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I, Cringely - The Survival of the Nerdiest with Robert X. Cringely
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The Pulpit
Pulpit Comments
May 11, 2007 -- The Final Daze
Status: [CLOSED]

Hey Bob,

Why don't YOU write a book based on these comments? Something this educational deserves more than a blog's comment thread.

Here's to hoping I'm not at comment 1000.

David | May 11, 2007 | 2:04PM

This does smack of lying with statistics. To illustrate my point, imagine a scenario where a person working for IBM has four sub-contractors beneath him. LEAN comes in, and the IBM worker get moved. After all, in the 70s, IBM did stand for "I've Been Moved".

The new person is an axe. His/her job is to whittle away at the sub-contractors one at a time until they are all gone. Poof: IBM fired no one, but eliminated four jobs.

Unfortunately, this is not an imaginary scenario. A friend of mine is an IBM Global Services sub-contractor. The scenario outlined above is happening to him as I write this.

Berin Greenbear | May 11, 2007 | 2:09PM

Cringely is now backpedaling. Robert X got it wrong - so wrong that his numbers exceeded total US employment....DOH! The reverbations in the blogosphere echosphere now causes him to backpedal and hedge his original 'factoids'. To cover his exposed journalistic butt, he's now appealing to raw mob emotions with a rant worth of Lou Dobbs. All large services companies for the past decade have been driving efficiencies to respond to client demands for lower cost and improved quality....welcome to the global market! But Robert X's fearmongering is as bad as Rumsfeld/Wolfowitz's fearmongering on Iraq. So exactly where are the WMD's, Robert?

Mark K | May 11, 2007 | 2:52PM

The problem is that executive compensation is not tied to company performance in any meaningful way. It should be "increase profit = better compensation" but over some sensible time frame to prevent short term profitability spikes which are EASY to achieve.

For example make a year end bonus payable as 20% cash, the rest as four chunks of stock restricted for 1, 2, 3 and 4 years. If the company is on solid footing then cashing the stock a year or three later will actually be more rewarding. On the other hand any short term "business magic" will punish the stock within few months.

Obviously the devil is in details but this is a workable proposition. It will not prevent layoffs and restructuring and moving jobs around the world but it should prevent short-term planning and quick fixes by management desperate to please Wall street.

Martin Naroznik | May 11, 2007 | 2:55PM

As much as I appreciate the columns on IBM, even you, Mr. Cringely, have gotten caught up in the LEAN misconcetion. "the very essence of LEAN is foreign hiring" is not true and is only supported and fed by folks like IBM management who have made LEAN and downsizing synonymous - and by writers such as yourself who have caught on to the rhetoric.

The very essence of LEAN is waste reduction. As such, it is an analysis and process more than a predetermined outcome. A result of that may be downsizing (or incremental improvement) but "foreign hiring" by definition has NOTHING to do with waste REDUCTION as much as with waste SHIFTING.

What this is about is cutting costs by shifting to another supplier. Nothing more. You and IBM should both leave the LEAN concept out of the equation. For those of us who have been practicing LEAN in manufacturing for years, you are all portraying LEAN as some idea spawned of the Devil. When done well, LEAN is the implementation of common sense.

The Builder | May 11, 2007 | 2:56PM

As much as I appreciate the columns on IBM, even you, Mr. Cringely, have gotten caught up in the LEAN misconcetion. "the very essence of LEAN is foreign hiring" is not true and is only supported and fed by folks like IBM management who have made LEAN and downsizing synonymous - and by writers such as yourself who have caught on to the rhetoric.

The very essence of LEAN is waste reduction. As such, it is an analysis and process more than a predetermined outcome. A result of that may be downsizing (or incremental improvement) but "foreign hiring" by definition has NOTHING to do with waste REDUCTION as much as with waste SHIFTING.

What this is about is cutting costs by shifting to another supplier. Nothing more. You and IBM should both leave the LEAN concept out of the equation. For those of us who have been practicing LEAN in manufacturing for years, you are all portraying LEAN as some idea spawned of the Devil. When done well, LEAN is the implementation of common sense.

The Builder | May 11, 2007 | 2:56PM

LEAN is a joke. I know some of you reading this probably think I am clueless for saying it. But let's look at what LEAN really means. Do your job with little waste. Last time I checked it wasn't acceptable for an employee to waste a company's time or money. These companies are using LEAN as a means to an end. and the end they are trying to achieve is not cutting corporate waste.

Dan Bricker | May 11, 2007 | 2:58PM

Mark K -- someone should stick a WMD up your sorry behind for bringing politics into a blog that has absolutely nothing to do with that. Take your stupid metaphors elsewhere.

G Richard | May 11, 2007 | 3:12PM

Dear Mr. Bob Cringley,

I am a former IBM GS Employee. I still keep in contact with many IBM GS employees who are complaining that as people get laid off/fired, there are no replacements for these people and the employees are required to pick up the slack even if it means working 90 hours a week per employee to get the work done. These employees have also not gotten any raises for the last 3 years because IBM claims they can't afford it. Most employees are also getting very low reviews despite doing everything they are told and working the very long hours so IBM does not have to pay out more money in bonuses every spring. It is super sad that my friends and former co-workers are litterally being screwed but want to stay there to get their retirement. Most of my friends have put in over 25 years of service to IBM.

Please keep all this information coming. You are right on track and I SO appreciate you being the one to finally bring IBM's TRUE color out!

MK | May 11, 2007 | 3:20PM

No one with authority has anything at stake.
The ones with authority are rewarded by the next quarter's results. Surprised?

E | May 11, 2007 | 3:24PM

No one with authority has anything at stake.
The ones with authority are rewarded by the next quarter's results. Surprised with the results?

E | May 11, 2007 | 3:24PM

Must've hit 'em pretty close to the mark to get a memo like that. Since the comments are so light today I wonder if you also earned an entry in the IBM content filter?

Bill McGonigle | May 11, 2007 | 3:26PM

The memo from IBM doesn't seem to say a whole lot, more hot air than substance.

Michael Rochanel | May 11, 2007 | 3:43PM

IBM's biggest problem is -- SAM.

This is not Sam's first senior executive position; however, they all had one thing in common: wherever Sam left, a disaster followed. Perhaps his worst mistake was matrix management, closely followed by mandatory overtime billable hours, and the requirement for more billable hours than could be worked if holidays and vacation were taken. And employee education / development / investment in employees is non-existent. Respect for the individual, striving for excellence, and the best possible customer service died with Tom Watson. Of course, one goal appears to be to make everyone exempt so they can work overtime without pay.

John | May 11, 2007 | 3:44PM

IBM? Does anyone even talk about them anymore? Surely there must be other controversial subject matter out there that is worthy of exposure.

But since you brought it up, as soon as the dollar bounces back (in process?) the market cap of many multinational corporations will get whacked. But with the increased use of offshore IT a rising dollar will make these foreign workers even cheaper to use...

And we're dealing with a corporation here right? And haven't most corporations been proven to be psychopathic sociopaths? Sounds like business as usual to me.

Dave Cline | May 11, 2007 | 3:54PM

The writing has been on the wall ever since we started training the Indians and Chinese. So, while this comes as no surprise to me, it still pisses me off that management has tried to keep this on the down-low, implying that those of us displaced will all find jobs elsewhere in IBM. So, this is dirty, aggressive, selfish, evil Capitalism on the extreme right. GOVERNMENTS are supposed to protect us from the extremes of Capitalism. Corporations are now in bed with government, so how we could actually expect anything different than this is beyond me.

No, laying off 50K people is no better than 150K because next year, it will be another 50K and another, until all we have left in the USA is blow-hard, arrogant executives, who actually think they've been INNOVATIVE by CUTTING costs. Any idiot can lay people off, but then what? You really expect your Indian workforce to innovative and hand it all over to you? It's not going to happen. How are you going to grow your business when Pakistan nukes India or Al Qaeda sets up headquarters there? Disloyalty to your country and countrymen will be your downfall.

Anonymous | May 11, 2007 | 3:57PM

"The market is for the bulls!", isn't that what you say? So... or you become a bull or you will be hit by one.

Me | May 11, 2007 | 4:41PM

I am an IBMer and my comment to all of this is, who cares. In the morning I have a goal, that goal is to do my job to the best of my ability. At the end of the day I feel satisfied that I achieved. Whatever happens in the future, will need to worry or lose sleep over it in the present.

Anonymous | May 11, 2007 | 4:45PM

Poster above doesn't have kids. Cats don't count.

But seriously, for the bottom feeder workers, not much can be done. Just the usual "keep your skills current" stuff, so breaking out my cash register this weekend.

Anonymous | May 11, 2007 | 4:51PM

The e-mail that Bob posted is interesting. I received an e-mail from a different VP in GBS. It was extremely similar to the e-mail that Bob posted.
It left out the last paragraph about Lean and replaced it with a paragraph stating that the blogger never contacted IBM. There is a unified effort to address this.

Thanks Bob for bringing this issue to the light. We want IBM to succeed and we can't completely change it from the inside.

One IBMer | May 11, 2007 | 5:03PM

Do the global math on resources, wages and GDP worldwide.

Equalization is in process. There is logically and economically nothing special about Americans, so they better be getting ready for a lower MATERIAL STANDARD OF LIVING.

However, no need to fret. Just stop trying to prove your status in the social group with how much stuff you own, and how big it is.

Talk about your mind, your happy family, your service to community. Society will then change to reward you for them, and they cost nothing.

You're welcome. ormondotvos

Ormond Otvos | May 11, 2007 | 5:03PM

To all of you who aren't managers and never have been (and I'm not talking about being shift-lead at McDonald's):

While I will freely admit that there are a lot of garbage managers (corporate executives, etc.) in the world, it is wholey unfair to characterize management and the tools that they use as pejoratively as they have been here and in the previous column. I understand that there are hurt feelings. I understand that there are a lot of people who have been left holding the bag. And what I'm about to say doesn't make that right. But, please take a minute to get it from the perspective of someone who knows.

Management is a tough gig. Every single day of your life you are literally screwing with the lives of every employee that works under you--whether it's deciding who gets the overtime or who gets laid off. You are tasked with balancing what you know to be reality with the stated goals and objectives of the organization that commands your loyalty. You spend your nights, your weekends, and those sleepless hours of darkness trying to find ways to succeed without adversely affecting anyone's life. But sometimes you just have to bite the bullet and screw it up for someone else.

Please don't think that that is ever easy. IBM is currently suffering from a bout of bad management. Poor decisions were made in the past and some of the good decisions didn't go quite as they had planned. Unfortunately, instead of going to their employees and their customers and explaining the situation (as they should have) and working together to find a solution that would incur as little collateral damage as possible, they chose to keep it close to the vest. Now a lot of people are very angry, very frustrated, and very confused about where to go next. Rather than taking a step back and considering the situation rationally, they are reacting emotionally. They have latched on to the first tool that a consult brought to the table and are trying to make it work without having to take responsibility. The problem is, Lean won't let you do that. What they are calling Lean is everything but.

The situation is very unfortunate. If the company was truly committed to Lean, the board would begin by firing every C-level executive and looking for someone who could really save the company. Then they would announce to their investors that things would be getting rocky and to stick with them, because Big Blue will come back from this. And then they would roll up their sleeves, talk to their employees (and REALLY listen) and get to work.

Pipe dream? Maybe. But I've seen it work before. In its day Boeing was headed into the same death spiral that IBM finds itself in today. Lean saved the company (and uncounted jobs). I'm just afraid that no one at IBM has the vision to really pull it off.

Anonymous | May 11, 2007 | 5:39PM

Yes, management is a tough gig, Anonymous. And I'm sure no one here denies that management, when well-executed, is not only a good thing but necessary to the success of any endeavour on the scale of a multinational corporation.

The point being made here is that in _this_ case management is not well-executed, and hasn't been since well before Gerstner. It is in fact myopic and driven by the avarice of the shareholders. The vision extends only to the spreadsheet, and damn the nameless, faceless drones who populate four-fifths of Bluepages.

I am a contractor, and have personally witnessed a two-thirds reduction in my area, and in the last several weeks was nearly relocated an hour and a half away from my home for an unspecified period of time to train the people who will eventually assume my job function, after which I will doubtless be cast aside like a used serviette. The basis for this training was some upper executive declaring that my group and three others doing wholly unrelated operations work were now a single, unified team, and then driving off in his S-class.

When middle management saw the grease fire it had started, they pulled the plug on the temporary relocations. So while I am still in the front line for getting The Call from my contracting company the moment Blue no longer requires my services, I have a little more time before that happens.

But having to perform one's job under this Sword of Damocles is rather a chore. And having to perform one's job along with those of two others who were laid off or walked out with a one-finger salute is quite frankly a waking nightmare. Our managers are bailing like rats in the cargo hold of the Titanic. We'll wind up with their job too.

vylgrn | May 11, 2007 | 5:59PM


LEAN, while maybe mysterious (at least hard to turly document it's benefits), is not an arcane IBM invention. It's a system & process that transformed GE and is working it's way through the DoD. You're generally better at doing your homework. Why not report on what LEAN is?

Kim Sommer | May 11, 2007 | 6:24PM

I don't think we can give Sam credit for the internal overtime policy. My guess is Kelton deserves that honor.

I've worked in matrix organizations. They work and can be very efficient. The problem at IBM is this: (1) The managers can not manage their departments. They can not get or develop the talent they need. (eg no training budget) Its hard for them to get rid of the talent they can't use. (2) They can't distribute work easily to more than one person in their team. The CLAIM lock down and the PE office desire to control who works on their contract prevent this. (3) In a matrix organization the manager and the most experienced people can be the QA officers for the work of the group. In IBM they do not have the authority to set standards, enforce consistency, override bad technical decisions of others. (4) In a matrix organization a person should be able to work on several projects at the same time. There are many PE offices who do not like to share part time workers. If someone can not be committed 100% of the time, they don't want you. One cause of this problem is IBM can not plan ahead and get in front of its commitments. Everything is an urgent, drop everything else request. In a matrix organization you need a little flexibility in time management.

In the last week I've encountered 6 people who have been cut. None of them are contractors. All of them are top-notch workers. Its one thing to trim the dead wood and cut the fat. From my very narrow view of things, we just cut into vital organs. I just spent a week getting an upgrade for a customer. The exercise should have taken me about an hour and involved 2 people in addition to myself. I wasted 39+ hours and worked with over a dozen people as we ran into problems and had to work around obstacles. When you sign a legally binding contract to deliver services to a customer and when that customer signs to pay you extra money for a new application, then getting the needed hardware should be a no-brainer. Somehow we have developed a process whereby a dozen people can veto an order that were are contracturally required to place. I then get to spend a week documenting the exception to allow the purchase to be restarted. The hardware profit we would have made on the project was lost on day 2 of the exercise.

The disconnect between IBM's management and reality is remarkable and defies reason. Sadly the only way 1000's of us have to get IBM's attention is through a public forum like this. We want to help the company and we can't get our leaders to listen.

AvailableForHire | May 11, 2007 | 6:42PM

According to the memo, IBM is not laying anybody off. Instead it is engaged in "a focused resource reduction in the U.S." Sounds to me like the same thing.

anonymous | May 11, 2007 | 6:51PM

The bottom line is this: IBM has no common sense as a corporation. I have 7 years with them and they are woefully lacking in practicality.

They staff key project management positions with non-technical people. When these untrained folks hear a customer say "jump" they have no ability to realize that sometimes the technical answer is "no".

Too many times, I have seen the company agree to everything that anybody says to win the business and then fail on the delivery because it was impossible. In the process, they lose the business and their credibility.

The idea that LEAN will work here is OK with the exception that many of the folks that stay on will be the ones that have an "in" and not that they are the creme de la creme.

You need common sense before you can implement common sense.

Veritas Now | May 11, 2007 | 7:06PM

A company can indeed fire a huge amount of people. I worked at Nortel Networks in Canada during the period when they fired 57,000 employees. That was half the entire company. They had a dozen or more office complexes around Ottawa that became ghost towns as the layoffs went out. They were worth 1/3rd of the entire value of the TSE, the Toronto Stock Exchange.

And the layoffs came in batches of 6k to 7k at a time over a period of 12 - 18 months I would guess.

The company did everything it could to keep its employees calm and convince them that the current batch of layoffs were the last batch. Then the next batch of layoffs came and they pulled the same routine again. "This will be the end of forseeable layoffs." If the people in the company had known that half the company would get wiped out, there would have been trouble and that would have upset the plans of the executives.

After wiping out half the company, the CEO walked away with a golden parachute worth $120 million. He came in, grew the company fourfold and got it into record profit range, then he cut it in half and walked away one of the wealthiest people in Canada.

The only thing I can say is that if this happens again, go after the CEO for everything he's worth.

Graham Fair | May 11, 2007 | 7:43PM

I worked for EDS for 3 years then CSC for 2 and it might be revealing to know that the problems you and most of your readers have raised are largely mirrored at both EDS and CSC. They both seem to share this same delusion that sending work to India will be cheaper in the long run and won’t thoroughly infuriate customers at all. And we also had to put up with our good share of corporate double-talk when it came to explaining why after spending numerous 12-14 hour days to really get a large and complex application rolled out and installed successfully with customers actually happy for once, all the while being constantly hampered by upper management with endless meetings, paperwork, policies and directives to increase billable hours (which I never did), we’re all losing our jobs anyway. Bottom-line is: these ultra-large multinationals, who think they’re all things to all people, can never be good at anything – it’s not technically possible. The top management is too far away from the real workers on the ground who are the ones actually generating the multi-million dollar salaries for the top executives. In the five years I worked for EDS/CSC I never received a pay increase or acknowledgement that the customers I supported were very satisfied with me (I knew they were – they told me). When I had finally had enough and handed in my resignation, my customers (notice I use the word ‘my’) were so concerned they threatened to cancel the CSC contract outright unless they made me a financial offer I couldn’t refuse. I may have actually considered such an offer too, but the numb-nuts running that show said they didn’t have the authority and they couldn’t get it from above them, so it fell through. CSC no longer has that contract – it went to a smaller 50 person consulting company, that I am the team leader for. My customers have never been happier. They can actually talk to the management - who actually listen. They have to - it’s their a*ss if it all goes south, unlike EDS/CSC, and apparently, IBM also. My advice – go with the smaller players – they want your business and are willing to actually do what you want them to do. I feel for all you IBMers. I know it hurts putting in all that effort only to have it all dashed by some mindless middle-management ignoramus for some short-term personal political point scoring.

Bill K | May 11, 2007 | 7:53PM

Y'know, I really wish that Robert Cringely had _qualified_ "Lean" in his article as "IBM's Lean" which seems to have little in common with what I've read of Lean/Six Sigma on wikipedia and elsewhere.

IBM's Lean may require job shifting but that's a financially driven reactive measure...

Oddly enough the problem is that LSS needs to be applied to the financial and bureaucratic superstructures FIRST because they consume, to my eye, 90% of the problem with "getting work done". (You try to get work done when you're handed an asset validation list and two weeks to return it. I've seen those come by and the anxiety of those it lands on is amazing!) It would seem that the bureaucratic mandates come first before "getting the job done" and is anathema to people like me who want to do our jobs *RIGHT*.

From my POV at the bottom of the food-chain, the folks up near the top who are supposed to be thinking several quarters ahead yet aren't thinking more than a couple of months, at best.

Oh, yeah, I forgot... they are good at proactively planning layoffs.

One other problem w/i IBM that I've seen, at least within IGS, is that no one knows what "TANSTAAFL" means; perhaps too many project managers have had the Heinlein Maneuver performed to purge both TANSTAAFL and Grok from their vocabularies.

Project manager want to go cheap and so try to "borrow" hardware w/o paying any lease/depreciation costs and don't even want to provide CLAIM work-items to people outside the project who are necessary to make it work. Many of the people who provide enabling technology-- you know, Infrastructure-- are taken for granted.

I have worked with some absolutely wonderful and talented people within IBM-- both in IGS and SWG-- and have even been impressed by GRs who are bright and energetic yet still inexperienced. Experience takes time to accumulate, of course, and, to me, there are those who hope that payroll won't grow to match.

Buy low, sell high applies to labor... but, from my POV, many employers won't see the price of that when it comes to no one being able to afford to buy your products.

relieved greppie | May 11, 2007 | 9:12PM

The bottom line to all of this is that the business side of U.S. tech companies don't have a clue about how to compete in the global tech marketplace. Not a clue. I've been at a large semiconductor manufacturer for the last 9 years, and watched our executives' "deer in the headlights" look as our overseas competitors blew our doors off. The dotcom bust ruined a lot of these guys.

Look at all the industries that the U.S. is successful in. Medical, law, finance, construction (thru cheap mortgages), etc. Common thread, these are all supported with gov't dollars or based on our smoke and mirrors financial system. Banks borrow money at x% from the gov't and lend it for x+y%. Doesn't take a brain surgeon to make money doing that.

So, I guess the bottom line is, are U.S. tech companies leaders really that incompetent, or does the public financial system in this country cater to all the industries described above and actually go against tech? Tough to say.

Mike | May 11, 2007 | 9:20PM


Tech is under-rated by a lot of people.

Few people realize that only engineers-- techies-- can CREATE wealth either by inventing products or processes.

Everyone else merely RE-DISTRIBUTES it.

relieved greppie | May 11, 2007 | 9:31PM

I'm sure Scott Adams is rubbing his hands and chuckling to himself as he prepares his next Dilbert comic...

Steve McKisic | May 11, 2007 | 10:54PM

Bob, I pointed out in Slashdot that if people had read the COMMENTS to your article, they would see that there is clearly an issue at IBM, even if the number getting dumped ends up less than 150,000. But everybody there was too busy "dumping on Cringely" as they usually are...

And since IBM was keeping the numbers close to their vest, clearly we can't be sure what that final number will be. But if, as you suggest, they fire 150,000 people at one pay grade, world wide, and then replace those people with 75,000 or 100,000 at a much lower pay grade, offshore (whatever "offshore" means for those people outside the US in Japan or wherever), clearly the bottom line is still 150,000 people out of work in a tough market.

Only if you look at the global employee count can one say that IBM isn't actually firing 150,000 people NET.

And that's just a semantics game to sugar-coat what is being done.

This is not to necessarily condemn IBM (although there may be good reasons to do so.) It DOES indicate how things are going to be played in the global economy from now on.

So anybody assuming "corporate loyalty" is some kind of virtue is definitely an idiot.

Screw the corporations. Work for yourself.

Richard Steven Hack | May 11, 2007 | 11:05PM

Little of this analysis seems particular to IBM. These are general trends affecting many transnational corporations.

Cringely comes down from his initial 150,000 job losses, "Maybe the number WAS too high. Instead of 150,000, maybe the true number is only 100,000 or 75,000 or even 50,000." This leads me to wonder if he is just pulling a number from his hat. There is no indication there were any sources, reliable or otherwise, for the number.

Cringely's analysis is often incisive, but his credibility is near zilch. The claim to have an advanced degree while working at Stanford, later admitted to be false, should remain a warning. I takwe what most people say with a grain of salt -- with Cringely, he simply can't be believed.

Greg Conquest | May 11, 2007 | 11:23PM

I am not sure of the intent of the follow up or the original article by Cringely. The mere fact that it received over 1000 comments from readers which doesn’t account for folks that haven’t commented, shows the article has obviously stirred the pot, but in a negative way. IBMers are forwarding the URL, spending more time discussing the possibility, than actually being productive at this point. Many folks are letting work slip, with the expectation that they won’t be around to pick up the pieces in a month’s time.

The comments on the “mysterious LEAN program” are pretty ignorant. If you find LEAN mysterious, you need to read a book. If you find IBM’s application of LEAN mysterious, you’re probably illiterate. IBM is in the middle of a multi-pronged plan to redesign its services organization, don’t confuse LEAN for being a driver of resource actions. They are independent of one another and when the results are combined, will help shape, not only the future of the company, but should, with any luck redefine how outsourcing and IT services are delivered.

These articles are an alarmist’s attempt at muckraking, which in the end, do more harm than good. If there was any desire to benefit the employees of the company, the shareholders or the company itself, the title of the article wouldn’t have included “150,000”. What do you think this does for morale, for customers, for potential customers and for the so-called heroes that “are tired of HAVING TO save the day”? While acknowledging free speech and the ability to blog whatever you like, someone with a backed platform for his voice (ie. PBS) should temper his drastic comments and think a few more minutes before hitting ‘post’ about whether what he has stated is ‘fact’.

ibmer | May 11, 2007 | 11:37PM

The telling thing about IBM's Official Response is that in the very first paragraph, they're already telling a blatant lie: To quote them: "We have received many inquiries regarding the subject. If IBM responded to every rumor, we would get distracted from the important work of delivering value to our clients."

A little common sense sees through this: No one has asked them to "respond to every rumor", and it's pure rubbish that every employee is soooo busy "delivering value to (their) clients" that they can't lift their heads to dispel a nasty, scurrilous rumor. What about PR and HR? That's what their jobs are for!

Why would they open their response with a blatant lie? Because they are lying about the rest of it. Timothy McVeigh was caught not because of the Oklahoma Bombing itself, but because was driving illegally. Why? It is what psychologists call Cognitive Dissonance: it doesn't make sense for a person breaking a major law to have to be a good citizen with minor laws. Same with IBM's PR spokespeople and lying: They know what follows is a lie, so they might as well open with a lie too.

Benny | May 11, 2007 | 11:55PM

Lots of mixing metaphors here. IBM's management problems and Lean are two different topics. Lean isn't the devil - it's actually a common sense mfg. philosophy that could some day save whatever jobs remain to be saved.

Go do some research and learning - our manufacturing base needs Lean if we're to remain competitive. Creating a Lean culture on an existing culture/ workforce however, presents huge challenges to any organization. Been there/ done that.

Jim | May 12, 2007 | 12:03AM


while some might argue Bob's 150,000 figure, I invite you all to view the following:

1 lakh = 100,00

the link appears to say "12", but is in fact 1.2.

1.2 x 100,000 = you do the math.


Anonymous | | May 12, 2007 | 12:11AM

I have been involved with LEAN for 3 weeks now and have seen 30% of our workforce disappear and the LEAN process is the worst BS I have ever seen in 30+ years of IT work. LEAN is about OUTSOURCING and nothing else. Look at the Lenovo deal. It was about outsourcing the PC division to China. LEAN is about outsourcing IGS to India and China without any regard to the customer and the quality of the delivery.

IBM will lose countless customers due to LEAN becuase all technologies are being considered equal. It simply is not true. UNIX is not the same as Windows or as z/OS. Oracle is not the same as DB2/UDB or DB2 on z/OS. But the damn LEAN consultants from McKenzie (I think) don't know crap about technology, so they think you can take a z/OS person and have them do a UNIX support job with NO TRAINING.

After 30+ years, I am totally done and broken by the arrogance of LEAN at IBM. For my mental and physical health, I am forced to leave IBM. I only hope it is before the axe falls on me.

IGS in NC | May 12, 2007 | 12:42AM

I used to work for a small Massachusetts computer company called Digital Equipment Corporation. When I started with DEC the worker population was around 130,000. When I left it was around 65,000.

All of this is nothing new to me. It was really interesting to see the change in the personnel left behind. People were too scared to make decisions. If IBM does go through with this, then I agree with Bob that it won't work...

Bryan | May 12, 2007 | 12:45AM

Well, sounds like 80's downsizing for IBM. Stupid then, stupid now. Get rid of the so called "fat" only to realize that the "fat" was the very thing that made the company go in the first place. Maybe upper-management should do the right thing and start cutting their pay and benefits rather than attacking the rank and file. Oh, right, the idea is to make upper-management more money, not run a really good service business. I guess it is hard to make a good decision when the ones who are making the decision are the very ones who feel they are the most effected; monetarily. Gosh, can't give up that Ferrari or 13 bedroom house, gee, that's poverty, isn't it?!

Richard | May 12, 2007 | 12:51AM

I have been involved with LEAN for 3 weeks now and have seen 30% of our workforce disappear and the LEAN process is the worst BS I have ever seen in 30+ years of IT work. LEAN is about OUTSOURCING and nothing else. Look at the Lenovo deal. It was about outsourcing the PC division to China. LEAN is about outsourcing IGS to India and China without any regard to the customer and the quality of the delivery The language problem will be the least of the issues IBM customers will have to suffer. Chaos is coming to IBM customers.

IBM will lose countless customers due to LEAN becuase all technologies are being considered equal. It simply is not true. UNIX is not the same as Windows or as z/OS. Oracle is not the same as DB2/UDB or DB2 on z/OS. But the damn LEAN consultants from McKenzie (I think) don't know crap about technology, so they think you can take a z/OS person and have them do a UNIX support job with NO TRAINING.

After 30+ years, I am totally done and broken by the arrogance of LEAN at IBM. For my mental and physical health, I am forced to try to leave IBM. I only hope it is before the axe falls on me.

IGS in NC | May 12, 2007 | 12:56AM

I posted in the response to the other article. Won't go into a lot of detail here. The problem is that IBM is not using LEAN the way it should be used. They don't use it to cut the number of ridiculous audits and processes, or to look for ways to improve the efficiency of the staff. They are cutting headcount in the name of LEAN. Well good luck to them. That means that they will move their cost producing processes offshore where they will not be questioned. Their vapor-profits will run the stock up for a year or two. Then when exchange rates and wages stabilize the price will tank. All I know is that I will probably get my 30 days on 5/24. Doesn't bother me. At least the weather is nice. Could have gotten the boot while it was cold. In the meantime all of you other IBMER's out there remember to put cover sheets on your TPS reports and maybe the two Bob's will pass you by this time.

Anyone check out the insider transactions for IBM on YAHOO. Doesn't look like the IBM EXECs have much faith in the stock price.

See the article on W3 about IBM opening talks on how to improve Africa's economy? See the hand writing on the wall there?

To relieved greppie. I know what TANSTAAFL is. Have to buy mine everyday. Not served to me on a golden parachute.

chucky | May 12, 2007 | 2:24AM

TANSTAAFL...There Ain't No Such Thing As A Free Lunch...mystery solved.
Let me give you the acronym that is killing IBM/GS. OEM...Oringinal Equipment Manufacturer. What this means is that we at IBM/GS/ITD are expected to support every kind of hardware that a customer brings in the door. That is what is killing support. That and absolutely no training.
Some of articles quoting Sam Palmisano and his plans, leads me to believe that maybe, just maybe, the upper management has finally figured that out. I have read that he wants to package IBM harware, software and professional services together. That is a brilliant idea and long overdue.
It also leads me to believe that IBM would like to get out of trying to support every piece of crap hardware that is on the market.
Even though that would lead to a huge loss of jobs, mine included, it would make IBM healthy again. I hope that is what they are doing and maybe some of us will survive. I would love to be an IBM'er who did what we should have been doing all along. Instead of trying to be the "jack of all trades" we would be the "master's of IBM technology".

ItCANbefixed | May 12, 2007 | 7:21AM

OEM= Original Equipment Manufacturer. sorry for the bad spelling...and IBM hardware...gee I miss spellcheck:-)

ItCANbefixed | May 12, 2007 | 7:30AM

Parochial question: How are these developments related to IBM's strategy of commoditizing the operating system (via Linux) and selling services, and with the current debate over GPLv3? For more, see

Bob - how about a follow-up to this follow-up?

JVDeLong | May 12, 2007 | 8:29AM

As an insider I must say I find your articles sobering. Unfortunately it confirms what I've been saying for months now. When LEAN was first mentioned it was a "company saving" program designed and patterned after Toyota. It was going to lead the way for us in the future.

IBM is not my first company and whether it be re-engineering or process improvement, the goal is always the same - massive layoffs. In fact, I saw that very result last week. My manager was asked point blank last week why the layoffs were coming before LEAN was barely off the ground. His answer was that we knew certain numbers of people would be eliminated and management wanted to see the results of LEAN sooner rather than later. A preemptive layoff if you will. Now if that doesn't make a mockery of the program I don't know what does. It simply shows that this company has a figure in mind and LEAN is a means to an end, nothing more.

The true goal of LEAN is to line the pockets of our CEO who, most assuredly, is preparing for retirement. Outsourcing thousands of jobs to India and Argentina will ensure high stock value in the coming couple of years. Things will be rosy and ready for him to bow out, complete with a multi-million dollar goodbye present tucked neatly in his bank. But like the person who tries to save a few dollars by skipping out on their car maintenance, eventually the chickens will come home to roost. The quality of Indian workers will eventually shine through and when it does IBM will be a shell of its former self.

This is a program that will devastate this company while benefiting those who least need it. Corporate greed at its worst.

Rusty | May 12, 2007 | 8:50AM

Well, this may be cold comfort; but I do believe massive layoffs turn eventually to the benefit of the employees laid off. I speak from my own experience and that of friends.

The customers need the work done somehow; and when IBM and India cannot satisfy them, they will turn to other companies. The other companies will hire the former IBMers to get the job done, and the net result is a massive reduction in paperwork, politics and bureaucracy and a much greater focus on satisfying the customer with the right equipment, service and software, in a truly efficient manner.

It is painful to go through the job search and experience that uncertainty; but ultimately (for me) the financial rewards, emotional rewards at work, and actual sensible hours were all vastly improved. I look back on the job from which I was fired as a living hell I was too dumb or too proud to walk away from. I was working 7 days a week and 80 hours a week four months at a go. I cannot recommend being fired highly enough!

IBM will eventually get their comeuppance; as my former company did. After wringing every nickel it could out of its investors and every benefit, minute and drop of blood out of its employees, it collapsed into bankruptcy, delisting and non-existence. It is painful to experience the death-throes of a company, especially an elephant like IBM, but it helps to recognize them for what they are, and realize that companies are not immortal, and the company is not you.

Good luck if you are laid off; and it cannot hurt to start preparing the ground now. It may be a tough six months, but for the skilled on the other side lies a new spring, and work as it should be. Profitable, enjoyable and satisfying, with happy customers and appreciative management.

Tony Castaldo | May 12, 2007 | 10:48AM

It may well be that any successful, well-managed company must take maximal advantage of well-qualified cheaper people, wherever they might live. I would not argue against that.

The problem is that this is not what is happening on several fronts: first, IBM is grotesquely mismanaged at all levels. Secondly, they are not trying to find well-qualified people, just cheap people. (I wonder why they couldn't do that in some ultra-cheap place in the US by the way).

The first problem (mismanagement) is IMHO the biggest by far. At the lower levels, managers lack even the most basic understanding of the work they are supposed to oversee, rendering them incapable of making any coherent decision about projects, schedules, people, etc...

There is an absolute wall between managers and non-managers (including technical team leads). Managers know/do *nothing* technical and non-managers have no real input into any decisions.

Upper management is equally disconnected from reality and is simply at a loss as to how to "turn things around", so they do the one thing they know how to do: layoffs. Being clueless does not in itself make one evil, but it does prevent them from making good decisions.

Cluelessness also prevents managers from properly evaluating people. Good, quiet, hard workers are punished while loud gold-bricks are rewarded. Because of this mechanism, the "top" talent is often anything but that.

The lack of empowerment of individuals (being able to initiate change from below) both derives from and contributes to extreme managerial rigidity and dependence on top-down authority. Managers have no interest in hearing any suggestions and doing so is viewed as "rocking the boat" and punished.

Management is unbelievably (ie: you wouldn't believe it unless you saw it) insular. 1st-line managers have virtually no contact with their people, often sitting in different states. Even when they are "local", they are often in a different building and in any case, one never sees their manager.

So how to fix it? what should be the case?

Managers must understand on a technical level enough of the business "under" them to make good decisions. S/W managers must have written software engineering, H/W managers must have designed hardware, sales managers must have worked in sales, IT services managers must have worked in IT services. It isn't *that* complicated. Managers and indeed all people must be given the authority to make good decisions and to meaningfully pass suggestions on up. Suggestions from below must really be listened to and often (enough) implemented when possible. Managers must not be self-promoting ladder-climbers (or not only that), and such behaviour should be discouraged. Quiet competence and hard-work should be rewarded. Managers must be provided the correct incentives (long term growth/stability). Managers must be involved with their people and *the work* they are overseeing on a daily basis. They must be intimately familiar with the work, including some technical aspects.

None of the above is the case at the moment.

Could all these changes happen? sure. Will they? I don't think so because managment would have to make these decisions, and that would involve them firing a lot of themselves.

IBM was as recently as 10 years ago one of the last great american companies. Let's hope a miracle happens and it can be again.

Anonymous | May 12, 2007 | 11:54AM

"S/W managers must have written software engineering" should read "S/W managers must be software engineers". Sorry.

Anonymous | May 12, 2007 | 12:22PM

I was in IBM, 1985-1995, and involved in the SP massively parallel AIXUnix project. Now I am the sysadmin for the AIX hardware (TCP protocols and email) for a small college. I've been on the inside, and, on the outside, I've been using IBM hardware and software support since 1995.

It used to be that everything IBM fielded was tested every way in every possible combination; that is no longer true, but it's gotten ludicrously bad lately.

1) The upgrade path for AIX busted for 9 months, February 2006 until September.

2) I, the customer, am now doing the alpha debugging. In the '90's, the word was that "System Test turns shit into gold"...that is, the software product would make the deadline but be garbage...then ST would make it right. Now the customer is turning the shit into gold.

3) On occasion, I get off-shore AIX support and it's useless: the English is barely comprehensible and the cultural shift is very difficult to deal with.

The IBM way now works like this: Some bright hard MBA finds a product or service that he think will make his or her name, and cost-reduces it until it useless...whereupon the customer walks and the magmnt drone will proclaim, 'It wasn't any good, and we're best quit of it".

Like American business management in general, IBM has lost sight of the fact that people pay money for a product/service, that the way to market success is delivering world-quality products. So, as other companies (usually from other countries) field better products and beat our brains out, our managment "copes" by gutting the company.

Old Man Watson's principles of business were:

1) Respect for the Individual
2) To give the best service in the world
3) To fulfill every job in a superior fashion

His coffin is now magnetically levitated so it can spin fast enough

Here's a webpage to make you cry:

Stewart Dean | May 12, 2007 | 12:48PM


OEM equipment actually isn't a _bad_ thing since it means that IGS isn't *just* a marketing arm for SWG and the various hardware lines and makes the appeal of IGS broader-based. Supporting OEM hardware isn't all that bad, either, because "Racing improves the breed" and IBM _has_ to stay current with competitors.

So OEM support isn't killing IBM (despite the broaders skills) and makes engaging IGS far more palatable when a customer doesn't see their vendor trying to lock them in to a limited range of products.

Don't forget that we *have* to deal with other hardware since we no longer make our own switches (or even re-label Xylan/Alcatel units) but use Cisco switches for network infrastructure. Look into any server farm and you'll be hip deep in Cisco switches, for instance.

There may be those who want to turn the clock back and bring back a more arrogant IBM. Back 7 years ago I spoke w/ an IBM customer and commented that the company "isn't as arrogant as it was in the 1960s"... to which I heard "IBM is still arrogant, you know. They're arrogant about not being arrogant."

I'm not sure that the observation is still true, of course, but, then, I haven't been customer facing (bringing in green dollars) for some time now.

Realize that supporting a broad base of hardware and software products at least gives IBMers skills that are useful to other employers; I couldn't go far if, say, my skills were limited to AIX and pSeries and didn't include Solaris, Windows, Linux, HP/UX and Cisco. Because I _have_ those extra skills I have found the prospect of being pushed out of IBM less fraught with fear and anxiety than otherwise-- I have salable skills.

I suspect a lot of Project Managers (who get paid a sh!tload more than I do) will have a much tougher time of it, but developers, testers, sysadmins and networking gurus will have much broader skill-sets to work with.

relieved greppie | May 12, 2007 | 12:50PM

Some comments on the *REAL* Lean (rather than IBM's apparent interpretation of it) from a guy at the bottom of the food-chain.

First off, my understanding is the Lean process, for the most part, centers on minimizing steps in a process.


I had found the number of manual processes and procedure that I faced on joining IBM dauntingly annoying given that NO ONE had made an effort to simplify or otherwise consolidate the steps of a procedure. (Consider one case, a 53 step MANUAL procedure/process to load software and integrate it into an established infrastructure. I found a way to drop it down to 4 irreducible MANUAL steps by automating most of the process.)

So, yeah, I know how much Lean can cut down on repetitive steps that human beings had to perform.

In the last 3-5 years I've seen a rise in new manual procedures that are unproductive and only exist to serve a financial bureaucracy which doesn't have to pay for the labor... and won't be hit for the consequences. The actual projects (who have already been loathe to give me any time in their CLAIM work-item) are supposed to eat such costs for tasks that I perform. (Inventory-- both book to floor and floor to book as well as the "audit challenges" of 5-6 assets per month. Then there's the security overhead in maintaining patches and THEN the huge workload of _proving_ we did that work!)

There are a LOT of fictions I _know_ exist in the CLAIM system since no one-- and this, I am told is wide-spread-- is allowed to CLAIM all of the hours actually worked on a project or for a client. I know of some folks from BCS/GBS who regularly have to put in 60 or more hours a week for weeks on end but the PM (or whoever is controlling the CLAIM workitem) only allows 40, or, if they're generous, 45, so those actually providing service will be able to get a "good" utilization rate.

But, I digress.

IBM is obviously NOT streamlining a lot of these bureaucratic processes (hoops we jump through just to do productive work) but is off-shoring them.

So it cuts the costs of some of the steps but the time required to navigate these steps is NOT reduced, even when dealing with Brazil (which is in a good time zone for quick response).

Lean's thrust seems to be to cut out steps. IBM's take is to just reduce costs while not cutting down on these initiative-sapping steps. Each checkpoint in a process is also a choke point and slows down the ability to get the job done in a timely manner and does not matter how bright, energetic or qualified the GR is. (Like US employees the bell curve will rule when evaluating GRs... though there's been a lot of culling inside the US.)

Eisenhower, by the way, made an observation in his book "Crusade in Europe" that the American GIs were far more comfortable taking initiative and trying to anticipate what they had to do to execute their mission-- to the point of inventing tools on the battlefield-- that he found the other nation's soldiers disappointing because they'd always be looking up for orders.

I'm not sure but I've seen a lot of other efforts-- and, to my eye, CLAIMs is a major player, here-- to reduce the initiative that an IBMer can show on the job.

Finally... innovation starts at the bottom, you know, germinating in *one* mind, though other minds will fertilize it. Innovations then work their way up the food-chain until someone high enough in management discovers it and will promptly [expletive deleted] it up.

relieved greppie | May 12, 2007 | 1:24PM

A few weeks ago I learned a college friend was taking an intensive course in six sigma. In her company being invited into this program is a high honor. The course is hard and she was sharing some of her frustrations one evening. I told her the secret to six sigma is 100% destructive testing. It was a joke of course and she enjoyed it. It took a similar education program before joining IBM. I've never been able to use it. As I've watched the LEAN program at IBM, I now have to wonder if IBM's approach is in fact 100% destructive testing. Maybe my joke wasn't as funny as I thought....

SixSigma | May 12, 2007 | 2:08PM

Special thanks to Cringe for publishing the IBM MEAN and LEAN article and for this rebuttal. Also appreciate the ability to comment.

Cringely "gets it".

"a severe dysfunctional corporate culture."

"IBM as an organization -- not just as a business -- is in trouble."

"Alas, offshoring doesn't work well in practice and certainly doesn't work better than keeping the work here in the U.S. -- a fact that IBM and a lot of other companies consistently fail to see."

Cringely gets it. Too bad IBM executives ruining the company don't.

People can argue about the LEAN philosophy as practiced by many corporations. Doing LEAN right is not easy and requires a great deal of fortitude, patience, insistence and persistence regarding adopting the LEAN philosophies - LEAN is truly a way of life -a new culture, which is why so many companies don't do it right.

IBM is one of those companies that has chosen at the executive level to do it totally wrong. It would take a long post to explain how, but briefly, they've focused on only service delivery and only to focus on headcount reductions. They are focusing on labor cuts without doing the end to end improvements that enable more effective use of personnel. In short, they've put the cart of cutting people ahead of the horses of empowerment, continuous improvement, procedure/process optimization and automation. I know this because I've been directly involved in it.

To amplify and support Cringe's position, here's a list of facts.

The service delivery organizations in IBM have no less than 9 layers of management. There have been no efforts to flatten this organizational structure, which not only adds unnecessary overnhead, it severely slows any activity requiring a decision. IBM's LEAN conveniently skips fixing this bureaucratic nightmare.

From IBM LEAN presentations, executives expect around a 40% cut in costs within 6 months. Again, because of IBM's failure to address the waste caused by the way it does business, this figure translates directly into headcount cuts. It's easier to cut bodies than the reform the corporation.

Let's estimate 130,000 services personnel in IBM and cutting 40% of them. That's 52,000 services jobs cut within 6 months.

Meanwhile IBM has announced last week to the India press their goal to increase the total India IT outsourcing personnel to 120,000 from the current 50-55,000 by 2008.

Now you know where many of those 52,000 jobs will go.

IBM executives of course denied such cuts were to happen, but it appears they are misleading the media (a.k.a. "lying" to us non-executives). Nothing new there.

I also work daily with offshored resources. I can confirm that Cringely is right about offshoring - it's not effective. These resources have few skills (although you can train that), they have no experience (you can't train that), have little discipline (you can't train that either) and are quite truthfully, a disaster wating to happen. As a result, we waste resource ensuring they do the job right - call it disaster avoidance.

I'm one of those frustrated overworked technical experts that have to figure out how to make this IBM LEAN disaster work. I'm not one of those highly paid executives driving IBM LEAN. I'm reeling from the recent set of cuts - we're trying to pick up the skills and work of those we lost. We're expecting to lose another 30% of our team. That one will break the business. We have no idea how to handle that.

My prescription for IBM's survival is total regime change. Hire a new CEO with integrity who demands brutal honesty. Institute equality of sacrifice as a corporate policy. Fire the top 4 or 5 layers of executives and their staffs to flatten the organization to no more than 5 layers of management. Institute a policy that the management chain must tell the truth subject to dismissal - no spin at any level is tolerated. Implement true pay for performance for executives. Then implement LEAN properly - not with the goal of reducing headcount, but with the goal of becoming more efficient and cost-competitive, and delivering value to our customers.

The goals here are to a) eliminate the total disconnect of executives versus what's really happening at the bottom level of corporation and b) flatten the organization to lower bureacracy and ovehead, c) improve value (customer benefit/cost) to grow the business, d) get executive compensation consistent with growing the business.


FrankReality | May 12, 2007 | 2:08PM

Such articles should probably be published in the likes of :-)


Opinion | May 12, 2007 | 3:07PM

1000+ comments don't translate into a very large number of readers or a roaring success of this article since an individual may have posted multiple comments. In fact, it means nothing for an organization that employes thousands of people who are busy doing their job (and not reading the column).


1000+ | May 12, 2007 | 3:18PM

"Hire a new CEO with integrity who demands brutal honesty. Institute equality of sacrifice as a corporate policy. Fire the top 4 or 5 layers of executives and their staffs to flatten the organization to no more than 5 layers of management. Institute a policy that the management chain must tell the truth subject to dismissal - no spin at any level is tolerated. Implement true pay for performance for executives."

Wouldn't it be nice? Wouldn't it also be nice to have this for the so-called "leaders" in Washington?

The reality is that humans are primates who adhere to an Alpha/Beta hierarchical neurochemistry courtesy of their primate evolution. The sole dominating characteristic of a human is the fear of death - and the competition with all others of his species is the result.

This means drag everybody down above you and stomp on everybody below you in the hierarchy.

Therefor none of the suggested remedies is even remotely possible.

Therefore your only remedy is work for yourself. Stop being a Beta to their Alphas.

Of course, if you ARE a Beta, that's a bit hard to do. But it IS possible to override your genetic predispositions. Having a conceptual consciousness that CAN learn is the only advantage a human has over a chimpanzee.

Richard Steven Hack | May 12, 2007 | 3:52PM

please unsubscribe me ( from the I, Cringely email list.

guy | May 12, 2007 | 4:51PM

The one thing that really caught my eye on our Lean presentation was " Find better ways of doing your task's, faster ways of fixing problems , & don't 'over deliver' to the customer"....maybe I don't have a PhD...but I always thought that keeping my customer happy was part of any service delivery unit...We have always looked for better ways of doing things in my operations unit, this isn't new to us. Fixing my customers problems as fast as possible has always been a priority. it's the 'don't over deliver' statement that baffles me. Lean may work making widgets on an assembly line, I don't see how it will from a computer operations/computer support standpoint. Computer problems can range from small to catastrophic in minutes and can take minutes to hours...and sometime days to fix. Just not the same animal as making the same widget day in and day out on a line.

Need my job | May 12, 2007 | 5:11PM

Read "Fast Food Nation" by Eric Schlosser to see what they are trying to do with LEAN.

And to the CIO and CTO folks who are crying about not enough technical workers - show us how much you have spent on training and educating your existing staff. How can workers learn new technologies, and have a family and community life, when they are expected to put in more than 20% uncompensated overtime? And do these executives wonder why there aren't enough volunteers to be fire fighters, Emergency Medical Technicians or to help in their communities?

Nigel | May 12, 2007 | 6:49PM

Bob, congratulations on a great column. I have never laughed so hard as when I read the earnest hypocrisy of the "LEAN" sycophants, IBM shills and assorted other vultures, rodents and parasites waiting to feed off of the misfortunes of others. The best part though, was the IBM memo - doublespeak straight from 1984. These guys didn't just drink the Kool-aid, they're mainlining the powder.

hmmm | May 12, 2007 | 8:38PM

I was at IBM for many years. Once a great company, it has been on a deteriorating path for many years since the early-mid 1970s timeframe or so with perhaps the 1993 (previous bottom) to 2002 timeframe as an exception. Plagued by the law of big numbers, large organizations, and diminishing returns, it is difficult to see how there is much upside for most IBM employees within the company. Worse, it is difficult for many IBMers say at 46 or 53 years old, not having worked anywhere else, being let go (and you will be let go, particularly if over 45) and trying to navigate the "real world". Can you pass the hot pre-IPO company, Google or Microsoft interview process? Kinda like being a house cat let loose in the woods. If you have any marketable skills, stop whining, just leave!

I just moved on well before my 45th at a company where my role is to take customers away from IBM and drive new business models in the industry. I don't worry about layoffs or the other crap posted here. I don't have a pension, but am far more prepared for retirement than I would have been as an IBMer.

It's a heck of a lot more fun being the predator than it is being the prey!

General James Longstreet | May 12, 2007 | 10:30PM

The most recent layoffs at ibm are set at 1300.
This does not include subcontractors, the number let go are unknown. Everyone left in my old division at ibm is stressed out from the constant rumor of being laid off. Stealth layoffs are constant, where 1 or 2 people seem to be let go on a near regular basis. No one smiles anymore.
People are scared to be seen in the cafeteria.
It is not a great place to work anymore.

Steve B | May 12, 2007 | 11:36PM

Thousands of manufacturing jobs were outsourced to India and China. I didn't hear too much about that. I worked at IBM ISSC a long time ago. I met some great support people, but please don't overestimate IBMers at GS. Sam knows that India and China can do the job. They will not miss this great opportunity. They are already doing a fine job in some areas.

IBM Contractor | May 13, 2007 | 12:27AM

I am an IBM manager, and I'm pissed -- extremely pissed -- about what I'm being forced to do in this company. Here are some points I think are being missed.

1. For every regular in IBM ITD (Global Services delivery), there are between one and five sub-contractors. These sub-contractors are being decimated at rates that make the cuts happening in the regulars look ridiculously minor.

2. The current implementation of "LEAN" is alternately called "PI" LEAN... "Productivity Improvement" or LEAN wave 3. There are seven "sources of waste" in the LEAN model, referred to in IBM as "levers." Only TWO of the seven are part of LEAN wave 3, "over-processing" and "over-production." And those levers are only being pulled in three (out of a dozen or so) major IBM delivery locations! The remaining levers and remaining sites are planned for waves 4, 5, and possibly 6, over the course of the rest of the year.

3. As a result, anyone who thinks this first wave of layoffs was the last is a fool. The expectation from THIS wave of LEAN are cuts between 20% and 30% (depending on area). That's THIS wave ONLY! Sites being affected by wave 3 ARE in scope for future waves (focusing on the other levers).

4. Managers are being cut at a rate equal to the regulars. An entire layer of management is disappearing. These managers are receiving no protection or "soft landings." HR has forbidden it.

5. Delivery is being forbidden to warn our customers about any loss of service, any people being cut, any areas being cut, any changes to service.

6. "Over-processing" means using people who are more expensive than are needed to perform task X. This is where most of the off-shoring is coming from. It also means we're cutting server support people and giving their work to operations, then cutting operations people and giving their work to automation, or sending it BRIC (Brazil/Russia/India/China). By the time BRIC receives the work, though, all the people that know how to do it have been cut. Result: no training.

7. "Over-production" in delivery means that if the customer is paying for 97% up-time, 97% up-time is what they get. NOT 99.9% up-time, 97%. If you're a member if Global Services account management, you get to explain this to our customers. Lucky you. If we deliver 99% up-time, then that means we can cut two more server support people and let up-time fall to the contracted 97%.

8. If you're an IBM Global Services customer, and your contract specifies that all your work will be done in the U.S. or in a given state (yes, I'm looking at you, Disney), I guarantee you that your delivery and account management teams are looking for ways around this. In a lot of cases, IBM is offering these customer concessions (a small percentage of the savings) in order to convince these customers. The executives of these companies are greedy, too, and would love to report a lowered cost of their IBM contract to their own share-holders.

9. Lots of us know how LEAN works. I myself have four books on LEAN in my office (notably the Liker book and both Womack books) and I've read them all. I know how LEAN works. What IBM is doing ISN'T LEAN! It's cost-cutting with the LEAN name attached to it. I know 20x more about LEAN than my so-called "LEAN associate" does. My "LEAN associate", in fact, mostly sits on his ass answering e-mails and Sametimes from other LEAN associates, about more or less nothing at all.

10. Most of the "LEAN associates" are first-line managers and project managers that were affected by and lost their jobs to LEAN waves 1 and 2. They are, for the most part, the dregs that the areas involved in LEAN waves 1 and 2 wanted to be rid of... in short, many of them are some of the worst workers IBM has to offer. These are the people to whom IBM has entrusted LEAN. There are some few really good people mixed in... but not very many.

11. When McKinsey and Company came into IBM and sold the execs on LEAN, they sold it to them based on the cost savings available. Humorously, they presented it based on server support numbers... something like 60 servers per person supporting Windows servers, "60 to one." The executive in charge of delivering in this area said "Well, we're pretty close... we're at 50 to one." McKinsey: "No, your metrics don't match the industry. You're only counting your server support people. You have to count everyone... database, storage support, account management, management, executives. Your real number is about 24 to one."

12. McKinsey, in the same series of meetings, made it clear that our executive management and mid-level management ranks were far too heavy. That was the beginning of the end of McKinsey's involvement in LEAN at IBM. You're not allowed to say we have too many Directors, Vice Presidents, or General Managers. ;-)

13. LEAN waves 1 and 2 were applied to "dedicated accounts"... accounts in IBM Global Services where everyone reports to the account management team. LEAN wave 3, by contrast, is being applied to "competency accounts"... accounts in IBM where like skills work in the same organizations supporting multiple accounts.

14. When LEAN waves 1 and 2 happened, they had six weeks of diagnostics to learn where the sources of waste were in these dedicated accounts. When LEAN wave 3 started, they cut this diagnostic phase entirely. Instead, an assumption was made that the competency accounts were running exactly like the dedicated accounts... a ridiculous, stupid assumption.

15. Finally, LEAN associates were told that there would be no CTOs (cost take outs, lay-offs or reductions of sub-contractors) during LEAN wave 3. This was an enormous lie. We're taking staff cuts due to LEAN... and taking more staff cuts due to CTOs that have nothing to do with LEAN. The whole point to LEAN is to build an "end state design" based on real data, real understanding of the work being done. None of this is happening in IBM.

Long, and I'm sorry for that, but interesting, I hope.

Various Points Being Missed | May 13, 2007 | 12:45AM

Various points, very interesting. How does attrition and the accelerating pace of retirements fit into this?

retirement | May 13, 2007 | 1:17AM

A couple of points regarding the "downsizing".
The early 90s had a bigger bloodbath. I took
"early retirement" when it started. At that time,
IBM had 405,000 employees worldwide (as I recall).
By the time it was over with, they were down to
slightly over 200,000 - most of the downsizing
hit the US employees hard. Outside the US, IBM
could not layoff people willy-nilly as they did
in the US - due to the various labor protection
laws in many of the countries, especially in
Europe. Downsizing in outside the US was down
mostly through attrition (retirements and people
quitting) with no or little back fill.

Today, I am not sure how much the work environment
has changed outside the US as far as layoffs. To
paraphrase Will Rogers, "I only know what I read
in the trade journals". While I have no doubt that
layoffs will be significant, I doubt they will be
of the same magnitude that took place in the 90s
(nearly 200,000).

I noticed that you had a link to "Big Blues",
last years column that started this mess. It
may be true for the current mess, but the real
mess was started years ago. The first "harpoon"
in the "big blue whale" was the 1969 consent
decree. You were probably still running around
in diapers back then (and probably just as messy).
That changed the way they had to do business. Up
to that point, they gave away all software FOR
FREE - with the hardware, which was GENERALLY
LEASED. However, they were still able to be
successful as they had a virtual monopoly on
the market - not unlike Microsoft today. The
next harpoon was in the early 70s when over a
billion was spent on the FS project - which was
eventually killed. After FS, the company pretty
much went into a shell and ran in a "maintenance
and incremental updates" mode. In fact, in that
time frame, the only products of significance
that came out of IBM was the AS 400 systems
(based somewhat on FS - rumor was Rochester never
got the word that FS was killed) and SQL/DS-DB/2.
The third harpoon was having the "large systems"
people in Poughkeepsie (MVS (XA, ESA)) in
conjunction with the marketing and sales people
convince upper management that the large operating
system was the only way to fly, because it moved
the "big iron". Of course, Europe the rest of the
world didn't quite see it that way. This was the
same group of people who convinced upper
management that PCs were "kids toys" and no
profit was to be found there (hmmm, has anyone
told that to Bill Gates?). Stick with "BIG IRON".
This was in spite of the fact the early "mass
marketed PCs sold by Apple, Radio Shack, et al,
had more power than the IBM 1400 series that
gave IBM the advantage over its competition and
laid the cornerstone to build the company into
what it became. I know, some will say it was the
360 systems, but the 1400 series were the first
"cheaply leased" systems (and some were sold)
that medium size businesses could afford. Plus
they were given the software and the System
Engineering services to go with it. You may not
be aware, but back then IBM System Engineers
wrote a lot of the software applications for
the customers for free. In addition, they more
than the IBM Sales force, were responsible for
much of the hardware upgrades that took place
(the Sales force may have got their foot in the
door, but the SEs were the people who had to
make the exaggerations reality by recommending
more hardware and writing the necessary code).

After I took "early retirement", I went back to
IBM as a "contractor" (late 90s) and saw the
difference in the way the company was run under
Lou Gerstner. While I think the vision he had
back then might have been good, he downsized the
wrong people in making it happen. He should have started at the top rather than the bottom. While
the people at the bottom, generally had no
problem adapting to the changing environment, the
upper and middle layers of management did. Based
on what I have seen in some of your reader's
comments, I suspect the problem still exists

Bob C. | May 13, 2007 | 1:29AM

In joint ventures we learned that the partners we train today are the competitors that we face tomorrow. This happened in Japan long ago, is happening in India and parts of Asia and happening in China very quickly. As we get deeper into outsourcing, I believe that we will find the same story. As the companies in India and China do more of the work functions there will be a day when they determine that they can cut much of their overhead by cutting the link to their foriegn management team.

Tim Wilmarth | May 13, 2007 | 2:26AM

This situation reminds me of Continental Airlines under Frank Lorenzo. The prevailing attitude was, "If we can take out another $XXX million in cost, we will be profitable".

The problem is that in obsessively reducing cost, you eventually create a product that no one wants to buy.

Anon | May 13, 2007 | 7:46AM

Let me tell you that at one of IBM's competitors they are pretty much planning the same thing. Too often, than not, the executive level, the account personnel, and the consultant types have no clue what skills are being applied to a project/job or how easy or difficult it is to obtain said skills. There are jobs where you can get someone fresh out of college, up to speed rather quickly.... while other jobs take significant post collegiate training($10K+) just to get them to trainee status and several years of experience, afterwards to get them to competent levels, let alone expert/senior level. Some positions are based on a building of skills by coming up the ranks, too. You can't reproduce this kind of skillset quickly.

To base a study on the number of people/server is ridiculous too... in many cases you are comparing apples to pears... mainframes take more people to run per mainframe, because they run more applications and software. If a mainframe has 2000 printers attached... and you compare it to 2000 print servers.... which is more efficient... 1 person supporting the mainframe printing or 40 people servicing 2000 print servers...which is cheaper then.

If you are a customer of IBM, EDS or CSC, you had better have your exit strategy in place(good business sense requires it in all outsourcing situations)...because the plan will be to replace the experienced/trained staff with inexperienced/untrained staff(just remember that the same people who are selling offshoring people are the same ones starving the training budgets, in the name of controlling cost). Demand/require that your outsourcer provide a list of all personnel that is being cut, so that you have a list of people to contact, if things don't work out, specifically the ones who have been supporting your account. PROTECT YOUR BUSINESS.

Another thing to ask, to protect yourself, of those trying to sell offshoring your outsourcing staff,... Have they done a skills inventory of what is required to support your business? Have they done a skills inventory of the personnel that will support your company in the future? Have they prepared a training program to address the difference? Does the training program deal with turnovers(low salary=high turnover)? Will this training be completed when they swap staffs? If they haven't done these things, you can bet, that ONLY cost is the concern... not whether your business is safe or will continue to be smooth running. You don't want to find out in the middle of a 12 hour outage, that is about to ruin your business, that the staff tasked to support your business, doesn't have a clue on how to keep your systems running.

Another sign to look for, if things get bad is, are the outsourcers keeping you on current software levels. Upgrades tend to get pushed back as staffs become leaner. In most outsourcing contracts, outsourcers are required to keep you on currently supported levels. Unsupported software can be a danger to your business too.

@ an IBM competitor | May 13, 2007 | 10:04AM

Does anyone one think freedom & courage truly exist in our leadership? What IBM is experiencing is a symptom of greater forces at work undermining american culture and society. Warnings have been issued, but folks forget to easily or take the path of least resistance; after all "when in ROME".

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." -Thomas Jefferson

"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance." -James Madison

"If congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to individuals or corporations." -Andrew Jackson

"The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity." -Abraham Lincoln

Despite these warnings, Woodrow Wilson signed the 1913 Federal Reserve Act. A few years later he wrote: "I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men." -Woodrow Wilson

Jim | May 13, 2007 | 10:19AM

Bob, great article, you have it exactly right. Except for one statement that made me chuckle...

"Most of the people I spoke to at IBM for these columns HAVEN'T lost their jobs nor are they even in danger of losing their jobs."

They only THINK they're safe. They'll most likely get a surprise right along with the rest of us.

If your work is critical to success, your knowledge/experience is irreplaceable, if cutting you would have disastrous consequences to the customer - none of those guarantee you a job within IBM, because IBM doesn't care about any of those things. Only if they can save a few $$. Warn your contacts that "are in no danger of losing their jobs" that, while they DO have a very good handle on what is going on inside IBM, they have one major blind spot....

intheknow | May 13, 2007 | 12:15PM

Growth in the U.S. IT market has stalled as the economy in general slides into recession. It will be a couple of quarters before the happy talk and bogus government statistics no longer hide that fact. Top heavy companies like IBM, HP, Microsoft, etc. will have to dump employees. The short term effect will be positive, but the longer-term effects are going to further weaken our industrial base and economic outlook.

The sad part about IBM is they are perhaps the only remaining R&D resource this country has. Bell Labs was destroyed by Pat Russo's cost cutting, Carly Fiorina wrecked HP's stable of scientific and engineering talent, and now the bean counters at IBM are set to clean house in the U.S. centers.

Kim _ | May 13, 2007 | 1:29PM

One of the reasons that IBM is struggling is the internal conflict between business units. Delivery doesn't trust the project office, and vice versa. Clients either aren't happy or are apathetic; I'm not certain which is worse. I suppose I'll survive this round, as I have with others, but I'm losing the few reasons I have to say with Big Blue these days.

exablaze | May 13, 2007 | 2:14PM

When I was a freshman in college, I took a class where the purpose was to teach me how to write. It was a painful experience at the time, and I remmeber it well. One of the most painful parts was where the professor scrawled the words "vague generalization" across whole paragraphs of my work. I think Mr. Cringley needs to take a similar class.

His basic premises, as far as I can tell are:

1. IBM is concerned about making a consistent profit in all its business units worldwide, and understanding and dealing with the factors that result in lower profit in some lines of business.
2. IBM is concerned about hiring and maintaining the best talent it can on a worldwide basis, but not maintaining employees where the cost of those employees cannot generate a profit for its shareholders.
3. Where the cost of maintaining a high level employee is lower in one place than another, IBM is developing systems to be able to deliver that high quality talent worldwide rather than maintaining redundant talent.
4. Number 3 above doesn't work.... Just a statement made by Cringely, no proof offered.
5. IBM may lay off talent in one place and hire it in another for cost or profit reasons.
6. IBM "is not stupid". Leaders at IBM, like most companies, will act rationally and seek to maximize profits for their owners.

I agree with every one of the statements above except number 4. Number 4 is a "vague generalization" not accompanied by evidence (like poor reported profits or lost revenue stemming from the practice reported by companies who've tried it....)

In that freshman writing class, my professor's other favorite comment was "so...." Where's the beef? What's you point? Is there anyone who believes IBM should have different goals and concerns? If so, and you can show with "evidence", IBM leaders would probably be interested in your thesis....

James Shaffer | May 13, 2007 | 2:46PM

I think it is time the US government puts a halt on outsourcing jobs. It is up to the large businesses that rely on IBM, HP, Dell and other large IT firms to ensure that their customer support does not go overseas. The only thing we are doing by shipping jobs overseas is taking jobs away from US citizens. Companies who do most of their business in the US should be supported by US staff on every angle regardless of cost. Without proper laws on the books prohibiting US companies from doing this type of thing more and more jobs will be lost to those 2nd and 3rd world countries like India. This step is another step backwards for the value of the US dollar and a step forward for IBM. Rather than laying off 150K workers why not cut the salaries of those Chief Management positions who we all know really don't do anything to help the company grow and live and eat really well on their 6 or 7 digit salaries.
IBM is not struggling now, the people who are struggling are those Upper Management people who have the ability to justify things like this so that they can have a nice salary increase.

Our motto here in the US should be.....

"Feed the rich and watch the rest starve."

If your not in the upper class then nobody really cares about you here in the US. It is going to take a miracle to get us back on track that is for sure! What happened to the good old days of having more jobs than workers.... oh ya illegal immigrants and lazy Americans... What a world we are leaving to our children... Kinda scary!

Mike Mentges | May 13, 2007 | 2:59PM

One great way to bend facts is to focus on small parts of the problem. Here, we keep referring to IBM workforce, but does this figure include subcontractors? Does it include wholly owned or controlled subsidiaries?

Subcontractors are great because you can get rid of them w/o any layoff announcements. Since we've been using war analogies, this is much like US Troops vs. Private contractors (e.g. Blackwater) -- notice how US death tolls in Iraq never include private contractors. Now one knows the real number. Similarly, no one will know the real IBM cutback numbers.

That said, I still think the 150k figure is too high. Bob -- you should articulate your figures more.

sra | May 13, 2007 | 3:16PM

I am just completing a senior level business communication course. The course focuses on internal and external CEO communication. We've analysed several shareholder letters, and read material from L. J. Rittenhouse and Warren Buffet.

My take on Somers' e-mail is that it is full of fluff, and if those unit leaders go out there cascading those key messages, the result will be confusion rather than reassurance. I smell smoke in that e-mail...

Shane Strachan | May 13, 2007 | 3:19PM

A lot of the comments about outsourcing abroad I've read are really worrying. IBM offers it's services in countries all over the world. Many of the services it delivers to the developing world are US or at least rich-world based. My company is a case in point, we are mainly London based and offer products and services used all over the world.

If it's OK to do it this way round, what is so wrong and immoral about basic services operations in the developing world? Aren't they entitled to job? Are they somehow inferior beings of lesser moral value? Of course not, it's just a natural rebalancing as the global economy grows and matures, a process that benefits our whole societies.

I have no experience of IBM, but I see no reason to panic. I've lost jobs in the past, and moved on to pastures new, it's part of having a dynamic and flexible labour market and economy. Look at the lives you have and the things of real value - your lifestyle, families and friends. Have savings and make preparations to see yourself through any hard times life may throw at you, and keep an eye out for the next opportunity but please, enough with the bunker mentality.

Simon Hibbs | May 13, 2007 | 3:32PM

Someone claiming to work 90 hours/week is not someone you should trust with any assessment whatsoever. Go past 50 h/w and your ability to perceive things as they are is essentially gone.
So better tell your friends there to stop working these hours.

mx | May 13, 2007 | 3:40PM

I have a question for the present and past ibmer's.

To start, many of the commenters say that a big problem at IBM is that management, starting at the front line, makes poor decisions because it is composed of non-techies who lack the needed expertise.

Also, a lot of present and past ibmers say that the company used to be vastly better, with many saying things started to go downhill rapidly around 2002.

Now my question is, before 2002, were managers technically knowledgeble, and if so, how were they all replaced in such a short period of time?

anonymous | May 13, 2007 | 3:42PM

I have a question for the present and past ibmer's.

To start, many of the commenters say that a big problem at IBM is that management, starting at the front line, makes poor decisions because it is composed of non-techies who lack the needed expertise.

Also, a lot of present and past ibmers say that the company used to be vastly better, with many saying things started to go downhill rapidly around 2002.

Now my question is, before 2002, were managers technically knowledgeble, and if so, how were they all replaced in such a short period of time?

anonymous | May 13, 2007 | 3:42PM

If it's OK to do it this way round, what is so wrong and immoral about basic services operations in the developing world? Aren't they entitled to job? Are they somehow inferior beings of lesser moral value? Of course not...

Agreed, but there are the described training, experience, and cultural issues. I, for example, doubt that I would be considered a good replacement from the US for a local Indian software job. Imagine the cultural and business issues I would encounter trying to deliver but was still given the work if, say for example, I was only 20% of the cost of the Indian I was replacing.

Concerning the bunker mentality, in my opinion, all is ok as long as trade with a country is reasonably balanced. For those that offer nothing more than cheap labor, it's in a country's best interests to break from world trade agreements and impose tariffs on imported services and goods, American owned or not, at whatever level it takes to bring trade into balance.

Of course, other countries should do the same thing with the US, and each country should nurture internal manufacturing and agricultural sectors for their own, and each of our countries, security and well being.

But the more balanced trade, the better.


Ralph Daugherty | May 13, 2007 | 4:22PM

I think you've either deliberately misrepresented what LEAN is or you are just showing a shocking lack of research.

LEAN is a methodology used to reduce waste in a process, yet you've suggested that IBM are running a project called LEAN to reduce headcount. It's a common methodology that's used in many companies to optimise a business process, and that doesn't necessarily mean headcount reduction or relocation. You also say that "the very essence of LEAN is foreign hiring", which is nonsense. You're merely using a play on words to suggest "lean" (the word) is synonymous with headcount reduction. If the process was called "TABLE", would you even have had an article to write?

A LEAN based project may result in resource or people reduction or reallocation, but to suggest that just because someone's using it that they are automatically talking about headcount reduction is scaremongering and irresponsible. I suggest you look up LEAN manufacturing on Wikipedia.


Paul Cardno | May 13, 2007 | 4:32PM

I read the first article regarding LEAN and found it interesting that the IBM program shares the same name as the concept however I assume the article was written with solid source material so I didn't question it. Based on IBM's email and the follow-up attempt at saving face I can see the initial article was far off. IBM's Q1 call made it obvious there would be restructuring, and with a company as large as IBM I would assume that means some lay offs.

I respect this column but I am now somewhat jaded because I see simply being wrong in the first column is something you can't admit here.


Brian Raymond | May 13, 2007 | 4:58PM

I read the first article regarding LEAN and found it interesting that the IBM program shares the same name as the concept however I assume the article was written with solid source material so I didn't question it. Based on IBM's email and the follow-up attempt at saving face I can see the initial article was far off. IBM's Q1 call made it obvious they would be restructuring, and with a company as large as IBM I would assume that means some lay offs.

I respect this column but I am now somewhat jaded because I see simply being wrong in the first column is something you can't admit here.


Brian Raymond | May 13, 2007 | 4:58PM

Sorry, but didn't you guys join a company overcharging their clients? Didn't you consider that?

Myself, I'm in a dotcom and I'm well aware it's one of the most unstable jobs in the world.

What did you expect from IBM, already famous of mass layoffs in the past and now completely oriented on the IT scam of standardized nonsense?

Why don't you read this:

IMHO, you took the dark side of IT, and it's not just IBM. All these companies have been hurting many other businesses. The support contracts are ridiculous and the kickbacks and worse are careless.

"[...] No sympathy for the devil; keep that in mind. Buy the ticket, take the ride..."

Mr. Reality Check | May 13, 2007 | 6:01PM

I am an IBMer from Argentina. I've been employed only a couple of months. I'm part of the GBS - Global Business Services - area. I am a student, so i work only six hours under an special work agreement that allows me to attend to college (with certain privileges like "study days", flexible work hours, etc). Along with me, there are other 35 new employees this month under the same type of work agreement ("students program"). How much do we get paid? 300 US dollars per month...

Through the training program i did a free (read "mandatory") SAP Course, so now i'm a certified FI Consultant (that costed 2000 US dollars... to IBM)

Anónimo | May 13, 2007 | 6:26PM

First thing about the true LEAN system of process simplification and waste reduction is that if it is associated with layoffs it will inevitably fail. Thus, IBM will fail without any doubt.

LEAN, and all cost-reduction changes, require that work groups involved to trust each other and trust management to reward their efforts. Lay-offs are not a reward. Quality and lower cost of production are both based on harnessing the creativity of the people doing the job. Lay-offs eliminate this and reduce quality work.

So, what IBM managers really want is flying pigs.

Coffhound | May 13, 2007 | 6:30PM

The mathematics do matter here, which is what IBM is fundamentally saying in its reply. Yes, there will be 150,000 IBM employees who will no longer be working for IBM at some point in the future. You can say that because IBM employs mortals, and everyone dies. In fact, you can pick just about any number. My grandfather worked for IBM (CTR that is), and he's deceased.

So would you care to make a prediction on how many employees IBM will let go and, more importantly, by when? Otherwise we could spend forever tossing around big numbers, and IBM management will have plenty of room to obfuscate.

Regarding the weak dollar, you make at least two mathematical errors. One is that the Japanese yen is not particularly strong, trading at over 120 yen per dollar currently. So profits in Japan don't look bigger when stated in U.S. dollar terms, and Japan is a large market for IBM. Another problem with your analysis is that a weak dollar (with stagnant U.S. wages) is a reason to keep labor in the U.S. Let's suppose IBM is serving the IT needs of the Uncle Sam Company. Uncle Sam Company pays IBM in U.S. dollars for the contract. The dollar is weak, so that means IBM could take a greater share of those dollars and spend them on foreign labor, or it could keep the jobs in the U.S. and pay with now cheaper dollars. Conclusion: the weak dollar actually promotes keeping jobs in the U.S. I think you have it exactly backwards.

Now, IBM may still want to shift jobs from the U.S. to other countries. China, for example, has tried to keep its currency pegged to the weakening dollar, largely successfully, but wages are going up in China, especially in IT. Nonetheless, while the labor deals aren't quite as good as they used to be (and are getting less good as time goes on), IBM may still see some benefit. But the weak dollar, ceteris paribus, isn't conducive to moving labor offshore. Quite the opposite. Also, turnover is accelerating in places like India and China, and turnover is extremely expensive because training is expensive.

The reality is that any multinational U.S. company should focus on increasing top line revenues (i.e. sales) abroad when there is a weak dollar. Every euro that you receive in AR is worth that much more when translated to U.S. dollars. And this is really IBM's core problem: the company is still struggling to increase top line revenues, at least on a consistent basis. And that's the real reason the stock hasn't performed well, despite the recent run-up: Wall Street is not stupid. I'm waiting to hear from IBM management a clear, coherent message on how they expect to grow revenues and sales worldwide. In the early 1960s IBM bet the company on the System/360, and IBM is still earning billions every year as a consequence of that investment. Does today's IBM management have the cajones to invest for success?

Also, I should point out the flip side of the weak dollar/labor cost effect. It's not the U.S. labor force that needs to worry (as much) about layoffs: it's Europe's. If IBM is going to trim workforce anywhere it'll be Europe first, assuming IBM can get away with further reductions.

Thomas Watson VI | May 13, 2007 | 6:55PM

We've reached a slippery-slope-intercept here with IT offshoring.

The fatal flaw has become very evident -- if you can't communicate what you want, you're not going to get what you want, and offshoring makes this a lot worse.

Exec focus on getting the delivery right moves to the SA's and BA's (folks who write the specs) and ignores the production team, who really, really depend on those specs to be correct, and miss the corrective feedback they used to enjoy. If it's too difficult to talk, people won't.

Then the internal spec-writing job becomes self-centered and is the next to be outsourced.

If you can't stop the progression, it's only natural to expect that the next step involves off-shoring your capital and the board of directors, too.

Kelley Johnston | May 13, 2007 | 7:34PM

Don't you people realize that IBM's future growth is going to come from outside the U.S.? Sam has stated this. U.S. growth is tapped out, and IBM is just bringing the "International" back into International Business Machines.

poodledogwalker | May 13, 2007 | 8:02PM

The kuroshin article is how most projects fail because "Upper management was very reluctant to move back the deadline because the project had a lot of visibility, and executive bonuses were dependent upon completing the project by the end of the year." The number of projects I've seen that failed because execs were pushing to get their bonus instead of doing the right thing for the project and driving towards unreasonable deadlines even though the technical people are telling them they can't make the deadline. Sorry, you can't blame IBM on that one.

Charging | May 13, 2007 | 8:20PM

To "Mr. Reality Check" - you said:

"Sorry, but didn't you guys join a company overcharging their clients? Didn't you consider that?" and also "IMHO, you took the dark side of IT".

Here's a reality check for YOU: Most of these US-based employees were basically given NO CHOICE about joining IBM. It was either "take this offer, or you have quit your job and forfeit your severence pay". And also forfeit unemployment, etc....

Big choice there. Lots of people would have turned down the offer if they were given any choice at all. Or even any time to really consider it. We were herded like cattle into IBM. Lots of promises & dangling carrots. All lies, that they knew full well all along. They just needed the existing expertise until they could get it all shipped overseas, and made sure there was really no out for the people that they needed to make that happen.

fedup | May 13, 2007 | 8:39PM

As a 6 1/2 year survior of IBM IGS, my opinion on the failing at IBM comes down to disconnect.

The company stopped treating us as part of a goal, we were treated as day to day assets.

Quite literally, every day I went to work, I wondered if it was my last.

We were the front line, technically skilled people who kept customer systems up and running in spite of the newest "corporate directive".

Who worked around the clock and over weekends to meet aribtrary contract deadlines for contracts that would never produce a profit? I don't seem to recall anyone from the "management" chain online at 3am.

No raises, poor reviews, no education. That sent a loud, clear message. I mean, a top rated performer got a whole 2% raise in 2006.

You could make more money working at a car wash on the weekends for a month.

Its not just about the money, its the message.

IBM seems to have lost touch with reality, and I for one could not be happier to say I no longer am associated with them.

Jim | May 13, 2007 | 9:12PM

As a GBS employee, who's currently working on a project outside of his normal area (an outsourced IT dept, basically) I think you're wrong lumping Offshoring and LEAN together. They appear to be completely separate.

Case in point, at the beginning of this year, they tried to take this project and Offshore some of the work to Argentina. Well before anyone had heard of LEAN. This is just the normal way of doing things at IBM today and will just accelerate. And based on what I see from the people I'm working with, they're not all wrong in trying to find someone cheaper to do the work - it is largely low-skill or unskilled, with only a few truly technically competent people needed. It would also be 10x more efficient if everyone was doing the work together in an office, as opposed to the current setup of 100% telecommuter.

LEAN seems to be an attempt to take those telecommuters with limited skills and use them to their maximum potential. The idea is that they do some kind of job for this outsourced project (such as setting up UNIX ids or access) and may not have enough work to justify 2 people doing it for one project. IBM wants to identify who has too little work to do, and identify who is doing work of certain types. The goal is twofold - eliminate extra people, and take people who are currently just working on one project, and have them work on multiple projects doing the same monkey work for both.

Unfortunately, none of this is going to be particularly successful - not because it's a bad idea, but because the efficiency of their telecommuting workforce is directly related to the skill of their managers - and I have yet to meet more than one or two managers out of dozens at IBM who are able to effectively manage this workforce.

On a side note - you're still grossly overestimating the amount of people who could be removed, because GBS is not just about outsourcing large, repetitive projects. There are a lot of projects that require more skilled employees and direct-to-customer travel which isn't going to be easily shipped, well, anywhere. My job, for one, is normally 100% travel security consulting. It may not be safe if we don't bring in the work, but it won't be because of LEAN.

Mr. Anonymous | May 13, 2007 | 9:30PM


Keep on truckin'. A certain competitor to IBM based in Palo Alto has started putting "LEAN" items on the training areas, and they are starting to make the rounds. We who work at that company in the Services area have been relegated to second class citizen status (we get half the bonus of other parts of the company, for example), and there have been a round of voluntary early retirements. The next step is to start radically reorganizing some divisions to replace workers with workers overseas, and either to layoff or reassign the "high cost" workers.

A friend who used to work at EDS once told me that every so often, some young hotshot would come in and have a great idea that would get picked up by the gang in Texas as "the way" to do something. He told me that if you kept your head down and did things the old way, the wave of "change to the new process" would blow over, the hotshot would be canned, and you could go back to doing what really worked. It's starting to sound like the old adage of keeping your head down and just don't draw attention to yourself won't help worth a darn.

One thing that seems to have been lost in all this is that India is quickly becoming not so cheap. A coworker there left his job after a year for a 70-80% pay raise. Do the math; if salaries increase at that rate over the span of 4-5 years or so, then the differential between an American and an Indian worker becomes minor. Where do companies then go for cheap IT labor? Companies that may be rivals (China) or potentially socialist (Venezuela)? There will come a point for diminishing returns in offshoring, but it may take some years before it becomes obvious to the people who really make the decisions.

Competitor | May 13, 2007 | 11:25PM

I think this article by economist Alan Blinder speaks directly to what you are saying.

- snip --
In recent research, I estimated 30 million to 40 million U.S. jobs are potentially offshorable, including scientists, mathematicians and editors on the high end and telephone operators, clerks and typists on the low end. Clearly, not all of these jobs are going to India, China or elsewhere. But many will.

Max Allen | May 14, 2007 | 12:28AM

Mr. Anonymous: Your statement: "There are a lot of projects that require more skilled employees and direct-to-customer travel which isn't going to be easily shipped, well, anywhere."

Haven't you read or learned anything from these 1100+ posts? That statement and type of thinking has absolutely nothing to do with any IBM decision to offshore work. Doesn't matter if the project requires more skilled employees. Quality, efficiency, customer satisfaction is not the issue. If you think there are jobs in IBM that are safe based on that statement you are in for a rude awakening.

It has been repeated many times, but, again, I will state what drives ALL IBM decisions - I will repeat is several times so you don't miss the point, living in your dream world of "projects that require skilled/experienced people". Here is the key:


It's all about how many of these the top management can get into THEIR pocket, and absolutely nothing else.

fedup | May 14, 2007 | 12:29AM

Saxon B.,

As are you?


ps. nar nar nar

Jimbo | May 14, 2007 | 1:51AM

You IGS people still think you are so special and so above having to work on other vendors "crap hardware". You think that your job is to get high "customer sat" ratings. Grow up! Your job is to perform a very basic service. And with idiot Palmisano's matrix design, you should have it easy. Windows admins, all you have to do is manage a pathetic little Windows operating system. Same thing goes for Unix. If you think its rocket science, perhaps you should be working at 7/11. As far as "customer sat" goes, if you jerks weren't always so obsessed with what you DON'T do customer sat would just happen from doing a good job. You brought this mess on yourselfs...don't blame the idiots in management, they don't even know you exist.

IBMIsAJoke | May 14, 2007 | 2:45AM


Did you read the article? You take only one thing out of context and excuse IBM for all it did. Sure, the client's higher managment are to blame for many things, but that does not excuse IBM. It's like excusing the mafia because people want to take shark loans on gambling.


Not all were herded to IBM. Most took the job. Many already on this IT scam trend of fake inflated resumes.

For the group not belonging to the herded group naively followed dangling carrots why didn't they do a basic check on company background?

For the herded group, didn't you try to take another job? If you did make that effort and failed, I'm sorry to you from what I implied. But if not, and I believe that's the larger group, sorry but out of credit on tears for you.

Mr. Reality Check | May 14, 2007 | 5:01AM

In this, and previous column's, comments I see lot of negative comments about IBM and mainly IBM management, BUT.... they all seem to come from the US. What about IBM Europe and the rest of the western world? Also lots of IBM people there and also lots in IGS. They do not seem to respond, or are not that negative. How come?

Confused | May 14, 2007 | 5:06AM

"Now my question is, before 2002, were managers technically knowledgeble, and if so, how were they all replaced in such a short period of time?"

They were always incompetent. It's just that their incompetence is getting worse, and, at the same time, the technical expertise inside the companies that would be IBM clients is getting far better. Remember, IBM lost 2 Billion dollars on OS/2, at that time a superior operating system, by making a long series of foolish decisions. See:

It's not outsourcing, it's incompetence.

A manager with no technical knowledge, and no interest in technical knowledge, cannot run a technical company successfully. Such a manager may be able to make short-term gains that distract people from the larger issues, however.

Futurepower® | May 14, 2007 | 5:09AM

@ confused:

maybe because the European IBMers aren't inclined to read a primarily US-centric and targeted Blog?

(a European (US-Expat) IT Guy)

Lavaguy | May 14, 2007 | 8:33AM

Gravity sucks

Left to itself, water moves towards the deeper parts of the pit. The apple fell on Newton's head. Now, it is the turn of the big apple. Yes, dear readers, gravity sucks. Now, read all this again by replacing water with work, gravity with globalization.

IBM or AT&T or GE or whoever are not as smart or sinister as is made out to be. They are simple folks, running a business. Businesses run (or not) based on their bottom-line performance. Now let's try to get that bottom-line thing straight.

There are 2 ways to write to good code :

1) Set up huge, expensive offices, fill it with people who work with "style" - have loong Dilbert styled meetings, systematically make minutes, track progress with exotic tools (and create some, just for kicks), attend lavish conferences on office productivity and throw some dimes at technology seminars too; File meaningless patents - and burn the greenbacks to keep those patents active; pay hefty salaries so that all the nice office folk can own a few 4WDs; And yes, btw, when the code doesnt get written - or not well enough, throw some (more) money on classy consultants.

2) Hire guys who write good code - without the need for all the pretentious stuff mentioned above.

Now, if it were YOUR money, which route would you take ? Is it YOUR fault if the latter folks happen to live in another timezone, look different or eat other things ?

For a moment, look not at IT, but instead at clothes or shoes or toys. You buy them with YOUR money. And you buy them from WalMart - with a "Made in China" tag. Now, if these had been made in USA (or western Europe), you would have to pay 10 times the price.

For all the breast-beaters on outsourcing, here is the simple truth. IT in India or China or Brazil or in such other places is not cheap - it is simply un-pretentious. Or, put in other words, IT outsourced is valued as it should be, for what it is worth. Just as WalMart does with its wares.

VRD | May 14, 2007 | 9:00AM

Regardless of the numbers us at IBM all know it is coming - the next Date floating around is the 24th of May so we will see next week if another wave hits the street.

I've Been Missled | May 14, 2007 | 9:23AM

"Now my question is, before 2002, were managers technically knowledgeable, and if so, how were they all replaced in such a short period of time?"

In my 3rd-level S/W-tool organization, in late '02, our 4th-level manager wanted to re-org our group, so he brought in a whole new bunch of managers (1st, 2nd, and the 3rd level) from outside our area, and outside S/W. These people were mostly hardware designers, usually new to management, and simply had no understanding or knowledge of S/W in general or our tools in particular,

Managers, at least through 3rd level, come and go quickly in our area (every 18 months or less), so even before that there was a more gradual change as the new managers coming in were less and less often "home-grown", or knew anything about our tools or S/W.

anony-mousse | May 14, 2007 | 9:52AM

Don't know where you get your info, but my entire location, over the last 5 years, has been "herded" into IBM. All other companies in the area that signed contracts with IBM went thru the same process. I don't know of a single IBM employee that wasn't "outsourced" to IBM from their previous job.
Once again, those in the trenches who actually do the real work have someone else who doesn't know try to tell them "this is the way it really is".... or "how come you didn't do it this way". Once again, IBM & the former company made sure that the alternative was very unattractive, to make sure they got all the people they had to have take the offer. And VERY little time to consider it, put the pressure on even more to ensure nobody has time to look into anything or research/job hunt. Please read before you respond, repeating is a waste of time (but it IS the IBM way, so obviously its a wonderful thing).

fedup | May 14, 2007 | 9:56AM

Lets play "guess the management levels" in IBM shall we? On average how many levels of managers do we have between the drone and our GM? Give up? Six and in some cases seven. That's right folks, 6 or 7 layers of people who's only goal in life is to manage people. Think about that for a bit. The guy at the top manages managers, who manage managers, who manage mangers, who manage mangers, who manage mangers, who manage mangers managing people doing work.

Once the great outsource is done, guess who'll be next? No point in having 7 layers of managers who manage nobody now is there.

Chauncy | May 14, 2007 | 10:44AM

It is laughable to see so many insecure, xenophobic folks blaming Indians as opportunistic, stupid, incapable of innovation etc.

Stop blaming management, Indians, India ... everyone and everything except the shallow consumption-crazed, credit-loaded society that America has come to be. Look at the mirror folks. The answer to your problems lies there.

These xenophobes should be ashamed that in spite of coming to work via poo-laden streets on our bullock carts with oil lamps and powering our computers using hamsters, we are able to out-think and outdo you SUV driving, warmongering, McDonalds-fed, overweight Walmart shopaholics.

Karthik | May 14, 2007 | 10:52AM

Here's a suggestion, what if IBM(under Sam's leadership abilities), actually had a plan to envigorate their products and services, as opposed to just cutting workers? Now the large mulitnational are being run by financial/accountant types, this is the mentality. Let's give control to product development, sales and marketing and quality control. Wow, has Detroit learned this lesson yet?? Uh, TOYOTA!!!!!

edd culbertson | May 14, 2007 | 10:54AM

Here's a suggestion, what if IBM(under Sam's leadership abilities), actually had a plan to envigorate their products and services, as opposed to just cutting workers? Now the large mulitnational are being run by financial/accountant types, this is the mentality. Let's give control to product development, sales and marketing and quality control. Wow, has Detroit learned this lesson yet?? Uh, TOYOTA!!!!!

edd culbertson | May 14, 2007 | 10:56AM

After reading these comments, I think IBM is trying to avoid admitting that the new service business doesn't have the economy of scale of traditional heavy industry. In services, all you have is 1 team per project, times the number of projects, equals linear growth.

Now, you can make great money in services, but not the geometric growth you would get from, say, mining coal and buying a steamshovel 3x the size of the one you had before.

To squeeze more money out of services, you have to squeeze the same high-talent employees who are getting the job done.

It's not going to work. IBM's only asset is talent, and its only source of cost-cutting revenue is talent. They are actually trying to eat their own leg.

To Serve Man | May 14, 2007 | 10:57AM

Here are a couple of tidbits:

- and the LEAN process are owned by McKinsey and Company. Apparently IBM went to McKinsey and the quote they got back was so outrageous, they figured they could do it on their own.
- When our phase of LEAN started, we had a kickoff meeting with slides, great. After that, we maybe saw the managers for 5 minutes in total the rest of the week. We basically had to figure it out for ourselves what needed to be done.
- This phase was supposed to be a 6 week process, 2 weeks in the LEAN travel budget was halted. Now, we're forced to work on this remotely with our peers. We still don't have a real clear direction on what needs to be done.
- The first 2 phases of LEAN did not involve layoffs, those only started on 5/1 across all support contract groups.

CS | May 14, 2007 | 11:04AM

Here's a suggestion, what if IBM(under Sam's leadership abilities), actually had a plan to envigorate their products and services, as opposed to just cutting workers? Now the large mulitnational are being run by financial/accountant types, this is the mentality. Let's give control to product development, sales and marketing and quality control. Wow, has Detroit learned this lesson yet?? Uh, TOYOTA!!!!!

edd culbertson | May 14, 2007 | 11:04AM


"The first 2 phases of LEAN did not involve layoffs, those only started on 5/1 across all support contract groups."

Not true. My IGS support team was in Lean wave 1, and when it concluded our head count was cut by approximately 40%, with all personnel led out the door being contractors.

Given our workload at the time (25%+ overtime average across the team), I've never seen any cost savings statistics that would justify getting rid of 40% of our team, so IMHO it was just another typical number picked by some higher up to make themselves look good to the next layer of management (repeat ad nauseam up the line).

But, they sure weren't done there.

We then took an additional hit of another 20% during the 05/01 layoffs, which included both contractors and IBM regulars.

That leaves the remaining 40% of us here to perform the required work, which unsurprisingly continues to increase.

So, here comes the breakage, it's just a matter of time. In the end, it's not only the IBM employees but the customers who will suffer, and I sure haven't run across anyone in management who seems to care.

Here comes the breakage! | May 14, 2007 | 11:35AM

CS, you are wrong. is NOT owned by McKinsey.

A Non | May 14, 2007 | 11:40AM

You should check out the section titled "International" in the first post of this article:

Everyone is, as government, a tool for businesses to make money by whatever means is necessary.

Fry Cooker | May 14, 2007 | 12:10PM

Well I am not suprised by the state of affairs at Big blue now... I was up until April a contractor working in Poughkeepsie... After 7 years there I thank my lucky stars that I was 'resource actioned' when I did considering what seems likely to be happening in the not too distant future!!
I loved my time at IBM, but for a few things;
1: I ended up with an hourly pay rate lower than my initial rate back in 2000
2: I started doing the work of 1 person, by January this year I was doing 4 1/2 head count, some poor sod has eneded up with my 4 1/2 headcount in addition to what he had already
3: I used to be able to see my Manager virtually anytime I wanted... In the last 2 years I only saw my Manager twice! And one of those meetings was the 'sorry about this, but...' final one!
4: Something that intensely annoyed me this past year was the use of Sametime (not email, but fricking Sametime) to tell a Blue Badger he had a month to find another post within IBM (this it seems on the grapevine is an increasingly common tactic)

So after 7 years of working my tail off I am left with good memories but an overwhelming bad taste in my mouth about IBM... It's true that within IBM you could see the detrimental effects of the retirement of Gerstner and how Sam has buggered everything up... IBM went from having a strategic vision to playing nice for Wall Street with Sammy boys rein.

To all the Beemers (and supplementals/contractors) who are worried about what to do after the axe falls I can only from my experience say that it's the best thing that could have happened. I ended up in a company that I look forward to going to work at (although my commute is 30 miles longer each way it is only an extra 15 minutes of travelling time) I have an increase in salary of over 60%, shorter hours, and am appreciated and rewarded... Heck I can even pop upstairs and drink coffee with the CIO anytime I want!
Poughkeepsie beemers leave the sinking ship and come down south to Jersey or NYC and actually start having a life again!!

SteveB | May 14, 2007 | 12:49PM

McKinsey: The firm I used to work for, Aon, had a McKinsey partner come in as CEO and he is really the Chief Accountant in Cutting. Doesn't matter what, cut it, reduce expenses, reduce headcount. Well, no company can ever EXPENSE CUT it's too great profits. At Aon, the cutting has gone deep, into real muscle and Greg Case is busy outsourcing everything in sight and all of it is turning out to be disaster.

But cost cutters and bean counters don't see those loss of productivity numbers. The HelpLess desk (hello, Bangalore) solves nothing in a big way.

So I am not surprised that the LEAN concept is a McKinsey brainchild at all.

Bob Eisenhardt | May 14, 2007 | 12:53PM

"The facts are that our regular U.S. population is just under 130,000 IBMers"
This quote means that last week's claim "150,000 U.S. layoffs for IBM" is accurate. As the 150,000 layoffs includes contractors. Such as myself

Anthony | May 14, 2007 | 1:17PM

"we are able to out-think and outdo you SUV driving, warmongering, McDonalds-fed, overweight Walmart shopaholics"

Who's the bigot here?

Is this what you tell yourself to feel better about stealing another person's livelihood? For the record, the sort of guy you have stolen from isn't awfully "well paid", they are IT support - i.e. ordinary folks. The difference between most of them and you (evidently) is that they are mostly humble, modest people who work hard to make ends meet. You are just an -er- egoist. Oh, and if it weren't for these guys having the decency and professionalism to TEACH you how to do your freshly stolen job (before they were laid off) you'd still be walking through that pooh covered street.

Just a guess here - you secretly hold on to the cast system, don't you?

Thought so.

Oh, time for lunch, gotta go. I think I'll have a hamburger in honor of your cleverness, Karthik.

Karthartic | May 14, 2007 | 3:01PM

Many years ago, I was a young IBM recruit right out of the Navy. The first thing that happened that impressed the hell out of me about IBM management was the six month delay between the submission of my application for employment with a resume and the answering of the phone by a cheery, "Yes Mr. xxx; I have your application right on my desk here. When can you come in to talk to us?" I know that he wasn't sitting there waiting for me to call in but it sure felt good!
The second thing that happened was when an "IBM Means Service" award was presented at a branch office meeting a couple of months later. The branch manager brought the wife in of the recipient and presented her with a dozen red roses(to soften the effect of all the overtime). Then they gave the engineer the award.
The third thing was the silver baby spoon engraved with the baby's name sent to my wife from Armonk, NY. on the birth of the baby.
That was in 1967. You couldn't get me out of IBM with dynamite. Where did all those managers and people like them go?

xibm | May 14, 2007 | 4:13PM

"Who's the bigot here?"

I suspect both are.

I probably am one too.

I don't know if this has anything to do with the post itself but historically, groups of humans have tried to ensure survival by eliminating other groups. Earlier we used spears. Now we use knowledge. Or maybe we always used knowledge. Knowledge of how to use a spear better would be a distinct advantage in decimating a rival tribe, methinks.

Talk of decency on one hand and reference to "pooh" (however wrong in spelling, one does know what you mean) on the other are contradictory, but that's the human condition.

We just can't stand anyone who's not like us, can we?

We'll either mock hamburgers or curry.

Will we ever do anything to go past mockery and make sure everyone wins? Yes, including the big corporations. I'm sure we can all win if we decide to.


Deepak Morris | May 14, 2007 | 4:22PM

Deepak, enjoy the honeymoon.

sure | May 14, 2007 | 5:04PM

For those shills that STILL keep commenting on the numbers being wrong, get over yourself already. The story, as stated, is within these comments. Lean and TPS is a great process IF implemented properly. IBM, IMHO, is using it as a means to thin the ranks without looking bad to the public. They are using as a ruse to improve the company. The ONLY thing they have improved so far is the short term stock price. We have been cutting back since 2002. We are beyond cutting muscle.. were into the bone at this point.

As others have mentioned,they need to fatten the levels of management. I am very sad that I gave as much as I did.. those 90 hour weeks for 40 hours pay, the lack of raises, rating purely based on your rapour (sp?) with your manager. The rating system is meritless. Cuts are not even based on PBC.. its all who you know. Lots of folks have given their all for the IBM Culture. Everyone is now wlaking around with a bullseye on their back. If one looks at the retention rate, you will see the documented churn & burn.. new hireswho leave by 5 years.. due to lack of ratings and pay. The knowledgeable folks have left in droves. There is ZERO incentive to stay now. Getting a package is now a GREAT thing.. you get several months of pay and a chance for getting a real job. Morale and work ethics are lost.. commitment.. lost.. quality service to the customer is now non existent. Sales people sell these contracts, under bid so that they make their commision, then leave the steady state folks holding the bag for their lack of due dilligence. Gosh.. one can fill the entire blog with the issues we have at IBM.

I dont see an end until Sam is long gone. The nerve of him and upper management casting away folks with zero regard to their careers. You have damn near lifers that have given soo much thrown away.. ZERO RESPECT TO THOSE WHO HAVE GIVEN SOO MUCH TO THE COMPANY..

Best luck to those left who have to pick up all the work that is left from the cut backs..


RA'd in may | May 14, 2007 | 8:19PM

Dear Robert,

You really are an idiot.

Saxon B.

Saxon B. | May 14, 2007 | 9:40PM

Saxon B.

We get the message, you have a problem with Robert.

Could you please provide some context or reasoning for your assertion of Roberts mental state.

otherwise you'll just get bounced.



Jimbo | May 14, 2007 | 10:31PM


I'm not taking a potshot at the hardworking IT folks who get laid off. That barb was directed at the holier-than-thou xenophobes who accuse equally modest people of theft. Like you did. Not calling you one, I know you reacted to what I said. They are ALSO trying to make a decent living using these off-shored jobs as a way out of generations of poverty.

Sure, it must hurt like hell to lose a job for no fault of yours and it must hurt even more to have to train your replacements. Mudslinging their replacements, calling them names, making fun of their supposed squalor, that is NOT going to help these poor American IT folks who lost their jobs.

Instead, lobby with Congress and that off-the-rocker president to stop wasting precious taxpayers dollars on massacring hundreds of thousands of innocent Iraqis and wrecking a similar number of American lives by sending their kids as lambs to this senseless slaughter.

The $430 billion wasted so far could have gone to college scholarships (20+ million) to retrain the affected IT workers and/or to pay for their kids' education or build 4 million public houses ... your government could have helped and they still can. Instead they choose to go hunting for oil so that they can make you pay $4 per gallon ... and where does that money go? To the Aramcos and other Saudi sponsors of terrorism.

I digress.

The average American has no control over who Oracle or IBM or Dell outsources their work to. You have way more control over how your tax money is spent to alleviate these problems. Fix your primary, secondary schools, retrain these IT workers ... there's so much that can be done!

Corporate America is ALWAYS going to find ways to keep costs down. When the Harvard/Stanford/MIT educated blokes, America's "finest", don't have the rectitude to not outsource these jobs, how fair is it to blame and insuly ONLY the Indian kids they outsource the jobs to?

Everyone is entitled to make a living. Nobody is going to pass up an opportunity to earn more and no one (unless they are living comfortably like you or me) is going to sit back and analyze where their job came from.

An American's livelihood is worth exactly the same as that of an Indian or an Argentine.

I follow the "cast" system as much as you can make a C compiler spit out executable code with a "dynamic_caste" statement.

Visit India instead of believing in popular misconceptions. The caste system is a relic of our past that most Indians including me are ashamed of.

As much as you are ashamed of your hard earned tax money being used to butcher innocent Iraqis (or so I hope). I'm as guilty of being casteist as every American is of murder. Not to say two wrongs make a right ... look in the mirror before pointing a finger!

BTW, poo is the correct spelling. Pooh is a Disney bear.

Karthik | May 14, 2007 | 11:16PM

My reasoning is this:

Robert reports that IBM has "lost its way", has no idea how to run a globally integrated enterprise, and will "offshore" every job it can in a second to make a profit.

He gives no consideration to the fact that IBM could have "offshored" to the extent purported at any point in the last ten years. He gives no reason why IBM has decided to execute the mysterious LEAN program at this point in time. He completely disregards the fact that IGS Americas is the only geography not experiencing growth in recent times.

I do not have much of an idea about Robert's background other than what is written on the "About" page, but it seems as though he has no experience in anything other than writing.

It is my opinion that Robert has little understanding how a modern global enterprise is operated, and has absolutely no idea about "offshoring" other than the fact that it scares a lot of IT workers and will generate traffic for his blog right before his contract is up for renewal.

Saxon B. | May 14, 2007 | 11:26PM

Well, Project "Lean" from IBM, complete with the usual managerial doublespeak and reassurances, eh?

Well I've got a little project of my own going - every time I encounter one of these "global solutions" companies I carefully check out the "products", or to put it in their terms, the "solutions" that they're trying to get me to use.
In IBM's case, they bombarded me several years ago with long winded brochures on new server solutions using their version of Linux - peppered with words like "developer" and "environment" and a bunch of CD's none of which did anything except tout more
"solutions". Well I've dumped all the IBM literature into the trash along with the Microsoft literature, books and software CD's and switched to Debian Linux - I call it Project Insourcing".

Insourcing is a new trend in which tens of thousands of small and large businesses rediscover the power of inventiveness, initiative and creativity while legions of overspecialized zombie drones toil over Microsoft's prepackaged ".NET" nonense or IBM's "solutions" or else torture entire business IT systems to fit into the "Oracle" mold. In bypassing the "global" corporations and their single minded, expensive and technologically rigid solutions, the average business will gradually regain control of its desktops and discover just how bloated and expensive their "IT" budgets have unnecessarily been - no legions of zombies needed.
It is a gradual thing that will happen under the noses of the "experts" who will carefully watch it unfold but neither acknowledge nor report it and will take pains to deny that such a thing is happening. Each time another UBUNTU or Debian user discovers the ease and power that come from some simple experiments in trying out a new system,
it is another nail in the coffin of expensive bloatware. The first signs will be an historic shift AWAY from Microsoft, IBM and their ilk and deservedly so.

Citizen Jimserac
James Pannozzi

James Pannozzi | May 14, 2007 | 11:28PM

Well, Saxon B., your "reasoning" seems to have quite a case of tunnel vision. You totally ignore the 1000+ posts of current & xIBMer's that tell Bob he has nailed it right on the head.
Funny how you seemed to miss all that... must have your blinders on. At least you admit that it is your "opinion", and it "seems to you"... while the rest of us say, we are in this and deal with it every single day, and that's exactly the way it IS - it doesn't "seem", and it isn't our "opinion", it IS what goes on at IBM.

But, then again, there are none so blind as those who refuse to see...

fedup | May 14, 2007 | 11:38PM

You're absolutely correct fedup.

The internet is the only source of truth.

I wish I was as smart as you are.

Saxon B. | May 14, 2007 | 11:46PM

Well, Karthik, I see now you want to take potshots at our government and Iraq. Ok, fair game, since you have made it so.

Did a little research - the estimated death tolls from the 3 wars India has fought over Kashmir run anywhere from 1/2 million to over a million people, I'm sure more than a few of those were innocent. And that's not even mentioning the Sri Lanka conflict. Whether your agree or not, at least we got rid of a dictator that butchered, tortured, raped and slaughtered over 1/2 million of his own people and dumped them in mass graves, including using poison gas on entire towns. What's YOUR excuse? I'm sure that's alot of money spent militarily that could go towards improving the lives of a whole lot of Indians instead....

Leave the politics that have nothing to do with the discussion out of it. If you can't add an insightful comment or reply to any discussion in an adult fashion and stick to the point of the thread, then either don't reply, or realize that you only reinforce amongst all reading your posts the very prejudices that you are trying to dispel.
Let's not turn this into an Iraq war blog. Let's keep the posts on topic. There are other blogs you can spout off on if you wish.

fedup | May 15, 2007 | 12:05AM

Saxon B.
I deal with these situations that everyone is describing every day. You telling me that I've somehow got it all wrong as I bust my butt working a ton of overtime to make up for the many that have been let go while the work load does not decrease, and the offshore does not produce at the level expected, just rings hollow to the ears of me and many others. Pretty much anyone that is not in my shoes telling me how my situation is "isn't as smart as me". I don't pretend to tell other people that I have no knowledge of their situation "how their situations are". I at least wish you were in my shoes and could experience it first hand. In that respect, I wish you were as smart as me too.

fedup | May 15, 2007 | 12:14AM

Obviously I cannot speak for you situation.
What exactly do you do at IBM?

Saxon B. | May 15, 2007 | 12:29AM

I'm an SE. I now spend most of my time redoing other's work, and pushing tons of worthless paper overhead. What used to take 2 days now takes 2 weeks. Oh well, as long as the customer can accept the lower quality/longer turnaround/increased downtimes.....

fedup | May 15, 2007 | 12:43AM

Fedup, not that I want to get into an argument over politics. Shall we talk about Hiroshima? Nagasaki? Vietnam? Korea? Please. Want to tally up all the dead in those conflicts? And talk about your excuses for those?

Nope. I don't either. We have a problem on our hands today. Outsourcing. America has the money to fix it today. Iraq was just a way of saying you are in a democracy where your voice counts. Make yourselves heard! Heck instead of training your Indian replacements, educate them that they are taking your jobs. Ask them to spread this awareness in their communities and not jump in for a quick buck in a sweatshop.

Yes, you're spot on about how our government could have spent all that money on 60% of our population that's still below the poverty line. I don't dispute that at all.

The Kashmir conflict is over one of our own states. What would America do if Canada laid claim to Washington over some obscure 12th century story book? Hand it over meekly I'm sure! Comparing that to Iraq is juvenile to say the least. "Got rid of a dictator" ... erm using another of his kind?

Sri Lanka is an independent country! And India is not politically or militarily involved there (yet another misconception) apart from sending a peacekeeping force in the 1980s at the request of the then Lankan government.

My point is instead of wasting money on some unrelated cause, there are a bazillion different ways of protecting these IT jobs that are being "stolen".

Don't waste your time mudslinging Indians now. In 5 years, you'll be mudslinging Vietnam and in 5 more, the Philippines while America continues to bleed jobs.

Much as you claim I should leave politics out of this, you tell me, is this holier-than-thou-dirty-Indian attitude going to give you ANY chance of saving these IT folks that are getting laid off?

Karthik | May 15, 2007 | 12:46AM


Unfortunately software engineering has become commoditesed. Software engineering shares much in common with the manufacturing slow down of the 1970s-1980s.

IBM is not to blame for this. And neither is any other company. If you want to blame something, blame the internet. International collaboration would be impossible without it.

The real question you should be asking is what you can you do about it.

And there really is only one answer to this. You must be able to do something which some graduate in China cannot do.

I see a lot of emotionally charged articles on this topic and it does frustrate me somewhat.

If you like to read, I highly recommend you read this:

Probably the most relevant book on the topic for the IT professional.

Saxon B. | May 15, 2007 | 12:59AM

I wasn't mudslinging Indians. If you would read back thru my posts, you will see that I have repeatedly spoken out against people "mudslinging Indians". To quote myself a couple of times: "I have no malice or ill-will towards overseas workers - they are just trying to make a living same as we all are.", and "Again, I have nothing personal and no disrespect meant to Indians or any overseas peoples or nation.".
Now just WHERE do you read "holier-than-thou-dirty-Indian" into that? Based on your last post, I AM beginning to doubt your understanding of the English language. My beef is with the greedy execs and how they are driving and handling the situation.

As for Kashmir, Pakistan claims the same thing, etc, etc... over 1,500 Indian troops have been killed in the Sri Lanka dispute... etc, etc... lots of innocent people have been killed in disputes all over the world. Sometimes its to get rid of a ruthless dictator, sometimes millions of innocents get killed because someone deosn't want to "meekly hand over a state".... etc, etc.... but you do raise an interesting point, however. Aside from Japan (which attacked us first), maybe American foreign policy DOES need to change. In the other examples you gave, when a democratic government is about to be overran by a communist or dictatorship, instead of answering a request for help (like maybe you did in Sri Lanka), the US should just say SCREW YOU. Yep, that would make the world a nicer place. Should have let Nazi Germany conquer all of Europe.
We could argue forever, so lets drop the politics once and for all. You brought it up, I've answered, now lets drop it.

And please don't label me something I am not, or accuse me of doing something that I have not been doing in my posts.
That fact alone calls your honesty into question.

fedup | May 15, 2007 | 1:13AM

Saxon B, I do agree partly, my main beef is with the way IBM execs are handling it. They don't seem to care about quality or customer satisfaction much anymore, let alone their employees that just happen to cost more $$ than others. But, again, as long as the customer/American public is satisfied with it, then there's not much I can do. I'm pretty much already doing all I can (lots of thankless OT). But I'm glad we finally see a middle ground.

fedup | May 15, 2007 | 1:20AM

Forgot to answer this one statement. The last time I checked, the "another dictatorship of his kind" that we'er "using" in Iraq was holding elections open to the public, so I don't really know what you meant by that...

fedup | May 15, 2007 | 1:38AM

You know, I am the one saying "drop this", but your comments and your branding me a "holier-than-thou-dirty-Indian" attitude despite my statements to the contrary have gotten me somewhat riled up. But I won't state anything, I just have a few questions for you, to see just what it is you truly think should be done concerning world affairs:

1) Can you tell me what happened after we left Vietnam? Was it all roses, once the big, bad, USA got out? Did the government that took over after we abandoned the democratic peoples march into Cambodia and spread flowers and good cheer? Ever hear of "The Killing Fields"? Should we have never tried to prevent that?
2) Should we have never defended South Korea? If we had never been there/were not there now, would Kim Jung Il turn South Korea into the paradise that North Korea currently is?
3) Should the UN and/or US go into Darfur and stop the genocide? Based on your statements I believe you think not...

You do have a point. We have a saying in the US: "The road to Hell is paved with Good Intentions". But, I see from your arguments where you sympathize, and, quite frankly, I find it disturbing....

fedup | May 15, 2007 | 1:54AM

Fedup, you got me wrong. I wasn't accusing you of mudslinging Indians or accusing you of wrongdoing.
(you = xenophobic folks, not you as in Fedup). My apologies if it came across like that.

We differ on the motivations for military intervention and I agree that this is not a political blog so let's drop it.

It is the general attitude against overseas workers that you are against and I am against that I referred to.

Looking at the 1000+ comments for the orginal article or to this one ... pretty much every reference to India or Indians is derogatory. Zombie, thief, incapable of innovation, poo laden, dirt ... just what did we do to deserve that :-)?

Financially, IBM is under threat from all other big IT majors. The Indian IT giants alone have a headcount of 300K in India at a fraction of the cost and can outbid IBM on ANY tender they bid for. What's more, they have earned quite a reputation for doing things right.

Given that these costs are never going to go down, either IBM tries to survive by pulling something like LEAN off or it slowly dies out competing in this insane environment.

Since this is a bit of a helpless situation, won't it be best if somehow all these affected IT staff are retrained?

These employers (unlikely) or the government (likely) could subsidize their education using state funds and equip them with enough skills to get back into the workforce. At least they can provide themselves and their families a decent living.

That said, it must be crappy on the US-based IBMers that their loyalty to the company is being paid back in this form.

My heart goes out to them and my CV (and that of as many friends I can influence) will not go near the HR Inbox of any American company, not just IBM, trying to hire on the cheap in India.

Karthik | May 15, 2007 | 2:16AM

Thank You Karthik, apology accepted. You are right, many posts here have come across as very racist, from both sides, I don't blame you for getting upset about some comments that have been made.
I don't know the answer. I only know that the way IBM management has been handling it leaves alot to be desired....


fedup | May 15, 2007 | 2:23AM

Guess my apology came a trifle late. Sorry to have pissed you off this much Fedup. I was NOT accusing you.

As for your questions, I think you are among the majority of kind, good Americans who tend to see only the good side to military intervention. Nothing wrong with that.

I say yes to you on 1), 2) and 3) but there are as many selfish strategic interests as humanitarian ones in each case to warrant intervention. Most of the time, I find the not-so-compelling strategic reasons cloaked by the very compelling humanitarian ones. I'm sitting on the fence.

Because Iraq is the first major war I'm living through as an adult, I have strong views of US intervention there.

I have at least 2 close friends (as I'm sure you do) whose brothers and boyfriends are serving out in Basra and Baghdad. It is so senseless to send out a young life full of promise to some war torn land on the hope that they'll fix a conflict that has been around for ages. Good intentions alone cannot fix these problems. Hope that answered your questions.

Karthik | May 15, 2007 | 2:33AM

You are exactly right, Karthik.

But now, back to the topic, if only someone could convince me that IBM upper management had "good intentions", that involved something other than their own bloated compensations.... :)

fedup | May 15, 2007 | 2:42AM

In Australia, it is an offence for directors of a public company not to maximize the shareholder profits. ( Corporations Act (Australia) s180 to s184 ). I expect the USA has similar laws. I remember Bobs column, maybe 2 years back, about a teachers retirement fund that touched this same issue. Good intentions ( or otherwise ) have noting to do with it.

Surely, it is not surprising then when these directors ignore other considerations, such as what is good for the whole country. Cant blame them for not wanting to be prosecuted, I suppose. But of course, the consequences are often sad and frustrating, as being reported here. In my opinion, this law is fundamentally wrong and immoral. So it would be good for everyone if it was tempered somewhat.

james | May 15, 2007 | 3:20AM

Well with all the above comments the similarity line up is that IBM has to maintain a Microsoft Like Management or It will be on the verge of another DAEWOO, The South Korian Company , which got the same scenario as IBM now.

Saumendra Swain | May 15, 2007 | 7:01AM

While I don't appreciate Mr. Cringley's journalistic style, analysis or conclusions, this article struck a nerve apparentely. It is unfair to confine comments IBM when outsoursing is a national race to the bottom regarding cost reduction. Claiming customers will not like the shift to India is not credible as they are outsourcing themselves. If you work at a multinatinal you can't help but notice the large number of Indians, Chinese nationals that populate the company. They innovate just fine and they can do it just as easily in their home countries. This trend will continue and be successful in moving high paying jobs abroad, and leave a wake of trauma for the displaced workers and their families to be cleaned up by the government. This is no different than the trauma my parents went throught when good manufacturing jobs were transfered overseas. Contrary to the political hype at the time from bought politicians, they didn't find "higher level better paying jobs" but only could find low paying service jobs as is the case today. Taxes shifted to the next highest paid group as Government stepped in to provide services, education, health care, housing assistance to workers that can't pay for it on service wages. We still hear this today, "it will be painful but we all will evolve to higher level jobs." This just won't happen, and government will move the burden on to the next higest paid workers and the companies that remain. Net we saved nothing as a nation by shifting jobs for cost reasons. Compaines need to grow the old fashioed way, not buy cost / revenue tricks but by innovative new products that cutomers adopt. Sabine Oxley outlawed over inflating revenue, same should be done for artificially reducing costs by shifting jobs abroad. Especially when the stock price moves up at the news of layoffs.

Joseph | May 15, 2007 | 7:27AM

To Saxon:
Robert reports that IBM has "lost its way", has no idea how to run a globally integrated enterprise, and will "offshore" every job it can in a second to make a profit.
And you point is?

He gives no consideration to the fact that IBM could have "offshored" to the extent purported at any point in the last ten years.
Not so...they had to spend 6 billion to build the facilities first.

He gives no reason why IBM has decided to execute the mysterious LEAN program at this point in time.
Because they have put in the infrastructure and have enough Indians in place to implement their plan now.

He completely disregards the fact that IGS Americas is the only geography not experiencing growth in recent times.

Let's just dispel this notion right now. In a solution labor is 40% of the solution. How much of that is profit depends on how the contract is written. If the solutions in the Americas are GRing (offshoring) then of course the Americas will not experience growth.

It is my opinion that Robert has little understanding how a modern global enterprise is operated, and has absolutely no idea about "offshoring" other than the fact that it scares a lot of IT workers
Damn right it scares us and it should scare ALL Americans. IMHO

waiting | May 15, 2007 | 7:40AM

George Bush should step in and set the tone
for these pillaging companies like IBM. Strong
corporate culture is how IBM, Hewlett Packard,etc
got them where they are today.. The corporate
playbook is right out of MBA college today..
Chew & screw..Long term vision & strategies are essentials to build a loyal workforce & company..

Peace out!

Dan M | May 15, 2007 | 7:41AM

In a solution labor is 40% of the solution.

waiting | May 15, 2007 | 8:03AM

In a solution labor is 40% of the solution. The rest of my comment disappeared? I should have said that in an average solution labor is 40%. Every solution is different so I was just picking a mean.

waiting | May 15, 2007 | 8:09AM

Here is part of the problem: language.
Let us examine the most recent post by Sumendra just above a few ...

"Well with all the above comments the similarity line up is that IBM has to maintain a Microsoft Like Management or It will be on the verge of another DAEWOO, The South Korian Company , which got the same scenario as IBM now."

Poor Capitalization.

Starting a sentence with "well" makes no sense.

What does "the similarity line up" mean?

"or It" - capitalization again.

I never heard of South Korian.

"which got the" - bad grammer.

And you wonder why some post that there is indeed a language barrier in place.

Hey, good idea: Proof your posts in advance too.

bob eisenhardt | May 15, 2007 | 8:25AM

Pssst.. Bob, it's "grammar" (with a), not "grammer" (with e). Thanks.

choosy | May 15, 2007 | 10:15AM

I'm curious how much IBM US pays to a lowly IT Specialist in IGS?

Lets say I've got about 5 years of total work experience?

Here in Poland it's around 50k USD (which becomes 30k USD because of taxes).

polish IBMer | May 15, 2007 | 10:29AM

Top of the news in India today: H1-B visa abuses

This is the most popular visa category that most IT companies use to ship their Indian/Chinese engineers to customers across the US.

After sacking 120K people in the US, IBM could EASILY fill these 120K vacancies in India and bring these folks into the US using H1-B (for foreigners hired to work in the US - limited to 65K visas per annum) and L1-B visas (for intra-company transferees - with no known quota).

A H1-B is valid for 6 years and an L1-B for 3. Each provides a tried and tested path to the Green Card.

Honest users of the H1-B and L1-B suffer as a result of this abuse, not to mention the raw deal American IT folks get.

On April 2nd this year, 150K people applied for 65K visas. In one day.

Karthik | May 15, 2007 | 11:04AM

Point taken.
Choosy - bad me. LOL

But my basic thought remains that if there is bad language used in most normal conversation, then how in hell do these newly minted, fresh tech types deal with technical issues?

Look up Foamy the Squirrel and his tech rant.

bob eisenhardt | May 15, 2007 | 11:16AM

@bob eisenhardt:

>Here is part of the problem: language.


>Let us examine the most recent post by Sumendra just above a few ...

Let's examine your examination, too.

> Poor Capitalization.

There is no need for the capitalization of the word capitalization, if you want to emphasize you can do italics or bold. But you don't really need to, as it's a two word sentence and the only other word is an adjective.

> Starting a sentence with "well" makes no sense.

Not exactly. It's to connect or continue to a previous statement. He only missed the comma.

> "or It" - capitalization again.

Quoting doesn't shield capitalization.

> I never heard of South Korian.

But you should have heard of the auxiliary use of have.

> "which got the" - bad grammer.

As already pointed by another user, it's bad grammar.

> And you wonder why some post that there is indeed a language barrier in place.

Doesn't make sense. Just like the example you give you your victim.

> Hey, good idea: Proof your posts in advance too.

Comma should be exclamation or stop. And it should be prove and not proof. And there should be a comma before too.

My English is terrible but yours is disgusting and I'm foreign.

Go back to school, racist ignorant bigot.

Mr. Reality Check

Mr. Reality Check | May 15, 2007 | 11:31AM

Many typos on my last comment, probably caused by anger and contempt. My fault, I didn't proofread before hitting submit. For example:

> Just like the example you give you your victim.

Ironic! It should've read: Just like the example where you criticize your victim.


Mr. Reality Check

Mr. Reality Check | May 15, 2007 | 11:50AM

The gist of what Cringely is saying seems to be ok with what I know of internal IBM directions. I definitely disagree with his published numbers but there is a reduction number that upper management is shooting for here. (Probably 30-40k over a period of time in the Americas and then hire contractors to backfill as necessary. This is in line with the conversations I have been involved with at several levels.)

Recently several outsourcing contracts were intentionally underbid with the strategy that these contracts would be renegotiated soon and/or dropped. If you had access to these contracts and you understood the IBM QA process for these contracts it would be obvious to you as well.

My point is that there is no way these contracts should have passed QA without upper management signing off with the contingency plan in place to renegotiate. So Cringely is really spot on here. He just didn't understand the intimate details. Fix the numbers at 30k of layoffs to reduce fixed labor costs by replacing with contractors then add the renegotiate the SO contracts piece instead of blindly dropping the customer then it all fits into the LEAN effort.

Upper management is in it for the short term at IBM and there are not enough leaders. This is very evident by all the facts around the LEAN initiative. LEAN by the way is a methodology that is not a particularly good fit for the IT business. But who said the new IBM leadership was smart or had the guts to say no to these stupid ideas using the wrong methodology? I know many of these individuals who are involved with the US LEAN effort and I have to say they are average at best as managers. The real gap is their inability to be real leaders with vision or back bone. They leave much to be desired here and roll over to whatever direction comes down the pike. This means we are all in for a very rocky time here at the good ship IBM.

My advice is to sell your IBM stock now if you have any large holdings and especially if are an IBM employee. It could be your last chance for several years to get a good price. LEAN is going to be a bloody and ugly situation that will take several years for IBM to recover from if ever. Unfortunately for the stock holders and Wall Street analysts nobody inside IBM understands the fallout completely of this new strategy.

The new stratey (like Cringely pointed out) will result in smaller SO revenues but overall profit margin will go up because each contract that is honored by IBM will be profitable. The downside is that any customers that stay on with IBM will get less quality and the quantity of resources to manage their contracts from IBM. They will pay more for precious resources or they will have to go elsewhere. IBM has already communicated this on current contracts or is in the process of doing just that. (Contractors are fine but I can tell you from years of experience that it is a mixed bag of results.)

Once thing is clear it will not be positive for the stock price for several years if ever. This is clear since IBM will be destroying its reputation in the US outsourcing business which will give its competitors the edge they need to win the big ones. I am checking to see if LEAN is being implemented in other areas. (EMEA etc...) I do check my facts with key management within IBM whom I have known for many years and the consensus agrees with my overview.

IBMer in the Americas | May 15, 2007 | 12:31PM

As almost all comments point to IGS in this context, some thoughts about IBM SWG and the labs. I expect the same "LEAN" measures will be set in SWG soon.

Some maintenance of products has already been moved to China for instance.

Also SWG has acquired tons of firms over the last few years, with slow track records of rolling out these new products & functions on the market: guess why : no skills in field sales and tech services, overlapping product features with the newly weds etc.etc.

Perhaps SWG does not have the pressure yet, from a profit perspective, to reduce workforce.

swgemployee | May 15, 2007 | 12:32PM

I would expect that SWG would be in for some changes as well like you say. IGS and SO in particular are the pain points today. But with smaller IGS numbers there will be less sales of equipment since IBM has used IGS to penetrate many market segments that were closed until they won a contract that changed all that.

Anothere item that Cringely missed is that IBM management is looking at moving more back office functions to other geographic locations as well. (I am sure this flew under the radar since they are not strictly IT jobs. But obviously are dependant upon the IT workforce.)

Brazil was recently the recipient of thousands of procurement jobs when this function was moved from the US. There are other planned back office changes coming soon.

IBMer in the Americas | May 15, 2007 | 12:46PM

Ah ha, reality check. We're both at fault.
Now I will blame on part of me I have arguments with (and I will capitalize here): I NEED A BETTER KEYBOARD TOO. Sticks a bit, nasty and evil thing.

To tell the truth, my favorite keyboard is the old IBM PS/2 keyboard from the late 1980s.

bob eisenhardt | May 15, 2007 | 1:10PM

This a frightening laugh. IBM has established a virtual business center. Are we considering "virtual employees" instead of paid staff whether Fishkill or Armonk.

Hey, the benefits are cheap (nill), the payroll is cheap (nill) and if you want to fire one, just hit the delete key.

As weird as this is, I can see it happening!!!

bob eisenhardt | May 15, 2007 | 2:34PM

I would expect accuracy regardless of this article to correct a number just thrown out. The suggestion that 150,000 would be the number of layoffs and this number being inaccurate suggests that you wanted to report IBM having trouble and you had to manufacture a number to go along with.

Rebecca Cornish | May 15, 2007 | 3:19PM

any word about the research labs?

concerned_phd | May 15, 2007 | 3:35PM

I believe that number probably also represents contractors, which don't count for IBM's full-time headcount. As has been stated repeatedly throughout these posts (yawn) (sigh). The fact that people constantly overlook that and argue the numbers suggest they are IBM shills and have to manufacture some posts to refute the article...

fedup | May 15, 2007 | 4:07PM

Who needs researchers when you have no other employees?

Research? | May 15, 2007 | 4:59PM

Is the world going to end this time for real? Last time companies were downsizing and moving jobs abroad (end of dot com era), the world was ending for sure. I still cant believe that I lived through that ordeal! what defies any human logic even more is that everyone I know also managed to live through and prosper.

I do work for IBM in a non-executive capacity, and happy to do so. Pray tell me, will I live through this time or should I kill myself now to save all the pain and suffering.

Dan | May 15, 2007 | 5:21PM

arguably, IBM had one of the best research labs remaining, after the implosion of Bell Labs. When Bell Labs blew, literally NO ONE was safe (even the father of C++ was shown the door).
Same deal when Carly gutted HP Labs, and they laid off a Turing Award winner (Alan Kay).

I wonder if LEAN will lead to the final gutting of IBM Research. Well at least Almaden, Hawthorne / Yorktown, Austin, Zurich, and Toyko labs. Really doubt headcounts will go down in Beijing, Mumbai, or Bangalore.

Days like this make me wish I went into another field. What kind of nation rewards MBAs and JDs instead of PhDs in the sciences?

concerned_phd | May 15, 2007 | 6:05PM

Last week I spoke to my brother-in-law in Taiwan (he's Taiwanese) and he's having an extremely difficult time finding employment there. He reports that many high tech, engineering and electronics jobs have gone to China and many manufacturing jobs have gone overseas as well; mostly to China.
He noted that numerous factories have relocated and that it's really a struggle to even get an interview. He said that there is now a subtly imposed age barrier and hiring anyone over 35 is becoming very rare as those over 35 are most likely married with children and an increased benefit drain.
China is like a Black Hole with a gravitational field so powerful (1/5 of the world's total population) that it will suck the energy out of the rest of the world and its resources and economies.
We seem to think that China's effect is localized to America and that IBM and the like are acting differently than say those of the Taiwanese corporate culture and that the effects aren’t shared by others not living in America. They plainly are.

Alan | May 15, 2007 | 7:56PM

Bob, your comments are pretty much on target. Our management team cuts people, "defunds" projects necessary to improving productivity, eliminates budgets for improving critical skills and simply expects those of us left to suck it up and move mountains with no reward or recognition for all the additional work placed on us. I figure about a third or more of the department I'm in is at or beyond burnout and the workload just keeps increasing. What will our management do when significant breakage starts to take place, "resource action" more headcount? Motivate by exhortation and threats? I guess I could be called fortunate because I've been informed I'm safe, but I don't plan to be around when the planecrash takes place. I'm already way too close to burnout.

ibm insider | May 15, 2007 | 8:12PM

" Now my question is, before 2002, were managers technically knowledgeble, and if so, how were they all replaced in such a short period of time? "

In "Old IBM" there was a split: Some were, some were not. Old IBM was run by Marketing (Sales). It looked down on programmers and admin. It believed "anyone can be a computer programmer, so we hire the best people in any discipline and train them" and that manager's didn't need to have any technical training. They were (you guessed it) not very good, but the good managers and competent technical people kept everything running smoothly despite them.

Then came the big purges. Lifetime employment was over. Since then the whole corporate culture had changed. Many good people left to start their own businesses: Why bust your ass building up an organization that might turn around and fire you tomorrow? One friend still at IBM had to keep 'reapplying' for his own job. Many were temps and the few permanents had no loyalty to the organization which had no loyalty to them. I'd see temps and permanents sneak out early, avoiding their manager so they wouldn't get given more work. There were no on the spot firings despite that. Maybe that has changed, but IBM has been in a long, downward spiral.

Benny | May 15, 2007 | 9:18PM

"Days like this make me wish I went into another field. What kind of nation rewards MBAs and JDs instead of PhDs in the sciences?"

The kind that wants to survive; lots of civilizations have flourished without advanced technology or science (like Western Civilization, for most of it's history until fairly recently). How many civilizations have flourished without law and commerce?

realist | May 15, 2007 | 9:29PM

My experience from a number of years dealing with employment issues via the IEEE-USA (admitedly a somewhat biased view), H1-B holders have many YEARS of waiting to MAYBE have a chance for a green card. Are you sure this "tried and tested path" really works with the US Immigration maze today?

> A H1-B is valid for 6 years and an L1-B for 3. Each provides a tried and tested path to the Green Card.

>Honest users of the H1-B and L1-B suffer as a result of this abuse, not to mention the raw deal American IT folks get.

>On April 2nd this year, 150K people applied for 65K visas. In one day.

Russ Kinner | May 15, 2007 | 10:19PM

Russ, you're right about the long wait for a GC for H1-B holders. Unfortunately, there's a loophole with the L1-B visa.

L1-B is issued to non-managerial intra-company transferees. That can be converted to an L1-A if you can cook up obscure managerial responsibilities. L1-A to GC takes under a year.

karthik | May 16, 2007 | 12:00AM

To all of the IBM'ers - current and former, do you know if its possible to negotiate a better severance package ? I see companies on the net that offer help with this, but I dint know if its viable in our situation. Does anyone have any experience ? I have a health / disability issue that will make transitioning to a new job / employer very very tough.

Thanks for everyones time.. I hope all that are currently affected as well as those who will be at the end of the month, a safe and properous journey to a new career.. change is tough but in our case, its over due and well worth it

Cannon Fodder @ IBM

Screwed by JCS & Team | May 16, 2007 | 1:01AM

While all the layoff's are going on I sure hope the lucky IBM Exec's that attended this $100k+ lunch had a good time.

anonymous | May 16, 2007 | 8:41AM

If you read IBM's internal reply you will notice they didn't address the layoff issue. They tried to quickly sweep it under the rug by mentioning the number of jobs in the US, without even once mentioning the number of IBM jobs worldwide, which can more than accomodate 150,000 layoffs. After that, the layoff issue magically dissappeared and they went on a rant about how much better they are going to be, how much their clients are going to benefit, etc, etc. What they are really afraid to address is the key point: their plans can only be carried out by laying off a large chunk of their workforce in some countries. And guess which country will be the most affected. Don't be fooled by their statement regarding the number of IBM US workers ("has remained relatively stable in recent years"). As they say in the financial circles, past performance is no guarantee of future returns. For anyone working for IBM, the question is not "Are our client going to be better off after LEAN?" but "Am I going to be here when that happens?"

Sam | May 16, 2007 | 10:45AM


I also found it interesting in the IBM reply that employees are advised to view this process in the total view of corporate interest (or words to that effect). Aka: you need to understand everything about the firm to understand the very good and positive reasons for firing you. It's all for the common good you see, and if you do not see that common good, well then you're no good anyway.

But, employee, just try to see it as management sees it, then you'll understand.

.... in a pig's eye.

I wonder if Sam is eating green eggs and ham.

bob eisenhardt | May 16, 2007 | 11:30AM

That memo was about as close to a sideways confirmation as you can get. I was actually surprised how completely they evaded the issue of 'massive layoffs'.

After 11 years, I've started looking for a new job. I'm hoping at this point to have lots of irons in the fire by the time they lower the boom on me - the severence will help me transition back to the Real World. I don't need this anymore.

I can get by on less pay. Keep my truck payment and house payment current; anything over and above is gravy. Thankfully, I don't have kids to support.

I can't wait for the opportunity to love my job again.

Another IBM GS Employee | May 16, 2007 | 11:52AM

I envy you. Everyone that got "herded" into IBM lost the many years of severence pay we had built up at our former company... now we get chump change.... :)

fedup | May 16, 2007 | 12:05PM

I agree fedup - I am very sympathetic to the various in-house IT'ers who got absorbed into IBM when their parent companies outsourced to Big Blue - those people will get the axe with relatively little severence tenure. Even 11 years is measly, but there'll be plenty with much less than I.

Another IBM GS Employee | May 16, 2007 | 12:18PM

For the pro-Indian-Techs: I have seen more than a few postings here that we rich Americans deserve our lessons to live the simple life, aka cost of living in Bangalore.

My goodness. I never thought that I could work for Bangalore wages if I just pick up the phone and call all of my creditors (mortgage, credit cards, automobile loan, fixed home expenses, college loan for daughter, etc) and just simply

ask them

To reduce my expenses across the board just because I am working for a pittance now. I am sure they will all be receptive and instantly grant my request.

In turn, they will turn to all of their employees and ask them to accept wage cuts to accomodate Bangalore cost of living, and their employee base will wonder how they missed out on this wonderful thing!!!!!

Then we can all buy the Brooklyn Bridge.

bob eisenhardt | May 16, 2007 | 1:05PM

There is a fine article by robert J Samuelson

debunking the offshoring myth. The article talks about authentic facts and numbers and concludes that
"It's easy to blame all our economic anxieties and problems on globalization, because that makes foreigners and multinational companies responsible. Though satisfying, it will also be self-defeating if it diverts attention from fostering a healthy economy at home."

fact and figures | May 16, 2007 | 1:48PM

I think it's time for the free trade era to come to an end. Europe, NA, Japan, Korea and Taiwan (and Singapore) are about to hear the giant sucking sound of resources from China. Companies will become China-centric, and what is good for China will be good for them.

In fact, Google is already doing it. Tiannamen Square? What Tiannamen Square?

Lockdown | May 16, 2007 | 1:57PM

Last time I checked, this board was about IBM, not about a public works company finishing a project, or about a movie wrapping up filming. So, my job is only being outsourced because they've finished filming Shrek 3?
I, too, have read many interesting articles lately, on Global Warming, the NBA playoffs, and Paris Hilton's upcoming jail sentence. What I'd really like to see is an article "debunking" the myth that IBM is offshoring as much of its work as fast as it can (actually faster than it can, to the detriment of all involved). I think those facts would be slightly more pertinent to this topic...

fedup | May 16, 2007 | 1:59PM

The problem at IBM today is the number of layers in management. Under Lou, at one point, there were only 5 layers of managment from the lowest employee to Lou. Many of the management levels today are executive level positions, making big money, big bonuses, and stock options. IBM should start booting these people.

Retiree | May 16, 2007 | 3:50PM

The problem at IBM today is the number of layers in management. Under Lou, at one point, there were only 5 layers of managment from the lowest employee to Lou. Many of the management levels today are executive level positions, making big money, big bonuses, and stock options. IBM should start booting these people.

Retiree | May 16, 2007 | 3:51PM

Just a dumb question. Are customers entitled to be informed if or where to their work is being "offshored"? This could be a serious security or intellectual property concern.

geekie | May 16, 2007 | 5:06PM

Lean is an American word for TPS, Toyota Prodcution System. TPS has been hijacked by many companies to make short term profits increase. They rip out the tools without changing the culture. TPS is more about the culture of trust and respect than the tools.

My Toyota teachers hate the term 'lean' and what many have done with it. What IBM is doing is not real TPS(lean). It is a smokescrean.

I personally have been involved in several 'Lean' programs that have saved companies, and jobs. I have watched highly frustarted employees effectively eliminate endless bureaucracy and red tape. I have witnessed many front line employees have their dignity restored through real lean(TPS). They become valued for their minds and ideas. They fix bad companies and bad systems.

Sorry to say that many 'Lean' programs don't understand this. People can use anything, even religion to do terrible things.

Leanguy | May 16, 2007 | 8:21PM

The Samuelson article is a joke, and a prime example of manipulating statistics to prove whatever point you want to make. So US jobs aren't being offshored eh? What about the fact that IBM alone is pumping 6 BILLION into India in the next few years, on top of what we already have? What about the fact that EVERY engagement coming down the pike for the past several years is automatically bid for GR, for almost all skill areas? What about the FACT that the Indian companies like Wipro and Tata are becoming increasingly more skilled at beating US firms (like IBM, ironic?) and taking jobs away that may have been staffed by US resources?

Anyone who can look at you with a straight face and say "offshoring jobs won't tangibly hurt the US economy" is an idiot and ignoring the writing on the wall. There can only be so many burger flippers, cashiers, and stockboys. Can anyone point me to the next great skillset that will pay as much or more as the typical IT job, without having to go get another degree or take 18 months of classes?

Where oh Where'd my IT job go? | May 16, 2007 | 10:40PM

If you are interested in LEAN as a process, have a listen to this (excellent) BBC Radio 4 programme.

and if you dont want to install Real and all its stuff. Try this

Rupert Watson | May 17, 2007 | 2:34AM

My group is required to have regular "cadence" meetings each day to discuss how well the new structure is (not) working for the Middleware Team. There is a woman who sits on the conference call for the sole purpose of communicating the will of the "Powers That Be." Yesterday, as my coworkers asked question after question regarding the new system, the liason finally broke down and said that we needed to make sacrifices "for the greater good of IBM." I don't know what the execs think, and I certainly don't know what they've been telling their flunkies, but IBM isn't a charity, and I have no civic responsibility to screw myself over for IBM's "good," regardless of whether it's greater, lesser or mediocre. After years of doing the layoff shuffle, I have a laundry list of great references and little else to show for my hard work. It's past time for me to think of my OWN "greater good," and that may involve dumping I.T. as a career. Nobody should have to live with this kind of stress and uncertainty.

Middleware Survivor | May 17, 2007 | 8:33AM

Facts and Figures: Would you explain how it benefits our economy (not quote from Samuelson) when American workers, professionals who earn a good salary by working their tails off (evening hours, weekends,etc) by reducing their income to lower levels. I love, myself, having less money to spend because some helpdesk half a world away is doing my job for less money, less effectiveness, less efficiency and far less results.

IT is fast becoming a non-career here, college courses are emptying so when this career slot is fully staffed and manned by Third Worlders and all of our servers are managed if not sitting in Bangalore ... then we are in deep trouble.

Who is protecting YOUR data?

bob eisenhardt | May 17, 2007 | 8:43AM

"Who is protecting YOUR data?"
Bob.. hello.... US! We, you, me, and all these people that have been shown the door..


1. Do not sign or extend service contracts with IBM.
2. Build the IT infrastructure in-house.
3. Who will run the show? - you know the answer :)
Either you hire them, or if they're smart they will form a small consulting company.


Choosy | May 17, 2007 | 10:47AM

Who is protecting YOUR data?

good point. I'm surprised the media hasn't picked up on the identity theft from outsourcing yet. I know lots of friends who have had their identities stolen by compnaies that have outsourced finacial stuff abroad. oh wait, they also control the media, so never mind...

concerned_phd | May 17, 2007 | 11:20AM

Exactly my point - we should probably start making a lot of noise on various blogs and "letters to the editor" sites about keeping sensitive data (SSN, financial data, etc.) INSIDE the US.
At least the servers, hard drives and tape backups are not sitting in Bangalore. This could also help save some of the field engineer jobs in the US.


Choosy | May 17, 2007 | 11:43AM

From the News Depart of IBM:

"IBM, the world's largest technology services company, also said it expects "emerging country" revenue doubling by 2010, according to a slide on IBM's Web site accompanying introductory remarks by Chief Executive Samuel Palmisano"

HMMMMMMMMM - Emerging Country Revenue.
Not India. That's already emerged.

bob_eisenhardt | May 17, 2007 | 12:40PM

Re: Off-shored ID Theft: Do you think it a coincidence that so much ID theft comes from off-shore? If we become a victim, what is our recourse? I think we would have to trust the bank, credit card company or vendor through which our identity is stolen to be honest and do the right thing. Would this be enough? Can we REALLY trust EVERYONE from countries like China, India Russia or Brazil with our personal (e.g. medical) or financial records? Just read the posts from some of the Indian IT workers to get some idea of what they think of us. I know, we can't trust some Americans either, but at least we can take criminal and civil action against them. Also, as I look through these posts, I don't see an American IT worker telling us that we deserve to have our jobs outsourced because they don't like us. I also know that not all foreign workers share this opinion - but they would not be the problem!

What's next? Will government contractors start off-shoring work? Should we trust a weapon system made in a country whose people (or government) resent us?

Where are our lawmakers?

reality check | May 17, 2007 | 1:31PM

If our private information were copyrighted .mp3 files or Microsoft code then they would be protected by many government agencies rigorously defending them in these countries. Too bad the files that control our lives are less important to our government than a Maria Carey track or bad software.

Answer | May 17, 2007 | 1:40PM

To reality check: it depends - many government projects require security clearance, AND US citizenship or permanent resident status; they can not employ anyone on visas. Typically the candidates will have to fill out a bunch of forms and then these forms get submitted to the FBI and various law enforcement agencies for a background check.

Back to the issue of protecting sensitive data - say, the servers are in Bangalore. One day a hard drive fails and needs to be replaced. Who will be responsible to secure the drive? Will it end up in the trash??? Seriously ...


Choosy | May 17, 2007 | 1:56PM


Please keep up your accurate reporting of the IBM management fiasco. The facts are that IBM management is trying to fix no top line growth by beating the daylights out of the rank and file to prop up the bottom line. Now, what exactly does "beating the daylights" mean?'s the current list .. sure to be expanded as these greed mongers and yes men, posing as managers, realize that their ideas are not producing the desired results. It is not a sustainable strategy, in fact it is not a strategy at all ... purely tactical. Ok now the list of how dysfunctional the organization is. 1. - Awards are non-existent 2. Education non existent 3. Career development and planning non-existent 4. Unfair appraisals used to manage payroll costs 5. Raises are scarce and are in danger of extinction 6. Performance bonuses (variable pay) are way down because while Sam collects his millions they set performance objectives that are impossible to meet and will surely result in very limited payout of performance bonuses. Even if you are having a tremendous year, they will raise your quota after 6 months to make sure you don't make too much money. 7. Mandatory overtime is out of control 8. First line management is basically disconnected from daily customer support and service delivery, and is now a high paid administrative staff of yes men and women. 9. Very good people being forced out of the company because they are on the old defined benefit pension plan and represent more pension liability in the future. 10 - Contracts continue to be underpriced, which results in either throwing bodies at the customer to fix the issues, thus losing money, or holding the line on labor costs and losing customer satisfaction and follow-on business. 11. The entire corporate culture is now run on a fear of losing your job mentality. The idea that an employee or manager can "buck the system" when a foolish idea is making its way down the food chain is, at this point, impossible. 12. Lifetime medical benefits promised for 20+ years taken away. 13. Pensions promised for 20+ years converted to cash balance plans, sometimes only providing 50 cents on the dollar. 14. Jobs continue to move offshore to developing nations, good for the bottom line now, but when service delivery suffers as it surely will, bad for the bottom line long term.

In closing, I have been in the company 20+ years and I have never in my career seen morale this low. Not a single person I have talked to, and I promise that is no exaggeration, feels differently than I do. We are truly in a death spiral cause by unoriginal and tactical management at IBM. This is a company full of smart, dedicated, and professional people. But it's time for these pathetic executives to ride off into the sunset with their millions and let others try to restore this once great company to its place of respect and admiration.
The shame of it all Bob, is that IBM can achieve all its business objectives without the systematic abuse of it's most important asset. People.

IBM insider | May 17, 2007 | 2:08PM

So .. with the 13 points you mentioned above, why exactly do you still stay with IBM?

(Was awarded FIVE SE Excellence Awards during the golden years of IBM - glad he left the company)

Choosy | May 17, 2007 | 2:21PM

To all IBMers in the US - yes, those of you who still work for IBM U.S. and read/follow this discussion:

If you believe that the management is not doing anything to save your jobs;
If you know that IBM is pouring BILLIONS of investment $$$ into building centers in emerging countries outside the U.S.;
If you feel that there's no future in your career with IBM ...

What is keeping you from sending out your resumes, packing up your belongings and leaving the sinking ship??
What are you waiting for?


Choosy | May 17, 2007 | 2:45PM

IBM Insider, you nailed it. Choosy, many of us are trying to abandon ship, but it is sometimes easier said than quickly accomplished.

Big Blue Blows.

BZ Boy | May 17, 2007 | 3:20PM

On some people's mention about IBM losing their clients in the off-shoring bargain...

Unfortunately IBM's a big brand name among the IT companies and given that they are one of the very few branded players providing end-to-end services in IT, clients might overlook IBM's outsourcing/off-shoring spree and stick with them. Chances of that happening are pretty high as most of the other major players too are busy off-shoring!!

Btw, IBM's too smart even while they off-shore work... They usually have most of the employees on contract and not on pay roll. This seems to be the case in all major off-shore centers. Be it China or India. After all, they know very well about how to make the best out of human 'labor' (goes without saying... that doesn't include the 'top management' guys. They never work on contract!! Morons!! Jesus! Such mean bunch of people!!).

Avon | May 17, 2007 | 3:26PM

To Choosy:
First of all, hope is always the last to die. As long as those in charge at IBM continue to deny and obfuscate, IBM'ers have a reason to ignore the "rumors".
Second, it would be very convenient for IBM to replace Americans through attrition - and I believe it is IBM's intent. I.e. to get as many as possible to leave on their own so that their numbers won't be counted as layoffs. Then IBM can just shrug and say "if only their were more H1B visas, we could keep this job in the U.S."
To put this another way: An offender who is (ahem) involuntarily screwing someone else would always prefer that the screwee just lie there quietly, and then walk away quietly when the offender has been satisfied.
So, if IBMers are going to send something, it should be a letter to some of the politicians who are up for re-election next year.
Here's a link to a site listing all congressional email addresses:
House of Representatives:
I think that if enough people send enough emails - even just links to this discussion - people will take notice. After all, you are not just "screwees", you (hopefully) are voters.

reality check | May 17, 2007 | 3:27PM


Please make sure that you are getting prepared for another job. Rumors pretty strong that ITD will go to the Caryle group. Dont expect favors if someone else buys us either. The IBM'er culture is DEAD.. no matter who buys us now.

The EXIBMER culture has now been born. Stretch your legs and find a new place to hang your hat.Put a fork in IBM.. its dead.

randymcdonald is after your job | May 17, 2007 | 4:01PM

BZ Boy: what does 'trying to abandon ship' mean?
It sounds very vague to me. If you DO WANT (not just try) to abandon the sinking ship - what is your plan? How much longer do you want to cling on the last straw? When are you going to say 'Enough is enough'? Or, are you waiting for a miracle, hoping that things would suddenly flip overnight?

To reality check: I still don't see a strong link between sending letters to politicians and helping your career with IBM. Do you think they will stop IBM from sending jobs overseas? It's clear that IBM has no intention to keep the jobs in the U.S. They've made it very clear that they're going to invest BILLIONS of $$$ in the emerging countries. They could care less about H-1B visas. IBM Policy used to be that they only hired H-1B visa holders with PhD, not even those with a Master's degree. Any other H-1B visa holders would work as contractors, they were not IBM employees.

I worked for IBM, as an IBMer, for 15+ years until two years ago, when I started seeing the unhealthy trend that we later knew was labeled as 'cost reduction', GR, and what not. They kept raising my utilization, forcing me to travel Sunday and Friday nights, etc. I got fed up with IBM's management and how things were, and finally decided to send out my resume. Within a short period of time, I got a job offer. I love my current job, which is still in the IT field. So - YES - I LEFT IBM!

So .. IBMers ... there is greener grass outside IBM U.S. Where is your courage and determination?
Aren't you tired of playing the "Will I be next? Will I still have a job tomorrow?" game already?


Choosy | May 17, 2007 | 4:14PM

I am extremely pleased and happy for those who have managed to find other and better jobs outside of IBM. Congratulations. However, depending on your location, the job market may not be so rosy everywhere. Some of our ex-colleagues are having a difficult time in the job search, and ending up taking much lower positions, or out of IT alltogether. To answer choosy, and echo BZ Boys sentiments, it's not always as easy or as quick as one would like it to be. So, in the meantime, while we may be looking, there is still the mortgage, insurance, payments, kids, etc... and not all of us are "living way beyond our means". Tuition for the kids only seems to be cheap if you are an illegal alien....

fedup | May 17, 2007 | 4:30PM

Choosy: You point is very well taken.
To clarify mine: The grass may very well be greener in another pasture, but at some point we are going to start running out of grass! We can't stop IBM from persuing their offshore investments - it's their money!
BUT we can: 1. Stop them from moving our personal data outside the country.
2. Demand severe punishment for data comprises.
3. Demand that all government work (not just classified work) be done by U.S. citizens. Note: there are lots of components that are developed for such systems that are not sensitive by themselves, but could prove to be problematic later. Could we trust -e.g. a Linux driver to be used on a Naval weapon system which is developed in China, Russia (Pakistan, India, Vietnam, etc?) We know that our relationship with these governments has "varied" over time, and that they maintain interest in many of their software companies. Could we ever be sure which government an outsourced engineer is really working for?

reality check | May 17, 2007 | 5:26PM

"reality check" is an impostor of a troll. Er... I mean... A troll impostor. Wait... ;)

Mr. Reality Check | May 17, 2007 | 5:48PM

I assure you, I am me. What's a troll?

reality check | May 17, 2007 | 7:22PM

I feel compelled to write, what I believe to be a fair representation, of the collective opinion of my peers; executives responsible for the management of relationships with IBM’s strategic outsourcing function, or more simply, IBM customers. In summation, I believe the current efficiency initiatives, of which LEAN is a part, is a continued escalation of commitment to an organizational model of delivery which is flawed in both concept and execution.

To understand, you have to realize that each customer of IBM’s IT outsourcing services is supported by, at minimum, three different organizations which meet oftentimes at only the Senior Vice President level. Incrementally, within the organization responsible for delivery, their model is to leverage competencies from disparate geographies accountable to customer deliverables but managed by a functional manager with no integration to client satisfaction. The result, from a client’s perspective, is that there is a great prevalence of ambivalence to customer quality, speed, and cost competitiveness. Conversely, those IBM individuals with responsibility towards client success against these metrics have little to no knowledge to the initiatives within the competencies.

Moving forward, the current initiatives are, basically, a double-down on the efficacy of the current delivery model. Strategies include looking for ways to segment activities by work type classifications / difficulty, developing more flexible resource models, and more leverage of offshore labor pools. Ultimately, these strategies make sense and, although they may cost U.S. employees some jobs, they are at the core to the benefits to which most clients subscribed. However, unless IBM solves its internal organization and compensation structure to draw each individual into a direct line of accountability to a client account the benefit of these actions will be short lived. Initial cost savings will be counteracted by higher service level penalties, defaults, and reduced customer satisfaction.

I urge IBM to look first at the very basic issues of human motivation and incentive structures prior to a significant step to making yourself more efficient at being dysfunctional. Your clients want you to be successful.

Milton Burgman | May 17, 2007 | 7:23PM

IBM EARNING FORECAST (from the Yahoo board) seems to paint an entirely TOO BRIGHT picture for the years to come. Maybe the price of abandoning all American employees for that cheap labor force so far FAR away (for truly integrated customer support - HAH) is putting big $$$ dreams into Sam's accounting oriented mind.

NEVER be too optimistic about the future, particularly on Wall Street. Be slightly so and if you meet expectations: you're good and if expectations are exceeded: YOU'RE A TONY THE TIGER GREAT!!!

But, temporary gains only folks. I am on hold for tech support at Bangalore.....

bob eisenhardt | May 17, 2007 | 8:30PM

Milton: A few suggestions, respectfully submitted, if I may:
1. Be clear: We are passing your post around the office as a "real-life Dilbert memo".

2. Don't Presume: When you state: "Ultimately, these strategies make sense and, although they may cost U.S. employees some jobs, they are at the core to the benefits to which most clients subscribed. ", you seem to say that you are exchanging American employees for off-shore contractors because this is what the customer wants. However, as you note above, IBM is disconnected from the customer, so you can't really say what the customer "subscribed to". Try this experiment: ASK IBM customers what they want - i.e. Who they would prefer to do their work and who they would trust more, Americans, or unnamed foreign contractors. (You might even show them some of the more negative posts from your Indian colleagues.) I'd wager that most customers would not provide an answer in line with your "efficiency initiative". I would therefore suggest that you not presume to speak for the customer, but let them speak for themselves.

3. Be sincere: This discussion is about IBM losing the faith of its employees, customers, shareholders and the public at large, due in some part to the kind of language you use in your posted "memo". If you are sincere in your effort to "provide a fair reprentation", begin with a simple statement of the truth - i.e. what are IBM's short, mid and long term plans for its U.S. employees and customers. How many will be laid off, turned into contractors, etc. When will IBM provide full disclosure to customers regarding their fate. You might even offer to field questions in an open forum.

reality check | May 17, 2007 | 9:04PM

Milton: Is YOUR job one that will be offshored and replaced by cheaper labor?

I didn't think so....

fedup | May 17, 2007 | 11:33PM

I think it laudable that Milton, an IBM exec, had the courage to post what he did and sign it. Given the climate of fear and reprisal in IBM, this is amazing. Go Milton!

I also found the "manager-speak' more than a little confusing, but on the other hand, think of who needs to read this the most: other execs and managers who speak like that all the time. Yes, the lingo is a little funny, but how many other execs (or even IBM employees) had the guts to sing their name (not me).

anonymou | May 18, 2007 | 12:08AM


I don't understand why anyone is saying "IBM come clean and tell the truth". I read the New York Times articles two years ago where Sam Palmisano said that the future was a globally integrated economy. Two seconds on the web and I find reference to it:

If you say to IBM customers "Would you rather your work was done onshore.." many will say yes. But follow that up with the qualifier "...even though you could halve your costs by going offshore" then customers have to consider it to remain competitive. If IBM doesn't do this it will lose the business to another supplier who undercuts us.

By all means write to your congressman about addressing this issue, but protectionism isn't the answer, and nor is IBM bashing, and nor is bashing the Indians who are just accepting a job, just as Americans did. (I am neither Indian nor American). For that matter, all of us in IT have spent years automating other jobs out of existence. Not a lot of moral high ground for us to seize there!

Accept the change that is coming and plan for it!


Fearless | May 18, 2007 | 12:48AM

" The average American has no control over who Oracle or IBM or Dell outsources their work to. "

Well, yes, they do. They're American corporations, subject to American Law, made by American politicians, receiving donations from aforementioned corporations. If Congress and the President wanted to stop this, they could tomorrow. These are the only people who could stop it. Cashed-up Sam won't, nor the Shareholders who are getting richer by watching you get fired.

Bitching on Bob's forum might feel good, but it's a conversation between animals lined up at the slaughterhouse. If you want to do this, let you Congressman and Senators know about this and how you feel about this. Make your displeasure known, and remind them of upcoming elections and how you're going to blab far and wide about this support or lack thereof. You all live in a Democracy, so suggest you take advantage of that fact.

If you won't do this for whatever reason, then stop complaining and accept your fate. It's that simple.

PS. Let's not kid ourselves: "Multinational" only refers to where a corporation sells.

Ken | May 18, 2007 | 2:17AM

There is *no* Milton Burgman in IBM. For those who are able to, check BluePages for yourself....

Another lurker

another lurker | May 18, 2007 | 6:34AM

Why do i see many Americans blaming the Chinese, Indians, etc. in this offshoring/'restructuring due to offshoring' debate??
Poor fellas, they don't have any say in this. It's the American companies that are making a bee-line to avail services of people in those regions.... Blame our corporations (top management) and their short-term outlook. Those greedy executives at the top of the pyramid don't take any beating in their swelling pay packets but want to get rid of their junior counterparts in the name of growth. Hold them responsible if you really want to make a difference. Find a way to attack their way of working on this issue... Blaming those Chinese or Indians will do no good. We will only loose more time and bleed further.
The heart of the issue is the lack of any kind of social accountability among these large for-profit corporations. Those corporations are a part of the society. They need to address the society's needs too and not just the needs of ever-hungry shareholders. Why do corporations forget that?? More surprising is that the citizen or common man is forgetting that and accepting the excuses those corporations have to offer. Try to organize some of those restructured folks in your respective states/region and see if something can be done.

No more blame game | May 18, 2007 | 8:10AM

Ken: I fully agree with what you have to say.
That's probably the best way to take some action. Blaming the top management or the government or the Chinese will do no good. Things will keep rolling until one day, when your turn comes....

No more blame game | May 18, 2007 | 8:18AM

As an IBMr I agree on the blaming point. I would even state that the accountants and managers that are making these decisions are just doing what makes sense by adding 2 + 2 together. This is the name of the corporate game that all global corporations are playing. We can not blame them for not being patriotic if you will and want to favor an American worker over a foreigner!

Or should we?

The real blame is our own blindness as a country!!! We are letting this all happen essentially.

The point is that we are believe or led to believe that everything is all going well economically for our country. We should wake up. Corporations are doing fine because they are global entities like IBM they don't have any patriotism. Lets make sure that is fully understood. If the US goes under IBM will still be doing what ever it needs to be profitable. Is that wrong?

Check these stats from our own CIA agency.
The US is the least profitable nation with the largest growing debt in the world. Corporations may be doing fine and the stockmarket as well but these numbers to me look like very bad news.

Guess where investors are putting there money in terms of countries? In the countries showing a profit with most promise for the future. NOT the US. IBM is just doing what all sensible investors are doing!!!!

So shame on us for letting this happen. For maintaining the illusion that all is well while the ship starts to sink!!! America wake Up!!

When a corporation eliminates jobs in any region, the local economy suffer and corporations do not. On the other hand where ever the new jobs come in that local economy benefits. Stating the obvious perhaps.. but for ever job we export we are hurting our country and benefiting another. Personally I consider this not a patriotic act. As Americans we should praise truly patriotic companies and pressure those who prove anti-patriotic by exporting jobs. We as a people should do this. But we are selling out completely to the Chinese Commies in exchange for cheep goods produced by slave labor with an artificially fixed rate currency. Is this fair trade?

IBM has great employees... the article sites the fall of the dollar.. this continues to occur. While our currency falls others rise. The cheap labor in India may not be so cheap anymore soon and the quality of these resources will most likely keep diminishing as all the good folks have jobs already!

What may end up happening in IBM is that the company will sell out its US heritage (it already sold all the original IBM real estate in Endicott!) The many good workers they will lay off will form smaller truly LEAN companies that will end up taking business away from IBM. But by then IBM Management would have cashed in there stock options and moved on to other companies.

BillyV | May 18, 2007 | 9:36AM

IBM: The Tragedy Of the 21st Century Company

Last paragraph states:
IBM needs to come up with something to make Wall St. happy. But, it has no plans for an HP-stype resurrection. It wants to go the financial engineering route.
But, IBM's plans reveal a sort of self-loathing. The things the company cannot do with better products and services, it will do by pushing out people, cutting their benefits, and buying in shares. It is the poor man's way to build an attractive investment

LEANer | May 18, 2007 | 9:56AM

Indian Techs: Please Read

Several Indian firms are offering incentives to retain employees as companies compete for scarce talent with wages rising by about 10-15 percent a year.

Wages are going up? Now we may see how "loyal" IBM will be to YOU a few years down the road. Happy outsourcing.

bob eisenhardt | May 18, 2007 | 10:51AM

Bob, that's what happened to Ireland for example. It used to be an offshore hotspot for many years!


Choosy | May 18, 2007 | 11:58AM

INDIA TECHNICIANS: How dare you live in a low wage country and, as soon as American firms come into the picture, YOU DEMAND HIGHER WAGES!!!! HOW ARROGANT, You must all be driving sports cars and living in good houses. YOU FAT LOUSY TECHs, hahahaha --- Live in airconditioned houses with good wages. YOUR TURN WILL COME.
Oh my that was fun to write.
Feels good for the soul.

bob eisenhardt | May 18, 2007 | 12:08PM

Here is what a call center in India gets ya. Wonder if ibm has informed the affected customers?

Approximately 30 minutes ago, we activated our business continuity plan, to address potential impacts to the India SO Global Delivery Services provided out of Hyderabad, India.

Problem: There was a bomb explosion in a mosque in Old Hyderabad area (near Charminar). 5 people are said to have been killed and 25 injured. The Charminar area and 3 km around have, experienced unrest. The police have restricted the traffic. Old Hyderabad is located ~22KMs from the IBM Location housing our personnel.

Impact on Operations:
We will have more concise estimate of the impact on our services in 1.5 hours.
We have ~950 employees spread across 7X24 operations, primarily for help desk and mid-range server support
The early indication is that we will see some impact on North American help desk operations
N.A. Help Desk services covers the following accounts:
EMEA staff were already on-site, and will be retained to assist with North American services that will start in a few hours

Next update in 1.5 hours. Pete

V.P., India SO Global Delivery Center
Block D, 4th Floor, Embassy Golf Links
Bangalore India 560 071
Cell: 91 99008 33117 Office: 91 80 4177 5375

Bill Mare | May 18, 2007 | 12:12PM

Well - no surprise AT&T customer service SUCKS!!
It's in INDIA - go figure!
But I guess they're very proud that they made it to The Customer Service Hall of Shame -- not too shabby, eh.. :)


Choosy | May 18, 2007 | 12:42PM

Agree with you position and statements. In today's global economy this type of migration is fundamental. As you state, there are many issues and the dynamics that are forcing them and this is what I call the “Wall Street” blues. That is, you begin the downward spiral when you start make decisions based on Wall Street’s perceptions rather then smart market and business decisions.

To this end, one of IBM glaring failure (you have pointed out many) – in my humble opinion – is their inability to look the one work force that are the real culprits – management.

This is not an indictment on every manager in IBM because there are some very good ones but I would say that for every good one there are five (5) bad ones. Indeed, I can not tell you how many managers I have the misfortune of working with that simple do not understand basic finance or management 101. If it wasn’t so sad it would be laughable.

There largest drain on any SO account by industry is the management staff’s charges to the account and they add absolutely “no” value. From VP on down, it is a parade of fools that match Nero’s fiddling while watching Rome burn!

There are so many examples of mismanagement and poor decision making that I could write a book, yet like lemming they march enviably towards disaster. Unfortunately they all march to the same drum beat and do not know how to fix the problems.

That said, what about IBM’s mania for processes! Most are misconceived, add no value but do add costs! Or how about the redundant work being done by groups all over IBM how is LEAN going to fix that… well we know the answer to that don’t we.

I consider myself lucky because I planned for this contingency several years ago because I recognized what I postulated above and acted on it. When the other shoe drops, I will be prepared. I wish my co workers who care as I do good luck they will need it because we are in a classic catch-22.

Steven patricola | May 18, 2007 | 12:47PM

Bob: That was well said... Though please remember that wages will always rise in a geography once there is a demand/supply issue. If all the IT biggies are coming to India scouting for ready-made talent, they will surely fall short of some people... Like in most places, it's an issue in India too... And given that IBM hires a lot of people on contract (risk mitigation tactics even in relatively low wage countries!! :-). Some people never change. :-) ), many of the talented techies would not like to work for them. So they have three main problems - 1.competition for talent from hot tech start ups, research units of IT biggies, tech shops like Google, Nokia etc. 2.disinterested techies due to contract positions offered and 3.comparatively lower wages offered. It will do no good unless they drastically reset their 'best' practices.

That said, given that there is a larger scarcity of talent in even-lower-wages countries like Vietnam, Philippines etc., they cannot move large volumes of work there. Plus, India is a big market for IBM in terms of sales and hence they'd like to do some amount of development work in India for strategic reasons. Hence, they have little choice but to put up with the wage escalation in India where lot of companies are scrambling for talent.

Yes, it might feel good at times like these to curse indians but like Ken and 'No more blame game' say, corporate greed is the problem and not Indians or Chinese. Though i understand that at these times you guys might be mad at some of them...

Now make note that, per Red Herring, 30+% of all silicon valley start-ups have been started by Indians living in the valley. Plus remember that India was once a bedrock of learning and wealth along with greece and rome, only to be plundered later by muslim invaders and colonization by British, French, & Portuguese. So, In a nut shell, indians are probably better than most! ;-) Well, these are facts and so no offense meant to anyone here.
Let's all hope for better times and may be you guys should do something collectively to bring those times sooner than later... Good luck guys!!

Also an Indian! | May 18, 2007 | 12:55PM

Bill Mare: The bombing incident in Hyderabad is a stray one like the Virginia Univ shoot out incident.... Let's not forget that it's far, far less crucial than a WTC or Pentagon bombing incident. The point i'm making is that these incidents are out of anybody's control given that there are some hard core, inhuman minds behind them....

Choosy: I see that appear to be a very pessimistic, anti-indian sort of a person. Why so much cynicism that you keep pointing at every other flaw you see with India. Do you ever look at the brighter side?? If you have problems with offshoring, blame the corporations who're choosing it. Like many people have been saying in this forum, nobody's forcing them to do it except their greed!! Why don't you divert your energies into something more fruitful by lobbying against the offshoring corporations. Let them have a limit beyond which they should not offshore - that sounds like anti-free trade policy! The only way forward is to accept the reality and adjust one's life. It's globalization, stupid!

Ashish | May 18, 2007 | 1:10PM

At one time I too worked for IBM's Global Services. Everything they say is true -- it's like working on a slave ship!!

A few years back I managed to get sick enough with IGS and found a real job working for their Software division. I now work on a luxury liner. Life is 'much' better. However, the turmoil still affects me.

I perceive what I call the 'combat syndrome'. When you're buddy is shot and killed, the first thing you think is, "Wow, I'm glad that's not me!" Then the feelings sink in, "Boy, selfish me." Which is immediately followed by, "Oh man, I'm probably next!!?"

All of this mental process leads to one thing -- less productivity, not more, much less creativity or innovation.

IBM has been buying companies at a rate of at least one every three months. I would argue that they do this because they are short on innovation. They buy it via other companies. It is entirely possible that that lack of innovation is due to the mental process described above. If you're too focused on staying alive, you're not interested in developing a better gun or tank...

Phil | May 18, 2007 | 1:17PM

Not to directly attack the veracity of this statement, but I find it very odd that man who makes a living writing a column can claim that "IBM and a lot of other companies consistently fail to see" that "offshoring doesn't work well in practice and certainly doesn't work better than keeping the work here in the U.S.".

Those people make billions doing what they do. If Bob is so smart as to be able to see what they cannot, why is he not running a company to compete with these blind mice?

Jeff H | May 18, 2007 | 3:00PM

It's just cheaper, period. Doesn't matter that it doesn't work as well, as long as the customer gets cheaper, then all is well in la-la land.

As for making billions, I could be a top IBM management executive, and direct that everyone in my organization jump out a 50th story window, and then give myself a huge bonus for cutting wages.

Does that make me smart?

fedup | May 18, 2007 | 3:20PM

To Ashish, "Also an Indian", etc. I would ask you to compare market, business, currency and job protections of the "job recipient" countries with those of the "job donor" countries. I think there is a trend toward laws in favor of getting and retaining those contracts & jobs, protecting "developing" markets, and manipulating currency in support of this trend. I say "trend" because not every country takes the same approach. For example, China pegs the yen to the dollar, so that however far the dollar slides, the favorable exchange rate remains the same. I believe India's practice is to trade business for jobs - i.e. IBM can enter the Indian market, so long as they effectively make it an Indian business, so that (almost) all of the work is done "on-shore". So, when a poster says "you", they _could_ mean it in a "collective" way, referring not only to the individual, but to the prevailing government policies of one or more recipient countries. "India" seems to get mentioned alot because Indians speak English - oh and some of the responses don't help!

Another note: I don't buy Ashish' "indians are probably better than most" claim. BUNK! There is nothing inherently better about an Indian, especially with respect to America, which is rumored to have Indians among its citizenry! This only serves to reinforce an Indian stereotype of arrogance.

Nor do I buy the assertion that "It's globalization, stupid". Globalization is not "India gets all the IT work and China gets all the manufacturing work." Globalization only works as long as, and to the extent that everyone benefits - and that means FREE TRADE. Unless India, China, Russia, etc. develop and OPEN their markets to free trade, trade surpluses develop, exchange rates slide, resentment builds and adjustments are made to "re-balance" the situation by supporting currency, withdrawing contracts, protecting markets, etc.

The problem is that these societies are highly stratified - e.g. 60% of India's population lives under the poverty line - the _Indian_ poverty line. Even in this "enlightened" age, millions of Indian kids are virtual slaves, earning less than 1 USD per day. It's pretty hard to develop a market based on these numbers. (Nothing against India per se, as we see similiar numbers in places like China, Russia Brazil, etc.) I guess this means that unless there is fundamental social change resulting in the rise of a majority "middle class", India Inc., China Inc., etc. are going to face increasing competition for ever diminishing markets.
So the issue at this point is not the prejudice and greed of Americans, you have already gotten what you want from them, but that of Indians, Chinese, Russians, etc.: Can you REALLY share enough with your 2 billion (collective) poor to lift them out of poverty and turn them into new markets? Historically, a poor Indian's (Chinese, Russian's) biggest problem has not been so much "invaders" as it's been the RICH Indian, Chinese, Russian. You speak of history, can you really get past yours?

We'll see.

Yeah, Right | May 18, 2007 | 3:35PM

Much is written here on difference between Gerstner and Palmisano. Gerstner was a brilliant man. He took a company that was bleeding dollars and turned it around. In the process he made a lot of money for himself. He knew what financial levers to pull to make results look as good as possible. He lined his pockets big time but money also trickled down to the employees. There were increases, there was a fairly substantial variable pay program. Palmasano is not a brilliant man. Under his leadership, he too, has lined his pockets. The difference is, he lined his pockets by taking money from all his employees. Big difference between Gerstner and Palmisano.

QCC | May 18, 2007 | 6:18PM

All these posts and the following piece of literature comes to my mind....Welcome to the rat race we have created! Oh and by the way the west outsources something else besides jobs --

The Red Queen Race
In Lewis Carroll's Through the Looking-Glass there is an incident involving the Red Queen, a representation of a Queen in chess, and Alice constantly running but remaining in the same spot. The scene is often referred to as The Red Queen's Race.

The Queen kept crying "Faster!" but Alice felt she could not go faster, though she had no breath to say so. The most curious part of the thing was, that the trees and the other things round them never changed their places at all: however fast they went, they never seemed to pass anything. "I wonder if all the things move along with us?" thought poor puzzled Alice. And the Queen seemed to guess her thoughts, for she cried, "Faster! Don't try to talk!"

Not that Alice had any idea of doing that. She felt as if she would never be able to talk again, she was getting so out of breath: and still the Queen cried, "Faster! Faster!" and dragged her along. "Are we nearly there?" Alice managed to pant out at last.

"Nearly there!" the Queen repeated. "Why, we passed it ten minutes ago! Faster!" And they ran on for a time in silence, with the wind whistling in Alice's ears, and almost blowing her hair off her head, she fancied.

"Now! Now!" cried the Queen. "Faster! Faster!" And they went so fast that at last they seemed to skim through the air, hardly touching the ground with their feet, till suddenly, just as Alice was getting quite exhausted, they stopped, and she found herself sitting on the ground, breathless and giddy. The Queen propped her against a tree, and said kindly, "You may rest a little now."

Alice looked round her in great surprise. "Why, I do believe we've been under this tree all the time! Everything's just as it was!"

"Of course it is," said the Queen: "what would you have it?"

"Well, in our country," said Alice, still panting a little, "you'd generally get to somewhere else -- if you ran very fast for a long time, as we've been doing."

"A slow sort of country!" said the Queen. "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!"

Jim | May 18, 2007 | 10:58PM

Surely you can see what is happening...

Any 300,000+ person company ends up with some disgruntled ex-employees. You have followed them to their hang-outs and bought their silliness.

IBM is in no danger and will show this on Wall Street in short order.

Dan | May 19, 2007 | 2:39AM

I previously worked as a corporate strategy consultant with IBM BCS for over 2 years. In that capacity, I have worked with most of IBM's top Fortune 50 clients in the US. In retrospect, I have to conclude that IBM has to be one of the most mismanaged corporation I have ever worked for.

Everything the blog mentioned was true and accurate. I can personally confirm that IBM often underbid (usually due to sheer incompetence and lack of accurate pricing visibility) on contracts in order to win them (for top line growth purpose), and then resort to heavily slashing the quality of its work products/services in order to achieve some semblance of profitability, if at all (and always at the clients' expense).

The $5 Billion dollar JP Morgan (JPM) financial outsourcing deal that was cancelled a few years back exemplified this practice. IBM won this contract by substantially underbidding its nearest competitors. And having won the contract with negative margin, they had a hard time delivering on the quality of services as promised. Hence, JPM suffered due to IBM's stupidity. And on the day that JPM cancelled this contract, IBM stock actually shot up because the company was no longer dragged down by this money losing deal.

I guess I want to ask the previous poster, Dan, how will IBM show Wall street anything when all it knows is to underbid on contracts, and then attempt to pass off junk to the client as final deliverable.

Kevin | May 19, 2007 | 4:26AM

Dan - read back thru all the posts and count up how many are CURRENT IBM employees... or have someone do it for you, since you obviously aren't very good with numbers...

fedup | May 19, 2007 | 8:42AM

Without a contract we have nothing. Join the Union

Dave | May 23, 2007 | 6:39PM

Without a contract we have nothing. Join the Union

Dave | May 23, 2007 | 6:40PM


Would like to respond to the person in the thread that indicated that the falling Dollar just helps the US Employee compete, and that the statement in the article indicates the contrary. I believe the point in the article was another. And that is that big contracts are stipulated in Dollars.. so if the dollar drops with respect to a currency where the work is delivered the profit margin goes down the tubes with it. So this hurts IBM profit margin wise which puts more pressure on trying to tighten things up and Offshoring is still the lowest hanging fruit, not withstanding the weakening of the dollar.

BillyV | May 24, 2007 | 10:50AM

I voluntarily left IBM before the resource actions began. I had no desire to work through another "lean" cycle - they lay off as many as they can and once the remaining employees start to break, they hire some back. I saw this happen several times over a couple decades during my employment.
I worked in an area where we did most of the outsourcing. I cannot count the number of times we were given the green light to send positions to India, then one week to a month later, told to stop. No official word why but the rumor was that as soon as an Indian employee gained the skill and experience, and got a slightly better offer - they left. And IBM was upset at the lack of loyalty. Ironic that.

My grandmother worked in a shirt factory and her union supervisor gave her the heads up that the business was moving to India for production. She left with her pension intact. And 40 years later, the same happened to me in an I/T position.

Hopefully Americans can figure out the next best thing coming for employment but I don't have any idea what that would be.

As far as the employment numbers go, I would assume that IBM doesn't count the contractors - and there are plenty of them - as employees.

And finally, we need to vote the right people into congress to make sure America gets to play on a level playing field with other countries. CEOs do not care about country, only the bottom line.

Glad I left | May 24, 2007 | 3:19PM

My great grandfather founded the Alexander Hamilton Institute and under their main web page is a fantastic collection of outsourcing articles and references - Posted the link just below:

and I urge this community to review it.

bob eisenhardt | May 24, 2007 | 3:44PM