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The Pulpit
Pulpit Comments
December 28, 2007 -- Leaner and Meaner Still
Status: [CLOSED]

This was the most depressing commentary I read all day. My only happy thought is that I didn't take a job with IBM a few years ago.

Steve | Dec 28, 2007 | 4:57PM

IBM is a company that SHOULD have collapsed under the weight of its management at least half a dozen times or more. Should never seems to happen though. The reason is that everybody in business NEEDS the things IBM provides. All that is going to happen is the management will get the axe/ move around, strategic re-marketing will occur, a clever exec (or 100) will find something more profitable to focus on, they will go too far, screw up (like now) and the process will start over. And thats IBM right there in a nutshell, too valuable to ever fold, but too big and slow to really drive the world forward.

Joseph Becker | Dec 28, 2007 | 5:13PM

Sadly IBM is far from the poster child for this behavior. I've recently lost several staff and interviewed many contractors as replacements. I was heavily encouraged to look at an Indian outsourcer for part of this. Apparently we have over 1000 Indian contractors currently...and we're only a medium-sized, mid-western financial services firm...the future does not look bright for American workers...I call it the great race to the bottom...

Sam | Dec 28, 2007 | 5:16PM

I've been a IT/Engineering consultant (that means I consult when I don't have w2 work ;

I fight for every scrap of consulting with Wipro and H1B others (and the sad fact is that the good ones are really really good).

No-one in corporate management-land is looking at the long term results; and the stock market proves it by rewarding these short-term actions.

You're right it's depressing; I wonder when Wipro will buy IBM. (fire sale)?

-aedmunde

aedmunde | Dec 28, 2007 | 5:23PM

Not only IBM doing this... when I was at HP Consulting in Australia all the benefits of working for HP, car allowances, bonuses, health benefits, etc were slowly cut back to "match industry standards".

This was followed by a series of layoffs over 2 years, each handled wore than the previous and the attempted outsourcing offshore.

Two years later the consulting arm is effectively dead and all the excellent employees started there own cosultancy which is doing very well.

Learnings from this, 1. sucesfull comapnies exceed industry standards and 2. offshoring doesn't work with customer facing business.


Good luck IBM (especially Global Services) I await your demise!

Jimbo | Dec 28, 2007 | 5:23PM

For someone who prides themselves on reporting facts, dont you believe its a little Michael Moorish to bring up the story of your friend losing his $70,000 job to someone with an H1-B who accepted the job for $21,000.

There are two problems with this supposed incident. First off, I know hundreds of H1-B IT workers here in the Washington DC area making in excess of $100,000. I have no idea where people get the notion that H1-B visa folks are living the same lifestyle as cashier at the local grocery store.

Secondly, and this is my personal opinion, the US is losing jobs by the drove to the international labor market because it talks about free markets yet isnt willing to follow free market principals when it comes to wages.

Capping or eliminating the H1-Bs will do nothing. Companies will always go wherever they can get the same quality job done cheaper.

Take American manufacturing as an example. Everyone complained about being beat by the foreigners who have lower wages. So the Govt steps in an institutes a minimum wage. Did thay help us ? Everything my wife and I bought for christmas this year wierdly was made in China. Where has American manufacturing gone ? It is all but wiped out. Minimum wage did good for the politician preaching better local lifestyles at the time. But in the long run, companies have shifted all their production overseas.

The same has happened with IT work. Every company on the Fortune 500 have now established officed in India, China and Brazil to tap into labor markets there. How has this helped the American worker ? It hasnt at all. Capping/eliminating H1-Bs will simply mean that more investments will be made in long distance communication and even more jobs will be sent overseas instead of being done locally. Which means those foreigners who would have been paying US taxes if they were living in the US would instead be paying taxes in their home countries.


Shawn | Dec 28, 2007 | 5:23PM

Our company has been trying to move some development to India, but, except for generic call center type things, it just hasn't been working.

One thing to realize is that Indian development just isn't that cheap any more. We set aside a chunk of cash to do a pilot project to move a high-end 3D graphics-based application to Windows and we ended up going through our entire budget just trying to get to a contract.

I suspect that those looking for a huge cost savings in India may be too late. And the firms we dealt with seemed to be highly oversubscribed. They were having a hard time finding enough qualified staff to meet even their current backload.

Interestingly, a manufacturer of specialized computer equipment told me that he had brought much of his manufacturing back to the States. He told me that small runs were just much cheaper to do in the States. It takes a large manufacturing job to make the economics of overseas development favorable these days.

fustian | Dec 28, 2007 | 5:35PM

As an IBM'er my first comment is to thank you. I have a very hard decision to make this year -- to stay or to try to find a better job.

I now have 2 kids in college and money is tight, real tight. Over my 15 years with IBM my net income has dropped on average about 2% per year, when you factor in the increased health care insurance costs it could be worse.

As I was preparing my PBC (performance review documentation) I got a good chance to reflect on the last year or two. In the last 18 months I've been asked by IBM management to LIE to a customer. I refused on both occasions, was kicked off the assignment, and my manager was sent an ugly note about me. A few weeks after the first incident the customer figured out what was really happening and promptly sued IBM. The company settled the dispute by writing the customer a big check.

This year every one of my accounts are losing money, are in a troubled (RED) state, and relations with the customers are REAL ugly. I am lucky that I work from home. After a call with the customer, I get pretty depressed. I now schedule 30 minute breaks after these calls so that I can take walk and get things back in perspective.

One of the biggest frustrations with my job is I can fix many of the problems. IBM keeps me from doing so. I have to drag about 20 IBM'ers along in any effort. If I am lucky enough to sell IBM's on the solution, I then get to wrestle with finance to get the funding. About 10% of my proposals get through management and about 10% of those get funded. I have a 1% success rate. IBM spends a small fortunate discussing and ultimately shooting down 99% of my work. Even the 1% of my work is not without pain. I have to fight with managers to get their people to do stuff. It is an interesting concept when a server admin team will not install and support a server, or a backup team is too busy to backup one more server, or... It is insane.

It is real hard to paint a rosy picture on your year end evaluation. I am embarrassed to work for IBM. I am ashamed of the way IBM treats its customers. If they only knew what was really going on.

Even though I am on vacation over the holidays, I found my self visiting the office/data center on Christmas Eve. Someone called from the Argentina help desk. A server was down and they needed someone to go on site to help fix it. All the local support folks have been laid off. I found a lose connection and a couple incorrect connections. I was able to fix the problem, get the server back up and running, and make it possible for the nice person in Argentina to be able to work on the server remotely again.

There was a time when IBM'ers would recognize a special effort to help a customer and thank the person involved. The acknowledgment would usually be a nice phone call or email. In today's IBM nothing will be done. The incident will be swept under the rug. Not only do they NOT want me helping with support problems, they won't let me charge my time to the contract. That 2 hour visit to the data center came out of my vacation time. At least on the way home I was able to take in some last minute Christmas shopping.

Mark | Dec 28, 2007 | 5:40PM

I am one of the guys that lost a job to India. I was with a major industrial controls company with a mandate last year to move 25% of engineering to our remote engineering affiliate. We didn't increase our market by 25% so that amount of staff were laid off in the US.

I found that a better spot for employment here is with a mid-sized firm who might have a overseas office. They typically aren't so concerned about making the bottom line look good this quarter, but looking to keep the company positioned for the 3-5 year timeline. We keep hiring and increasing our market as we concentrate on what our customers want and need, not to make the current project a "cash cow" for the balance sheet.

It appears that to be sucessful in today's US market as a US employee, you need to break from the big iron firm and create your own place.

BTW, I landed a job in 6 weeks after the layoff and it was the best thing I could have happened. After 1 year it sure seems like a place that will be around long enough to retire from and I'm treated as a valued colleague, not a number on a cost sheet.

Kinner | Dec 28, 2007 | 5:48PM

Part of the problem is that the employment market isn't free *for immigrants*. One of my co-workers had to turn down promotions to avoid messing up her visa status.

The body-shop firms that rely heavily on H1Bs have some great people and some not-so-qualified people. They're paid exactly the same (90% of "prevailing wage"). If these people could leave for another firm without risking their visas, they would earn more, customers would get better value (by not having to hire the poor performers), and outsourcers would have some incentive to know which employees are doing the work, instead of just treating them all as warm bodies.

JimJ | Dec 28, 2007 | 5:49PM

Readers of this column, please be aware that Mr. Cringley has no clue what the H1B program is about based on his comments about it. Mr. Cringley believes that H1B equals cheap labor, which is a myth and scare tactic with no validity to it. It's like the automotive industry would blame Global Warming on bicycle riders because of the sweat created by these bicicle riders emit into the air when peddling. Mr. Cringley believes that the H1B program encourages emplyers to hire cheap labor when the exact opposite is true: it's more expensive to hire on H1B workers because of strict labor laws, primarily around salaries and job description vs education match that the employer must adhere to and get approved by both the DOL and USCIS prior to even hire an H1B worker(not to mention the cost of an immigration lawyer and time it takes to get the paperwork through the DOL and USCIS if, assuming that there is an H1B visa available in the first place as the annual quota is now being used up the very first day the USCIS releases them, meaning that the employer can only hire H1B workers one day per year and has to rely on a USCIS H1B lottery to play out favorably for his prospective H1B candidate as there are many more applicants than the annual available H1B visa number...). These very strict government regulations and obstacles do NOT exist for US citizens, thus IBM can easily get away with low wages for US workers but not for H1B workers. Hiring an H1B is a pain in the neck and more expensive than hiring a US worker, and lots of luck is needed to be the one who wins the lottery aspect of the H1B program the one day per year it happens (October 1). Oh, I forgot to mention that in order to qualify for the October 1 lottery based on the nature of the current H1B process, the application must be sent to the USCIS on April 1, not before and not after. So, with lots of upfront money spent, higher salary offer than to equivalent US worker, and lots of lottery luck, and a wait time 9-12 months, the employer may be able to have the H1B worker on staff. It bothers me when a writer is too ignorant or uneducated about issues such as the H1B program he writes about, instead completely misleads the readers. If you don't believe me - the writer, and especially the writer - is strongly encouraged to research the H1B program to learn the facts - just check with the DOL, USCIS, or an immigration lawer - a quick Google search may also be enlightening.

BJ | Dec 28, 2007 | 5:52PM

Readers of this column, please be aware that Mr. Cringley has no clue what the H1B program is about based on his comments about it. Mr. Cringley believes that H1B equals cheap labor, which is a myth and scare tactic with no validity to it. It's like the automotive industry would blame Global Warming on bicycle riders because of the sweat created by these bicicle riders emit into the air when peddling. Mr. Cringley believes that the H1B program encourages emplyers to hire cheap labor when the exact opposite is true: it's more expensive to hire on H1B workers because of strict labor laws, primarily around salaries and job description vs education match that the employer must adhere to and get approved by both the DOL and USCIS prior to even hire an H1B worker(not to mention the cost of an immigration lawyer and time it takes to get the paperwork through the DOL and USCIS if, assuming that there is an H1B visa available in the first place as the annual quota is now being used up the very first day the USCIS releases them, meaning that the employer can only hire H1B workers one day per year and has to rely on a USCIS H1B lottery to play out favorably for his prospective H1B candidate as there are many more applicants than the annual available H1B visa number...). These very strict government regulations and obstacles do NOT exist for US citizens, thus IBM can easily get away with low wages for US workers but not for H1B workers. Hiring an H1B is a pain in the neck and more expensive than hiring a US worker, and lots of luck is needed to be the one who wins the lottery aspect of the H1B program the one day per year it happens (October 1). Oh, I forgot to mention that in order to qualify for the October 1 lottery based on the nature of the current H1B process, the application must be sent to the USCIS on April 1, not before and not after. So, with lots of upfront money spent, higher salary offer than to equivalent US worker, and lots of lottery luck, and a wait time 9-12 months, the employer may be able to have the H1B worker on staff. It bothers me when a writer is too ignorant or uneducated about issues such as the H1B program he writes about, instead completely misleads the readers. If you don't believe me - the writer, and especially the writer - is strongly encouraged to research the H1B program to learn the facts - just check with the DOL, USCIS, or an immigration lawer - a quick Google search may also be enlightening.

BJ | Dec 28, 2007 | 5:54PM

Dear Shawn

Life inside the Washington DC beltway is very different than the rest of the country. In the midwest great programmers used to make about $60/hour, or $120,000 a year. Today the job pays about $15/hour and an American citizen can not get the job. H1B has flooded the job market with cheap labor and shut out American workers. If you and your friends can make $100,000 in Washington, enjoy it while it lasts.

This may not seem like a big problem to you. When an automaker lays off 1000 workers, the economic damage to the community lasts for years. IBM has laid off 10x more people in our town and the impact to the local community is becoming apparent. Communities all over this country are being hurt by H1B. It is only a matter of time until the political climate changes and when it does I would not want to be anywhere near Washington DC.

William | Dec 28, 2007 | 6:04PM

Cringely works from the blindered assumption that Americans have a natural right to be paid more than people from other locations on the planet, but that isn't the way it's going to go, and until he wakes up and starts talking about the wider economy, and social justice worldwide, he'll just be sitting in the corner talking to himself.

He may be trying to occupy the "patriot position" where he gets plaudits from the people who have been living on the stolen resources of the rest of the world, but that time is past, and he should get with the reality program: if people can do the job, they should get the job.

What goes, Cringely? Are you even aware of world conditions, world justice, fair trade, labor laws, and so on? Are you so afraid of politics you'd rather just pretend you can comment on IBM's approach to the world's situation without acknowledging the wider constraints they work under? It's easy to criticize if you ignore that, but IBM is then justified in ignoring your feeble jibes, and the tempest they stir up.

Why don't you stop playing technical ivory tower and talk about the real world situation?

Expecting your prompt reply,

Ormond Otvos ormond at mail dot

Ormond Otvos | Dec 28, 2007 | 6:06PM

After comparing IBM to the other 2 big outsourcerers after your first story, my decision to leave was made.
IBM locally have some excellent staff and managers, but are the most "siloed" of the 3 big firms.
More than a grain of truth there.

Unless you know people in other teams/silos personally,
it is hard to get anything done quickly.
I have been watching a new IBM site go
horribly wrong for want of central office financial support.
Very sad as the local staff could please the customer, if the bean counters would let them.

Herodotus | Dec 28, 2007 | 6:08PM

The prevailing wage requirement is now actually 100%. Also, The H-1B employer must pay its H-1B worker(s) at least the “required” wage which is the higher of the prevailing wage or the employer’s actual wage (in-house wage) for similarly employed workers. This means that the employer myst pay AT LEAST 100% of the wage a similar American worker would make and often even more.

BJ | Dec 28, 2007 | 6:11PM

IT staff in user departments are essentially overhead. They are not a line function, but a staff function, not part of the core competency of the business. Unless what they work has "intellectual property" associated with it, expect it to be commoditized and shipped to an off-shore location. IBM Global Services is just a big body shop and are not in the business of creating "intellectual property". So it is par for the course they will provide those services from cheaper places. When steel workers lost jobs to overseas manufacturers, US economy adjusted, so will it this time around. The laws of the market based economy are inexorable.

Amarnath | Dec 28, 2007 | 6:11PM

Exactly. This column is nonsense from top to bottom. So IBM is pushing people out the door. Big deal. The overall demand for talented IT people is very high at the moment, and based on the number of unsolicited calls and emails I get from recruiters on a weekly basis still growing. I have no doubt that a few untalented mediocrities (which our industry is unfortunately full of) who've been hiding out in big, inefficient companies like IBM will have trouble finding work, but if you have half a brain, you'll find a good job very quickly.

It's important to note that experience != skill. My previous job was with a small software consulting firm, and in addition to my programming duties I would also do 2 or 3 technical phone screenings per week of potential job candidates. After about a year at that company I had easily done somewhere between a hundred and a hundred and fifty of these. I found it absolutely stunning how many people I spoke with, who had impressive-sound titles at prestigious companies on their resumes, couldn't answer simple questions like "what's the difference between a stack and queue?" and "what is a factory class?" What I realized from this experience is how many "experienced IT professionals" are really just useless time-servers who's main skill set is bs'ing non-technical managers into hiring them.


Michael Ellis | Dec 28, 2007 | 6:11PM

The prevailing wage requirement is now actually 100%. Also, The H-1B employer must pay its H-1B worker(s) at least the “required” wage which is the higher of the prevailing wage or the employer’s actual wage (in-house wage) for similarly employed workers. This means that the employer myst pay AT LEAST 100% of the wage a similar American worker would make and often even more.

BJ | Dec 28, 2007 | 6:13PM

Hi. I used to work in the USA on a h1b program. Can you explain please why you say that a h1b worker is working cheaper than an equivalent US Citizen? The law used to be that the h1b worker was not allowed to be paid less than the equivalent US citizen. That was the point of the h1b system, so that U.S companies can get workers to fill positions they couldn't otherwise fill.

When you say h1b are cheaper is this certain knowledge or hearsay? As an Australian thinking of returning to the US I would seriously like to know.

Thanks.
Kevin James.

kevin james | Dec 28, 2007 | 6:34PM

Regardless of whether the H1B recieves 100% pay or not, the company wins because these employees are locked into the company that sponsors them for a 2 year period. Consequently these employees don't have the bargaining power that American employees have and the American worker is devalued. An American citizen is less likely to put up with a poor job or poor management. Overall this is leading to a downward spiral in job quality within large american companies that outsource.

CM | Dec 28, 2007 | 6:41PM

Regardless of whether the H1B recieves 100% pay or not, the company wins because these employees are locked into the company that sponsors them for a 2 year period. Consequently these employees don't have the bargaining power that American employees have and the American worker is devalued. An American citizen is less likely to put up with a poor job or poor management. Overall this is leading to a downward spiral in job quality within large american companies that outsource.

CM | Dec 28, 2007 | 6:41PM

H1B actually sucks in many ways but NOT the salary as I got paid more than my coworkers with the same education and experience and more than colleagues with more education and experience as a direct result of the H1B regulations around wages, but I had no mobility whatsoever within my employer or between employers due to H1B regulations. My employer knew this and systematically abused me knowing that I would prbably not resign due to the H1B restriction. I also could NOT take legal action because they would fire me and I would automatically and immediately become illegal as my H1B visa would be invalid as soon I was fired. If people believe that H1B is cheap happy labor, they are dead wrong on both accounts.

BJ | Dec 28, 2007 | 6:52PM

Kevin James, as you indicate H1Bs are NOT cheaper labor. It's a simple as that. People who claim that simply have no clue about the H1B program but uses the good ole cliche about H1B and cheap labor. It's a scare tactic along with animosity toward foreigners. Many Americans do not seem to understand that there are simply not enough QUALIFIED workers to fill many IT jobs. Merely being a laid off IT worker does NOT mean you are qualified for IT positions in a different IT field, something which Mr. Cringley and others seem to think. Because you are laid off from IBM and have with a Cisco background does NOT mean you are qualified to be a JAVA programmer or web developer.

BJ | Dec 28, 2007 | 7:00PM

A quick check of monster.com shows me a lot of jobs available (for my industry anyway) that range from 80k to 130k (those that mention wages).

Being an Aussie I am able to use the E3 visa rather than a H1B which makes things easier.

Also in relation to 'the body shops' forcing you to stay with them. You can always have a different company take over your h1b visa sponsorship. The visa belongs to the worker not the company that sponsors you.

Seriously folks, whats the job market in the US like?

Kevin james | Dec 28, 2007 | 7:14PM

Kevin you are right, lots of availabe IT jobs are unfilled even though they offer HUGE salaries. Many people don't seem to understand that the applicant pool of QUALIFIED workers is much lower than the jobs available. Thus the huge salaries to attact QUALIFIED workers. I capitalize the word "qualified" to empasize that the problem is NOT lack of workers but the lack of QUALIFIED workers with the right education and/or experience. If there was a surplus of QUALIFIED IT workers the salaries would be much less (simple economics). Americans living in this supply and demand capitalistic society should know that. Also, you are dead on it again: H1B is employer specific. The process to transfer it is manageable but still lots of DOL and USCIS regulations to follow, including salary requirements and job description vs education/experience match.

BJ | Dec 28, 2007 | 7:21PM

America must face up to the fact that in a globalised world (which it enforced after WWII) than to the company it does not matter where most of its staff is based. While the decline of U.S. jobs may be sad, it is generating wealth and raising the standard of living in countries that are not as fortunate as the U.S.A. WHERE jobs are located does not matter in a global economy/village, especially in the interconnected world of IT.

Edwin | Dec 28, 2007 | 7:38PM

"the problem is NOT lack of workers but the lack of QUALIFIED workers with the right education and/or experience."

I've heard that one for the last thirty years in this industry.

It wasn't true then and I suspect it isn't true now.

When you allow HR to hire people, it becomes an acronym-matching game.

Education? Anybody who goes through a computer course quickly realizes that the US educational system is a joke. The material taught doesn't even begin to prepare you for real world work. I took refresher courses at City College of San Francisco for four years from 2002-2006, and in my estimation most of the courses, although adequate for preparatory purposes are not good enough to produce people who can just jump into a real world position.

Experience? Experience is almost irrelevant if what you call "experience" is merely having done the same project ten times at ten different companies. And that's what IT management looks for when they look for "experience". Your ability to think, your ability to research solutions, your ability to work hard are not judged - and in most cases, cannot be judged.

So IT ends up hiring people who HAVE the same project ten times - which means they are probably people who did it wrong ten times due to lack of imagination and lack of competence.

Maybe it IS true that there are more IT jobs in the US than can be filled here. If so, that says volumes about the inadequacy of the IT infrastructure in this country, the inadequacy of IT management, the inadequacy of the software industry as a whole, and the inability of corporate management in general to manage competently and plan for the long-term future.

And outsourcing is not going to solve any of those problems.

Richard Steven Hack | Dec 28, 2007 | 7:40PM

In order to clarify education and experience I need to say that an IT business searching for a JAVA programmer obviously needs someone who a JAVA background. This typically means JAVA courses and a history of JAVA programming with an employer. People who lack those are generally the not understanding the need for it, which may lead to unemployment due to not being qualified to meet minimum standards in the IT industry. People who are not in the IT industry may not know that IT is very different now than 30 years ago. Only 10 years ago, you could get an IT job with no formal education or experience in IT. Employers were happy to give you on the job training. That has dramatically changed the last 10 years. Apply for a web developer position with no education or experience in web development and see what happens. Your application will be thrown away in favor of an H1B worker meeting those educational and experience requirements. If they hire you today you need to produce today. HR does NOT hire, at least not at many locations within IBM. Managers always have the final say so and always interview candidates in person. That process has also changed over the last 10 years. Management generally does Not care about the ability to think or how hard you may work - these variables are hard to quanify. If they need a Cisco engineer, they will hire someone with a Cisco Engineeing certificate and usually 3-5 years of Cisco work at an employer. You are right on one point, management does not care about the long-term future. They work within the quarterly economy, meaning hiring and firing as needed with the bottom line of quarterly earnings.

BJ | Dec 28, 2007 | 7:54PM

Well, I was inspired to write a letter to my senator concerning the H1B visa situation. Thanks for bringing this to our attention.

charles | Dec 28, 2007 | 8:01PM

Thank you Bob for writing about this !


I used to work as a programmer for a medium size software company in the USA on an H1B visa. They expected me to smile and be happy all the time working 60 to 80 hours a week on low wages and knew I would tell any lies they wanted to customers or shareholders. I was not going to complain about being paid much less then the local programmers I worked along side of, no matter what the law in America might be. Obviously, I did not want to be fired and deported. I was not alone either.


Generally and more broadly speaking, management do not know how to write programs. They suspect one programmer is just as competent at writing programs as the next and because of the programmers inherent power, do not trust any of them. On the programmers side, they are so scared of getting the sack any day they would not dare mention their fear to anyone. “Be happy” has become a jealous religion. They know that management don't know whether they are any good at their job or not. Hence programmers quickly cling to secrets and myths to make them unsackable. Examples of this can be seen by IT people insisting that a good programmer is one that knows what certain words mean, like “factory”, “struts”, and “spring”; the newer the term the better and the best is simply to invent your own classes of words. This ubiquitous and mischievous argument is like saying Lewis Hamilton is not any good at racing cars because he dose not even know what an HSV is. After all, every racing car driver in my country, that is any good at all, knows very well what an HSV is. Ho hum.

james | Dec 28, 2007 | 8:18PM

Well, my experience pretty much mirrors what Bob has to say, except for the H1B visa situation, which I haven't personally experienced. I worked for IBM as a contractor in their 3rd party NOC in Boulder, CO. I was there little over a year.

During that time I worked on a single contract for a worldwide services company that was using IBM to track and troubleshoot problems on their network. During this year, IBM decided that as these NOC contracts were already written and the customer base was stable, they could cut services to the bone and the companies would not notice.

Before this decision, all the personnel - contractors and IBM'ers - were equal responsibility and duties. Afterwards it was a disaster. First they created a tiered system with only IBM staffers allowed to hold tier two positions. Then they moved employees with no qualifications into those positions - deliberately. I ended up as a tier one training my tier two. The new network T2 asked me what a switch was. The server T2 couldn't figure out how to remotely log into a Windows server. Seriously - you can't make this stuff up. The managers overruled the contractors and sided with their employees, even when their decisions endangered the client's operations.

None of this made sense until the second portion of the plan went into effect. As the new Tier two was largely ineffective, the 'decision was made' to eliminate them. As for the contractors, they were told that to keep their jobs they would be forced to quit their existing contracting firms and join a new firm that had drastically undercut the other companies. In order to support this move, we would have to take a pay cut that averaged about 18%. The new company didn't have an office in the Denver Metro area, and didn't bother reading the resumes of their new employees. Either you accepted the contract terms or you were out.

I told them to get bent. Then I made plans to move away from Denver. On my last night my manager came over and took great pleasure in telling me that they had decided to let the 'difficult' employees go early. I had the equal pleasure of telling him I was moving in two weeks and had already accepted a job paying 75% more than they were offering under the new contract. I treasure the memory of the expression on his face.

The company I was working with at the NOC had already figured out what IBM was doing and had built their own center at the company headquarters in Houston; by the end they were shadowing what I was doing to make sure they and their tools were up to speed. Which they were. Operations at that company was outstanding. Had they offered me a position in their NOC I would have seriously considered it.

As annoyed as I was with them for their treatment of the contractors, I was enraged by their treatment of their own employees. Many of them had relocated at their own expense with the promise of steady jobs. They had been there less than a year and were told that they were to be surplused. They had two months to find new positions within IBM. If the new position was in another location they would be forced to relocate again - paying for it themselves once again. It was despicable.

During the time I was there I figured that on average every contractor was paying for one IBM staffers that had not duties but to supervise - and more importantly, play politics. The IBMers would stab anyone in the back.

I won't work at IBM again. Ever. And I discourage everyone I meet from doing business with them in any capacity.

Bob, I really have worked at good companies. You just never *write* about them.

Ron M. | Dec 28, 2007 | 8:33PM

I find the $21,000 salary very hard to believe. I work for a mid-size company in Florida and we pay our IT *interns* $14/hr, which is equivalent to $28,000 per year.

Paul | Dec 28, 2007 | 8:39PM

I agree $21,000 seems a little unrealistic. I'm sure Bob will correct, but nonetheless, I think what we're witnessing, is a "big lumbering giant" (to use Bob's own words), adapting to the business environment first (ie. shareholders, executives) , and the human resources are an afterthought.

Unfortunately us Americans, will need to come to terms with the new reality of the global marketplace, and or consider work outside of IT. I think we all forget the grand old traditions of going to college, working hard, and looking for an "A" grade large corp. to work for, are really an a pre-1960's concept the world has changed much since Big Blue glory days, all IT workers today are just as expendable as the cleaning staff. Too bad we never unionized....

tonyb | Dec 28, 2007 | 9:04PM

I agree $21,000 seems a little unrealistic. I'm sure Bob will correct, but nonetheless, I think what we're witnessing, is a "big lumbering giant" (to use Bob's own words), adapting to the business environment first (ie. shareholders, executives) , and the human resources are an afterthought.

Unfortunately us Americans, will need to come to terms with the new reality of the global marketplace, and or consider work outside of IT. I think we all forget the grand old traditions of going to college, working hard, and looking for an "A" grade large corp. to work for, are really an a pre-1960's concept the world has changed much since Big Blue glory days, all IT workers today are just as expendable as the cleaning staff. Adapt, IT isn't going anywhere we just need to adapt.

tonyb | Dec 28, 2007 | 9:05PM

Hey Tonyb. The ending line to your comment was better in the first version ("unionize") than the second ("adapt") ;-). But why not make the former part of the latter? Nothing to say that adapting without any kind of collective power will do anything to fix any of these issues in the short or long term.

Matt O | Dec 28, 2007 | 9:15PM

Hey Tonyb. The ending line to your comment was better in the first version ("unionize") than the second ("adapt") ;-). But why not make the former part of the latter? Nothing to say that adapting without any kind of collective power will do anything to fix any of these issues in the short or long term.

Matt O | Dec 28, 2007 | 9:17PM

H1Bs are not cheap. Since, most are either Indians or Chinese, doesn't mean they are cheap.
Get your facts right, Bob.
And, i found it hard to believe that 35% of NASA are indians. Even in my company many are Indians. They are neither cheap nor under-skilled. They are competing with us with right skill set not with low pay.

Kavin | Dec 28, 2007 | 9:30PM

Cringely,

You need to check this out...IBM has setup a subsidiary in US to "land" H1B resources from India for services to be performed in US. They are paying abysmal salary under GST and all IBM India employee who are currently in US are supposed to take 25-30% salary reduction and are forced to join GST.

http://gst-services.com/

an ibmer | Dec 28, 2007 | 10:14PM

Cringely,

You need to check this out...IBM has setup a subsidiary in US to "land" H1B resources from India for services to be performed in US. They are paying abysmal salary under GST and all IBM India employee who are currently in US are supposed to take 25-30% salary reduction and are forced to join GST.

http://gst-services.com/

an ibmer | Dec 28, 2007 | 10:15PM

I worked at IBM (acquired through a rather large software company they bought around '02) but left in '04. Maybe the experience of being brought in through acquisition gives me a different experience, but even then you could feel the pall.

From my continued contact with people still at IBM and my occasional interactions with them as a customer, it seems clear to me that the underlying problem is a major disconnect between (upper) management and those closer to the end of the gun that goes bang. It's very difficult at IBM to know 'which way is up'; to understand the true goals of any program or service you are involved in. One feels caught in a tail-chasing organization. The comment from Mark really captured the essence of how all internal dealings felt while I was there, although it's clear to me that he is in a different division of the company.

Large orgs like IBM aren't constant; they have institutional eras of expansion and contraction, clarity and confusion. To me it seems quite obvious that this is not a time of clarity for IBM, or for the IT industry as a whole. IBM, however, seems particularly pallid and bereft of vision right now.

IBM'ers still hanging on: I salute your tenacity, and I hope that IBM sees the light in time to do well by you.

PS: Bob, you'd probably do well to examine Microsoft for similar but less pronounced symptoms.

Bryan | Dec 28, 2007 | 10:27PM

Here's irony for ya...

I do support for one of the big storage systems companies.

Three years ago our company moved all of our customer facing support back to the US from India, and except for a couple of language support centers in Europe and Asia, we support all of our customers from the Eastern US.

I'm a 3rd shifter, which means I support primarily Asian and European customers.

The ironic bit is that I spend a good part of every night on the phone supporting the Indian support centers of the big US companies who have moved their own support there.

Chuck | Dec 28, 2007 | 10:37PM

Answering the poll question: Will IBM survive?

Lou Gertsner turned IBM around, starting 1993.
It took an outsider to do it - and the board knew that.

His legacy, after leaving in 2002, should've been a company with a solid future. Five years on, it appears not so - that can only be "Corporate Culture".

IBM is far too important to be let fail and broken up in a firesale.

But we have a perfect model for the future of a 'lumbering giant" - Unisys.

In 1986, Numbers 2&3 in the market (Burroughs & Sperry Univac) combined and produced a dud. It's still alive, but failing. Because enough people use their mainframes (2200's and A-series), they can't be allowed to die. Slowly withering on the vine is fine.

Fujitsu is the perfect vacuum-cleaner to buy the hardware business in the final break-up.

steve jenkin | Dec 28, 2007 | 10:57PM

The minimum salary for H1B is prevailing wage, usually 4k to 5k per month.

See statistics for all labor applications filed in 2006 (includes h1b and permanent residence green card): http://flcdatacenter.com/CaseH1B.aspx

From that info, less than 10% of H1B are paid more than 100k, and less than 10% are paid below 60k per year. A solid 80% are paid between 60k to 100k per annum.

i am not on h1b | Dec 28, 2007 | 11:11PM

I don't know whether Mr. Cringely has had any prior affiliation with IBM of any kind or not but his articles are a little too dramatic and factually wrong. Name a single (proactive, profitable and public) company anywhere in the world that doesn't follow market forces. His posts are more emotionally driven on pseudo patriotism (read protectionism) than on fundamentals of business and economics. Mr. Cringely, in today's time, there are many other legitimate issues one can focus on to demonstrate patriotism - sensationalizing mundane issues won't always make one a prolific writer.

GG_007

No_Nonsense | Dec 28, 2007 | 11:39PM

IBM GSA and the other 'Tier 1' outsourcers operate from the same playbook - a version of 'bait and switch', a.k.a."The Value Prevention Society".

I've worked with and for all the major outsourcers in Australia. They all bid low to win contracts and adopt a dual strategy of "controlling costs" and price gouging for "variations"

'Controlling costs' is reducing staff, replacing competent staff with 'cheap and cheerful' newbies, not performing maintenance and avoiding capital investment. (What's wrong with a 5-10 year-old system? Nothing if you don't have to suffer the performance and other problems!)

They routinely ignore contract provisions - like scheduled roll-outs of new desktops, upgrades and performance targets.

The problems are at least three-fold:
- inequality of parties (Outsourcer vs Client)
- internal 'manager' performance has no upside, only downside
- no impartial umpire and effective 'stick' to enforce performance

Every company that signs an IT Outsourcing agreement signs just *one*. The outsourcers has done this many, many times before. Clients also don't factor in the *increased* staff and reporting costs - each side needs additional staff for 'contract management'.

The Client thinks it has stitched up an iron-clad contract and they forecast a bountiful harvest... Which doesn't happen.

Service degrades, minor works become hugely expensive, major works take forever and seldom get implemented - and the business people give-up and adapt around it.

In Australia, all the major EDS contracts let around 10 years ago are now being re-tendered - with EDS getting very little of the new work. Are they the worst? Hard to say...

Outsourcer 'managers' can only be assessed on monetary performance. With fixed price contracts, base income is fixed.

If a manager reduces costs 5% one year, this becomes the expectation for every following year - it is not seen as a 'one-off'. Without significant staff training and capital expenditure, this quickly becomes impossible without sacrificing service quality. Commercial systems are quite reliable these days. For existing stable systems, 'Do nothing' is good for at least 3 years - then you are in deep trouble.

The only ways to increase profits are to reduce expenses or increase non-base income.

Every service request is deemed a 'change' and subject to the full, heavyweight, project evaluation methodology. No project, not even buying a simple standalone appliance, takes under 4 man-weeks ($20-50,000). For the client, this stifles change/innovation (or forces it underground) and these additional costs overshadow most systems costs.

Capital expenditures are worse. Payback has to be within 12-18 months - *and* it has to beat 'do nothing'. Since the 2003 slowdown in Moores' Law for CPU speed, the problem has compounded.

Finding solutions that benefit the customer and reduce operating expenses are career suicide for outsourcing staff in ac culture focussed on increasing billables.

For example: one of our major banks replaced all the local file servers with small NetApp NAS's. The outsourcer had charged ~$2,500/month to 'administer' these systems. The bank paid for the change in under a year, increased availability and performance and solved many other issues to boot.

If the client gives all its IT staff to the outsourcer, who is going to seek out, design and implement new cost saving technology/systems? Not the outsourcer - it's not in the contract and not in its (short term) interests. The client has no IT staff - so it doesn't happen.

The last point is an impartial umpire.
Who reports to the Client on the performance of their systems?
Who has the training/qualifications to check and asses the metrics and reports?
Who maintains & audits the configuration database?

Only the Outsourcer.

What are the downsides to the Outsourcer of a major failure in Prime Time? A small number of 'service credits'. Meanwhile, the Client suffers real costs and potentially large losses.

The Client wears all the risk with only minor penalties to the Outsourcer.

There is a clear conflict of interest (or Agency Theory problem).
The outsourcer is Judge, Jury and Executioner...

steve jenkin | Dec 29, 2007 | 12:05AM

Michael Ellis, BJ, Kevin James, Richard Steven Hack,... started a thread about the 'value'/competency of individual IT practitioners.

The huge (100+:1) variability in individual competence and the inability to measure it is one of the worst problems in our industry.

IT is not a 'profession'. It, like 'Management', fail a very simple test:

What are the personal and organisational consequences of *repeating* a known error??

Mostly it is "fire/blame the innocent, promote the guilty". The exact inverse of what you'd want. People may trump technology and process, but Politics trumps everything...

And our Professional Bodies don't help.

The only real research into the causes of Project Failure are by consultancies - who are driven by the ability to sell their products, not what will benefit the Profession.

The ACM, IEEE, IFIP and friends have abrogated their responsibilities. We on the firing line, get to suffer.

Managers have to go with what they can quantify and inspect. Good managers will see through the B/S - but mostly too little, too late. Mostly, office politics, influence and self-promotion rule.

The adversarial nature of Outsourcing and the seemingly universal decline in code and service Quality stems from this failure of IT as a Profession.

steve jenkin | Dec 29, 2007 | 12:25AM

All I know is I have been making a lot of good money cleaning up after the Indian's junk code.

My new clients have felt so much pain from offshore outsourcing they will pay anything just to make it go away.

They have my sympathy, but after losing jobs and contracts to offshore companies and H1B body shoppers -- I have no mercy in my rates when they realize the pain they have put themselves and others into.

DL | Dec 29, 2007 | 12:49AM

Bob,

I think your data on H1B salaries is out of date.

I came to the USA 10 years ago on a work visa, and at the same time I helped hire many programmers from India for the company (some fresh grads from IIT, some IIT guys with 2-3 years at Microsoft in India). In those days (a decade ago) we were paid about 20% less than US programmers in the company - around $65k-$75k in New Jersey - but the company sponsored our Green Card applications, helped with rental housing and car loans etc. The company justified the pay differentual by making our titles say 'Junior ...' or giving unique titles with no comparable roles for Immigration paperwork purposes. BTW the company treated all H1B workers similarly, not just Indians - my boss (a VP who was a Brit on a H1B) complained about his salary and was told by the COO 'so what can you do about it - you can't leave until you get your greencard'...

The moment we got our Green Cards 4 years later we were given big pay increases if we stayed on (I personally moved jobs and got a 40% pay rise).


However NOWADAYS things are VERY different for H1Bs in my experience. My new company in New Jersey (one of the fastest growing small companies in the USA) is hiring like crazy every month. We hire contractors from body shops (mostly Indian and Chinese, some Eastern European) at $65-$100 per hour in 2007 depending on skills and experience. Some contractors are useless and we dump them within 1-2 months. Most are good and we keep them on 6 month rolling contracts. A few are very good and we hire them out from the body shop (pay a penalty) and their salaries are the same as any equivalent US worker we have (for programmers $85k-$120k base plus bonuses) with the overhead of getting them a Green Card too.


BTW For Kevin James' benefit: the reason you cannot job hop easily, even though a new employer can apply for a H1B again, is because you go back to beginning of the Green Card process with each new job. A friend from England on a H1B worked for KPMG, then Siebel then IBM over 8 years (6 year H1B plus two 1-year extensions) and each time his 3-5 year process on getting a Green Card had to start from scratch. Eventually he got laid off from IBM Global Services earlier this year and had to leave the country within two weeks (sold his car, gave away his possesions etc) as he couldn't get another job lined up in time. He can come back after 1 year and start again on a H1B.


Anil

Anil | Dec 29, 2007 | 12:58AM

Americans have no right to complain about how American businessmen run their businesses. You wanted $5 T-shirts, $300 computers, $30 DVD players, $500 32in TV's and a million other ridiculously inexpensive toys to fill your gigantic homes with. What's the point of building a 5000 s.f. house if you have nothing to put in it.

Well, you have all that, and more. Now you have to pay the price. By losing your overpaid jobs to cheaper foreign labour. The world has been trying to tell you about the problems with the American Dream for a while now but you didn't listen. It was nobody's business but yours. Your lives might be richer with quality rather than richer with quantity. Congratulations!

Dan | Dec 29, 2007 | 1:23AM

"Business is about keeping customers happy, a trick the guys in Armonk seem to have forgotten. Or maybe they never knew."

Bob, you know better than this. Before the mid-1980s, IBM, and most other U.S. companies knew that fact extremely well. It was the "Greed Creed" that made us forget everything but next quarter's profit. Of course, there is a LOT more to it and it would take a book to cover all the problems and issues that have led us to where we are.

Jim B. | Dec 29, 2007 | 1:51AM

As someone who has more than a little experience dealing with the likes of Lucent, Motorola, IBM, and similar large US companies who are laying off in droves in the US and hiring here in Bangalore, I can tell you that most of these companies are on life support.

They are rife with politics and senior managers only care about the weight of the org-structure that they can build underneath them. The competence of these structures is abysmal.

The outsourcers are usually worse. They have maybe 1 in 500 engineers worth their salt, the rest are just fluff to pad the time sheets.

I give them 3-5 years before they all collapse. All that the move to India, China, Brazil has bought them is an extra few years - they would have collapsed a decade ago if they hadn't found this stop gap arrangement.

Non IBMer in Bangalore, India | Dec 29, 2007 | 2:10AM

I think IBM will find out within the next 10 years that once the outsource all of their employees to other countries, that Mgmt adds nothing of value and then their jobs will go away.

I predict that IBM will be purchased by WIPRO or some Chinese company in the near future and the process will be accelerated.

Steve Dean | Dec 29, 2007 | 4:41AM

Cringely: why not just admit you made a mistake and actually do some reaearch and find out the actual figures?

It looks like you heard a rumour that IBM was planning to cut half its US Global Services workforce. You found that IBM employs around 350,000 people, and trumpeted the "150,000 job cuts" message.

But the 350,000 figure is IBM't total global workforce: not the US section of the Global Services division.

Quote: "More employees have quit IBM this year than have been laid off." In other words, there have been fewer layoffs than people quitting. You don't cut half of any workforce in under a year by trying to get people to quit!

Quotes: "IBM's Indian employment to 73,000 workers", "Twenty percent of IBM employees are now in India.", "How is it the company can know how many workers it employs in India yet not know how many it employs in the United States?".

Well, if the 73,000 Indian employees make up 20% of the total, then its not too difficult to work out that the total must be around 365,000. So where are the 150,000 layoffs you promised? (Not all accounted for by the 20,000 new Indian employees, that's for certain!)

Yes, IBM (like many other large US corporations) is laying off some employees in the US, and taking on more from overseas, but its more like 10,000 to 13,000 over two years than 150,000 in less than one year. But that wouldn't make such an eye-catching headline, would it?


Martin | Dec 29, 2007 | 6:14AM

Just a quick point on how valuable any worker is as a general statement.

I will get paid the prevailing wage as a US citizen doing a particular job, plus or minus my skill level and experience.

The prevailing wage is based on available talent.
If supply of said talent is short, the prevailing wage is high, the opposite is also true.

Anything that increases the available talent pool by definition LOWERS the prevailing wage.

So the H1B visa holders may get paid some percentage ( even up to 100% ) of the prevailing wage but they drive that wage down overall.

So if I made 100K 2 years ago, and now my field has been a target of H1B applicants, the prevailing wage will be reduced by the additional competition, I can take a pay cut ( more likely be laid off ) or I can leave to be replaced by a H1B holder now that my industry is "hurting for talent".

My employer can argue that they can't hire a citizen to fill my position at the prevailing wage, so they need to go outside the country.

In this scenario the quality of the workers on both sides doesn't matter since a prevailing wage is an average.

The employers average cost goes down just at the threat of H1B applicants.

Keep your employees cowering in the trenches wondering if they will have a job in six months and they are also less likely to balk at a reduction in benefits, they are just happy to be employed.

Kevin | Dec 29, 2007 | 6:26AM

On the subject of the supposed need for H1-B 'talent' the usual justification is that tech schools, like the University of California, aren't producing enough citizens with graduate tech degrees. UC's graduate tech enrollment is in fact about 50% foreign student.

Guess what, UC wants to INCREASE the percentage of foreign 'talent' (and, of course, diversity) by eliminating higher nonresident tuition for graduate tech students. The story is at www.santacruzsentinel.com/story.php?sid=49438 (hope that doesn't violate any URL prohibitions). Seems to me a public institution it ought to be lowering resident tuition to get more citizen talent to sign up. There are doubts, after all, about the cost-effectivness of getting a graduate engineering degree, unless, of course, you want to be considered for a computer operator job doing backups at Google.

Incidentally, have you noticed that the only workers in America ever described as talented, hardworking, or indispensable by a slew of pundits and leaders, such as both Thomas Friedman AND George Bush, are the foreign ones?

Anticipating the inevitable charges of 'xenophobia', I'd say there's a lot of the opposite psychiatric disorder, obsessive-compulsive xenomania, afoot.

John Reece | Dec 29, 2007 | 7:29AM

Everyone seems to be missing the big picture. This problem goes back to (at least) the first Henry Ford assembly plant nearly 100 years ago. Nothing much has changed since then except for the overall volume of the screams of the ones affected. “Automate or Desolate” - no matter which side of the fence you happen to be on, the problem is real and there is nothing any of us can do about it except to attempt to learn how to survive in its wake. Competition, shrinking margins, governmental regulations, taxes, overall employee cost, transportation cost and an almost endless array of other profit eating infestations are destroying America’s ability to compete. A company that thinks they can maintain consistent, acceptable profit margins without the elimination of the human workforce is whistling past the graveyard.

Bill Scott | Dec 29, 2007 | 9:43AM

Yeah Ive seen this before in australia,it just creates an environment of employees as ruthless mercenaries with the same attitude as the management team.At least with me it has.YOU GET WHAT YOU PAY FOR! Dont pay alot dont get alot!

entnow | Dec 29, 2007 | 9:53AM

> YOU GET WHAT YOU PAY FOR!

It is worse than that - the bad employers have damaged things for the good too - I earn pretty-okay money, but because of stuff like this, I don't trust my boss further than I could throw him - and he is a BIG man, so that isn't far.

Anon | Dec 29, 2007 | 11:51AM

MSFT has the same problem. You can pay a coder in India or China 1/10 as much, but the AVERAGE quality will be about 1/100 tha s good. Not for any inherent reasons-- foreign workers are plenty smart-- but because the US still has the best schools at the post secondary levels.

Look at MSFT Vista and see where "quantity" over "quality" leads.

tom B | Dec 29, 2007 | 12:42PM

I'm working at IBM, contractor, never would be one of their slaves. This is my fourth life at IBM and it is quite horrible. It has never been pleasant. You have to put up with the arrogance of Harvard, the intelligence of community college, the work ethic of a high school senior and the competent management of a taco bell drive through. Those were the good times. Now the place is somewhere between hell, and a new place recently found below hell called Hyderabad.

I can safely say that every single good thing IBM has sold in the last 10 years was some other companies useful product that was bought, then totally ruined, and then made somewhat workable over 20 software cycles. I can also say that any company that is stupid enough to contract IBM for software or hardware support services should have their CIO replaced. I know at least two companies that have to keep IBM because of the business agreements, but they are actually making money this year on SLA breaches. Kind of sad when IBM has to pay someone to accept their services.

Last point then I have to go. I am old enough that I can remember when it was an honor and somewhat intimidating to work with an Indian software engineer. That was a long time ago. The 95% of the people I work with now are Indian and 99% of those should be selling samosas out of a cart in the back streets of Bhagya Nagaram. India should be ashamed of itself for what it is trying to pass off as trained professionals, and US/European businesses obviously doesn't care because they are making about 1000% profit off every Indian capable enough to learn English.

Will Daley | Dec 29, 2007 | 12:45PM

To all you H1B trolls out there like Shawn and BJ, we know where your bread is buttered. Those of us who have worked with your incompetent kind also know where all your money goes; back home. H1B = low cost and very low standards. Didn't used to be that way, but since GW and the greedy whores running this country have opened up the flood gates, that's what we get.

What I want to know is, when will the first US company stand up and say, WE HAVE LEARNED OUR LESSON. We tried to go cheap but we got exactly what we paid for. I know many US companies that have wasted hundreds of millions of dollars (used to be a lot of money) on multiple instances of offshore projects. I don't know ONE company that has ever gotten what they wanted or even got what they paid for.

vincent | Dec 29, 2007 | 1:02PM

A company that decides to give away its IP to Open SOurced in the mistaken belief that Linux will make them more money than proprietary operating systems and software is doomed.

IBM has given away billions in IP in order to enhance a free OS.

Idiots.

Bruce | Dec 29, 2007 | 1:05PM

(Disclaimer: I am an IBM employee but do not attempt to speak for IBM.)


It seems the general thread in these comments is to hit on the outsourcing question. I want to respond to another remark in the original posting, which said that IBM was weakening its pension plan by converting it to a 401K. I don't think this is a fair statement. Basically, by contributing the same amount to a 401K as to the cash-balance pension, as long as employees are contributing themselves, the company is shifting the ownership to the employees. Over the long term it is likely employees can earn more this way than with the restrictive minimal interest rate previously being earned, though of course the risks are greater as well. It takes variability out of what the company has had to pay (since the interest rate for the pension plan would be fixed only every half year).

Not really as evil as we might have been led to believe.

Fred | Dec 29, 2007 | 1:13PM

Hi to Anil and others. You mentioned a company that was hiring (sponsoring) H1B? Do they have a website? Since I am looking into moving back around sept next year I am starting to look now.

What companies are hiring or willing to sponsor h1b (or E3)? Any urls or contact details are welcome.

Thanks folks.

Kevin James | Dec 29, 2007 | 5:37PM

Following the point made by some of the other posters and synthesizing it with what I am seeing in Brazil and other countries it appears that the outsourcing wave is soon to reflect and head back towards the United States. There is no magic. No one really wants to work harder than the workers in the USA ... but sometimes they must. Thus we can only expected this phenomenon to go into retrograde motion at some point. I think its sooner than we know!

Fred | Dec 29, 2007 | 8:35PM

In response to Bill Scott's post [Dec-29 9:43] on assembly lines.

I agree with: Nothing much has changed since then except for the overall volume of the screams of the ones affected. “Automate or Desolate”

However, for all his faults, Henry Ford's view was not this, rather the exact opposite.

He paid workers much more ($5+/day) than the going rate ($2.34/dy) to work on his line:
- they were motivated and engaged. Sabotage wasn't a problem.
- he got the pick of the bunch
- he kept Unions out (my take: HF already gave more than the Unions could negotiate)
- and most importantly: The ordinary worker could afford to buy the product.
- I also suspect there was more than normal interest in Health & Safety [no proof] - because stopping the whole line with a preventable accident is very, very expensive (over 1,000 man-hrs). If you are turning out a car every 24 seconds, whole line stoppages are to be avoided.

There is a thread there - maximising line output.
To do this, you have to respect the workers and attend to you Health & Safety.

This lesson of Henry Ford was not only never learned by Corporate America, but forcefully rejected.

The 1919 court case "Dodge v. Ford Motor Company" lays it all out.

[wikipedia] the Michigan Supreme Court held that Henry Ford owed a duty to the shareholders of the Ford Motor Company to operate his business for profitable purposes as opposed to charitable purposes.

The Dodge brothers held 10% of FordMoCo - a large stake - produced chassises for Ford and also made & sold their own cars.

They were in direct competition with Ford and used their shareholding to force Ford to stop ever decreasing prices and looking after his workers. [The 'charitable purposes' above]
Perhaps these days Ford could have challenged on the Dodges' 'conflict of interest'.

That management greed/laziness of the Dodge Brothers is the effect now rampant in not only US, but Global, enterprises.

I agree with Bill wholeheartedly, just it was the Dodges' not Henry Ford who caused the whole mess :-)

steve jenkin | Dec 29, 2007 | 10:09PM

I work for IBM in the services business and I confirm virtually everything Cringe has stated, with exception of the numbers and the timing.

If you add in contractors then extend the time frame out to mid-2010, the 150,000 number may indeed be possible.

What Cringe has not noted is this same offshore everything model is also being done in product development and many internal business processes as well. Call it the Globally Integrated Enterprise or GIE.

I'm not going to bother with repeating what Cringe has already stated, but I'll add some elaboration.

Our global resources are obtaining poor results - failure to meet quality requirements, failure to meet productivity requirements and failure to meet schedules. In some cases, the work had to be returned to the US. Many of the offshore resources (GRs) require too much mentoring and guidance from what little US personnel are left.

What Cringe notes about contractors is mostly true - almost all US-based contractors are gone. Those that remain have taken forced pay cuts. We are fearful we'll lose the few we managed to keep.

The selling off of parts of the business continues - Network Services is being sold to AT&T and there are rumors of selling the services business flying around.

Cringely is absolutely correct in laying the blame for this on executive (mis)management - unfortunately, they aren't suffering like those of us. They have made the US services business a disgusting sweatshop of overwork, underpay, overstress, despair, frustration and insecurity. They also don't care - all that matters is those cost reductions.

Friends don't let friends go to work for IBM

Frank | Dec 29, 2007 | 11:08PM

I want to thank everyone for your very heartfelt and detailed comments here. Obviously I have struck a nerve. And having done so (and having read through all the preceding comments) I'd like to make a few additional points.


I'm not opposed to change, nor am I in favor of ignoring reality, but I think change can be properly managed. If you'll look through my archive of more than 500 columns you'll find half a dozen or more on outsourcing and offshoring, some dating back to the 1990s. The major point I made in those columns was that outsourcing and offshoring was rarely successful, especially for complex projects. It is hard enough to do this work so why add additional requirements that make it even harder? Outsource to Des Moines or Kansas City if you must, because there are people in those cities who can do the work just as well and just as cheaply, but outsourcing to the midwest isn't as sexy as going overseas.


Another point is about H1B visas, which DO push down wages and which ARE substantially cheaper for companies since they don't usually offer comparable benefits. The major function of H1Bs in these companies are to act as tools for age discrimination. I have written about this before. Moving a job overseas or bringing-in a foreign worker far more often displaces an older, more expensive, American worker. It's a dodge, a cheat to beat the law, and our economy is suffering for it.


Read all these posts and notice that there is NOBODY saying "I am proud to work for IBM." If I am so wrong, where are the IBM defenders? The most damning thing I hear is that I'm bad at arithmetic.


All the best,


Bob

Bob Cringely | Dec 30, 2007 | 12:31AM

Bob,

Mismanagement is not an IBM only problem. Microsoft is also suffering from it. Many other companies are too.

Smart management seems sometimes to be an Oxymoron.

Wayne | Dec 30, 2007 | 1:21AM

Yeah, yeah, yeah, IBM's a sinking ship. Probably gets bought out by SAP in 2011.
Considering this and this, would it be safe to say either, " ... goodbye, Blockbuster!" or "Good Buy! Blockbuster ..."

Kevin Kunreuther | Dec 30, 2007 | 2:58AM

From the September 10Q SEC filing:

"The company has a significant global presence, operating in 170 countries, with more than 60 percent of its revenue generated outside the U.S. In addition, approximately 65 percent of the company’s employees are located outside the United States, including about 30 percent in Asia Pacific. This global reach gives the company access to markets, with local management teams who understand the clients and their challenges and who can respond to these opportunities with value-add solutions. The company’s broad mix of hardware, software and services businesses provide a strong and balanced operational base for the company.


"The company’s long-term financial model objective is to generate 10 to 12 percent earnings per share growth over the long term through a combination of revenue growth, margin improvement and effective capital deployment to fund growth and provide returns to shareholders through dividends and common stock repurchases. In May, the company met with investors and analysts and discussed a roadmap to deliver earnings per share in 2010 in the range of $9 – 11 per share, or 10 to 16 percent compound growth from 2006. This included additional earnings growth potential from a number of sources including growth initiatives, acquisitions and the current projected impact of retirement related cost over this period."

So they have given themselves a couple of years of running room before they'll be held accountable. They've made the fatal error of forecasting both a number and a date, and of course in 2009 or 2010 the CEO will announce that due to the economy and unforseen circumstances, they won't hit $9 to $11 in 2010, so he is putting in Plan B which requires firing the head of sales and the CFO. Then he holds his breath and hopes the institutions don't demand that the Board of Directors fires him. Same ol' same ol'.

Michael Murphy | Dec 30, 2007 | 7:35AM

IBM very likely is not the same company it was when it started. Its just not possible to maintain that culture with so many employees.

But that is still a seperate point vs. are H1-B's good for the economy. I agree with Kevin's point that an increase in the pool of available talent probably has driven down the overall price of that talent.

The arguments around lack of talent are misplaced. In any group of people from any country there will always be some bad talent. That doesnt really speak to quality of the majority.

Ultimately these questions then to the CEO's of the major corp's and their shareholders. They fueled this influx of talent in exchange for growth. They fueled outsourcing of work in exchange so that the corporation could save money.

This trend is always true whether we talk about IT or manufacturing. Forcing corporations to follow a minimum wage has fueled the complete dismantling of the American Manufacturing sector.

Forcing caps on H1-Bs will simmilarly just move the work overseas.

Bob, also outsourcing may have its share of failures but there are several successes that you are choosing to ignore in your statements.

Also, it is not true that outsourcing locally is a guarenteed improvement in quality. Please google "Defense contractor spending waste". You'll find plenty of your local American companies with American citizen employees doing a fine job of fleecing your own govt and its taxpayers.

Theres good and bad talent everywhere. We must be smart enough to capitialize on it and adapt.

Shawn | Dec 30, 2007 | 7:50AM

Well, Bob, you've convinced me that you don't have a clue what you're talking about. Unsubscribed: well done!

Barry Kelly | Dec 30, 2007 | 8:57AM

IBM international has been bone heads for a long time. Worked with a Vancover BC group that totally
hosed up a gov contract (six week build-test cycles, never heard of daily build-test,) insisted on courier sending cds of code from BC to Minnesota, why use something like the internet? Developed on MS platform for a production AIX platform, never tested on AIX, on and on.

Longer story short: they got fired from the contract. Customer was totally hosed, but with Rochester MN as a big IBM political base, never had to pay the price, too much local connections.

However Rochester IBM is pretty dead now. HEH.

Joe canuk | Dec 30, 2007 | 11:24AM

I work for the blue pig in software development. For many years we have endured expense cuts in the way of people, equipment, supplies, you name it. The quality of the products we attempt to market is not very good. I cannot understand why our customers would buy these things when there are plenty of other good choices out there. It's no wonder blue is sinking. Can't wait to leave the piggie.

sinkin blue | Dec 30, 2007 | 11:30AM


Ok, I've seen what you've said about IBM coming to pass so no argument there. However I work in the midwest as a programmer and I make $112K/year. Now that may be a little high and I definetely job hop but anyone with 20 years experience that works for 20K year is a moron. You can work at Barnes and Noble handing out coffee for more than that and it's a lot easier. Somebody is lying to you!

James Kimble | Dec 30, 2007 | 12:16PM


Ok, I've seen what you've said about IBM coming to pass so no argument there. However I work in the midwest as a programmer and I make $112K/year. Now that may be a little high and I definetely job hop but anyone with 20 years experience that works for 20K year is a moron. You can work at Barnes and Noble handing out coffee for more than that and it's a lot easier. Somebody is lying to you!

James Kimble | Dec 30, 2007 | 12:17PM


Ok, I've seen what you've said about IBM coming to pass so no argument there. However I work in the midwest as a programmer and I make $112K/year. Now that may be a little high and I definetely job hop but anyone with 20 years experience that works for 20K year is a moron. You can work at Barnes and Noble handing out coffee for more than that and it's a lot easier. Somebody is lying to you!

James Kimble | Dec 30, 2007 | 12:18PM

James Kimble may be making 112K now, but Bob's comment stated "a few years back". Back in 2003-2004, just after the internet bubble burst, there were a lot of unemployed programmers that took jobs as low as 21K, even in IBM as Band 6 entry level.

Now that demographics and a better business environment have come about, the salaries have crept up to their pre-bubble levels.

Bob, thank you for you exposing the truth about that terrible company and its even worse and incompetent and immoral management.

Kim | Dec 30, 2007 | 1:35PM

It should be a powerful issue this election year (as well as the last election year), but if politicians appear to be deliberately obfuscating (read: manipulating) the facts, it will be difficult to convince the general public that it is a developing and dangerous problem:

http://www.manufacturingnews.com/news/05/1012/art1.html

Terry | Dec 30, 2007 | 2:55PM

The following views are explicitly personal, I do not represent IBM Corporation in this forum.

I'm finding it hard to reconcile Mr. Cringely's views with my experience as an IBM employee. While relatively new to IBM (3.5 years via acquisition), and probably wouldn't have chosen to work there, none the less I've found it to be an interesting, and occasionally exciting place for software development. Perhaps because of more than 30 years of software experience (much of it on what is now called IBM z/Series), I was already familiar with much of IBM, at least to the extent a customer can be. My observations:

1. IBM is not alone in recognizing the potential value of using a global workforce; it would be irresponsible for a public company to ignore opportunities for increased efficiency and market penetration. Like many posters here, I've found that some of those efforts are ultimately misguided or unsuccessful, but a few duds don't make for wholesale policy failure.

2. The anti-globalization rants have a distinct xenophobic undertone to my ear; IBM has a long history of investing in the global economy (major development/research labs in England, Germany, Italy, Israel, Japan, etc). Some of those operations likely took over work previously performed in the US; are we getting worked up because the emerging economies tend to be located in areas with fewer ancestral or historical ties to the predominate US demographic ?

3. Typical of most large corporations, IBM management talent runs the gamut; the ones I've dealt with have tended to be quite talented, so wholesale condemnation of the ranks seems over-broad and uninformed.

4. IBM employees (myself included) are not indentured servants, we are free to leave for greener pastures at any time. The rants over benefits, conditions, etc ring hollow when posted by supposedly active employees.

5. For many newer IBM employees, substitution of a 401K for the cash balance plan is a net gain in my opinion. The interest rate on the cash balance plan tended to be in the 4% range, so taking a lesser corporate automatic 401K contribution with the potential for market rate gains is OK by me, and let's not forgot the 1:1 savings match.

6. The defined benefit pension plan was eliminated for new employees some time ago; those legacy employees under the old plan retain their accumulated benefits along with future "step" increases, and special 401K benefits. Reading this article would lead one to believe that the defined benefit pension plan was entirely dissolved in favor of a 401K, that is false.

7. Like any large global enterprise staffed by humans, we make mistakes; our size virtually guarantees some of those errors will be "whoppers". I've found that most if not all IBM'ers expect to learn and adjust when things go wrong, our shareholders expect nothing less. It's worth remembering that the "old" IBM many posters remember with such fondness nearly self-destructed in the early nineties.

The periodic "woe is IBM" Cringely columns are hard to take very seriously for the reasons noted above (and let's not forget his "little math problem"). IBM is not a static entity, we have the talent and resources to adapt to our world in exciting ways. We won't always make the correct call, but neither will Mr. Cringely.

Mike Evans | Dec 30, 2007 | 3:46PM

I am happy with the change from the purely-IBM defined benefit pension to the 401k because this change meant portability. Previously, leaving IBM meant freezing your pension as it was on your last day. The 401k money can move to your next plan.

Retiree | Dec 30, 2007 | 4:14PM

Bob,

This article doesn't sound like you've written it.

IT Outsourcing is on its last legs - in the current version, for purposes of costs. It will resurface - but for reasons of skills and value - and only the companies that are able to provide skills and value will survive.

IBM will again re-invent itself (a smaller better one). Companies like Lucent, Motorola will also go through a lot of change..

The world IS very much a global place that will serve to displace people somewhere and employ people elsewhere - and this will happen in India as well - not to that much of an extent as the World economy is now not just dependent on the US, so work would come from elsewhere - not because it is cheaper (which it still is) - but more because talent is just not available.

I would like to see you quote statistics on how many Engineering students are taking to Software development in the US. There maybe some answers there as well - pointing to the future of the IT Services industry.


As for H1B - look at the companies getting started today - and ask about their resource requirements - are they getting their requirements met locally?

Would encourage you to be more analytical and less passionate (although passion helps sometimes...

Kiran | Dec 30, 2007 | 4:23PM

Bob -

You are dead-on with your assessment. IBM knows no limits in employing "trolls" - mostly from India - to batter postings not to the liking of the 1BM Company, so don't fall for opinions contrary to what your sources tell you.

The insider-management of IBM is dismantling the business with an eye to their own wallets. The share buybacks and other financial engineering gimmicks are all for the purpose of keeping fresh makeup on a dead pig.

Except for the monopoly on the mainframe world and a software business propped up by acquisitions (because the nincompoops in charge cannot make strategic investments of their own) the rest of the businesses are in one stage of decay or another. Services are a joke propped up by just-in-time hiring of newbies fresh from school or English-challenged but cheap labor from around the world. As India prices itself out of the market, Eastern Europe is becoming a fresh source of (dare I call it?) talent.

Stick to your guns, sir. You are essentially correct: don't let nit-picking finger-pointing hired shouters dim your message.

John | Dec 30, 2007 | 6:34PM

Bob, I am an IBMer (non-US, but also not from one of the BRIC countries), and this append represents my own opinions.

I'll take up your challenge. I have respect for the way senior IBM management are managing the off-shoring of jobs.

They have recognized that it is a commercial imperative, and are doing it, but they have also said openly that this is what they are doing. We have all been encouraged to think about how this affects us and to plan for it.

That's not to say you don't get some individuals being disingenuous...that happens anywhere. Both managers who lie to their staff and staff who lie to their managers. But I don't believe it's institutionalized.

It's also not to say that there isn't a social cost in the transition. But the discussion here should be about how to mitigate the effects, rather than demanding that reality not happen.

I'm in the process of transferring some work from my country to a lower cost country, and I have had nothing but support from IBM in being upfront about what is happening with the team, and in planning the transition of those affected to other jobs within IBM.

IBM is just a company doing what it has to do to survive, and in my view doing ok. There are a lot of people here who think IBM doesn't know what it is doing. The beauty of free enterprise is they can vote with their feet. Right now, I'm happy here.

Fingerbun

P.S. Bob describing your prediction of 150,000 layoffs as "bad at arithmetic" is a little understated. The prediction was flat wrong.

Fingerbun | Dec 30, 2007 | 9:08PM

Bob - you're 100% correct. I've been around for 20+ years (U.S.) and have seen a lot of corporate B.S. - but what I see now is A LOT of people leaving on their own - either taking retirement or flat out quitting. 20 years ago NOBODY quit - it was unheard of.

Anyway, I'm personally riding it out until they fire my butt (layoff or whatever) and you're right again old man it is cheaper to have folks just quit!

The powers-that-be are tracking departures from the business like their lives depend on it. It no longer an issue that needs to be discussed and explored but something to be tracked with quarterly numbers to make.

Sad, sad, sad.

innovation station | Dec 30, 2007 | 9:56PM

Respected Bob,
I am an IBMer from India. New Delhi Office.

Last week, 250 fresh graduates arrived at our Gurgaon office. They had come to join IBM, as they were given Appointment Letters in June-July of 07.

IBM said that it could not absorb any one of them, and apologised to all 250 of them. They were all asked to go away and show up again in Dec 08.

Later the same week, a mail has come to all 'People Managers' advising them that all IBM employees will be 'Tested' in various skills, [Technical, Comms, Leadership] etc.
The penelty for faliure is loss of job at IBM.
It seems to be a thinly veiled exercise to reduce head count in india.

I think IBM is preparing for a massive downturn in its business, most of which is from the USA.

This is the sorry state of IBM in India.

andy

indian_ibmer | Dec 30, 2007 | 11:21PM

I think the overall article painted a correct picture of IBM. I worked for IBM over 12 years, and over this time, I saw it go down hill. The only wrong point is the H1s, they make more then the Amercians, he must mean the ones that are sent out of the country, and pay no taxes. The real problem I have is the H1's that come over here and mistreat women, don't have the background, and IBM doesn't care, we have to train them, and then they simply knock us out of the way. I took alot of abuse from one, IBM didn't care, or help out. He did no work, only caused everyone grief, spent months out of the year going back to India to pick out his wife, their behaviour is disgusting, and their treatment of women implorable. That's just the H1 part. Then, there is the IBM management( I hate calling them that, because they have no idea how to manage, and don't even try, just lash out orders when your trying to take care of the customer, demanding you stop your work to do what they ask), they are virtual managers, you never meet them face to face, because there are no budgest for travel anymore. I had to ask the customer for office supplies, training, because IBM cut them out long ago. I thought it was my division, AMS, that was isolated in this treatment, but it is all over IBM. I see no hope for this company in the current state, and only see all our jobs going overseas, even the H1's are starting to worry at this point, and I can't understand why our congress won't listen , they take our jobs, which takes away taxes, which is what pays those people, unlike them, we can't vote ourselves a raise, IBM only dings away at our salaray, and has no concern of our time, they just force us to work overtime that the customer sais not to, things got so bad at the end for me, I had 3 different IBM managers forcing me to work different amounts, and the customer thereating me to NOT work overtime, i just quit taking time off to make them all happy, since IBM can't keep help anymore at my former contract. It's all behind me now, I quit recently, and now, I can just concentrate on my job, it's unbelivable! No more being mistreated by H1's, management for overtime, and getting threatened to not get a raise if I don't put in extra(which was also a joke, they dont' give raises anymore).

Ann | Dec 31, 2007 | 6:20AM

Tee-hee - Europeans are cheaper, huh? Then I guess US companies like IBM and others will be more than happy to pay the Europeans to stay on the big salaries (est. 2x west coast on average), performance bonuses (because they are successfully hitting sales and management objectives), subsidized cars and an average 6+ weeks paid vacation per ...

In the IT job market, it's said: "go to England for the salaries, France for the vacations and Germany for the cool car schemes."

What do they say go to America for? The cheap burgers?

drew | Dec 31, 2007 | 8:58AM

I work or I should say worked in semiconductors, an industry which has pretty much mirrored IT in general and find, like most, Bob's comments are right on except for the H1B part. At companies I worked for we paid H1B's the same as the other engineers and for the most part, they were just as qualified and competent as the US employee's.


Regarding the outsourcing and the decline of US jobs and tech industry I whole heartedly agree. The party is over. One company I worked for now has a policy that if a US worker quits, no US replacement will be hired, but you can hire 2 engineers in India. Lovely. All you mathematicians take that curve to the limit and tell me what you get. My specific job in particular has been almost completely outsourced to India. For me the solution is simple. I'm out. It's over. I'm self employed in my own business that has nothing to do with high tech or IT. There will be IT jobs here but far fewer and world wide pressures will bring down the salaries. That is a given and actually as much as I don't like it, I don't disagree with it. It's simply market competition. It is the disgusting treatment of the current employees, the worker bees that get things done so the "Upper Eagles" can lite their cigars with $100 bills because there stock options just doubled. The utter and complete lack of accountability on the part of the upper echelon of the IBM's of the world that I object to.

Phil | Dec 31, 2007 | 9:41AM

While actions by IBM and other companies are deplorable, the root casue is capitalism. Competition is key to successful products. Most people will do what ever is necessary to get the most for the smallest price. While companies like Walmart are much maligned for thier practices, the stores are swamped with customers looking for bargains initially and now people shop their for survival as wages/benefits are cut. On positive side we have many low cost goods and services, when long distance was deregulated and competiton set in long distance calls went from $/minute to cents/minute,etc. When competiton was in the US only wages/benefits went up as companies competed to attract and retain a good workforce. Globalization changed all that and its a race to the bottm to cut costs. Especially since Sabox removed the revenue inflation lever. However to protect us from the dark side of capitalism we depended upon our government to help regulate. Laws against dumping toxic waste, or Sabox to protect against inflated revenue. We watched as most manufacturing was outsourced in the 80's and now its every job that can be will be outsourced. Government needs to step in to stop the slide and regulate the free fall to a level that the country can absorb. It can't be stopped but needs control. They standard of living will drop without a doubt and life will be harder as the world catches up or this trend bottoms out and industy moves to another gimick to increase stock price. Unfortunately, business pays the bill for most political elections so any real progress will be slow or non existant.

joe | Dec 31, 2007 | 10:19AM

IT is a loser's game these days. I wouldn't advise anyone enter IT as a profession anymore. I spent my entire career (30+ years) as a software developer and, now, when someone interested in computers asks me what they should do for their career, I routinely tell them "Something that can't be done in India, Russia or China"... in other words, find a different career. If they have any aptitude for it at all, I advise law school -- that is the one career that will never be outsource-able.

I'm semi-retired now ... I work on small contracts as a self-employed coder. I don't get benefits but I don't need 'em. I make as much as $75/hr cleaning up after outsourced labor.
My clients think that is a bargain...

stevewi | Dec 31, 2007 | 11:12AM

Bob states, "The USA has more than enough IT workers for its needs." Given that Bob is a smart guy and doesn't throw out comments like this lightly, I'd like to see an article expanding on this one comment.

Again, as Bob says, this is an election year, and some cold, hard facts would be nice to put in a candidate's face when one asks for a position on H1B visas and education in the U.S.

Rob | Dec 31, 2007 | 12:50PM

IBM is engaged in a race to the bottom. No one wins that race, only Palmislimo and friends who are laughing all the way to the bank. IBM stands for "Indian Business Machines".

No self respecting American IT worker should stay there. Remember, the longer you wait to leave the more of your fellow IBMers you will have to compete with for the scant few IT jobs there are on the outside.

blueballs | Dec 31, 2007 | 6:49PM

I think that everyone targets the H1B visa for everything under the sun. At least from the perspective of an Indian worker, let me tell you that nobody here thinks he/she is better. We just feel incredibly lucky to find ourselves at this juncture. To be honest, IBM has never been known as a company with great management practices. Isn't it the same company that sued its own customer (SCO) a few years ago? IBM is where it is because of such decisions that were taken by its senior management.

In India's defense, India was a self-content country with a closed economy until we were stone-walled into opening it up to global competition. Now that we have successfully adapted to this, we are being labeled "the bad guys"? Come on...

I have seen both sides of the coin. I got myself a graduate degree from an American University. I lived in the USA for three years, and two days after I defended my thesis, I was back on a plane bound for my own country. Why? because I think that the USA is no longer a country that pursues scientific progress. Can you really blame tech companies for looking at distant shores when kids in US schools are taught "Intelligent Design"?

The average age of an Indian IT worker is about 28 years. That means, most people have less than 5 years of experience. Now I work for a guy who has 16 years of work experience more than I do. I am amazed at this person's knowledge and expertise every single day. You know what? He is American. He lives and works in the US. He has never been out of a job and will never be. Real skills earned over decades of work will always be sought after. People must just strive to acquire new skills and develop upon them? The current atmosphere in the US is not conducive for this...

Frequent reader | Jan 01, 2008 | 12:09AM

I've spent several years as an IBM global services employee. During this time I've worked under at least 5 first line managers and have been “dotted line” into several more. For the most part they are good people, but those that are bad are really bad. And only the bad ones moved up the corporate ladder. I don't mean looking out for the company vs. looking out for the employee. I'm not a child. I understand looking out for the company is a management priority. What I mean by bad is management that looks out for themselves and their own best interests to the detriment of their employees and their company.

The problem with IBM global services is simple. Somehow the business culture has evolved to a state where the administrative sides of the house, management, HR, finance, etc, are viewed as the reason IBM exists vs. the people that actually provide the services that clients and customers pay for.

With regard to large scale layoffs of US IBM employee’s …. They are going to continue. I’ve seen the global sourcing targets for strategic outsourcing out through 2011. For most of the technical roles providing operational support, the number is either 100% or 75% global sourced by 2011. For example, physical DBA resources have a 100% Global source target. Those targets can’t be met without large scale layoffs of US employees. IBM isn’t growing the business.

For those that are in IT, forget the reasons why it’s happening and start planning for it.

formerIBM | Jan 01, 2008 | 8:51AM

formerIBM: Do you happen to know if administrative functions e.g. secretarial - will completely be offshored? I know parts of it are scheduled to move to Malaysia in 2008.

Anne of Green Gables | Jan 01, 2008 | 10:26AM

Correction on who sued whom: SCO sued IBM, not the other way around.

And by the way. IBM has good lawyers (nicknamed Nazgûl), even if they can't manage a tech business. :)

Arthur Klassen | Jan 01, 2008 | 12:46PM

Perhaps 2 decades ago, I was flattened with a financial front line about Michael Eisner, his Buddies on the Board, the bottom line mentality that paid huge bonus amounts to the chief and his council, by simple top down management directives that all departments reduce the cost for everything and everyone by 10%

The boys at the top then split the bottom line savings to to the tune of tens of millions of dollars paid as bonus money, while stockholders were losing equity and dividends.

While my facts might not be 100% on target in this email, the concept is and has permeated corporate america to a point of embarassment to the US, and anyone who truly cares about our future.

The top level managers are recruited with offers that are out of touch with the world, because of networked boards and wall street connections. In short, it is all out of whack in every major industry that the US had roles in forming or creating.

Seems that the "B" schools teach this in CEO 101 classes. Got mine - up yours is the appropriate bumper sticker for these times. Individual greed is the single cause of every problem on the planet these days, papered over of course with words like "global, democracy, 911, Security, nukes, and political instability" There are more of course.

Much of the world hates the US because of the bulliness about our idea of democracy and free enterprise, and capitalism, which has failed miserably in the US, while we try to export it to other societies.

I fear greatly for my childrens, childrens, children as the future portends some insurmountable problems for the average person of the world.

I am not much on history, but I would be willing to bet that guys like Eisner will be put on a pedestal by his peers, just prior to the largest collapse of a society the world has ever known.

Doug Cummings | Jan 01, 2008 | 12:53PM

Good programmers at $21000/year(about 10.00/hr)?

McDonald's pays the same for a junior manager:

http://www.payscale.com/research/US/Employer=McDonald's_Corp/Hourly_Rate

I work for a family owned company. They're just as interested in making money as they are in being around in 20 years. Publicly owned corps. seem to enjoy gutting themselves with short term gains and no long term plans.

My advice to anyone leaving such a place would be to find a privately held company or start their own.

Infogleaner | Jan 01, 2008 | 1:12PM

i work for a large telecommunication equipment manufacturer, and i can recognize exactly the same symptoms, at least in the local organization.
i work in global support, and the focus is only on cost cutting (even on stupid things), lie to the customer, offshoring highly remunerative contracts trying to scrape a few bucks more.
at least locally, the (so to speak) management is carefully crafting our own demise. this is insane, considering the absurdly high margins we have. customers will ultimately kick us in the teeth. morale in the workforce is at its lowest. people leaves and they don't get replaced. we used to be a good company to work in.

anitalian | Jan 01, 2008 | 6:27PM

i work for a large telecommunication equipment manufacturer, and i can recognize exactly the same symptoms, at least in the local organization.
i work in global support, and the focus is only on cost cutting (even on stupid things), lie to the customer, offshoring highly remunerative contracts trying to scrape a few bucks more.
at least locally, the (so to speak) management is carefully crafting our own demise. this is insane, considering the absurdly high margins we have. customers will ultimately kick us in the teeth. morale in the workforce is at its lowest. people leaves and they don't get replaced. we used to be a good company to work in.

anitalian | Jan 01, 2008 | 6:28PM

>A possible answer to this paradox is that the >IBM employee in question is from Europe, where >local laws make it difficult to fire employees >for cause, much less strip them of their >retirement benefits.

This is almost certainly the case here, but it should be noted that "Europe" is not a single entity and that local laws on the ease (or not) of firing employees (and the pay-offs they might or not receive) vary from one country to another.

Retirement benefits too vary. In Finland, where I am, the usual situation is that a company has an agreement with one of the few "retirement insurance" companies that provide the bulk of all peoples' pensions (the state pension is minimal and not given at all to most people who have worked most of their lives). In this case a company's "own" more generous pension usually consists of them paying an additional percentage (maybe 0.5%) to that retirement insurance company over and above the state-decreed norm.

If this were the case with IBM, this additional percentage has already been paid for all the past years (and is part of each person's existing pension "fund"), and yes, as you write, it's likely to be included in the contracts for staff who started working for IBM while it was in operation and would be difficult for them to get rid of.

(In my case I lost that additional 0.5% when I was outsourced from an insurance company - which had it - to a computer services company, that didn't. Without compensation of course, showing that there are ways even in some European countries to reduce pension payments .....)

MikeW2 | Jan 02, 2008 | 2:17AM

Seems to be a common trait in big IT companies at the moment. Mainly cutting costs in support services for customers. Outsourcing technical support to India and making working conditions for existing locally based tech support insufferable. People are leaving left right and centre and not being replaced. Thus increasing the pressure on the remaining tech support people and so on. In the end the company suffers as customers get fed up and change companies.

Amstrad464 | Jan 02, 2008 | 4:56AM

The statement below from the article not only applies for IBM pretty much it has become a norm in every company these days.

"All decisions come from the top. There is no delegation of authority. Business units can flounder for years from neglect."

People just leave & they are not replaced in US but yes replaced in 1-4 ratio in India. Thanks to our government for paving a path for our own economic graveyard. Yes people talk when lay offs happen who is talk when people make a voluntary decision to jump the ship in the hope of finding a better job & guess what when they are in the job they have no jobs left either there are cheap H1b workers or a Infosys or TCS L1 visa holders who have already taken their jobs.

US workers may have to think about moving off shores to find a job. With dollar depreciating may be the pay is better off than 20,000 US$ in India anyway. Shame on our government for still supporting H1 & L1(getting these is so damn easy when ever some one leaves in my office there come 3 from India with a L1 visa & then they eventually get H1b who cares L1 or H1 the point is the positions are not filled with local jobless highly capable individuals) while its own citizens are taking up low paying jobs.
Many cheers to US for making the poor nations do better while making its own citizens poor.


Tina Dublin | Jan 02, 2008 | 7:57AM

"This person had 20 years of programming experience and was really good. The job paid $21,000. Then the employer laid this worker off during his first week on the job, bringing in an H1B replacement. "

If this is true then the employer is now paying a lot more than 21k. If you applied for an H1B visa for a programming job paying 21k, you would be laughed at.

Contrary to popular belief, the process is not that easy. The cap on H1Bs is now so low that the whole lot are usually used up on the first filing date each year. I am a UK citizen who worked on an H1B in the late 90s, I lost my job in the mass layoffs of 2001 and I have been trying without success ever since to find another H1B sponsor and return to the US. Every job applied for results in a response of "sorry, US citizens or greencard holders only".

If anyone out there knows of a company that will sponsor an H1B for a software engineer from the UK with 10+ years experience, I would be very interested to know who they are. I know lots of experienced professionals who would love to work in the US but have given up trying. Many have gone to Australia, NZ, Canada, etc. which are all so much easier. The US is seen here as one of the hardest countrys in the world to emmigrate to because of the extremely strict and complicated exmployment-based-immigration laws. It's not just hard to get an initial visa, it's also +much+ harder to get permant residency once you are there.

I have just recently gotten an L1 visa from my UK employer. They only did this because after months of interviewing, they were finding it impossible to find the right candidate local to their US offices. It has taken over 8 months and a mountain of paperwork and legal fees to get me the visa. The application was twice sent back asking for more detail on why they couldnt find someone locally. It's costing my employer a lot more to relocate me than it would have done to hire a local person. In the UK, they dont need to pay for my health, dental, etc, etc.

I know I am lucky to have the chance to go back and live in the US again. I don't think I have any +right+ to expect it to be easy, it is a privelage and one that I am very grateful for. I love the US and it's where I would prefer to live, given the choice. I just wanted to point out that it is far from easy when compared to the other countries with a comparable standard of living (and in some ways a higher standard of living), such as Australia or even the UK.

David | Jan 02, 2008 | 10:03AM

H1's of course there is an advantage, why else would a company put up with the high amount of overhead paperwork? These people, are educated in america, so very qualified. Uaually they are on a probationary employment status and as a result get the low end of the pay scale, reduced benefits. They also work much harder than american counterparts who feel they need no work vacations or jobs that are 40hrs a week vs 60-80hrs. So of course they are in demand.

joe | Jan 02, 2008 | 10:05AM

IBM will be one of the next GE's. Why? They do learn and do adapt. Microsoft is far more likely to disappear than IBM at the moment - especially as Microsoft is facing its first real big challenge - replacing its primary founder, Bill Gates, and will soon face its second biggest challenge - replacing Steve Balmer. IBM has saw that scenario long ago and overcome it, and has transitioned to being more of a services company; it is also quite diverse (though has narrowed that diversity in recent years) and in many markets - it's not going anywhere, and will easily stand on its own. (Microsoft however could been nearing its end; it is certainly seeing the end of its dominance, and stand to lose a lot more than that.)



So, to say IBM is falling apart is wrong. Sure, it may be having its issues - what business isn't? - but it will figure it out and survive. It may be doing some more out-sourcing - but that will at most cost it its U.S. business while strengthening its non-U.S. business, but it will more likely than not just figure out how to make them both strong.

TemporalBeing | Jan 02, 2008 | 11:34AM

IBM will be one of the next GE's. Why? They do learn and do adapt. Microsoft is far more likely to disappear than IBM at the moment - especially as Microsoft is facing its first real big challenge - replacing its primary founder, Bill Gates, and will soon face its second biggest challenge - replacing Steve Balmer. IBM has saw that scenario long ago and overcome it, and has transitioned to being more of a services company; it is also quite diverse (though has narrowed that diversity in recent years) and in many markets - it's not going anywhere, and will easily stand on its own. (Microsoft however could been nearing its end; it is certainly seeing the end of its dominance, and stand to lose a lot more than that.)



So, to say IBM is falling apart is wrong. Sure, it may be having its issues - what business isn't? - but it will figure it out and survive. It may be doing some more out-sourcing - but that will at most cost it its U.S. business while strengthening its non-U.S. business, but it will more likely than not just figure out how to make them both strong.

TemporalBeing | Jan 02, 2008 | 11:35AM

This is the saddest of all times for great American Company's, as current top management blunders terribly, guts the company assets as it sells out to cheap foreign labor, and then lets the almost dead remains to flounder in bankruptcy while managers fly away on golden parachutes. Be sure to suck Motorola right into this story, they are maybe even worse off. There is no excuse for them to be blind sided by Apple in handset market, they were totally mismanaged and now look at their CEO scurrying away for more time with his family. Apple, IBM and Motorola were the big three partners of PowerPC. Look who survived all that. Go AAPL, heading for $300/share this year. Good bye Moto and IBM.

mark king | Jan 02, 2008 | 11:42AM

For those saying "hey, the H1-Bs here get paid fairly", -- you're forgetting the outsourcing context. Where a single immigrant is treated as a normal employee (as at universities), they may well be treated well. The problem is bodyshops that treat everyone badly and underpay everyone, to the point that people with a green card of their own generally won't work for them. Whether there are entire companies like this, or just sections of companies, I can't say. I can say that I have met people unhappily employed in such situations.

JimJ | Jan 02, 2008 | 4:17PM

IBM isn't the only one doing this. Other service companies are doing this stuff too, because they want as cheap as possible. (Even ones that on the surface look like they're doing quite well for themselves.) Kind of like paying Morton's prices for a Rustler steak.

The problem is that the cheap replacements can do little more than break/fix work, even though the big service companies assume that everyone is at equal skill levels.

Honestly, I blame the rating systems used for employees. At least a decade ago, companies switched to using a three level rating system; a couple of people would be the highest rating, a coupe of people the lowest, and most everyone else in that hazy middle area. The thing is, shoehorning people into that type of bell curve means that a borderline bad rating employee is considered as good as a borderline best rating. That's a bad assumption, and it leads to decisions that assume further that most of the employees are adequate for any job within their skillset. Then, when accounts are going south because all of the "hidden" good people have left, the middle managers are scratching their heads wondering why the numbers are down; after all, they were all middle rated personnel!

I'd like to think that Bob's prediction about outsourcing and offshoring this past year had turned out to be true, but I'm afraid that it isn't. Not yet, at least; too many managers subscribe to the groupthink at Gartner, which reminds me of listening to the heads of the Board of Realtors when they say that "it's a great time to buy a home! What are you waiting for? It's always a good time to buy a home! Don't worry about that man behind the curtain!" It's only when those same service companies are required to actually provide real innovations and engineering is when the "cheap break/fix personnel" model falls down.

One final note, India isn't so cheap anymore either. With wage inflation there, the costs for employees is rapidly rising. Look for Malaysia and China to be the next boomtown, for at least 3-4 years or so.

More than Just IBM | Jan 02, 2008 | 5:44PM

Hmm. That first part didn't come out quite right. I meant that companies outsourcing to those major service companies are paying Morton's prices and getting Rustler steak quality of work in return.

More than Just IBM | Jan 02, 2008 | 5:46PM

Bob:

I've been a regular reader of your columns since the days when snail mail delivered paper magazines. I generally think you have some good insights. There is no doubt that you've blown the "massive layoffs at IBM" story and I'm sad that you won't flat out admit that.

I worked for IBM in Global Services, mostly in Chicago. I saw first hand that even in the 'swifter' days late in Gertsners' reign IBM still moved too slowly. The Innovation Centers could have made IBM a lot of money, but they over promised, under delivered and were top heavy with ineffective management.

Sadly too many fat old men and vain non-technical women were VERY comfortable milking the company instead of helping the company and themselves.

There have huge changes in how IBM Global Services is typically brought into help firms with IT, and much of that is because IT itself continues to change much faster than people generally do.

Much of the personal added to IBM employment rolls in India, China and low-wage eastern Europe is 'partnering' with US employees who will be downsized, but a great deal of it is also added to increase the ability of IBM to take advantage of the significantly higher growth rate that this regions have -- this is a good thing. With relatively little risk IBM is able to participant in the gains of far less mature economies.

It is shocking that you'd also get things so wrong with regard to H1B workers. There remains a HUGE gap between firms desire to have competent IT workers and the pool of such workers in the US marketplace. IT wage growth reflects this reality. There may be some freakish out lier of a programmer that is paid a third less than the median, but the real worry that most IT workers face is not from H1B competition but from the still bloated nature of most IT projects -- business leaders want results in short order. They have been burned by outsourcing, offshoring, re-engineering and many other "save big money" lies. Now they are increasing skeptical of any IT "promises". Sadly even the bad experiences that executives have getting broadband and VOIP at their homes have made them reluctant to greeenlight technology upgrades (and their costs) in the workplace -- in the long run the lack of delivery that plagues almost all IT providers has the potential to put a damper on adoptation of IT innovations

formerBlue | Jan 02, 2008 | 6:15PM

Worked for Philips semiconductor (before they spun out to NXP) in Phoenix back around 2001. We were originally VLSI, before Philips bought us. They kept downsizing because, and I quote, "Americans are too expensive". Will be interesting to see what happens now that a) the Euro is way up and b) they are owned by a group of leveraged buy out firms (excuse me, "private equity"). By the way, its not impossible to lay people off in Europe, it just takes a bit longer.

edaguy | Jan 02, 2008 | 6:36PM

The problem is that there are a lot of smart people in the rest of the world who can do the same jobs we Americans do for much less money. We have lost world leadership in industry after industry because as nation after nation has come on line with the necessary skills and resources to make these same products or provide these same services at a lower cost we haven't developed the innovated technologies we need to compete competitively in these industries while maintaining or better yet increasing our income levels.

Science and engineering departments in universities and industries would be considerably lessened with out our constant infusion of foreign students and workers.

What we are reap today is a direct consequence of our short sited policies in business and education. We can't blame the rest of the world for bettering themselves.

Michael D | Jan 02, 2008 | 9:33PM

Check out this link to India's Outsourcing Industry. They took our US IT jobs and now are complaining about the stress.

http://edition.cnn.com/2007/WORLD/asiapcf/12/25/india.outsourcing.ap/index.html

After almost 30 years with IBM, and seeing many folks get the boot cause their job moved to India, this makes me crazy.

R Finn | Jan 03, 2008 | 4:01AM

In regards to the international grad students it's been the law for awhile that h1b's pay in-state tuition. Most of your grad students at Cal State in comp science are h1b's. They do anything for these students, and actually have a lower set of standards in admitting them. This is true accross the country. MIT recently admitted the numbers they were sending to US News for ranking don't include foreign students. At Cal State they accept scores about 25 percentile lower for foreign students. They claim these students are not native English speakers but education is all about language, and anyway they are plainly violating civil rights laws. People say Americans aren't interested but it is almost impossible to get into a good school like UCLA for example. You need almost perfect everything. It's been proven that people with perfect everything are not the best. Of course, the foreign students do not have to meet these standards and they are becoming the majority. You can not complain about this if you want to go on living in California. They will destroy you, typically calling you a bigot, or something else. To give you an idea one of the Cal State schools had offered a job to the professor that had made the statement that the Americans who died in 9-11 deserved it. He took the job at Colorado instead but after the controversy the administrators at Cal State publically stated they wished they had hired him. (He was later fired for plagerism.) What this guy said wasn't just controversial, it was a threat. Almost all the 9-11 hi-jackers came in with student visas. Two came through (Cal State) San Diego. It's liikely they didn't meet the standards that Americans were required to meet. This means the school committed vias fraud because they vouch that these students meet the standard. Of course, all these schools are committing vias fraud. The students that came through San Diego were picked up at the air port by a professor and stayed at his house a week. Anyone who's gone to Cal State lately would laugh at the idea of a professor picking you up anywhere. They claim they have no money for anything. Those students literally crashed their jet into the World Trade Center. California refused to change any of their systems for foreign students even though Diane Feinstein made a big stink. She suggested all student visas should be halted, which was laughed off. She was right and there will be another attack and it will be again through student visas. Worse than that Americans are being shut out of their own schools and we wil lose our engineering lead within five years. It's really already gone. Consider this, when Governor Wallace blocked the doors at Alabama he didn't deny anyone an education. There were alternative schools for blacks. There are no such schools now. Literally you have Americans being completely shut out and they justify it by some spin on civil rights laws. Back in the 50's they fired professors for supposed maybe links to communism, but now you wouldn't need an investigation. This is all happening out in the open. Forget about foreign terrorists. I don't think this has ever happened anywhere in the world where the government was not violently overthrown at some later point.

Frank p | Jan 03, 2008 | 5:07AM

I work for IBM. Departments have a yearly goal of eliminating one position from every team. IBM has told employees of its goal to reduce US head count. The last meeting we were told they are ahead of schedule and increasing the reductions. Please continue your articles.

Tom | Jan 03, 2008 | 8:18AM

Those Indians didn't take any jobs. They were offered the jobs and took them because they payed comparatively better than the other alternatives in India. Can you fault them for that?

Exasperated Fellow | Jan 03, 2008 | 11:10AM

The US is currently issuing 65,000 H1B visas a year. (Non-citizens who graduate from a US university may be able to get a different type of visa, so they may not count in that total: I'm not sure.)

As of 2007, there were 33,437 foreign computer science students: http://opendoors.iienetwork.org/?p=113124

In other words, about 8,000 graduates a year (assuming a 4 year degree).


Plenty of those H1B visas go to non-IT jobs: e.g. management consulting firms. I think we can assume that at least 8,000 H1B workers are not doing IT work, so let's just say that the foreign graduates and the non-IT H1B visas recipients cancel each other out.

A (probably highly conservative) estimate of the number of foreign IT workers added each year to the US labor force is thus 65,000.

That assumes that these foreign workers never leave, which is improbable.

So frankly, I call "baloney" on your fear mongering with respect to H1Bs. I don't think there are enough to truly make a difference. As a computer scientist, I'm offended that my profession seems to think that we need protection from competition. We're highly skilled and highly educated. Let's grow the economy by siphoning off the smartest workers from other countries and improve everybody's lot.

(Also, I'm rather ticked that both computer science professional bodies, the ACM and IEEE, oppose the expansion of the H1B program. Boo.)

Andy | Jan 03, 2008 | 1:33PM

Those "cheaper" foreign workers are cheaper for a reason...and not beccause they are more efficient. When companies in China, India, Vietnam, etc. have to meet the sort of anti-polution, safety, and health-care costs as US companies, then there will be a level playing field for international labor markets. Meanwhile we have to restrict movement of jobs to cheaper international markets or we will be reduced to the standard of living of China, Vietnam or the like.

Vern | Jan 03, 2008 | 2:10PM

This comment is for David | Jan 02, 2008 | 10:03AM who is also looking for a company that sponsors h1b people.

I have been in discussion with a company that hires and sponsors h1b workers. At the moment they place people in seattle or San Francisco area (silicon Valley).

If you want their contact details email me. (At the risk of getting hundreds of spams :-0 ) email me at justspamme@kpjco.com (I will prob delete that email address in a month or so).

Cheers.

Kevin James | Jan 03, 2008 | 4:50PM

Two hundred years ago, it was understood that national boundaries are things that neither people, nor goods, nor information should *routinely* cross. The subsequent shift in attitude was not technologically driven but politically driven. Its fundamental assumption -- that nations that had more and freer communication of all kinds amongst themselves would be less likely to come into violent conflict -- has proven false. It would be good for the failure of that assumption to be acknowledged and acted upon; but we probably should not hold our breath. Something else happened two hundred years ago -- the invention of the steam engine. The macroeconomic and political implications of that invention have not yet been understood.

Frank Wilhoit | Jan 04, 2008 | 10:02AM

I am a little surprised at the lack of response from IBM employees to this commentary. I am an IBM'r and we have lost thousands of good employees this year, regardless of whether IBM is truthful about the numbers or not.

I would have to say that the lack of response is an indication that IBM employees are apathetic. I personally don't care what happens to IBM. In fact I would like to see IBM and the rest of the "global" corporations disappear. Loyalty is a two way road.

What follows apathy? Anger? Then anarchy? Maybe syndicalism? I am just your average American. I still have the same needs that I had when I joined this corporation many years ago. It is the corporation that has changed, not me. It's not just IBM that is run by greed and corruption, but all of corporate America. Indeed the whole USA is a mess. What we are seeing is a collapse of our basic beliefs.

Somehow we, and our government, have sat idly by while the corporations have chipped away at our needs until there is little left to sustain us. If you remember Maslow's hierarchy you can see that the top 2 layers are already gone, most of the middle layer is fading because we are expected to put all of energy into our work at the expense of our intimate relationships with family and friends. Beyond this the "safety" layer is quickly eroding (security of the physical, family, and property). What do you think is going to happen when this corruption starts dismantling the base of the pyramid?

If you back a dog into the corner...

JustTired | Jan 04, 2008 | 10:58AM

I'm a former IBMer. I was an employee for a little over 6 years. I worked in an IBM Global Services unit supporting the former American Express Financial Advisors. I was given a cost of living increase only twice over 6 years of employment. Reimbursement for job related education ended during the 3rd year of my employment. Each year the cost of health care increased. IBM Global Services renegotiated the contract with American Express Financial Advisors once during my employment. After the renegotiation IBM Global Services would be paid less for their services. It wasn't hard for us IBMers to realize that we would be paid less for our services as well. Meetings were held due to rumors of lay offs taking place within the former American Express Financial Advisors. We IBMers were assured that we had nothing to fear. The contract remained the same. There were fewer employees to support at American Express Financial Advisors, but our jobs were secure. Despite the assurances I came to work one day to find that half of the help desk staff had disappeared. Empty cubicles abounded. The remaining help desk employees explained that all help desk contractors had been let go with one day's notice. The remaining IBM help desk employees had 3 months notice. The help desk was relocating to India. I didn't work on the help desk, but was laid off nearly 4 months later. I was told of my lay off on September 22nd 2001. It was my birthday. It was two weeks after September 11, 2001. The day after the terrorist attack the manager of my department informed us that we would be working in shifts to keep our department open for 24 hours per day. Each employee would be required to volunteer to work several of the evening and night shifts. Our department was a training, software, and hardware procurement team. We had never been open past 6:00pm prior to the terrorist attacks. Many of us IBMers wondered out loud to management why American Express Financial Advisors would find it necessary to order software, harware, or request training in the middle of the night after a national tragedy when they had never needed to do so before. Wouldn't this event make these requests less likely? Of course the help desk and server team would remain on the job 24/7 as they always had in the past. Management assured my team it was necessary to maintain the contract. Each employee on my team did their part. We sat alone at our desks in the near dark bleary eyed and tired waiting for an email or phone call requesting our teams services at 1:00am. We never received a single request during these new late shifts. I must admit I was a little disgruntled when I was then laid off on September 22nd, 2001. My manager had failed to realize it was my birthday. I had been pulling new shifts like everyone else during the 2 weeks after the attacks. I was informed that my position was moving to India. A new Indian employee would do the work I performed for less pay and fewer benefits. Perhaps my manager was so truthful because he too was losing his job with IBM. I sat at my desk at home a few weeks later searching online for a new job. I heard on NPR that IBM was one of the several companies requesting millions of dollars in aid from the federal government due to losses incurred in relation to the terrorist attacks. What an audacious request by a huge international company that was then laying off thousands of U.S. employees.

Jennifer | Jan 05, 2008 | 2:14PM

The reason there is so little interest from ibm employees to this article is they are mostly chicken shits. They have mortgages, educational expenses, car payments, etc. They are living the American lifestyle that corporations as well as our government want them to live. In short, they are afraid. They think if they keep their heads down and do what they are told, they will somehow survive. How pathetic. I am embarassed to be working with this people and ashamed to being led by ibm's crooked executive management.

ScrewedByTheBluePig | Jan 05, 2008 | 6:52PM

I'm a recent US college graduate with a CS degree. Even though I'm not an American citizen, all the offers I received out of college were easily on par with my American friends'. I, for one, am not any cheaper to hire.

The top employers are scrupulous about who they pick, and, adamant about hiring those they do pick. Microsoft recently set up a development center in Vancouver to be able to employ their non-American workers despite the H1B mess. I'm being moved to Canada for the same reason. Where do you think those people will be paying their taxes then?

I know many programmers, architects, investment bankers and financial analysts who are being moved to Canada and Europe because of the whole H1B situation. If you don't want these well trained hardworking people, someone else will. And that's how competitive advantage works.

One of them H1B'ers | Jan 06, 2008 | 12:10PM

Thoughts on IBM

Mesut Yilmaz | Jan 06, 2008 | 7:57PM

IBM is shedding 4500-5000 jobs to AT&T. Network delivery and sales.

Kim | Jan 07, 2008 | 1:16PM

20 yrs of solid experience, getting $21K and then getting laid off again to an H1 guy! You must have been deep asleep while writing this article... Being an Indian, I can vouch for it that an average indian with 5 yrs of experience would not even work at $60K a year. So how can your grand wise old man lose a job to an H1 holder, giving back so much to the company! You definitely need to stop this for sure... but who knows, i still see some people believing in your fancies and whims and thinking hard that how unfair the world has become. Long live idiocy and people who live on idiocy of others!

Abhinav Garg | Jan 08, 2008 | 7:33AM

Common declaration by
IBM Network Service Delivery employees, worldwide against the outsource to AT&T
Supported by national unions, works councils and the IWIS (IBM Workers International Solidarity) global network. www.allianceibm.org

Since the Press announcement of 2 months ago, IBM has not given to the affected employees sufficient and detailed communication about the outsourcing of services and workers to AT&T.
We ask together, with one voice, to both IBM management and AT&T management for:
1) A guarantee of employment, where both companies subscribe and guarantee the employees will keep their jobs for at least 5 years (time of the outsourcing contract)
2) Voluntary transfers
Furthermore it will be necessary to start , as soon as possible, a negotiation process with the legal representative employee organizations or the employees themselves in case representative bodies dont exist, about:
Voluntary transfers (including GOM applications) from IBM to AT&T no involuntary transfers will be accepted.
IBM & AT&T deal and further strategy the terms and conditions for the employees to be transferred
Re-entry options back into IBM in case of failure of the deal
Compensation and/or welcome packages
Criteria for selection of employees
If no news is received from IBM and AT&T in the next few weeks, we are planning to organize legal, press and public initiatives against this outsourcing, country by country, and start a possible union international mobilization (a global actions day).
Communique signed by:
Alliance @IBM CWA Local 1701--USA
Executive Body of IBM Workscouncil of Vimercate, Italy by mandate of NSD employees CFDT--France
CGT-FO--France
CFE-CGC--France
IG Metall--Germany
UNITES Professionals--India
IBM Chapter JMIU--Japan
CCOO--Spain
PESYI--Greece

Unionyes | Jan 08, 2008 | 2:28PM

The American worker needs to wake up and smell the Globalism. The elite of this world have absolutley no national loyalties and couldn't care less about any worker, especially American workers right now. They want to flatten out the workforce so American workers on par with the rest of the world, including 3rd world nations. Wake up to the new world order. The companies have sold this to the worker, to love their servitude, as global companies, to make global profits. This is nothing more than a neofeudalistic system...wake up people.

american | Jan 09, 2008 | 12:55PM

The American worker needs to wake up and smell the Globalism. The elite of this world have absolutley no national loyalties and couldn't care less about any worker, especially American workers right now. They want to flatten out the workforce so American workers on par with the rest of the world, including 3rd world nations. Wake up to the new world order. The companies have sold this to the worker, to love their servitude, as global companies, to make global profits. This is nothing more than a neofeudalistic system...wake up people.

american | Jan 09, 2008 | 12:55PM