This is just fear mongering from the IBM old fogies. You have a bloated company with engineers obviously not as smart as Google, Paypal, Youtube, etc. What do you do? Blame the hard working H1Bs.
The dead wood should be allowed to rot. The smart people have already left for companies with better prospects.
Ah, Capitalism - the economic system that defies gravity (money flows UPHILL only). Not to worry - there will always be plenty of work in America, as long as people can still drive to McDonalds. Oops.
If IBM lays off 150,000 workers the market will drop like a rock. If IBM cuts off customers there business is done. The old saying goes no one gets fired for choosing IBM, if that adage loeses its value the company is done for.
The market doesn't particularly reward companies for layoffs, and a round this big would likely hurt a companies stock not help it.
Unfortunately this is a continuing trend in all corporate america. Whether it be airlines outsourcing maintenance to off shore airlines (as my company does), or moving call centers to India (as my wife's company is doing), the only bottom line IS the bottom line.
IBM is a far cry from Thomas Watson's IBM, where employee contribution was appreciated and rewarded. Now the company (like most of corporate america) is focused on Wall Street and investors.
At least we can still make money selling real estate to each other.
Seem's the US has caught up with big business in the UK. BT has been doing these sorts of moves for the last decade, the biggest in the mid 90's.
Ultimately it hurt BT when they sacked almost half their technicians over a two year period and they're only just recovering from it now. This will only hurt IBM as Bob points out - unfortunately it seems to be the trend on both sides of the Atlantic at the moment.
Not a surprise. IBM has been battling a war in the transformation of business fueled by new technologies, and moving such an elephant is not a piece of cake. Of course Sam will not end up bad (some things do not change in corporate america) and the company will take a step that, will, unfortunately, set the trend in the industry before it is forced to completely take a new look inside to simply survive. If it can.
First they outsourced off the call centre workers and I did not speak up because I was not a call centre worker.
Then they outsourced the testers and I did not speak up because I was not a tester.
... and then they outsourced me.
What is that IBM does?
What is their product, or service?
Who are their customers?
Last month IBM told all its employees that no-one (except its 'top performers') will get a pay rise until their pay falls below the market rate for their job. And who determines the market rate? Why, IBM, of course!
I work for GBS and have had a number of interesting experiences working with my off shore colleagues in India, turn over issues being the least of the problems. If we drop 100K employees that could / will create a vacuum in the US to service those organizations that were supported by the folks who were just canned.
Some how this seems to me like we are eating our own children. The risk is that this continues and these skills evaporate in the numbers required and we become a 2nd world county like the UK. Which is fast turning into a service industry of Starfu*ks, BHS, and creators of annoying advertisements for hair product featuring people with crap/crass accents.
Typical liberal feel-good bloviating about outsourcing.
"And it is just plain mean."
Grow up. As Denis Leary once said, "Life's tough get a f@#$ing helmet."
I'm sure the people you spoke to are just bitter that their hackneyed ideas weren't given more credit before being summarily ignored. If those people are so smart, they will prevail.
I am see this as part of a bigger trend in global business altogether. Companies that do well as startups end up crushed by their own success. The smaller, more agile companies like Google, Apple, Paypal, Digg, etc. can do things quicker and cheaper than the larger monolithic companies like Dell, IBM, etc. The larger a company gets, the stronger the pressure to reduce margins, grow organically, invest less, the exact opposite of what those companies did to succeed. The effect of this is being unable to meet customer demands as quickly as before, if at all. This kills organic growth as the customers you have, can't get the level of service they are used to, and only buy what is necessary to stay alive. That will only work for so long, until the customers leave in droves for the quick, agile up-and-comer.
I used to enjoy your puplits, but they are becoming more and more shrill as you lean farther and farther to the left. How disappointing.
I'll ignore for the moment your pejorative use of the term "liberal" and cut to the substance of your remarks -- that this column is based on the whining of people who either have or are about to lose their jobs. It isn't. I spoke to many people from IBM in the last week, but none of those referred to in this column have lost their jobs or are even in danger of losing their jobs. I try to speak to the people best qualified to comment and those are in this case teh ones generally charged with making the new system work. IBM isn't stupid. The company will make an effort to do this in a way that causes as little collateral damage as possible, which means relying even more on its strongest contributors. And these very able, if harried, folks have a fair chance of saving the day. But they aren't whining to me, they are annoyed. They are tired of having to save the day. They are people all of us can admire and most of us would be better for emulating. And that makes their reluctantantly-held positions all the more eloquent.
YOU are calling names, not me. I don't write this stuff for fun. If you are tired of thoughtful prose, by all means read something else.
Bob, you might call this sonnet to Sam Palisano's attention.
Ozymandias
By Percy Bysshe Shelley
I met a traveller from an antique land,
Who said--"Two vast and trunkless legs of stone
Stand in the desart....Near them, on the sand,
Half sunk a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them, and the heart that fed;
And on the pedestal, these words appear:
My name is Ozymandias, King of Kings,
Look on my Works, ye Mighty, and despair!
Nothing beside remains. Round the decay
Of that colossal Wreck, boundless and bare
The lone and level sands stretch far away."
Corporate honesty? CORPORATE honesty? Talk about an oxymoron!
IBM is just another company that is apparently filled with managers and officers who have forgotten -- or who never understood -- the difference between cost and value.
Other than that, there's no news here. Another fading corporate icon that'll end up on the ash heap of corporate history, soon to be joined by GM and Ford.
Buh-bye.
America's turn as a world power, indeed as the unipolar power, is shortlived.
We were founded n the concept of interclass mobility and intelligent and/or strong immigrants flooded in to fill the land to the far coast. They came to stay. Even the poor families among them motivated their children to achieve a more bountiful, better life.
"Them days are gone forever." Labor and Capital are only commodities. Products exist to create financial wealth. The true boards of directors are the private equity firms, the pension funds and the insurance companies.
For the longest time "Value Added By Manufacture" sustained the economy abetted by the velocity of money. Productivity gains induced by capital offset the price of labor and we could use the nearby raw materials.
Capital can now freely move and build identical plants in low labor cost countries. The labor price differential can more than offset the cost of transportation.
We thought that we could replace the manufacturing base by a new construct "Value Created by Ideas." Ideas are ever more portable, and the service industries reliant upon education have found two things. First, the failure of the American public school system has created low performing graduates. Second, these can be replaced at lower cost by higher performing persons in a variety of Asian countries at a much lower cost.
Our comparative advantage is leaking away.
With the household sector, the corporate sector and the governmen sector awash in debt, America finds itself unable to compete on the world stage.
The PRC has trillions of dollars to invest in raw materials ventures throughout the Middle East, South Asia, South America and Africa. In addition, it can barter (much as we did after World War II) military goods for raw materials and throw in consumer goods as well, continuing the march of dollars into PRC hands.
We are in a power struggle which resembles the oriental game of "Go." Our checkers players defeated the chess players of the former USSR, but they too are coming back with new gambits.
"Go" involves the surrounding and thus disarming the opponent. America is being surrounded by the PRC, unable to take decisive action in the arena of international economics and politics. Our people are being played out by the energies of self interest and parties who appear to believe that "Politics is the implementation of war by other means."
The deconstruction of IBM will enrich its owners and senior executives in the short run. In its own way it will likely go unnoticed by the American public. An icon will have died. If only the Icahns of the world were as concerned with the company's employees as the much earlier Henry Ford is reputed to have been.
Bob, I imagine you emailed a copy of this article to Lou Dobbs.
Well, it *is* "International" Business Machines after all. I think a good case can be made that if the company wants to do more business in India, Russia, Brazil, etc., that it would be a good idea for it to hire more people in these countries.
As far as US Business is concerned, suppose a potential customer of IBM wants to dabble with its own offshoring effort, but with a familiar vendor who has already worked out the logistics?
Unless you are a plumber, dentist, or someone else who's physical presence at the jobsite is required, you are probably overpriced in the world market. This imbalance will get resolved eventually, though probably not in most of our lifetimes. About time we got over being shocked about it.
Good advice about asking their supervisor about their job's status. If they deny either knowing, or deny they're slated for layoff, and they later are, that could become the basis for legal action against the company.
In addition there are laws concerning notification of layoffs both to the concerned states, since they're on the hook for unemployment benefits, and it directly threatens their tax base, and to workers as well since the advance notice gives them the opportunity to start searching for work.
If what's being reported to you is true though, and I have no reason to doubt it, then were I working for that division I would be focusing less on my job with IBM and more on finding a new job.
The H1B visas have been problematic for some time now. Lou Dobbs of CNN fame has been keeping the nation abreast of corporate abuses of them.
I think I'll forward a link to your article to his producers if you don't mind. It's exactly the type of story he covers so well.
Nice reporting Bob.
I have been with IBM Global Services for over 15 years, and I fear my "value" will come to an end not for any lack of skill or contribution on my part, but solely due to the myopic drive by the executives to make Wall Street happy, thereby maximizing their own net worth due to the enormous number of shares they all own.
One internal rumor regarding LEAN was that the external consultancy hired to actually perform the analysis was discharged after their principal finding was that IBM is far too top heavy in the executive and management ranks. Not having heard the answer they thought they were paying for, the executives subsequently took ownership of LEAN to pursue the path they had already planned.
Once again, those guilty of plundering and wrecking a formerly great company will retire to a continued life of wealth and ease just about the time the remaining shell implodes.
Given this move, we should expect to hear IBM whining, like many other large companies that they cannot "find" IT workers within US borders and demand an increase in H2-B visas.
Small wonder that Computer Science is doing so poorly as a major in college. Better they become doctors or lawyers instead.
Bob,
What if those experienced, known by their customers, 150K engineers banded to create their own, non-top heavy, competitor to IBM GBS? They know the systems, they know the market, they know their customers, they should know that non-compete agreements are very hard to enforce. Cut out the management and the insane compensation of said management, and you can likely be competitive on bids, while presenting a much more acceptable face to your customers. Call you company XIBM.
And when IBM does fall, you'll have the market to yourselves.
I, too, remember when IBM was the company everyone in computers wanted to work for. Obviously, not that company any longer.
The point that the author is making is that IBM is fundamentally suffering from really bad management, which is not something that can be fixed by LEAN, reducing costs, layoffs, etc... As a former IBMer, I saw the quality and rationality of management fall off the cliff after 2002. By the time I left, there seemed to be no vision, or even rational planning about where the business was going. Important work was devalued, nonsense work was deemed "important", plans changed monthly, projects canceled, restarted, canceled again. There are still plenty of great people and products there, but they are being systematically managed into the ground. Management appeared to live in their own world, completely disconnected from either business or technical reality. Perhaps some jobs do need to be done by cheaper labor pools, but that will not fix the basic problem. Unless they fix their management problems and soon, their days are numbered.
The long term problem at IBM has been management that is TOTALLY out of touch with reality. They are short-sighted, with no care about the future of the company. I know many stock-holders, myself included, who have cashed out of IBM stock because we see the writing on the wall. It seems that over the past years, IBM has made nothing but mistakes. They go through the motions that they care by internal initiatives, but when your manager calls, and starts their canned speech about a resource action, this cancels out everything. Employees that I personally know are spending at least 5% of their time looking for other employment. The good talent has started leaving IBM, and over the next year or so, more and more will leave. IBM and their shareholders deserve to get what will remain..... a weak, anaemic company, with no customer base.
Use to IBMers well extremely loyal to the IBM, but not so today. IBM has screwed them over one too many times.
Thank you Bob for raising the alarm here... I hope this becomes an issue in the next presidential campaign. I would recommend we do not allow companies who offshore to receive R&D tax credits - it is wrong to let them double dip. There is no comparison between the value of a full-time job to our economy and the meager corporate income taxes they pay. In my opinion, and for the same reason, the same policy should apply for government contracts - no offshoring because the value of the job far outweighs any minor cost savings.
Of course, this does not get to the root cause of this situation - which I would say is in large part due to folks like Nicholas Carr with their implicit endorsement of low-quality (aka "good enough") software. Professional Licensing of Software Engineers, just as other engineers are licensed, should be mandatory in every state. I am amazed that the software industry has not been held liable for shoddy worksmanship. A few liability lawsuits would change CEO's minds quickly on whether to offshore mission critical code.
I was once proud to wear an IBM badge. I was part of the best technology company around the globe. Since then we have lost our top talent. Our remaining employees come up with reasons they cannot do something versus justing completing work. They are scared to put themselves out their since they are just 1 layoff away from unemployment.
Sam needs to go are we need new blood to restore old pride.
Uh, your article would be a whole lot more credible if it had any basis in reality. IBM has 350,000 employees WORLD-WIDE. And only about 120,000 of those are in the US. Not sure how you lay off 150,000 from that bunch....
Oh, and that's IBM in toto. Global Services is perhaps 1/2 that #.
This is not just global services. It is happening in a lot of other places in IBM. In Rational, they have openly admitted to the employees that everyone who leaves will be replaced in China.
So Jimbo,
you're saying IBM management does not have a grasp on reality... you are right. That number probably includes Europe and Canada.
Keep in mind that IBM executives only get rich off their stock options if that stock is worth money. Who buys the stock? Pension plans, 401K plans, mutual funds and other things used by the middle class.
If you have shares in a fund that includes IBM, you can write to your manager and ask that they transfer your funds to something that does not involve IBM, a company that will surely not perform for you in the future.
Any way you look at it, 150,000 is a big number.
Good read.
I too have been in the past proud to wear my IBM badge. I remember taking my job with IBM right out of college. The prevailing thought was that once you have IBM on your resume, you will never have trouble finding work!
Those times are long gone. In my CUSTOMER-FACING position, I'm continually embarrassed by our ever-diminishing capabilities and excuses for not `just getting the job done`. I feel bad for our customers who are getting screwed for the most part... But not half as bad as I feel for myself, who will surely be out of work if Bob's article is the truth.
Customer satisfaction is out the window. This IBM Project LEAN initiative is supposed to be about eliminating duplicate processes and streamlining. Everyone knows that firing a bunch of wage-slaves is much easier than comparing duplicate processes and choosing the most efficient one to retain.
I'm very sad about this news. But I cannot escape IBM quickly enough!
To the person who made the statement "these can be replaced at lower cost by higher performing persons in a variety of Asian countries at a much lower cost".
You have no clue whatsoever. I AM on the inside, I deal with this DAILY. US workers are not being replaced by higher performing. They are being replaced by cheaper, period. That is all that matters to the company. I could tell you horror stories about the quality of work done overseas that the US people spend hours and hours of unpaid overtime correcting, only to see the official company line talk about how wonderful the outsourcing is working.
It is all about $$$$, and nothing else.
I know. You don't.
When I joined IBM in '87, it was a company that was truly a leader in the way employees should be treated. It was a company where families (fathers, mothers, sons, daughters, grandchildren) came to work. Now, IBM is just another run of the mill fortune 50 company.
For this year's variable pay (bonus) payout, most of the business units were shown as "needs much improvement" in the calculation of payout to employees. This comes after seeing stock go up by $25/share and from all other indications a decent year in 2006. If I as employee get this "needs improvement" rating and am told quarter after quarter after quarter that I'm not getting the job done, I would have been shown the door. However, Sam and the Sr. VPs keep chugging.
I've given up on this company turning around as long as the current leadership is in place. They've sold their collective souls on LEAN and offshoring and despite the fact that the turnover in the booming India ecomony is huge compared to those of us who have sweat blood for IBM, they don't see how detrimental this is in the long term to the health of IBM's intellectual capital or to the customer base that we are supposedly trying to please.
As to the current round of layoffs, I've managed to not get hit this round, but I cynically believe that IBM senior management WANTS us to fail in the US so that they can justify the LEAN and global resourcing strategies once and for all.
It may take several years, but this lack of management vision and leadership will bite IBM in the end. But for Sam and the other senior execs, they are just lining their golden parachutes and getting ready to leave the mess behind for some other poor sap to try to resolve when the real crap hits the fan.
Lastly, I think IBM is banking on the I/T market in the US staying flat or going down. If the I/T market does pick up, a huge amount of talent will walk out the door. It will take guys like me longer to make that switch due to the years I've invested, but eventually if a resource action doesn't force me out then the frustration will.
And what is really incredible is that the management team just goes along with the idiotic plan....let's all get on the Big Blue Bus to Abilene, no questions asked.
IBM managment's problem starts with the fact that even at the lowest level, managers understand *nothing* (technically) about the projects they "manage". They usually have either completely non-technical backgrounds or backgrounds which while technical are in completely different fields. They are unable to understand if/why something is easy/hard, short/long to do, why it is important or not, what technical relationship it has to other products, what the implications of a certain decision are at a real (technical) level. And this is at the 1st-level manager rank. It gets rapidly worse in the higher ranks as managers become less technical. This has been somewhat true for a long time, but in 2002-3 it seemed to rapidly accelerate. Managers also have no contact with their people to speak of. They are completely disconnected from the day-to-day work of their people or the people themselves (they are often remote or sit in a different building), rarely seeing their people. Managers are just paper-pushers who implement the (often bad and short-sighted) policies that come down from above. Despite this, the company is *full* of extemely talented and knowledgeable workers (for the most part). So all hope is not lost, but their salvation would have to start with a radical change in management at all levels. And who would have to decide this? ... management.
Well, I guess that Big Blue is turning into "Black and Blue" at least for the employees. Hmm, wonder how much "bonus" the CEO will get for reigning in costs. Probably will be covered by most of the cuts.. Profit at all costs.. the corporate mantra..
Oh!, lets not even think about ethics
IBM and corporate America are using the same scare tactics as terrorism. People are too afraid to say something if fear that they will be the next target. I am not against offshoring, I am against the corruption of Corporations and the officers making a big buck giving themselves benefits and pensions at the expense of not raises to a large percentage of the employees, and benefit and job cuts. We have an Osama Palmisano or corporate America.
There are two classes of employees at IBM - the executive class whose members regardless of their performance (usually poor) get raises, bonuses, promotions, stock grants and other perks and the worker class whose members regardless of their performance if they're lucky get no raises, minimal bonuses, benefit cuts, no promotions, stock options and if they're unlucky get a pink slip.
In short, the executive class gets all the gold, while the worker class gets only the shaft - after they've mined the gold for the exclusive benefit of the executives.
These layoffs are not about the performance of the workers or the lack of work - it's all about an incessant, anorexic (insane) drive to cut costs to make the short-term results look good.
Everything ill with the company is a result of the arrogant, unethical, uncaring, self-serving, clueless, short-term focused executive leadership.
The solution is "regime change" - take out the top four layers of executives starting with Sam, then hire a true leader such as Bill George, former CEO of Medtronic for 5 years to fix Sam's and Lou's disaster.
Yes, and Whitacre from AT&T/SBC, who has outsourced a ton of work to IBM, retires with $158 million package. Good thing all us "underperforming" people managed to help him with that....
I wonder if Scott Adams is watching all this. It is a Dilbert moment to be sure. God the short-sightedness of it all. And the gall they have to not inform customers? Everyone, quick find another services company like EDS and start up a new contract TODAY. Drop IBM like a hot potato. They are not loyal to you, so why should you be loyal to them? I mean it's business, and they are leaving their customers in the dark, so they won't know they will be getting worse service in the very near future.
IBM would not layoff 100k+ people between now and year end. First of all that is counter to driving the stock up, which there seems to be a renewed focus on. The expense of such a layoff of that magnitude would drive stock down, not up. The US population is about 1/3 of the WW population. So already 2/3's of the company is located outside of US. So, slow and steady wins the race. IBM will continue to slowly reduce population in US/NA while growing outside of US/NA. Already salary/benefits and pension of all US employees has effectively been capped. The US has the largest share of long time (older) employees. Attrition over the next 5-10 years as people leave or retire will drive US population to very low levels on its own. The question is really, how will IBM deal with this huge drain in experienced talent. The key to IBM's long term survival and growth is technology. If IBM can differentiate itself with technology, hardware and software, odds for success are higher. If not, there are hosts of companies out there who can effectively pull together technology to support solutions. The idea of Sam needing to do something outlandish to bolster his and his staff pockets is silly. They've accomplished that off the back of their employees already. Don't worry about Sam and his team, they aren't going to starve anytime soon.
Finally, IBM's strength has always been its size and scope. IBM is supplier to enterprise companies. It's failed miserable at every attempt to support individual/small/medium customers. They've effectively given that up and acknowledged it.
IBM is not a consumer base company anymore so they don't give a shit about their employees, they sell their crappy products to other corporate pigs that do the same slime crap as IBM.
IBM should do what Haliburton is doing, get the F**k out of the US and move their heaqdquarters and the entire stinky company to India. IBM loves India so much is sickening.
The number probably includes all high cost countries.... the issue is that it is not being done with proper thought and understanding.... it is being done to please the wall street and like always fill some pockets.... what have we come to... the elphant will now dance on its trunk...picture that..
I am currently an employee at IBM. The rumors are true and IBM is laying off a ton of people. They are also telling us to not notify our customers and to continue taking on work. I am not sure how long we all can put up with this. I am wondering why someone doesn't step in, namely our government, to prevent offshoring exploits of this type. It is destroying our society and putting many people on the street to look for a job in which there is a glut of those already seeking employment. I have been notified of another huge cut coming in a month that will be much larger than the previous one and I will most likely be part of that. Wonder why there is a huge upswing in foreclosures? This is one reason. Lives are being destroyed here. Come on politicians, step up and help those that put you in office, or soon they will come to remove you.
I've been an IGS employee for almost 11 years. When they called on me to innovate, I innovated. When they called on me to listen harder to customers, I listened. When they called on me to improve my processes, I improved them, as far as my management - none of whom have ever done my job - would let me. When they called on me to broaden my skills, I broadened them. When they called on me to think outside the box, I thought outside the box.
I have taken bullets for this company, its shifting corporate priorities and its thick strata of obscenely overpaid senior management for years. The stock price is up. We had a solid '06, and a good Q1 '07. My division made money last year.
I missed the axe this time - some longtime and fastastically gifted and hard working colleagues did not. But most of us knew this was just the beginning.
I just bought a new truck. And now I'll be losing my job. At just about 50, my prospects for matching my current income, fairly modest by IBM standards, are dim. I could lose my house.
I hope the Darwinian capitalists out there are happy. Enjoy while you can - you're probably next.
ibm
Can anyone tell me why there are 9 levels of management from my 1st line all the way up to SAM? What is wrong with that picture?
Blame it all on Gerstner. He decided many years ago to keep IBM a single company when it was headed toward breaking up. A company of 300+ worldwide employees with multiple layers of VP's and directors building their own kingdoms of subject matter experts, competency commitees and and powerpoint experts cannot opperate efficiently and to think you can transform it now is ridiculous. The operating units need to break up and become their own profit centers. If it means going offshore, then go off shore and deal with the consequences. Stockholders, Wall Street and the employees all want the same thing, a healthy company that is making money and not invloved in this continual re-shaping, LEAN, 6 Sigma, or whatebver the new term is these days. Is Ruppert Murdoch interested in foregoing his bid for the Wall Street Journal and the NYSE and buying IBM? Maybe Carl Icahn is interested in turning Big Blue around. Anyone have his phone number?
Tsis is all so the big boys up top can line their pockets. It just like the fiasco with the pension lawsuits...Lou and Sam were told by counsel they were going to get sued if they changed the plan like they wanted, but did it anyways to make their numbers for the bonuses. When is America going to wake up and stop letting these companies ruin our economy. Soon there will be no more middle class as all the white and blue coller jobs are offshored. We will be a nation of MsDonalds employees. Who do you think sees all this savings from offshoring...not the share holders or customers. Most of it goes to upper management and the board. Contrary to what people think...the offshore talent pool is no where near what we have in the states. I have dealt with plenty of these offshore teams within IBM, and they are poor replacements. The internal help desk is a joke, as are many of the call centers. Poor knowledge base, and impossible to understand. I have seen accounts turned over to offshore teams with admins who just completed a 2 week IT course !! That was thier whoel training...2 weeks. Upper management keeps on crowing about how great the offshore teams are...but those in the trenches know its all BS. We US/IBM employees end up fixing their work so the customer does not notice. IBM management KNOWS they is too much work for the people left and many SLAs are not going to get met for the customers...but they dont care. I was proud to be hired by IBM 15 years ago, and had the silly thought I could retire from the company. It used to be that when you hired IBM to do the job...you got the best...not anymore. Dr Watson is rolling over in his grave right now !!
I hope your wrong about this. I wonder does this type of thing even go on elsewhere, or is this blogger just bashing IBM because it is a big company. What is the motivator for this blogger? Does he or she trying to make a name for themself?
I hope your wrong about this. I wonder does this type of thing even go on elsewhere, or is this blogger just bashing IBM because it is a big company. What is the motivator for this blogger? Does he or she trying to make a name for themself?
Tsis is all so the big boys up top can line their pockets. It just like the fiasco with the pension lawsuits...Lou and Sam were told by counsel they were going to get sued if they changed the plan like they wanted, but did it anyways to make their numbers for the bonuses. When is America going to wake up and stop letting these companies ruin our economy. Soon there will be no more middle class as all the white and blue coller jobs are offshored. We will be a nation of MsDonalds employees. Who do you think sees all this savings from offshoring...not the share holders or customers. Most of it goes to upper management and the board. Contrary to what people think...the offshore talent pool is no where near what we have in the states. I have dealt with plenty of these offshore teams within IBM, and they are poor replacements. The internal help desk is a joke, as are many of the call centers. Poor knowledge base, and impossible to understand. I have seen accounts turned over to offshore teams with admins who just completed a 2 week IT course !! That was theer whole training...a 2 week class. Upper management keeps on crowing about how great the offshore teams are...but those in the trenches know its all BS. We US/IBM employees end up fixing their work so the customer does not notice. The cutomer pays for expert service on their servers, but they are not getting it anymore. IBM management KNOWS they is too much work for the people left and many SLAs are not going to get met for the customers...but they dont care. I was proud to be hired by IBM 15 years ago, and had the silly thought I could retire from the company. It used to be that when you hired IBM to do the job...you got the best...you paid more because they were the best...but not anymore. Dr Watson is rolling over in his grave right now !!
I have been w/IBM for 10 years started as ISSI they were making so much money IBM decided to them under the IBM logo. They "Global Services" if you believe some of the meetings contribute about 40% of the total revenue. The rest has been said in other comments. Ask yourself this question, with all this off shoring does it seem odd that the big money executive job/s aren't moved as well, for what these folks are making you could higher a thousand people in thier place ( each ) and actually get something done correctly. The real issue is poor management and that gets dumped on the employes back's.
Just a typical IBM Mgmt diet by cutting the meat and bone out and leaving all the fat. Customers are already 'pulling out' of LEAN, and long-term profitable customers are talking about leaving. Mgmt misses the point that THEY are the fat.
IBM - Idiots Become Managers
The IBM mantra: If 1 woman can have a baby in 9 months, then 9 cheaper women can have a baby in 1 month.
Or, to put it another way, 1 person with 15 years experience can be replaced by 15 cheaper people with no experience.
Doens't work that way....
Well, for the techs, all the folks doing the menial monkey work get cut first. Then the more talented subject matter experts (senior techs) need to absorb that gap, while still doing the more complex technically demanding work.
The salaried SMEs are fed up with the 70 - 100 hour weeks, and the most talented ones (not just technically, but with good communications, leadership, and customer facing skills) will either be jumping off the impending IBM train wreck to other companies, or may get cut in subsequent layoffs.
It's a joke that IBMers were told to hide LEAN from their customers. About what you would expect from clueless, IT-ignorant management that would instigate a disaster like this on the company, in concept and implementation.
LEAN, a plan specc's by Larry
Offshorting head-count to carry
work done so cheap
while Americans sleep
By folks who can wear a Sari
LEAN sounds good, of course, but the wrong folks are being leaned out-- the people who actually provide services to customers (internal or external). What's odd is that the bean-counters and financial types who've been so busy cutting corners aren't being LEANed. The ponderous bureaucracy that holds the company back from being agile enough to service customers is the one part of the various organizations that hasn't seen a knice directed... because they're the ones wielding the knife!
Quarterguy IBM has NOT given up on the midmarket.
http://www.crn.com/it-channel/199202916;jsessionid=JJRQFCORNTH1MQSNDLPSKH0CJUNN2JVN
As a former customer of IBM Global Services, and one that started with them back before they started underbidding everything, I have to say that I don't think IBM could do _anything_ to make IGS better. The individuals I dealt with there were mostly bright enough, they worked very hard, and they genuinely wanted to solve my problems. But they just couldn't, not once, do the job right the first time, as requested.
Disk arrays took three tries to build correctly. Implementations of their own products according to their own plans were never on time -- often by months. When the final delivery came, late, it was usually wrong. Documentation was frequently riddled with errors, and in some cases, wrong in ways such that the machines couldn't have worked if configured as documented. That was ok, though, because the documents had nothing to do with the machines anyway -- there was nothing resembling regular checking that the docs and systems looked like each other.
Most of this was due to management mistakes and big problems with the IBM culture. IGS was organized into teams that looked really good on a management chart, but that didn't work in fact. For instance, the "firewall" and "switch" teams reported to different bosses. You can imagine what troubleshooting anything was like: meetings involving 8 or 12 people, including all the managers, most of whom hadn't a clue what we were talking about. The rest of them were busy blaming the other team for the problem. And all of this was tied up in bureaucratic procedures that would have made Kafka weep. Every mistake led to outages that translated into lost business or SLA payments for me.
I don't see how shipping all the jobs offshore could make any difference: this is a group that just can't do its job at the price agreed to in the contracts, if my experience is any indication at all. It seems to me that, if IBM has decided to milk a few more years of contract payments out of their customers, paying less in salary and pensions is a perfectly sensible thing to do. As Bob pointed out in the previous set of articles on IGS, the customer started getting the shaft long ago. My guess is that very few will still be around once the current contracts all expire.
IBM has been in the business of saving money for years. IBM needs to be in the business of making money. The execs are touting double digit growth for the last ten quarters, and that 2006 was a banner year, breaking records for the company in many areas, and yet virtually every division is missing their targets? Fascinating.
The morons who set the targets need to be LEANed. Sam and his cronies need to be LEANed. Management teams who are blindly following this nonsense need to be LEANed. They've cut the front line troops for years, LEAN is taking out the final pillars in the foundations of the company, the final weight bearing structures that are holding the company from collapse.
May.04.2007:15:45 ET
.
.
.
http://www.pbs.org/cringely/pulpit/2007/pulpit_20070504_002027.html
.
.
.
I am a current IBMer who did not receive the axe (yet). Seeing that the IBM U.S. is being killed off I am planning on how to thrive now and for the long term (hopefully). I am not at the point of taking any employment offer. I have not been offered anything yet. I am planning so that I may make better decisions in the near future.
.
.
.
My questions are directed to those out there who have been recently cut, are getting cut, or are just fed up and planning on their own, whether they are IBM heritage or not.
.
.
.
> 1 of 4>
A lot of folks go into consulting, either on their own or with another company. What is the best way to enter this arena? And, what does it take to keep one's self employed as a consultant? This can be freelance or whatever is deemed consulting by today's practices.
.
.
.
> 2 of 4>
If consulting is not one's preference, then what about contracting in a similar profession? What signs indicate a better contracting firm over another?
.
.
.
> 3 of 4>
When in the employ of consulting or contracting, what is the best way to obtain health and other needed benefits?
.
.
.
.
.
and lastly
.
.
.
.
.
> 4 of 4>
If working for a pay check is not one's choice any longer, who amongst you are on track to financial indepence and what are you doing to maintain that momentum? As posted in one of the earlier comments, a suggestion was made to form XIBM as an entity and gain business that dying IBM will lose due to bad management.
.
.
.
As these postings are for the most part anonymous, I am posting my 'front' email so as to gain any type of ideas or suggestions from ones who have gone before me. If you do decide to email me please put in a reference to the subject of 'The Big Blew'. I will answer all sincere emails, although not right away. You never know, my simple post may draw huge.
.
.
.
Thank you all for your time. -- anc1ent@yahoo.com
LEAN = lets employ another nation
That's not all IBMer's are told to hide from the customer. IBMer's are routinely told to fudge and make up the metrics that "somehow" add up to show what a great thing the outsourcing is. And how the information is arrived at is NOT to be shown to the customer.
And then, they all have to take their yearly Business Ethics and Code of Conduct review. What a joke.
what IBM needs is a few more managers living in a dream world. It has been getting worse by the minute since Sam took over. It's amazing that this latest resource action is directed at older IBMers
My suggestion: Everyone that is left, get together and present your customer with your own "outsourcing" package. You already have the knowledge and skills. IBM may be paying peanuts overseas but they're still charging the customer a pretty penny. We could undercut their price and STILL make more money than we are now...
Heh. I worked at DEC in the 80's. My, my does this sound familiar. Death spiral indeed. I'm very sorry for all the employees who will be discovering their jobs are not for life. The average DECcie who was laid off had their income cut very drastically for a very long time.
And just think what this will do to the real estate market. This could be the sort of thing that actually pushes the country into a full-blown recession.
Hey,
It's Tory. I came across this today.
IBM ==> It's Burned out Mostly
I survived this round. 150K seems high - but 70K or so is probably right. Lose 30-40% of customer base maybe? It will take a bit longer than you say I think, mid 2008 then they'll sell what left of the division off to one of their competitors who has a clue as to how to make money in this business cuz IBM sure as heck dont just as they never could with PCs and they are finally realizing it.
The right people need to be LEANed. On my account, we have an over all PE(Project Executive) and then he has 4 DPEs (Deputy Project Executive) that report to him. They are there to act as liason to various parts of the customers business. Like: Security, ID Admin etc. Then they have 2 AVMs that are responsible for server uptime and driving solutions when a problem occurs, and each site has at least 1 SDM (Service Delivery Manager)they liason with customers at the more local level. So count that up and you will see that IBM GS is in upside down pyramid and it is being held upright by the guys in the trenches. Well with moves like this the guys in the treches will stop caring and let the dang thing topple over. I can not wait until it does.
IBM should be banned from taking any H1B visas from the yearly nationwide allocation. Hmmm... banned for 5 years sounds about right to me.
IBM is still in business? Oh, ya - I remember the comercials. Phone call - "Tech support: My server is down. I didn't hear that - what? No speeke english?"
I have worked for IBM Global Services (IGS) for 10 years (ISSC before that). Read Jim Collins book, Good to Great. Although this book is several years old, it is still poignant. This book outlines a very detailed study of how a good company becomes a great company. IBM is actually doing everything wrong, almost exactly the opposite of what they (we) should be doing to attain greatness. I have witnessed the decline of IBM, almost like a patient with a terminal illness, dragging on for year to it's ultimate demise. Although I have been told I am "protected" (something that I really no longer believe), I have started to look for work outside IBM before a true disaster unfolds. Good bye BIG BLUE.
If there are 150K in layoffs...then there needs to be 150,012 with the top mgmt. being the first 12.
LEAN came through this week and we lost several key hard-working employees, some with 30+ years experience. They will not be replaced by Americans or Asians. Instead, the remaining employees will pick up the slack, at least until the fortunate ones, myself included, are able to find a job with someone who cares.
As a good example of IBM's complete disrepect and contempt of their customers, two weeks ago our level one help desk was outsourced to India WITHOUT THE CUSTOMER'S KNOWLEDGE! We were told not to leak the information to them "because they would be upset," as if they would somehow not notice (they have not so far, although the customer's complaint levels have risen dramatically).
I work at IBM now and it's the most miserable place in the world to be. It's just a pit of despair right now and I'm willing to take a pay cut to get out! I wouldn't wish this on my worst enemy.
LEAN came through this week and we lost several key hard-working employees, some with 30+ years experience. They will not be replaced by Americans or Asians. Instead, the remaining employees will pick up the slack, at least until the fortunate ones, myself included, are able to find a job with someone who cares.
As a good example of IBM's complete disrepect and contempt of their customers, two weeks ago our level one help desk was outsourced to India WITHOUT THE CUSTOMER'S KNOWLEDGE! We were told not to leak the information to them "because they would be upset," as if they would somehow not notice (they have not so far, although the customer's complaint levels have risen dramatically).
Don't blame IBM. Giant corporations are just dumb machines that optimize for short-term income. If laws for the public good don't restrain them, they just continue on their course.
If you don't like the direction this country is going, you need to get involved and do something. This mostly means educating those around you to vote for representatives who will work to fix the system.
dude wrote: At least we can still make money selling real estate to each other.
Health care too. Stakes are higher though. When you have no insurance, they can get very high.
IBM: "India, Brazil... and Management"
or: "I Browse Monster.com"
or: "Indians Beat 'Mericans"
LEAN isn't the problem, it's just an excuse.
Hopefully Nicholas Cage will play my part in "Gone in 30 Days"...
Let's face it. Even those of us sticking around aren't stupid. I for one am not sticking around because of fear or lack of better options or hope that I'd still be left standing after all the cuts are done. It's very simple. We don't get any unemployment benefits if we resign. If we stick around and wait and see, we might get a package which we could then turn around and use to maybe get the heck out of this industry that's no longer much fun.
I wrote: Don't blame IBM.
Actually, I take that back. People (including people with a hand in running giant multi-national companies) should still be expected to behave in a socially acceptable way, even if it's not required by law.
But my point still holds that, if you want change, you need to start educating those around you so we can all make positive change happen.
It's time to unionize before it is too late!
What is unstated in this H1B aspect of the story is not that technical workers are unavailable but that CHEAP technical workers are unavailable.
This is the logical fallacy behind all this "jobs Americans won't do" bulldada. Americans will do any job, provided that it pays adequately given the skills required and type of work to be done.
I went to work for a wonderful little computer company called Scientific Data Systems in January 1969. Xerox purchased it to get into the computer market to go head to head with IBM 3 months later. We all missed the little company go-go atmosphere but working for a great company like Xerox would guarantee long, prosperous careers and good retirements. The joke was on us! Xerox milked the company and wrote off all it could for 5 years, then it dumped everyone except 600 field service people, whom they gave to Honeywell along with the installed base. Working for Honeywell was a living death. They didn't want us and did all they could to make us quit ASAP. That lesson in loyalty taught me well. Work for a company only as long as nothing better's available, then take the better deal!
The axe missed me this time. It did catch some good folks, though. None of them, as far as I can see, dead-weight. None of them, as far as I can see, in the management ranks.
My customers could rely on those folks to provide support within minutes in an emergency. Now, the customer will call a 'coordinator', who will probably do his best to match the customer's problem to a name on a list. The coordinator will then leave a voice-mail for that name (in Bangalore or Sao Paulo) who won't know anything about the customer's business and will require hours of Q&A before he can hope to be helpful.
Now, the icing on the cake, is IBM's annual 'diversity exercise'. This manditory hour-long conference call and slide-show is intended to reinforce company standards in the areas of non-discrimination. This year's subject is 'generational diversity' and the weenies on the call spent an inordinate amount of time bemoaning the fact that in North America, Europe, Australia and New Zealand the company is facing a brain-drain as the experienced older employees are leaving.
I have a simple solution for that ---- RETRAIN THE FOLKS, DON'T LAY THEM OFF !!!
But I guess that isn't as easy as firing them and begging Sam's buddies in DC for yet more H1B visas.
Questions:
1. I understand that there are state governments that are outsourcing their IT services to IBM and is laying off state employees. These jobs may go overseas as well. Is there any way to verify this info.
2. Our job market is turning coo, what is our government doing about jobs migrating overseas?
Thanks
Government account contracts prohibit offshoring. Some contracts even forbid non U.S. citizens from working on the acounts.
I work for IBM too. I lost my server and mail admin jobs to outsourcing 4 years ago. Good, engaging, interesting work that I enjoyed.
I moved to deskside services with the expectation that hands on would always be needed there and that I would be reasonably secure there. But my peers and I have watched as each new initiative reduces the perceived necessity for our services.
Customer's are not saving nearly as much money with us as they may have expected, possibly costs are actually higher now for their IT services as a result. The more specialized account knowledge and expereince that are lost the longer it takes to resolve our customer's problems. That means not only more IBM billable hours for customers paying by the hour, but worse, more lost productivity for our customers. That lost productivity is a huge hidden expense that was largely ignored, but believe me, our customers are catching on.
Living in fear of losing my job and health benefits is seriously impacting my wellbeing and job performance. With serious health issues it is hard to believe I can find a job whcih will allow me to immediately resume healthcare benefits without waiting several months to a year to earn this privilege. Last time I was on the job market the wait was 6 months before I could qualify to receive benefits. So a transition away from IBM to another job with another company looks very scary, not to mention that with so many techs still looking for technical work, it seems likelier and likelier I may have to retrain for a totally new occupation.
This might be fine when I was much younger, but seems much scarier now that I am pushing 50. I already have enough issues on my plate to cause me to feel suicidal, how many more pushes toward the edge should I tolerate?
How is this actually good reporting? I've never kept track of Cringely's reporting before, but I expect a LOT more from something with the PBS label on it.
IBM doesn't have 150K workers in the US to lay off. There are only 160K IBM employees in the *entire Western Hemisphere*. If you're going to spread FUD, at least make it credible.
I dont agree with IBM's lack of communication to both thier customers and thier employees. IBM is by no means a well oiled machine and will continue to face issues with dwindling revenue unless they take a hard look at how they can improve the way they do business internally.
IBM speaks of employee retention, but what have they done in Global Services over the last 5 years to make that happen? The answer is not only nothing, but they've done everything to shove their good employees out the door.
At IBM you're simply an expendable human resource feeding the big blue economic machine, and when it's done digesting you, it will excrete in the dirt. No pay raise in 4 years, nice retention strategy big blue.
Let's see, AT&T just won a huge government contract, and AT&T outsources a huge amount of their IT. Ok, so the law prohibits the DIRECT outsourcing of government contracts, as long as you have at least 1 buffer, then it's ok.....
To "Random workerBee" - I don't know about the exact numbers, but believe me pretty much everything else being said here is the absolute truth. If you want to throw the whole thing out the window because 1 number gets misrepresented, that's your right, go ahead and stick you head in the sand. Believe me, IBM routinely "fudges" WAY more than just 1 number to give to the customer to "prove" how well everything is going....
While the reality of globalization is painful, I think the discussion of H1B visa issue is off the mark. As it stands now, the jobs that companies like IBM are cutting are going to foreign workers oversees. These people are not paying US taxes; renting US apartments, purchasing US services etc. At least people on H1B visas are spending a good part of their money here and some of them are interested in becoming legal permanent residents.
Also, the stories about IBM cutting the quality of service due to offshore coordination difficulties have to be judged in the light of clients choosing Indian providers for a range of IT work (especially for lower end application development and maintenance). Surely, the quality of service may suffer when IBM relies more on its offshore staff; but, if the clients are willing to accept this sacrifice when they buy from Indian vendors, why would they not accept it when they buy from IBM as long as the price is competitive?
"Random workerBee IBMer" -- 150K may not be correct for the U.S., but if you're really a "workerbee", you'd know what's happening on the front lines where real work gets done. Or maybe you're one of those useless paper pushing high-band folks working in a vacuum in corporate that really should be LEAN'd off. Seems like the latter to me.
Thanks for reporting this, Mr. Cringely.
The comments are much more damaging to me than the article itself. I believe many are actual employees based on the details of acronyms.
More disscussion is needed on this topic. I have specifically turned my own children away from IT as I dont see a future.
My peers and I try to control costs, work alot of ovetime and believe the lack of pay will be amended as promised in the future.
I am aware management uses the lower wages of my Indian counter parts to get more out of us.
I think many of my indian team members are just out of school and lack the business experience,we who live in the US have. I know its only a matter of time before the learning curve is acheived and the economy of scale will tip me out of this career.
I was made aware of outsource by Indians now living in the US. They seem to work on skills that are not outsourced and ignore those tasks to be off shored. They are working long hours also to offset the lower wages abroad.
I have been told to document the actual savings of a project of offshore versus home. It is hard to do as after install the project closes yet defects and calcualting the downtime or lost customer good will, reduces the initial promised gain.
I do see those that promised the gain long gone and off to another area. I dont see how this business plan was ever thought sustainable long term.
I too am stuck in game theory trying to surive as I cringe while shopping at wal-mart. Knowing that I may contribute to the death spiral of my own middle class.
There are clearly winners in the offshore of jobs at this point. But I have to ask how much is enough for those that profit from this ?
I see no hope for postive change with the current politicians. I do see increased division among people as they compete in the shrinking domestic job market.
Shedding light on this subject seems quite distasteful to many in leadership positions. I will accept it as inevitable.
It took me quite awhile to understand how Lou Gerstner 'saved' IBM and the disapearance of the over funded employess pension were just coincidental. A legacy IBM-er winked and told me that was no coincidence, but it was 'legal'.
I do think it could be changed for the better. But after Enron and Haliburton it may take a while.
FUD at its worst. It doesn't even clarify whether the supposed insider contacts had access to the information or were speculating about it.
"....this is according to my many friends at Big Blue, who ***believe*** they are about to undergo the biggest restructuring of IBM..."
I was one of the 1300 just let go in this round. Second time as a contractor that they purged me to save a few dollars.
Fortunately, this time, I had the coolest manager in Big Blue, and was given a sly heads-up, so that I could get my life affairs in order. It would have been most uncool to have been surprised like the slap from a dead fish.
I am indeed forced with the entirety of retraining for a new career from the ground up. The IT world is dead in my geographic region. It used to be that SysAdmin was in demand and relatively immune from this kind of pointy-haired malevolence. Not so any longer.
Into what new career can one go at 40 without losing everything to go back to school for two to five years?
I never trusted IBM after the 2002 layoffs. Good for me for saving and keeping my eyes open.
Global Services has worked their employees to death. We are just pieces of Office furniture at this point. The attitude is that if nothing breaks, then they can keep cutting. "It is not broken, guess we can cut more. Most of the people can not give their work to anyone before they leave or there is no one to give it to. We have been told that now we are required to do 14% overtime to make up for those that were let go. Contractors were let go in huge amounts. Why does no one care about any of this.. ohhh yes.. it is all about how Wall Street sees us.
I'm a IBM First Line Manager that was notified on 5/1. IBM's LEAN answer to reducing the "heavy Management" ranks is to reduce the First Line Managers. In some areas, almost 1/2 were cut. They aren't reducing the levels of Management, just the management that the employees report to, so they have less time for their employees. The reporting structure from the worker to Sam will be just as deep.
It is true, there are 2 more waves of layoffs coming folks. This is from a 3rd line manager and a VP. The est. is around another 50,000 going bye bye.
Too bad you didn't get the facts straight, at least that would have been good journalism.
George W. Bush and Sam Palmisano, separated at birth?
Both inept CEOs of failing enterprises.
Organizations which were successful and optimistic before their clueless ham-handed meddling.
I need to divest from the USA and take my resources to a more business-friendly climate. Chile? Brazil?
Let's count the shills..
1. Random workerBee IBMer
2. Denilson
3. J
More shills to come as the managers find this article.
"kaizen" a Japanese word that translates as "continuous improvement"
This is what LEAN is really about. It worked for Toyota who is now kicking GM's ass. The end result of process improvement sometimes means fewer people. Don't blame LEAN for this round of layoffs.
Let's count the shills..
1. Random workerBee IBMer
2. Denilson
3. J
More shills to come as the managers find this article.
Thomas J. Watson, the founder of IBM, is rolling over in his grave right now for what Palmisano along with Gerstner did to his company. Thomas J. Watson was all about loyalty. You show loyalty to your company, your company will take care of you. What a shame some money hungry executives, who are not worth the salary they make, will break what was once - a long time ago - a good company to work for.
The "LEAN" that IBM talks about should NOT be confused with the "lean" approach as practiced by Toyota and taught by many others, including myself. When I implement lean with organizations, we do NOT lay off people as a result of any efficiency improvement. We create new opportunities by letting
"extra" people work on continued lean efforts in other departments or we grow the business to create more work. As Jim Womack says, "Lean is about doing more with less, not doing less with lots less (people)."
It's very sad for the IBM employees. I'm sorry you have lousy management. Don't blame this on real Lean, the Toyota Production System.
I once worked at UPS during 1995 and all the people I worked with were from Big Blue. They all had one thing in common: they felt betrayed. After years of dedication and hard work the Armonk facility in N.Y. ruthlessly layed off a large portion of their work force. Back then, I thought they were finished.
But now, 12 years later they are about to really finish the job.
LEAN = layoff every american now
IBM = Indian Business Machines
"More shills to come as the managers find this article."
Yep, this link is spreading as fast as the SameTime infrastructure can handle.
They definitely won't survive this, and personally, I think there will be a huge backlash, especially from their corporate clients. I for one, will absolutely, positively, never, ever, ever, endorse a single piece of hardware, software, or service offering coming from that company again, never.
It doesn’t take a real programmer to manipulate XML and property files. A clerk from the 3rd world country can do it just fine. So what’s the answer? If you are young, then go back to school and learn the trade which is of value in this country. If not, well, ride into the sunset.
Lean works. Period. What IBM is doing is not lean. It is a perversion given an honorable name to make it appear more honorable. Lean is about removing waste--whether that's scrap, unnecessary motion, or wholly ineffective management.
It's a shame actually. Had IBM really wanted to implement Lean (which, interestingly, is a service they offer their customers), they could have really saved the company. Instead, they're playing taps as the ships sinks lower and lower.
A global economy thats what you hear "we must improve the global economy its for the better of us all" I ask you this, if outsourcing is the answer to booming up the "global economy" then who is going to buy the products, services, etc produced by the Global Economy??? It won't be workers in the US because they don't have jobs to afford the luxery of such trivial products we are now a little more worried about actual survival. In the end these types of outsourcings have effects throughout the world. Sure you boost up another countries economy but hey sooner or later those companies paying for outsourced service can't afford it anymore because they have no friggen customers buying their products or services. We have to stand up and put a stop to this whole outsourcing situation period across the board! Our own Country is at extreme risk along with our children. A show I watched about Outsourcing stated that its the only way we can grow up and advance into other areas that haven't been thought of yet. Um, hello how in the heck are we supposed to truly think of innovative ideas when we are so stressed out because we can't provide for our families! I am not saying that this move IBM has decided to make is going to stop the world from turning. What I am saying is that if this actually takes place don't think other companies won't take the Leap because hey they did it, why do you think we are! If your a US based company then you know what you can only outsource a percentage of your workforce thats the rule. If you want to move your company overseas fine you deal with all the crap over there and quit reaping the benefits of actually being in the US. ENOUGH IS ENOUGH!
Bob, it's called a "resource action," not a "job action." ;-)
I'm caught in this, being an IBM employee. We have been told not to let the user know. Now that this secret is out on the web, I have no idea what management will say about the "secret". The main problem I see is the language barrier. Frankly, I have a terrible time understanding the folks from India. Very polite and have a basic understanding of processing, but they are not even in the ball park on job knowledge. But, hey, as the article says, if you get a 6 month surge in profits, that's the one and only one thing that's looked at.
Wow. What a lot of vitriol.
I've been at IBM 14 years. Every table I sit at half the people around it have been there longer, half not as long. You don't get employee retention like that unless you are doing something right.
The whole premise of this article seems... wrong. It does not describe the company I work for. The spiteful always want to see the proud made humble. I'm proud of my company. I'm proud of it's charitable activity, it's long view on things, and how it supports its customers. I've got a great manager and see good prospects for the future.
This fear mongering is just... weird.
Those of us who work with IBM's China team know how hopelessly inadequate they are. Testers test products without any real product knowledge; developers who don't speak English develop GUI's; and people who can't write a sentence and who do not know the product write the product documentation.
We know where the Big Blue Ship is heading, and we also know that we have about as much chance of surviving as the third class passengers on the Titanic.
The person who said the reason people aren't jumping ship is because we're waiting for a package is exactly right.
Fear mongering eh....let's talk about Dell. Plenty of that there.
First, I was one of the people cut during the Gerstner days. Wasn't happy about it, but I understood: the company needed to move in a different direction, and I was not in a position to help. And frankly, I needed to move in a different direction too, and the layoff was a kick in the pants. Worked out OK for all concerned. Not without pain.
In terms of 'corporate memory,' IBM's GS division started well after I left (1994), and includes the purchased consulting arm of some Big Five firm (was it Price-Waterhouse?) Anyway, I'm not so sure how big an impact that really is, if all these people have been moving around to different consulting projects.
The offshoring move is questionable, and subject lots of problems. In addition to what you mention (and I agree with) there's also currency-value fluctuations. I wouldn't make long term strategic decisions that depended on a high dollar right now.
Shill
I like your article a lot.
I would like to comment on H1-B Visa. IBM is not the only place that hire H1-B candidates. On the contrary H1-B are being paid by US co. much more then regulars. In some cases twice. Its just easy to get rid of them. I agree with your comments on LEAN . It was expected though but not upto this quick.Good Luck IBM
The large semiconductor equipment manufacturer I work for now is doing the same thing though of course on a much smaller scale. Its help desk and much of the rank and file systems and network admins are being or have been let go. This means very large groups of highly skilled employees who understood this companies systems and network infrastructure very well have either left (many saw the writing on the wall) or been laid off. The data network at the company's silicon valley HQ for example lost all but 1 of its network operations people leaving the stability and maintenance of a very large data network for a global fortune 500 company down to one extremely stressed and overworked person. Apparently this is happening with their storage engineering as well.
The help desk and rank and file systems/network admin work (and who knows what else) all went to an Indian company as well.
I need to brush up on my ass-kissing skill - I have a gap there and it seems the ones who survive these things are at least a 2 (new weighting criteria). My goal is to be a 3! Now where's that PD tool link again??? How do you open favorites in the browser thingee??? Where's my assistant? Oh, yes, she was let go, darn it!
I think US based "customers" of IBM should stop using crappy IBM products and services all together, then they can fire the idiot executives who hatch these schemes. At the end of the day, the US based workers, and all the dependencies their salaries pump into their economy - home purchases, cars, shopping, and so on - all of these suffer for moves like these. And guess who IBM sells computers/servers and services to? These very same customers who will be heavily affected when less shoppers come in and spend money cause IBM fired them. Vicious circle.
You're right, IBM employee, it doesn't take a rocket scientist to manipulate XML and property files. However, it DOES take someone with knowledge and experience on applications with millions of lines of code to keep it running and be able to improve/troubleshoot it. What planet do you live on? Have you ever actually worked on an application that had more than 1 page of code? As for the older employees "riding off into the sunset", aren't you forgetting that all those employee lost all of their 20+ years severence pay when they were "outsourced" to IBM and given no choice in the matter?
You may think it's all plain XML code, in your tiny little universe that is totally disconnected from reality, but I for one am sick and tired of getting test results back from overseas that "all cases passed, 100%" - and then when we check it ourselves, find out that not 1 single thing was done - not ONE - the app won't even run. So all of us "lower performing" people in the US get told to work whatever amount of unpaid overtime it takes to make it work, no raise, no bonus, WE get the app out the door on time and running, and overseas gets all the credit - for doing absolutely NOTHING. And, then, the headlines and internal metrics read, how wonderful the outsourcing is working, how much money its saving, etc....
The article is dead on. I still have a job, but a year from now, who knows?
My only hope is there's a mass revolt of customer who are sick of lousy service and 5,000-mile phone calls and they start bringing their workers back in to the corporate fold.
We call can't work at WelMart.
Boycott IBM and send them packing out of this country for good. Revoke corporate officers citizenships. Give them a one-way ticket. We need to ethically cleanse this country anyway.
If anyone thinks LEAN is about reducing process work, they are smoking wacky weed. Process work has doubled or more in the last month. None of this helps our customers.
Real work is slowed down.
Applying Murphys laws of names, anything corporate is the opposite of its name; eg LEAN = FAT.
History is repeating the late 90s and 2001 downsizing which gutted so many IT companies to the point HP nows primarily sells printer ink, IBM produces playstation chips, and the rest don't exist, except Sun, which resisted mass sackings. Expect a resurgence there.
No comment on M$, except one word, Vista.
I fear you are right Bob, which is a pity, as IBM has many really good techs and managers, which is a rare combination.
Boycott IBM and send them packing out of this country for good. Revoke corporate officers citizenships. Give them a one-way ticket. We need to ethically cleanse this country anyway.
The H-1B workers are being paid less than USA citizens, not more. Numerous reports have confirmed this.
I am an IBM employee in Global Services. I do not have any knowledge of the LEAN program, but Cringely's other assessments ring very true. I even wonder if a current IBM employee was a ghostwriter for this column.
Yeah right! This article sounds like it's been researched very thoroughly: by reading conspiracy theory blogs ...
and the LEAN stuff they are implementing is so slapdash, so unthought out, so poorly resourced that it boggles my mind that this is the same IBM I work for.
A few years ago, my former employer started outsourcing a lot of IT folks. At that time, I was doing so much work for them and left them before they had a chance to investigate all the things I do. Ultimately, they had to replace me with 6 people. All 150K employees should resign en masse and start a different company. IBM will probably have to hire 750K people.
All IBM is doing is jumping ship from one emerging country to another. As the skills and rates increase in India, they will have to more resources to the next emerging country, Vietnam for example. I have already experienced customer, internal and external dissatisfaction with our global outsourcing. Sam can not see the issues at ground level because he is sitting in the ivory tower at the top and is blind (and does not care) what happens in the trenches. Maybe we should lay off Sam and take his $18M bonus to become lean that way.
Believe U. Not - I don't know about the entire LEAN program, although I DO know people who have already been notified in the initial 1300 layoff.
As for what is currently happening internally, this is all pretty much true, coming from people actuall THERE - "in the trenches". So, if you think this is all a conspiracy theory, that means you are either 1 of 2:
1) Somebody who knows absolutely nothing about what is really happening, totally clueless
2) A top IBM executive who just noticed that another executives 140 foot yacht is 2 foot longer than your 138-footer, and need to lay off as many people as possible so you can get a longer yacht. Good luck with that.
or maybe this is ghost written by an IBM competitor.
If it isn't it, it is easy to follow the logic of IBM execs. Lots of people go out of a job, but what the hell, they can't see it from their front porch. And they will definitely be bonusing them selves.
Please not to be upsetting your cart of apples. All will well if only you come join us in our wonderful country.
IBM: If we don't get more H1B workers to fill the gap the economy will collapse.
US Govt: No problem we'll put legislation in place to help you. Hire away..
IBM: Oopps, sorry we made a mistake, missed a (-) it was -150,000 workers that was needed and not +150,000.
IBM CEO: Profit!!
IBM employee: WTF?
Read this when you can.
Read when you can.b
For Jo Grant, I hope you are as optimistic when you lose your job at IBM or you are called upon to lie to a customer to cover up for a bad decision by a manager 3 levels above you even though both of you have read and signed off on the BCG (Business Conduct Guidelines). I have worked here (at IBM) for almost a decade and when I first started I thought I was going to finish my career here. Not anymore. I am actively looking for a job elsewhere. As the saying goes, fool me once shame on you, fool me twice shame on me.
I have seen the "anything to please wall street" mentality before (used to work for another company in the industry that has all but disappeared and I wasn't so wise to what was happening and got laid off). I found a great job because I had strong marketable skills but it still was financially painful until I found the next great situation. This time I think I will leave on my own terms.
I have a great manager at IBM too, its too bad that she is put in a compromising situation on a regular basis as she is told by executive yes men further up the food chain to implement blatantly stupid and customer damaging decisions to help "pop" the stock each quarter. Management from Palmisano on down make short-sighted decisions to help their stock options, instead of doing the right thing for the right reasons, over the long term to help keep the company healthy and growing. The interesting part about it is I don't even work in the IGS division but I have seen these poor decisions being made all over the company and have finally come to the realization that I needed to put more effort into finding employment somewhere else.
Another sad observation is that part of the reason all of this is happening is because senior management at our customers companies are making the same "please wall street" decisions in order to make the stock pop this quarter. It all goes back to finding honest men with integrity to run our American companies. They are very hard to find. And sadly IBM hasn't been able to avoid this curse. I think I will go find a privately held company to work for, perhaps this is the only way I can avoid having to deal with "please wall street" flu, or executive "lack of integrity-itis".
Quote:
"It is true, there are 2 more waves of layoffs coming folks. This is from a 3rd line manager and a VP. The est. is around another 50,000 going bye bye."
IBMer who has had enough | May 04, 2007 | 5:22PM
End Quote
So this so-called 3rd line manager & VP have confirmed IBM is going to let go of ONE THIRD of their US employees? 50,000 people?? I've been called a pessimist before, but this is a bold statement. The article talks about 150K people in the US - that's basically the entire IBM workforce in the States.
Whether or not the concept is true, that's one thing. But these numbers are outrageous.
So when do the other IT companies follow suit?
CSC, EDS, Accenture, SystemHouse, etc...Will they panic and overreact just to appear to be cutting edge?
Or will they move in like sharks in bloody water trying to pick off juicy morsels?
I think IBM started falling a long time ago, I'm surprised they are still around! From dropping the manufacturing of their computers to this... How does this company even survive. Oh and for the record, sending jobs overseas... not a great idea when it comes to customer service. I don't want to talk w/ some guy named Bob in India who doesn't understand what I am saying, nor can I understand him!
First let me state, I work IBM LEAN everyday and have for the past 9 months. We were part of the "inovators" at IBM and were on the line when the implementors out of Chicago hired by IBM for $6 million to come in and make LEAN work at our account. I lived it, breathed it so I know what I am talking about, I was there for the executive briefings with the fudged up numbers from the consultants and told what to say and when to say it, I was there when we pleaded with the consultants to give us the babsis for the numbers they were spouting, I was there when we told them it cannot work in a service organization as it is layed out, I heard the Toyota speach, I made a simple suggestion that we "don't make cars, we provide a service" and was branded the rebel. As others have stated this is not true Lean, this is a bastardized, Frankensteined version of something that works that was brought in and molded to fit the ideas and perceptions the consultants wanted the IBM heirarchy to see and hear. No substantiations or metrics to prove the numbers were ever brought out and if we asked for them we were ignored. And yet it continues because the people that signed the contract and the checks to their "friends" at the consulting firm, can never be proven wrong or made to look bad and those 2nd and 3rd line managers that did found themselves on other accounts or out the door.
As for the layoffs it is 100% true, I am in the middle of it now and have been for a month, daily calls from the bean counters, "give me 20 people we can release", "no give me 30", now it's all contractors, you provide support but do not work in a billable job you are gone, now or in the very near future. Regulars will be next on the block, 2nd line and 3rd lines already have been told they are gone, length of server, who cares, your gone, 1 performers who cares your gone, the knowledge booted out the door is just phenomenal.
I've heard 40% RIF from two different sources.
This is a goat rodeo.
who _IS_ john galt?
Within every catyclismic change, there is some pain involved. For so many of you, I think you have missed the point of LEAN(Toyota Production Systems based)-if Toyota has recently become the leader of the world over GM, and IBM is attempting to bring the same discipline and quality to their product by using those methods-why would any of us want it to fail. On a day to day basis, Toyota requires their staff to look at what they do and figure out how to do it better-can each IBMr say that they have looked at their job daily and made a change to do right for our customer by cutting out waste? It's obvious from this chain of mail that people have no idea what LEAN really is and therefore are frightened of change-but what if we could transform this company into something that Toyota has done(and done due to US based resources no less)-let's rise to the occasion and yes-some staff will need to leave but hopefully it's the right resource that goes and leaves us with a truly faster, quality oriented company that is there to serve our customers. All of you might want to read up on what LEAN really means-it's not quite what you are so afraid of but if we in the US want to stay employed with any company, we should wake up and make sure we are doing the right thing for our customers every day vs saying "this is how we have always done it and I have no way of changing it". Instead, question and challenge everything in a constructive way with innovative solutions that put us out in front of our competitors.
I work at a colo 'serviced' by IBM. They let everyone go except for 1 person, our after hours coverage from 12AM to 7AM now has a voice mail and the 'oncall' person is located 90 minutes away, assuming he/she gets in their car the second we call with a server down issue. We found this out AFTER the layoffs only because I'm friends with one of the people let go.
They let her go at noon and 'rehired' her at 6:00PM when it was discovered no one could do her job. She is on a 30 day contract that is 'renewed' each month.
I am also one of the lucky one to be get fired, not sure where this company is going ?
There is no "us", there is only the management and the stockholders. The rest of "us" are the workers doing the day to day work that keeps this company in business. It seems that everyone except for an exhaulted few at corporate are subject to being let go at whim. Any benefits or "improvements" realized by this LEAN initiative will go either to the stockholders or in the pockets of the executives in the form of bonuses. Those of us on the front lines every day will see no benefit from this whatsoever. All we have to look forward to is "doing more with less" (25 FTEs doing the work of 100) or being asked to train our Indian replacement before we are shown the door.
Is that what we are supposed to be embracing?
Who knows if any of this is true? But say it is. There is one fundamental issue that no one can debate - and that is the stock price is in the toilet. I work at IBM - I see incompetency in upper management, middle management and lower managment. What company doesn't have that. IBM has great products. Great people that work there. Whatever layoff they have, lets hope it is those that do not bring value to the company -I doubt some scientist that has 100 patents to his name will get canned. I am not a high level employee - but I can say this. I work in Somers NY. The parking lot is EMPTY by 5pm except for the executive parking lot. Wake up and smell the coffee guys - I/T is not a 9 to 5 job. Someone SHOULD start cracking a whip - IBM has superior products. Try working a little harder and not expecting "a job" or "job security". Take a look at google - yahoo and other parking lots - packed until 8PM at night. IBM owes you nothing - put your goods on the table and stop complaining.
You and the comments provided on the inner working of IBM are so right on the money. IBM USE to be a great place to work. Its been on a steady decline since the dot.com bust.
Morale is at the lowest point I have ever seen. The rationale for getting RA'd (fired laid off canned) is not done how ibm tells you its done. Its all done by who knows who.. if you are "connect" within the teams your on.. its not lickely you'll be hit. They are hitting folks that have pbc's of 1's and 2+'s over folks that are 3's. The whole pbc process is a joke. Management dictates down that they will be so many 1's 2's and 3's.. you as a manager have to tag someone with the 3's even if all of your team is performing at a 1 level. Job security and being an "IBM'er" is what drove the 2040 hours we pumped into IBM.. folks were lucky if they ONLY put in 50 hours a week. What was the reward for dedication ? a pink slip.. this while the execs have 100K lunches, yet cancel our holiday pizza party. I do not see the end of where this is going. As people have mentioned, if you were a client that just got screwed by this lean effort, would you renew with ibm ? The people I am starting to feel real sorry for is the poor saps that will be left holding the bag when all of the layoffs are done. Our workload, for most folks, is crazy now, just wait. It seems like its a race to the bottom with sam at the wheel. I dont see the benefit EXCEPT.. to break up the company and RAID the pension fund.. research KB toys and what happened to their pension fund..
SOMETHING FISHY IS GOING ON AT IBM..
IBM has been 'lean' for a long time. It's been 8 years since I've been allowed to order business cards (cost: $10). When I go see a customer, I just claim I 'forgot' my cards.
We have been working years on unpaid mandatory overtime (illegal in some states); if we take holiday time, vacation time, or are sick, we must make up that time with billable overtime hours.
Customer satisfaction is still important; we'll bend over backwards make the customer happy. But often there is no time to 'do it right'. Yes, some customers need to be let go because they demand more than what is in the contract, and thus it is not profitable.
We have been offshoring for a long, long time... but in reverse. The US workers have been doing remote work for India, Asia-Pacific and EMEA. Now this is starting to change, often with cultural difficulty.
The good techs are being burned out. There is no longer a reason to work for IBM vs. some other tech company... no longer a place for a career (i.e. lifetime employment), no longer the best benefits. Certainly not competitive pay. And if you have to replace your vacation time with overtime, why bother?
The crazy thing is, when a corporation cuts way back on employment, the top-level people think they are getting rid of the fat and retaining the lean, but it always turns out just the opposite.
This is why. Most employees fall into one of two classes. The first is competetent, hard working techies. The second is political types who don't really know how to perform their job, and spend their time plotting and scheming, and tricking the higher-ups.
When a corporation sets on a course of massive layoffs, the competent techies set about trying to do their jobs better, and also looking for jobs elsewhere. On the other hand, the imcompetent political types organize together in a giant scheme to trick the higher-ups to fire the techies and keep the political types on their jobs. One way they do this by persuading t
The assault on the middle class in America continues unabated. When IBM gets away with this, which they will, it will open the flood-gates. Financial institutions will be next. Maybe it will even happen to Wall Street. Why pay high wages for traders and analysts here?
The best hope for everyone is that we wake up and realize that the CEO can be outsourced as well.