incredibly bold business game changer…but getting rid of 78% of employees seems like the sign of bankruptcy. And what will IBM tell the world it’s going to do with the remaing 22%? What are their job functions? What new products/whatever is IBM going to release? You don’t just fire 78% of your workforce unless a)you have real-world master plan or b)you are going bankrupt and just trying to stay afloat.
Maybe this will force them to get rid of the layers of unproductive process and
focus on content?
The ruling powers in Western nations (US and Canada anyway) all seem subservient to Globalism Greed, and are selling out the sovereignity of their own nations because they are deeply corrupt, they want quick megaprofits now – don’t care about their own nations or the future.
It’s almost as if they understand the combined implications of peak oil and the greenhouse effect.
Of course you realize that Disney dropped IBM for AN INDIAN COMPANY. So the relative merits of doing or not doing something was entirely ignored in this decision. What was the driver was clearly, cost and some degree of process mapping. One can debate whether these Indian body shops lowball to buy the business but on some level that’s happening. It’s about cost cost cost cost cost.
No difference from what IBM is doing, The works going to India either way, why not go directly to India and cut out the middle man (IBM). The support level may actually improve once all the layers of IBM process are removed and you have a dedicated support person not one person trying to support 5 other accounts including Disney.
[…] Plan to Grow Earnings-Per-Share to $20 by 2015: Fire Most U.S. Employees April 19th, 2012Via: Cringely:The direct impetus for this column is IBM’s internal plan to grow earnings-per-share (EPS) […]
On March 28th, after 27 years of service to IBM I was thrown under the bus.
Just glad it finally over.
American
[…] Here is Cringely’s first shout out […]
Having lived through this 2015 roadmap in IBM I can tell you that downsizing is not only happening in the USA but all over the world. I saw people like “just glad its over” being let go simply because they were “contractors” just to be replaced by an “employee” that costs less and also knows a lot less. Very dissappointing to see this happening as IBM has been in my family for generations.
This is a consummer orientated company and not customer one. It is just what everyone else is doing.
I will miss you IBM. You are still the best Notebook maker. I don’t know how much of that comes from your US employees, but your excellent customer support is something I could not find in any other company, and I think your US base had a lot to do with it.
PCs and Notebooks were sold to Lenovo in 2004. IBM has nothing to do with ThinkPad notebooks.
Even at that time they were made in Mexico.
If the government wanted to do something to protect American jobs and balance the budget they should realize that what American companies that offshore jobs are doing is cheating the IRS of payroll taxes. The IRS should look at what jobs are being outsourced, what an American worker would be paid for those jobs, and then bill the companies for the taxes ACTUALLY due!
KenS,
What we REALLY need is to get rid of the current government and scrap the IRS completely. A Flat Tax is the way to bring prosperity back to our country and IBM. If we rid the tax laws of all the loopholes that IBM and others are taking advantage of going to a Flat Tax, we will do nothing but help our economy.
Rid DC of all the Socialists and we can get back on track to advance and not just turn this country into a welfare state.
Unions are NOT the way to go, just look at Detroit and all the failures brought on by big unions.
I spent 30 years at IBM and never once thought we needed a union. I had the chance to see the best of IBM (1972-2003) and it was beginning to fail as I left. 14 levels of management leaves the executives deaf and dumb. Everyone lies to the next level just to keep their bonuses. I just recently dumped all my IBM stock. The current re-distribution government thinking will do nothing but increase the cost of dividends and capital gains.
It’s sad to see the IBM of today. I have several friends still working there and most of them will reach their retirement goal in the next two years. I’ve encouraged all of them to leave at the first possible date. Akers and Louie gerstner killed our company and they had lots of help from the progressives in government. We ‘used’ to be part of our customer’s ‘family’, NOT anymore. Customers are rarely mentioned.
Sounds like Wang Labs management strategy that led up to their demise. Sales and the bean counters, the talkers, took over. The engineering department (innovation) was down-sized. Eventually the company was broken up and sold for scrap.
Having worked at Xerox for more than 10 years and IBM for more than 20 years now, and I believe IBM is being forced into the changes by the deteriorating ECONOMY.
Name me one business that runs remotely close to the way they ran 10-20 years ago … NO business can sustain this economy without radical change.
I blame this economy. IF IBM did not react to what is happening in this world.. we could never be the wildly successful HUNDRED BILLION dollar business IBM is today. Yes it is very different than the company I joined in the 80’s… but where is DEC and WANG and Unisys and 50 other competitors we constantly ran into in the 80’s…90’s…..
When you find another 100 year old company who is this successful and still runs the way that they did before this economy changed so drastically – then I will buy your story.. but I am not there yet.
Sorry – even today – ALL I have ever been with IBM is IMPRESSED
Obviously you are a koolaid drinker and not close to customers who complain about terrible support and solutions that cannot be implemented after they were sold. The main reason for IBM’s continue financial success is milking customers for maintenance renewals who are too afraid to go elsewhere and because IBM has cut so much costs in the front line resources and outsourcing significant jobs. In addition, all of the employee perks that once kept people from leaving are gone – insurance costs to employees have doubled or tripled because the company does not cover the same amounts they used to, employees must work from their homes now and pay for their own telecommuting expenses, more bonuses go the mgrs than to front line workers so bonus money payout has gone down – and I could go one. Read the posts – you are in the vast minority from the reality existing folks – try to stop drinking the koolaid and you’ll see what is beyond your blue tinted glasses!
The “posts” are usually from the negative folks.. the more positive folks rarely “post”. Too bad..we get to read what a lot of angry people think.
I still work here..
I still work every day to make things better for the IBM customer. I and my collegues worldwide care very much about the customer.
You say I am drinking the Blue Koolaid? Maybe..
but at least I am not looking from the outside in…
I am inside and am still IMPRESSED ..especially when compared to MOST other large businesses.
But DO try it again for the first time …this way: 😉
3 (6 g) packages Kool-Aid , your favorite flavor (even Blueberry)
1 1/2 cups sugar
1 gallon cold water
In LARGE juice pitcher (1 gallon/4 litres), stir together the 3 packages of koolaid
and the sugar.
Add about 1/3 of the water and stir well, making sure Kool-Aid and sugar dissolves.
Slowly stir in remaining water; chill.
https://www.food.com/recipe/absolutely-perfect-kool-aid-33387
Don’t forget to …… “CHILL”
Keep riding him Kelly, I’m sure your good. Whatever.
“I firmly believe that any organization, in order to survive and achieve success, must have a sound set of beliefs on which it premises all its policies and actions. Next, I believe that the most important single factor in corporate success is faithful adherence to those beliefs. And finally, I believe that if an organization is to meet the challenges of a changing world, it must be prepared to change everything about itself… except those beliefs… as it moves through corporate life.” (Thomas J. Watson)
Problem is, while changing a lot of things, Palmisano did not adhere to any respectable beliefs any more. There are some basic values postulated by IBM internally and externally, but management’s actions are contradicting them every day. You could say IBM has lost its soul.
Good luck Kelly. Hopefully this expression of company loyalty will
spare you in the coming round of layoffs.
I know IBM was recently given the boot by the state of Indiana for their abysmal implementation and handling of the welfare automation deal. Basically, error rates increased under IBM’s management. A company really has issues when they cannot improve or perform better than a government system. Now the whole process is in court and IBM is hoping to save face by suing the state.
Very clear and correct article.
The bottom line is that the formerly very strong IBM brand name is hollowed out for EPS short term, and this will blowup skyhigh pretty soon as most customers f*ck off and then it’s common knowledge that IBm cannot service a customer to save their lives.
In my 12yrs at IBM until last november , it was remarkable the last 3 yrs every time in a meeting with management i brought up the word “customer”, they looked at me like a dog who seen a cardtrick for saying that word.
[…] homeschoolers of today are creating the ruling class tomorrow, even as America kills off it’s middle class. This is my promised column about IBM — the first of several on the topic, all to be delivered […]
Wow took the full bridge in 94. Medical still good, play golf 3 times a week (or ski) live at Lake Tahoe on a golf course. Timing is everything. Last 5 years sucked. Left in 94.
IBM is just the most visible example of what’s happening to enterprise focused tech companies throughout the world:
1 – Less margin and profitability in hardware and services. More profit in
software
2 – Emerging markets want what developed countries have and are catching up, in part, through technology adoption. Growth for global technology companies like IBM is in these new markets.
3 – Harder – not impossible – for big companies like IBM to bring innovations to the market due to abundance of process and other factors. So they acquire innovation.
4 – Every large enterprise-focused vendor including EMC, HP, IBM, Oracle has grown through acquisition strategy and faces the same issues with integrating disparate systems that, on paper, work together but often don’t work so well in reality. Buyer beware.
5 – All 4 of these mentioned vendors has a plan or vision to create a “system” that needs little or no technical support. The days of the on site SE are gone or soon to be gone. That’s what business people who control budgets want. IT is shrinking. Period. Cloud computing, self healing and configuring hardware is the future.
In a global technology world, expertise is everywhere and available at our fingertips. The US represents less than 5% of the world’s population and we don’t have a binding option on innovation, intelligence or expertise.
When I worked at IBM (UK), I was paid £30k and charged out at £250 and hour. Now (in another large company), I’m paid £50k, but charged out at £50 per hour. The reason, I suspect, is that I and the customer were paying for the 10 levels of management and process not actually delivering anything.
As a customer, I don’t see why I would put up with that…
I left last August of my own choice. I knew what was coming. I’ve been warning the people I worked with for years. When I left, I was architecture profession lead for my business unit, a senior certified Executive IT Architect, and the chief engineer of a billion+ dollar account. I saw what was coming, and spent the first half of last year wondering if I should leave or not. I finally did…and now wonder why I ever stayed so long.
I can vouch for the conditions this article speaks of…things were so bad, that in order to service my customers 30 million dollar backlog of business, we had to bring in Glasshouse. Executives would not let us hire the people it took to service the business.
I left, and went into the sales side of things. I told the VP’s the same things written in this article when I left. They acknowledged all this is true, and admitted they were helpless to stop any of it. If you think it’s just the worker-bees that are demoralized, your wrong. There are serious morale issues all the way up to the VP level.
I will say this…since I’ve left, I’ve gotten bigger bonuses, bigger pay raises, and more job satisfaction than I could have imagined. I gained a lot of knowledge from my time at IBM…and the irony is that I’m now using that knowledge to win business from my former employer!
And speaking of the businesses leaving…Amgen, State of Texas, State of Indiana, Capitol One, Ally (old GMAC), Disney..just to name a few of the bigger ones…there are dozens of smaller accounts that have lost. Baxter just renegotiated with IBM, and extracted more than a little blood from them. It only gets worse from here for IBM…the companies that signed 5 year deals with IBM in 2007 are the ones leaving now. I would imagine that there are about 4 more years of SERIOUS bleeding yet to come as everyone that signed 5 years deals since 2007 leaves.
Just my two cents. But then again, I don’t care. I cashed out all my IBM stock, converted my cash value pension to a 401k, and am making a GREAT living now picking up all those companies that are leaving. As a former band 10 profession lead, I know more about where the bodies are buried than most. I’m now leveraging that knowledge to take business away. Life is good.
IBM does not see skilled workers in India because IBM is not sought by skilled workers in India! Any decent engineer working in IBM will only.work towards moving to a better company. The IBM processes and management layers are the biggest gripes. You think only the US employees have probelms? Think again.
Well put. When I left, I had more than a few Brazilians ask to take them with me…even though they all had just gotten across the board 6% raises. Churn in India, I am told, runs 50 – 70% a year. The labor that does hire on is so boxed in by process that they are afraid to do anything off script. I had an Indian guy come over a few years ago to work with me. I remolded him into a lean mean working machine…by the time the project was done, I would put him against any band 8 here in the states. He went back to India, and was promptly given a 3 on his review. Despite my, and the customers, glowing review. The reason? He had become to
“Americanized”.
I agree…as bad as the NA work force feels, IBM treats foreign workers like COMPLETE chattel.
While working at IBM, I would make new meanings for the “IBM” acronym for their greedy and poor decisions. So, what does the double flip of the company’s logo “WBI” mean? Could it be “We Be Idiots?”
Great article. Thank you.
I would like to point make a point about Federal Contracts and IBM. Many Americans are working in the United States on these Federal Contracts but are not being paid the Prevailing Fair Wage as required by law. IBM is a hollow company; many employees work for other companies within IBM in the U.S. IBM is violating the law.
U.S. Government is allowing this because they hope to keep IBM here. IBM is gone. IBM is nothing but a funnel of more U.S. tax dollars into its bank reserves and overseas investments. I wish our leaders would quit awarding IBM with Federal Contracts. I hope investors in IBM stock see they too are supporting IBM and its top management.
Take this article as a warning; pull your money out of IBM stock before the management reaches their goal. Do it before 2015. They are reaching their goals quicker than planned. Think.
Normal stockholders have 3 to 15 month old information about a company, while top management’s information is current and daily. Plus, typical investors have information approved by the board and top management, that is not always the same as their info. They will come out with millions, like top management has at other companies.
Consider how many times they have expressed their thanks to all the lower layers of workers with bonuses of IBM stock. They know your retirement plans and goals. IBM management will win your bonuses of 30 – 40 years if you don’t sell before they do. I am worried that loyal workers will lose.
Don’t let history repeat. Your stock can become worthless. (Too many investors treat the stock market like a bank account.) You may be a genius mechanical or electrical engineer, but there financial wizards that have you calculated. They want your 30 – 40 years of bonuses.
You can protect yourself better than any government regulation or court. Be ready. IBM is.
If foreign nationals are the sysadmins of the information systems that run America – with the access to the privileged information that ALWAYS implies despite whatever is believed – what is the state of US information security? You don’t need to develop a Stuxnet if your people are already at the keyboard. I am not talking about government or militray systems but banks, ecommerce, logistics, etc.
What about outsourcing the executive team instead !!!!
Forget it. By the time the stock holder revolution takes place, and IBM is sued for fiduciary malpractice, the current regime will have cashed out, and be long gone.
I fear for the people that are left behind right now…my friends I have there that don’t realize how precarious their pensions and 401k’s are right now.
Was Steve Jobs the second coming of Jesus Christ? Granted Apple outsourced mainline manufacturing to China, but did Apple focus on EPS or Product. And now it makes ungodly amounts of money. On second thought: was Steve Jobs Satin?
[…] https://www.cringely.com/2012/04/not-your-fathers-IBM/ […]
What part of the internal plan that you saw shows 78% reduction? Can you post something to back that up?
Its insanity! I think Steve Jobs hit the nail on the head in saying that the companies forget to make great products. At some point they just turn to focus on profitability and only profitability. And that erodes the company from the inside out. When its only about delivering short-term share holder value to present yet another record breaking quarter. By only focusing on cutting costs ultimately the core service or product suffer and eventually cant compete. That this is happening in a company that has already been through this process once and managed to complete a rare turn around in the history of tech companies is all the more remarkable.
Yes. Succinct and illuminating
I started at IBM in 1983, working on a product that everyone said would never go anywhere— DB2. Around 1988, having decided that I had two lovely parents and didn’t need a third one, I left. I remember my manager (a Field Engineering Division relic, or maybe a fossil) saying: “Think of what you’re giving up! A guaranteed job for life!” Seems pretty funny today. Was always a “1” performer, got my first Means Service award in my 3rd or so year there. Just didn’t want to play the game. Looking back, the place was already headed in the current direction, they just didn’t know it. Process of product, form over meaning, “it’s not what you say it’s how you say it.” Looking back, the people I admired most at IBM just said it, and told it like it was. They did pretty well then, but it was made clear to me that their way was passe.
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[…]I, Cringely » Blog Archive Not your father's IBM – Cringely on technology[…]…
who cares? Let them mismanage their business. Maybe it will hurt their monopoly position.
I feel for the sales staff.The sales team has to believe in their product. It’s difficult to sell shit, especially if the sales team knows the product is shit.
A great percentage of salesmen are ethical, and they want to keep their good names and future job prospects. I wouldn’t want to work a company that can’t deliver on promises.
I am in software product development. You are right, the products are shit and the quality is often worse.
Your all Fucked big time, take that to the bank, Sam, Lou and Ginny have already.
My daddy screwed you all and is now living the hi-life and laughing his ass off from the stress he caused most of you. He doesn’t care a bit and knows he is going to hell. He told me that’s OK with him. He said he will have lots of ex-executive friends down there. He said he will continue to play his games with the devil. He loves games, he loves making people miserable, he loves “the game” and loves being filthy rich.
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With many friends working at IBM – no, not in management layers – I’ve often wondered what exactly they do. I hear all about the processes and the movement over seas and the downsizing. I hear about their frustrations with being overburdened with additional responsibility but no empowerment to accomplish anything. But never have I heard about a product. What product do they have anymore? Such a mess, and you’ve captured this outsider’s perception so accurately in just one blog. Looking forward to what else you’ll be posting…
[…] Not your father’s IBM, here. Cringely is on the […]
I reckon that IBM never lost it’s soul as a “big iron” company. I don’t think the research teams doing supercomputers and mainframs are being threatend.
All they want is to produce biiig computers and sell them. All the services and consultancy stuff, they felt they had to do because the margins on hardwarre weren’t there, but I think their heart was never in it, so now they’re treating it like it’s a commodity, rather than what they’re about.
It’s a darn shame……a great company has sold it’s soul!
After ten years at IBM and at the edge of your 2007 article, I decided enough was enough. I’ll never forget a Senior Executive at IBM telling me I would have to do things I didn’t like to do…..(embellish numbers), pull forward revenue…whatever (which I refused to do)…and that I would get used to it! I just flat refused to put my personal and professional integrity on the line so that his stock would be worth more and ‘my’ customers would suffer!
The biggest part of the problem at IBM is that they have no real relationship with “customers”. They’ve been eating their own soup for so long, they don’t even realize it is garbage. Everything at IBM PAPER CONTRACTS, they have taken people, customer, employee, stakeholder..you name it… completely out of the picture. The name is very fitting International BUSINESS MACHINES…… maybe if they just drop the s it would be a perfect fit…. one big machine…void of life……..sad to say but it would not be a surprise if IBM was dead before the next 100 years. Certainly, watching the gutless onslaught of deceit and mastery of the Peter Principle has created the foundation for failure.
Couldn’t agree more…..those who care for customers like myself, had to wade thru the mire every day and make choices that sent me on the road to attempt a good faith attitude towards customers when I knew it was all for naught! Many nights I called home to tell my wife how I had to watch others sell their soul to make the sale so they could hit their numbers and in the end the customer was the one who paid the price of a solution that could not meet their needs.
How true, and how very sad. I was with IBM from 1961 to 1980, and absolutely enjoyed my time with the company. I left the company when it decided to shift from the ‘arms around the customer’ ‘depend on us’ company to the ‘low-cost provider’ of hardware … a necessary shift in order to prevent the Japanese from making major inroads based on lower margins. It was the Frank Cary era, and it led to the personal computer, and still very much a product driven company. Then came John Akers, and history shows the rest. Before Akers, focus was on making the best product and telling the sales force to go sell it … and the stock value would take care of itself. Marketing was NOT about convincing the outside world that IBM was great … it was about showing the sales force how to sell the product … in fact, you could not be in marketing unless you had been in sales. With Akers came focus on earnings per share and achieving it via reorganization and cost cutting measures … rather bazaar, since John grew up serving the customer and succeeded because IBM gave him the best products and superior support resources. Then, as the margins in the hardware products became thin, the natural direction shifted toward services, and product development drifted out to sea. Now, a huge company with revenues dependent on billing employee time for services delivered by consultants demanding large salaries is in trouble … they have no choice but to replace their experienced people with younger folks who can produce larger margins. Most large consulting companies understand this equation, and have always hired younger people to deliver the services … with Gerstner at the helm, IBM marched into the consulting arena and gobbled up business by putting the most experienced people on the job … and predictably, they can no longer afford to do so. But then, if you buy enough of your own stock, you can keep earnings per share growing!
A couple of thoughts … when I was a manager in IBM, there were basic beliefs, a few specific principles to follow, and minimal process. In fact, the company gave it’s management the freedom to make decisions based on customer need. There was NO significant human resources infrastructure … just a few advisors … the line managers themselves were trained and expected to manage the human resources. And the entire organization was forced to prevent more than seven layers of management between the lowest employee and the President of the Company … while not allowing more than 14 direct reports to any one manager. The human resource management I learned as a first, second, third and fourth level manager in IBM was the greatest single asset I carried for the rest of my career.
Tom Watson would be sick to know that the company abandoned these principles, and the employees who are being fired now will never know the pride and confidence that came from working to uphold them. As investors flock to Apple and other creative, customer oriented companies, the only approach left to IBM is to reduce the cost of doing business … and to further abandon the principles on which the company was founded. Unless, of course, another Tom Watson finds a way to the top … not likely … he, or she would rather be at Apple.
Well said and spot on, depressing as it is….
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I would like to know when Mr. Cringley worked at IBM. I would like to know who his sources are. I would like to know the basis for the credibility of this story.
For me this is nothing more then fear mongering for a large company that for all I know Mr Cringley is jealous never hired him to work for them.
How many companies have been around for 100 years and are still increasing in value as shown by stock price.
Let’s talk about Instagram, 2 years and sold for $1 billion. Lets see where they are in 100 years. How about all of the other great computer companies that have come and gone since IBM started. Compaq, HP, etc.
Companies need to do what it takes to stay in business. When a company has stayed in business for 100 years they have a much better handle on what it takes to do that successfully then any of you making comments about it.
Personally, in my opinion, if you were so smart you would not be writing derogatory commentary like this and rather would be somewhere relaxing on the beach. Justify your actions in this world in writing and see what commentary you get from everybody who is protected by the anonymity of the internet
Another koolaid drinker – or a glutton for punishment and an empty soul with no regard for morals or ethics….too bad, hopefully one day you will find your way out of the big blue cesspool!
Cringely isn’t telling us anything we don’t already know, Steve. If YOU worked for IBM, you may have a clue about what it’s like on the inside. Cringely’s reports are pretty accurate. It is a depressing and demoralizing environment. Fine, companies should do whatever to stay in business and to hell with morality and honesty. It’s all about stock price – not about customers, not about service, not about products, not about employee loyalty. Wall Street is what it’s all about – everything. Is this what its come to for IBM? IBM lives to 100 but at what cost? The basic beliefs have been sacrificed, and the once valued employees replaced by people in 3rd world lands, but the IBM Frankenstein lives on.
Steve, you’re an idiot or you lack the ability to use the internet or you’d know Cringely’s credentials are – and have been authenticated and well. This isn’t the first time he’s exposed worms crawling up through IBM’s corporate decision making process. His previous articles are very well known, but then, you’d know that unless you’re either a paid corporate troll or you’re just a wet behind the ears loud mouth with little knowledge and less skill in it’s use.
I’ll give you the benefit of the doubt and assume it’s the latter.
IBM does not hire anyone anymore, If they do its a junior level out of school. Next they keep laying off people and hire them as contractors, Use to be 1 year at a time now is 6 month at a time.
They lie to you in the interview. During holidays they cut back on your time so you don’t get paid.
Oh forgot NETMEDIA the job website for IBM is black hole. Resume goes in 3 years later still under review
[…] Part 1: Not your father’s IBM downsideibm1 edited 300×158 Not your fathers IBMThis is my promised column about IBM — the first of several on the topic, all to be delivered this week. The last time I wrote at length about Big Blue was in 2007. I have been asked by readers many times to revisit the subject, something I haven’t wanted to do because it is such a downer. Writing the last time I hoped the situation, once revealed, would improve. But it hasn’t. And so, five years later, I turn to IBM again. The direct impetus for this column is IBM’s internal plan to grow earnings-per-share (EPS) to $20 by 2015. The primary method for accomplishing this feat, according to the plan, will be by reducing US employee head count by 78 percent in that time frame. […]
Embrace the opportunity and fill the customer service void management at IBM is so skillfully creating. They are weaving the rope by which the competitors they are creating will in the end hang them with. It’s an old story just on a much larger scale. No go form your LLC’s!
I work at IBM and although I disagree with a lot of the corporate culture (which by the way is the same in any corporation…even beloved Apple…they have far more of their workforce in countries like China than IBM has) — the vast majority of Mr. Cringely’s article is inaccurate. It’s almost as if he has taken every rumor and misinformation he’s gotten from disgruntled former employees, and synthesized this piece from a giant bag of half-truths.
IBM isn’t perfect by a long shot…but it is not anywhere nearly as diseased as this author makes it out to be. Clearly he has some sort of an axe to grind and anything he writes should be recognized for the extremely biased position he comes from.
What is happening at IBM is NOT the same as every company. Don’t compare to Apple or others. Dillusional and v. cynical to excuse what’s been happening @IBM as ‘it’s the same everywhere’. it isn’t.
The bottom line is: no company with stock holder is concerned about anything other than earnings per share period. Employee’s, benefits, retirement, what’s that? Every meeting I attend, the message that’s repeated over and over, is do whatever it takes to keep the earnings going up. Do anyone have any idea why? I don’t see where it’s tied to the quality or quanity of what we product. As someone said above, it must be about the retirement portfilos of management .
One other thing that sort of drive home the point that management is out of touch with reality. I’m not sure if this is true, but I read that Sam’s retirement package was worth more than $230M! And above and beyond that, the costs for each member of his families driving expenses is covered – for life! Come on, why should all future IBMers have to pay for his wife, children, and him to be driven around for life when he made millions in salary, millions in stock options every year he was CEO, and that much as a retirement package. Let’s see last year, I got almost $1300 as my bonus and it took me two years to get a replacement workstation. But hey, Sam’s kids are doing well in the back of a limo, so I’m okay with that.
I am disgusted with the actual articles on this blog. Seems to me very clearly that Mr. Robert Cringely has nothing better to do but bash IBM. And the rest of you people are succors that have also written such comments that makes no sense. All of you and Mr. Cringely need to understand one simple thing. The economy has changed to a degree that almost all large corporations are forced to make these types of decisions. Are you all including Mr. Cringely still living in the 80’s? Come on people, the economy has become a world wide economy these days. Outsourcing is part of that. Accept it.
At the same time if any of you can please explain to me why is that IBM career website still has 2,199 job postings to be filled in the US only. Vs. India only has 494 jobs to fill. And not only that, no other country comes close to the number of jobs to be filled as US. And yet IBM has 433,362 employees worldwide.
In my opinion, any public company does have an obligation towards their shareholders as well as employees. I have yet to see any reasons here to believe that IBM is not honoring either. In particular Mr. Cringely seems to have some type of hidden agenda or may be he was burned by IBM in some ways. If he has been in the computer industry for as long as he says he has and has worked as a consultant, he should know better.
Typical straw man fallacy. This is not about outsourcing as such, and neither are many of the comments. It’s about how it’s done (with no regard for quality and the customers’ needs), for what reasons it’s done (cost alone, not skill), and how the company acts when faced with quality problems (ignore them, let the “old country” employees break their backs trying to fix it). Don’t you think IBMers around the world are trying to make the projects work?
The treatment of employees and customers by IBM in the last years is something altogether different from the question whether to outsource or not. That’s what many of the comments are criticizing, and rightly so. If you worked for IBM, you would know how it has changed for the worse since Palmisano took the helm.
The 2200 job postings on the web site are just a front to make it appear that they are hiring and trying to backfill the layoffs – most of those jobs are a mirage and will likely never be filled. At IBM, just because I post a job doesn’t mean I actually need to fill it – often it is a PR stunt to create a false image of what the needs to be hidden.
This is the point of view from a band 8 software engineer,in the swg(software group) and I have been working for IBM for about 10 years, brought in from an acquisition. Being in the swg I probably have it about as good as it gets for any engineer in the company as IBM is shifting toward software as its main bread and butter and most of its main focus. I’ve worked in two parts of the swg, 7 years in one, 3 years in the current. I feel I have a pretty good heartbeat on swg culture(s).
I’ve been reading this series of posting over the last week. Obviously the majority of the comments support Cringely’s data to a certain degree. As well there are a few IBMr’s here, likely in upper management, or likely in the swg that feel this information is wrong or that Cringely has in some way got it out for the company. Yes, IBM is following suit like many other companies with outsourcing, fanatical cost controls, EPS for the company mantra, etc, etc.
I can only state facts that I have been witness to and have seen in the 10 years that I have been here. 2002 – 2006 were great years to work in IBM swg. Raises for pbc 2 workers were 3-4%, 2+ workers 4-6% and 1 workers 7-11%. Bonuses were on the same scale too. I was typically a 1 or 2+ worker and my average bonus during those years was 6-9%.
Years 2007-2012 have been some of the toughest years in my career, working 50-60 hours, no career growth/advancement oppt, no training, no ability to move. Pbc 2 workers get no raise, pbc 2+ get 2-4%, pbc 1 gets 3-5%. Bonus for a 2 worker is 1-2%, 2+ is 2-4% and 1 is 3-5%.
Here is the good part of IBM as I see it:
1. I’ve seen a few comments such as ‘All I hear is people complaining about how bad it is, yet they dont leave’. Its not too easy to leave ibm. They have some great policies that have actually kept me here such as flexible work schedule, good vacation time and good 401k matching. For workers with families and young kids, the flexible work schedule alone is enough for many folks.
2. Even with all the layoffs, there are good people in the engineering ranks of the company (band 7-9) and like anywhere else, when you work with folks for long periods of time, its hard to leave an extended family.
This is just the realities of IBM – there are still some good things about it for folks that are family focused or like lots of vacation time – who doesn’t?
Here is the bad part of IBM as I see it.
1. One of the points that Cringely has missed is what do you think happens to a company that is comprised of many many companies through acquisition? Every company has its own culture and way of doing things. Having worked in a few parts of the company, I can tell you that what I have seen is it is almost near impossible for a company with many many subclutures to work cohesively with the same goals in mind. An acquisition that is 2 years old has culture completely different than an acquisition that is 7 years old, or one that is 5 years old. Each culture assimilates the “IBM way” differently and thus is completely incapable of working as a cohesive team with other teams. Yet our products are sold as giant bundles or packages, each produced in a totally different way, with their own set of problems their own chain of command and their own level of quality. How does this affect the customer?
2. IBM is NOT interested in creating the best product for the customer. Let me explain. In years 2002-2006 I was getting 5-10% bonuses and raises. This was very motivating as I knew if I busted my ass, did the highest quality work possible I could really make some decent money. During years 2007-2012, my skillset did not change and in fact grew. I did not get dumber. I did not forget everything I learned in the 10 previous years of my career. And, I did not work less hard..in fact I am being asked to work harder and longer now more than ever before in my life. Back in the 2002-2006 era, I believe the pbc curve( the amount of folks that could get each rating) was something like 10% 1 pbc could be given, 20% 2+’s could be given, the rest 2’s and a small amount, like 3% pbc 3’s were given. Now, that curve has changed drastically. From what I can tell( i have several manager friends that have told me these numbers), about 2% of the workers can get 1 pbc, about 4% can get 2+, about 70% will get 2’s and about…15% will get 3’s(you get a 3, you are gone). Again, the payout for a 1 is at best a 3-5% raise and likewise bonus.A 2+ is 2-4% with likewise bonus, and a 2 gets no raise with a 1-2% bonus. IBM has intentionally removed almost all incentive for folks to do their best work. In the last 6 months, I have cut the amount of hours I am willing to work to no more than 45 and I honestly don’t really care about the quality of my work, other than to not negatively affect my peers. How can this structure create the best products or even slightly above average products?
3. The 95% rule for india. India, is much like the US during the dot com boom. change jobs every 6 months to 2 years, learn something in one job, move to the next, learn something, move to the next etc. This has created what I call the 95% rule – 95% of the workers do not have the skills, mentality and ability to do the job. They cant, there is no way to master something and become highly productive when you move jobs that often. The folks that say it takes 8 indians to do the job of 1 skilled, long time US employee is actually WRONG! It cant be done – under the current culture it is physical impossibility for anyone to master anything in 6 months to 1 year. What does this mean for IBM products and services.
4. There is no where to go. Ok Mako, on your previous comment above lets examine that. I think I can show how that number is not real. IBM grows real head count in the US only 2 ways, via acquisitions or recent college grads via the big blue program. I know they occasionally do some one off’s here and there for specialized positions, but in 10 years I have only seen 1 person hire off the street. The current policies, at least in many parts of the swg is that an employee is no longer able to transfer from one business unit to the next. This was one of the best perks about IBM before 2009. Also, if they were to find another position in their business unit, the current unit they are in can and does change their policy anytime they want and claim head count is too low and we cannot let folks leave. By the way, these policies apply to engineers only, not to management…I have seen a handfull of folks transfer departments in the last 5 years, I know about 20 who have attempted but have been blocked from transferring. This is real data, not just made up shit. So, how would IBM fullfill those 2100 position? they dont hire off the street, folks cant transfer into them and I can tell you they aint hiring 2000 new college grads. That number, is a bullshit number. Those are not real jobs. The current policy allows job openings to stay open for about 2-3 weeks, maybe a slightly longer if lucky before they get closed. A manager couldn’t even complete the paperwork needed to add a new hire in that amount of time, let alone find someone. Those jobs are not real and if you believe they are, you are smoking some really bad weed.
5. Its all about the executive. Here is a fun one for you. IBM has been pushing working at home, telecommuting and flexible work schedule for years now and it has been one of the great benefits of the company. Now, there is a part of IBM called Real Estate services(something like that, i can never remember as they change their name often) and this part of IBM is quite powerful. Many many executives reside there. Over the last few years folks have been working at home in large numbers, some for legit reasons, some just cause they dont want to be around poor morale in the company. At the beginning of this year, IBM corporate sent out email to everyone(I heard everyone, but that may not be true)in the swg that they want more folks back in the office and they mandated that people need to be in at least 4 days a week. Team building was the mantra. Only through 3rd line approval could you work more than one day a week at home. Many folks questioned the real purpose behind this as almost every team in the swg has folks all over the world working in it. As word started getting around, I got pretty substantial information from several different managers in several different business units of the real reason. Apparently, the real estate services executives bonuses are primarliy based upon office utilization rates. When rates are up, their bonuses go up, when they go down, bonuses go down. Utilization rates were way down…as we were being told for years to bring them down. Now we are forced back in the office to satisfy those bonuses. Using more energy, consuming more gas, team building by using instant messaging, email and phone calls from the office, instead of from my house. Smarter Planet….huh?
5. Quick look at the numbers:
Basic math here folks:
US number in 2007 = ~130k.
US number in 2012 = ~90k.
How many aquisitions between 2007-2012? maybe 20-30 or more….
So they’ve cut 40k right off the top in 5 years, plus how many more out of the aquisitions between then and now…..???
OH and yes…I AM looking for a new job and have been getting regular emails from hr folks and recruiters.
Same story, left SWG after 11 years – easier to get another job than change the department.
Great points and I have seen the same things and facts are spot on! Though a bit lengthy your points are well stated!
And….I only see Smarter Planet in the mktg messages to customers but not in the operational aspects of the company – they do not live by what they preach!
I’ve read a lot of intelligent and less than intelligent banter here. What is largely missing is a discussion of today’s market place. Too much is bought simply on price – the mantra seems to be “negotiate it down” and manage it after the contract signing. Customers need to wake up, too. You GET WHAT YOU PAY FOR. That said, IBM does need to thin out executive ranks by 3 to 4 levels and rid itself of that expense and the useless oversight activities that go with it. Palmisano admitted as much some years back but never addressed it – the reason this share holder has consistently voted against his retention for years. Further, there are too many people who can stop a proposal in the name of assurance. Those processes need streamlining and elimination along with the people doing them. Net is my advice to Rometty – (1) improve delivery capabilities and staff, (2) let the sales force sell and do so with some risk acceptance, (3) finance it all through the reduction in executive and process/assurance staff. That is a recipe for success and return to growth.
This is an amazingly accurate blog, and the comments are also fascinating to read.
My comments are as follows:
– This is the best articulation to the problems within IBM Services business….why the problem with the execution model as well….Sales / Marketing (and Finance) drives EVERYTHING. Delivery is not fully considered, not fully heard, and quite frankly not understood well by the decision makers.
– Building company value (some of which is measured by EPS) is not the problem. It’s HOW IBM is doing this. ALL being done by squeezing the tomato (cost) tighter and tigher. Internal Process improvements are minimal – even going backwards. Cost, cost, cost focus – but no focus on doing things better. Internally, our systems suck. Archaic processes which are BEGGING to be improved, but don’t. Lack of automation tools which integrate well, which could drive efficiencies and even support a higher resource cost model.
– We talk Delivery excellence and Project Management, but it’s all optics. Systems aren’t in place to properly execute. And good resources leaving every week who at least have the expertise and background needed to do execute and manage well.
– Human Resource Management in Professional Services business – where your product is very much your people …..well, the blog and comments say it all. Absolutely mind-boggling how the strategy can be viewed as a successful formula longer term.
– HOW IBM is treating people is unconscious. No soul left.
Wow, have we not heard this story over and over again.
Why are you quoting 15-year old Steve Jobs comments about a company that almost died under John Akers right before those comments were made? It is no longer relevant. The company is vastly different today. Would you have preferred the alternative of having it go bankrupt and disappear back then?
About 35% of current revenues come from sales within the US. Those sales are not growing as fast as non-US sales. Where should the workforce come from?
Are you implying that the workforce in Singapore, Taiwan, or Shanghai is less educated, aggressive, or nimble than the workforce in Endicott NY, Rochester MN, or Burlington VT?
Get a clue. IBM started as a US company but today is a multinational doing vast amounts of business around the world, employing almost half a million around the world, and owned by stockholders around the world.
BTW, there are no plans to cut US workforce by 78% in the next 3 years. I’m open to any enforceable wager on that one.
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I hate to agree with this, but it’s true. My husband’s job (and fortunately my husband too) just transitioned to the customer of the account he was working on. They’re pulling the function IBM is handling back in house because the work which is mostly being done off shore is taking longer, costing more, and of such poor quality that they’ve had enough. They’re pulling the jobs in house and taking IBM’s skilled on shore workforce with them. . . or what’s left of them.
Wow, I’ve never read anything so true in print. This is my last week with IBM after 7 years in GBS, moving on to greener pastures, thankfully. In every internal conversation I have with my colleagues we express the same disbelief and sadness as written in this article. I have nothing to add, other than 1) this article is absolutely true, our customers and the US IBMers left are really losing here, and 2) I wake up every day in disbelief that this story has not been reported in the main stream media, it’s really not a secret…
One of the many ironies you bring out in your article is your statement:
“IBM seems to believe it is cheaper to replace a skilled worker with two or three unskilled workers to do the same job. That is like hiring nine women to make a baby in one month.”
Did you know that the nine-women-making-a-baby-in-one-month analogy was created by Fred Brooks in his seminal book “The Mythical Man-Month”, written about IBM development in the 1960s?
They never learned.
Most companies that employee IBM have the best training programs in the world. Unfortunately, they are for training Indian nationals. I assume the higher-ups are sold on how much money they can save but it never materializes. It`s a shame that so many people who dedicated themselves to the company are made to tain thier Indian replacements as a condition of severance.
I know several IBM employees who serve customers. IBM is #1 unethical company. IBM Chairman, Sr Executives, HR People, Appeal Department Directors are lairs and they DO NOT HAVE ANY integrity. IBM Business Conduct Guidelines are total joke. IBM Counselor force all employees to certify BCG; on the other side, if you go Open Door or Report any unethical activities of IBM Management, IBM Chairman and IBM Appeal Department will retaliate against you. IBM Sr. Management and HR Partners have no values or honesty. Please encourage All Students, Customers, and Government to boycott IBM. IBM employs many BCG Violators. You violate BCG and solicit >$30k Entertainment from suppliers, you will be promoted. If you report this to IBM Chairman, IBM Chairman, Sam will send Appeal Department Director to terminate your employment. So, join the club and violate IBM BCG; you will protected by IBM Sr. Management and IBM HR People.
Yes fully agree. I have 15 years of experience at IBM. IBM BCG is total joke. IBM PBC Process is total Joke. IBM does PBC Rating in October and ignores your performance and customer feedback. It does not matter who you do for IBM customers. Your PBC will be decided by dis-honest your manager. HR People are total lairs. If go Open Door and complain about your PBC, Appeal Department Case Manager will work with you to terminate your job systematically. Appeal Department Director is a Job Terminator of IBM Chairman. IBM is not different than a Dictatorship. IBM cheat government and customers all over the world.
I think the replies here from the pro-ibm , pro corporate and governmental greed crowd are hilarious. The IBM story is important, not for IBM really, but for this country. There are many who still believe in the ‘american dream’ Well it’s over, and it’s not over because of anyone in India or anywhere else overseas. It’s because of our own politicians( I always wondered what King George the 1st meant by ‘new world order’) and our own greedy – greedy beyond belief – CEOs , and ‘share holders’ they dont share a goddamn thing. they just want their money…
If middle america was to wake up and see IBM for what it has become, they ‘d see this country for what it has become. The younger guys at IBM get real. You’d like to think your special . You’re not. You’re a number. They don’t CARE about you. They don’t CARE how hard you work. They don’t CARE how smart you are.
They care about their stock price and their bonuses and the money they take as they walk out the door.
It’s like these middle class republicans – signing up for their own demise. You aren’t going to be rich like them – ever. They are playing you. Wake up.
I’ve worked in IT for over 30 years. , and I won’t tell you where I work now, but I can tell you we’ve offshored some work and as someone who talks directly to our customers every day, THEY DO NOT LIKE IT.I m tech support and when I call them and hear my voice, many have said to me because their old and cranky like me – thank god your american. they aren’t a 30 year old kiss ass afraid to say the truth.
The problem for IBM is if they don’t offshore the work , someone else will.
The problem for us as a country is that we are believing this constant bullshit about how government and regulations are bad. They are not.
If there were not rules, how would that hockey game you’re watching tonight be for ya? it would be a brawl. there would be no hockey.
Rules exist for reason, and it’s time for us to stop believing assholes like Romney who get rich off other’s misery.
Demand your government represent you.
The pro ibm comments here make me sick. we aren’t that stupid anymore.
Take your PR HR horseshit and stuff it up your ass where it belongs. People who work in those departments haven’t got a fucking clue about how anything real works. I had one of those types call me up once to walk her thru using ftp.
I was like are you fucking kidding me? no one ever taught me, all I had to know was the three letters and I learned it myself.
but that’s the level of brainpower that we have in positions of power in this country
the smart people never speak up. we just keep our heads down doing our work.
it’s time to speak up and i’m glad mr cringely did.
Amen enuch!! All true.
“I feel your pain”. I doubt that a few more “Rules” will solve anything. Do you suppose the “rule makers” are less greedy than those subjected to the rules?
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[…]I, Cringely » Blog Archive Not your father's IBM – I, Cringely – Cringely on technology[…]…
As a current IBMer I can tell you there is no loyalty to employees who care about the co. Take IBM in Brazil for example. The company been trying to build a DB2 technical support team for 3 years and failed. However, the company still want to peruse this venture and in the process neglecting its DB2 support centers in north America where many good performers left. And of course IBM is not hiring any good technical people in NA. People on the team are suffering and upper management has no clue. They are not focused on the quality of support anymore but how much they can save by outsourcing the jobs to under performers.
IBM is tightening the noose. Many of those of us on the IGS Global Account are being forced to IGS commercial travel jobs – could be anywhere in the US. If we refuse, we have been told we will be terminated without severance. The code name for this is “Nautilus Program”.
There is life after IBM. After 21 years of service I left the corporation at age 55. I was offered an executive position in the financial services sector at DOUBLE the salary IBM was paying me. I accepted a three year contract and, frankly, it was the best move I ever made. I suddenly found myself in a world where my experience and skills were respected and valued and, most importantly, where I never had to punch a time clock again – I was in GBS where the ONLY measure of worth was billable utilization. Never underestimate the value of the skills that IBM has given you. You are a seriously marketable commodity. Cut that blue umbilicus and join the real world. You’ll be surprised by how good life outside IBM is.
Encouraging. IBM has become such an awful place to work, I have to believe it can only get better outside of here.
Yes, encouraging. I figure I’m next on the layoff list in this ridiculous chase of $20 earnings per share at all cost.
[…] Not Your Father’s IBM – Excerpt: “Top management will remain, the sales organization will endure, as will employees working on US government contracts that require workers to be US citizens. Everyone else will be gone. Everyone.” […]
Not true, just because IBM says that certian jobs must remain in the U.S. based on Gov’t contracts, doesn’t mean that it is. I worked for IBM 12 Years and ALL Software and Hardware have been moved offshore. The biggest was the State of Texas. The Mainframe systems Security Software for the state of Texas systems management is U.S based, but the actual Software installation and maintenance is done in India or maybe by now is done in either Brazil or Argentina. So I wouldn’t put much faith in what Big Blue is telling you. Hell, IBM Management always told us to Blame the Customer for any issue so that IBM doesn’t get penalized financially. Not what I was taught where the customer comes first and is always right. I.B.M. where Idiots Become Management…….
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So many comments on a small article in which I couldn’t find one single statement to be untrue… Says something, doesn’t it…?? The IBMers knowing my nickname will immediately know what I mean… Another sad ending…
I worked for IBM for several years. In those years, I saw a tremendous amount of attrition. Why? Unfair bonus structure. Depressing work culture. Non-cohesive selling teams. Penny pinching so much so, they do not reimburse for lunch at a client site when you are working 12 hours a day…ridiculous! Management layers are insane…too many! I spent more time (a lot of it) filling out and listening to diversification trainings and webinars than I did selling product and improving my product knowledge. Management are glorified administrators…rubber stamping expense reports and verifying their subordinates completed nonsensical virtual training sessions. The culture is dog-eat-dog and you are simply a serial #…that is it!
Just look at the lost outsourcing contracts recently…..Indiana, Texas, Disney, AstraZeneca, etc. These people have seen the light. IBM makes promises that they do not keep in these contracts. They ship work and jobs overseas to people that are not qualified to do the work, and US jobs are terminated. And the service to the client suffers. The trend will continue and more outsourcing agreements will terminate. The Kaiser Permanente contract will be next.
When will big corporations learn that people working for IBM on these contracts will never work as hard for them as the people they laid off on their own payroll did.
I spent 13 years at IBM, and that was far too long. What a sad mess. Sack up
and leave, guys, you’ll thank yourselves endlessly. There’s a whole world outside
and it’s kinda nice.
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I think your prediction is a bit late. It’s already happened. Contact one of their Help desks and you will get someone named David from India or the Phillipines. These people are told and trained to use American names and speak like Americans. Seriously FolKs, All of the work that has been outsourced to them, such as Equifax, GE, Experion, and one of the major natural Gas Companies’ major Gas line structures in the U.S.A. are now in those countries hands. Just think of it, all of your Personal Information, SOCIAL SECURITY numbers, addresses, Financial information, even your kids info are in the hands where terrorists thrive for that information. BTW, I just stumbled across a NY TIMES best seller, IBM and the HOLOCAUST ‘ The Strategic Alliance Between Nazi Germany and America’s Most Powerful Corporation’ by Edwin Black.
in the past year IBM have lost and keep losing more customers, directly due to there cheapness. The problem lies in the cheapand unrialble outsourcing.
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I disagree with the author,last 5 years were tough for almost all companies and it not fair to compare it with apple or google. And regarding EPS projection of 20$ by 2015, they are going to do it with a combination of increasing EARNINGS and decreasing traded shares in market by going for a BUYBACK, so obviously EPS is going to increase. And its not entirely correct that Jobs in US are going to be lost.
We are all systematically being downsized via inflation and stagnant wages. Buying power is shrinking. Offshoring by companies like IBM is a symptom of a global malaise. The 3rd world is the new normal. After Roadmap 2015 there will only be 2 classes: the wealthy minority and the rest of us struggling worker bees.
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Having worked for IBM in India, I have tons of internal material which highlights the fraud going on within IBM in India. BCG violations are going viral in that country. The legal department team of IBM India outsources work to their relatives, the top management team scams millions to line their own pockets, the talent hired is so below par it is a joke – the list goes on. Ofcourse the ‘ivory tower’ in Armonk is aware, as it was escalated to them. As a result, the India MD Shanker Annaswamy was recently offloaded for another as ‘competent’ manager. The entire organization lacks the ethics required to be a a sustainable business model. Maybe that will be Palmisano & Rometti’s legacy.
So many views and opinions… I was RAed from IBM in 2008 after 21 years…
I enjoyed working at IBM for most of my career .. I saw many changes.. Most of them
Seemed unfair at the time… Yet the whole world was experiencing such changes..
My idealistic view of how things should be was shattered by my situation.. At the time
I took it personally.. And thought I was being somehow singled out and vindicated…
Yet all one needs to do is look around at the rest of the world.. And how things are similar
And in most cases.. Much worse.. How can IBM expect to survive by keeping old traditions
And benefits.. How can it live on and thrive in this new and ever changing world when it’s
Having to stick to and live with its old outdated values.. While I wasn’t happy being phased out
And treated like a number… I now have a better understanding of it all.. And why IBM did what
It had to do.. Lets face it.. The world is a different place.. So many more people in the world
Need jobs .. Everything is global now.. It’s just not US anymore.. So I moved on.. And I now play the
Game differently.. Just like the corporations do.. The only constant is change.. We need to change with it to survive.. U can blame IBM all u want for ur situation.. But the fact is that any company would do the same to stay alive.. So get over ur self.. Instead od trying to stop them and change things the way they were..
Find a way to work the system to ur needs.. There are other opportunities and life beyond IBM..
Bitching about it and trying to make it the way u like is not the answer.. IBM is as evil as any other corp that wants to stay viable in today’s world.. You can bitch about it or make your own destiny… The choice is yours.. Not theirs..
You are an idiot. Please put your money where your mouth is. Contact me for an even money bet.
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I actually work for IBM, I have for several years now. I happen to work at a newer facility, that was opened in 2008. They created 1400 new jobs here that took the place of what was being done by over 3000 employees, including 1000 in India. Efficiency is the way of the future. I work my hours, my talents are utilized, and I get compensated very well for my work. From what I have seen, at least 50% of the US workers could be let go and replaced by less than half the number based on the current service model being used.
I am a 15 year UK IBMer. In this round of redundancies not one single “bad” employee is leaving. There is no delivery “fat” in IBM any more. Plenty of management and executive “fat” ( unproductive), but the remaining UK delivery personnel are working hard with wide-eyes to compensate for the poor performance and high attrition rate of arbitrage country delivery personnel. This of course can not be discussed because it is “racist” to even suggest this may be true,regardless of evidence.
I fear for my pension, and I fear for the next ten years runout of my career. IBM’s executives have made and are making terrible , indefensible decisions which yield short-term bonus for executives while failing employees and customers.
It makes me sad.
As a hard worker (until recently) for IBM, after the 5 years of being there, and seeing the lack of recognition for my own personal service (long unpaid nights/weekends) without a single “thanks” from my management (remember…plenty of my OWN unpaid time)..I decided to relax…I had a further 5 years on a very basic salary basically doing a part time job…working from home staying on ‘sametime’ for the occasional ‘chat’ pushing out some useless report that no one was going to read anyway but running my own successful business in the background trying to put in as little real work as possible at IBM (actually emulating the execs in IBM)…Yes it goes against my principles, but when we were all laid off all my colleagues who really believed the crap they were feed were left with nothing….I had a business built and paid for by good old big blue. I was willing to work, I was willing to help my customers….but in the end it IBM successfully tore that out of me, for that I got compensation.
This statement is bang on:
“Troubleshooting, which was once performed on conference calls, is now done with instant messaging because the teams speak so poorly. Problems that an experienced person could fix in a few minutes are taking an army of folks an hour to fix.”
It is SOOOOOOOOO frustrating to spend hours in Sametime (instant messenger) fixing a simple problem that I could fix in 5 minutes myself….and these global resources take HOURS….FRUSTRATING!!!!!!!!!!!
I became one of IBM’s early programmers in 1957 at the time they introduce the 305 RAMAC. I subsequently became a marketing manager in the Dallas office and from there was promoted to manager or product planning for a product line in headquarters in New York. I resigned in 1965 to join a start-up company and later founded BancTec, Inc. which today operates world-wide. I have been hearing about the changes in IBM for years and it appears to have gone from the best employer to one of the many who failed to adjust their business to compete with the newcomers such as Apple. Too bad, but it has happened to many of the old corporate leaders.
I have read several posts here from IBM employees that “scratch their heads” wondering why their customers put up with this poor products and support. As a tech employee of an IBM customer I have a unique insight into this.
Much of the IBM sales people make bold claims about the ability and ROI that customers will see with their products. In companies like mine with poor technical leadership, these kinds of purchasing decisions are made without any internal evaluation by their own technical staff to the viability and claims made by the product. The sales people booze and schmooze, shoot some golf, slip some NFL season tickets into the pockets of the VP’s and the signature is made before we have a chance to even look at what the product does.
By then it is too late. The terrible products and awful support cause the client to suffer but it is often extremely hard to shed ties with IBM because enough money was spent with them that their heads will roll if they admit they made an enormous mistake.
The only saving grace I see is that IBM technical documentation is verbose and well written which allows the client’s own technical staff to work through issues despite the clueless support people.
I just resigned from IBM after 22 years. I was part of Global Services, and got sick of all the BS – global diversity, resource actions, etc. Ridiculous. We all referred to IBM’s “Roadmap to 2015” as “Roadkill 2015”.
[rant on]
Maybe that is why their software SUCKS BALLS!!!
I spent a week debugging their shell scripts to install WESB on Redhat. I found error after error. No idea how they can sell this crap! You have to use an xManager that runs Firefox to install the software. How STUPID is that! xManager is SO SLOW on a remote connection. They give a “silent” install option but it is broken.
The next week, I had to install WID. EVERY piece of software was a struggle. Installing WID, DB2, creating profiles using the profile manager–all a horrible struggle pouring through logs, Googling errors, fixing issues, over and over again.
I don’t mind troubleshooting here and there but with thirty years of software development experience it shouldn’t take me a WEEK to fix EVERY DAMN piece of software!
WHAT THE HELL, IBM!!! Fix your CRAP!
[rant off]
Virginia said earlier this year that she will make sure customers’ requests being entertained in 24 hours. It never happens.
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I am not sure why most westerns pick on Indians and tag them all as cheap labor. Well if you think we are cheap, then it is high time you thing what makes you all expensive. This is not an argument of any sort but being hired in India has its own problems. Yes it is a fact that you could find people skilled or unskilled out here in India. Millions of them in fact. But having worked with 4 of the biggest names in the IT business be it software or hardware is that when they migrate stuff to India, people are hardly trained on the processes and there is zero knowledge transfer. And this makes the objective of the company clear and that is, all they want is to save a few million bucks so they just don’t really care about the quality of service delivered to their clients. Back in the early 90’s and 2000’s it was fair to say there was a huge language barrier when things were moved to India, but things have moved on well and I don’t mean to say 100% but it is a way lot better than what it used to be. Exceptions however are inevitable.
I am an Indian guy but what I have expressed just above does not have anything to do with nationality or patriotism. What I find about the big blue is that no matter how hard you try, people above you mostly in the US are reluctant to share what they know to us. And they end up taking the credit of a positive outcome and blame us for the negative outcome when we get to do all the mundane tasks and all the copy paste exercises. Talk about a language barrier? I really don’t think so.
Really! Say What!!! “…….think we are cheap, then it is high time you thing what makes you all expensive”!
Ron ‘you thing’ we are expensive? So funny, guess you don’t understand the basic concept of value!
You get what you pay for?
Love the name! Ron, is that short for something?
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Ron, (ya) from India! Say what ‘language barrier’! Those who read your post, get it all!
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