On January 28th, IBM CEO Sam Palmisano was in the East Room at the White House taking part in the stimulus show. Standing shoulder to shoulder with President Obama and an all-star cast of CEOs representing entities such as Xerox, Kodak, Google, Motorola, and Applied Materials. (Applied is a supplier to the semiconductor industry.) All agreed that a massive taxpayer investment in tech infrastructure projects is needed to save workers from unemployment. President Obama invoked “those who live in fear that their job is next” and Sam Palmisano gave a stirring speech about the need to “reignite growth in our country” and “undertake projects that will actually create jobs”. Word has it Palmisano’s performance may shoehorn him into a late Oscar nomination for supporting actor. Roll over Heath Ledger, a bigger joker could best you.
As Palmisano waxed pious in the White House, heat-seeking a $30 billion stimulus of projects that would benefit IBM, his company was laying off thousands of workers. Calling the firings a “resource action”. Doing it on the down-low at facilities in several states. Such tactics make the exact number of fired employees difficult to ascertain. IBM has a history of being secretive about job losses. Federal law requires companies to report mass layoffs (also called “material events”) to the Securities and Exchange Commision (SEC) but IBM claims that a few hundred here and a few hundred there are all in a day’s non-work. And given the SEC’s record of oversight on Wall Street, it’s easy to believe they might miss any number of material events. Layoffs are being more reliably tracked by Alliance@IBM, an affiliate of the Communications Workers of America. Alliance@IBM has been trying to unionize Big Blue for almost ten years. A tough job, but somebody has to do it.
In this recent round of firings close to 5000 workers have lost their jobs at IBM facilities in New York, North Carolina, Minnesota, and Vermont. Laid off employees plus those “who live in fear that their job is next” have been burning up the comments section at the Alliance@IBM website. Further layoffs are said to be looming. Posters who are still employed use pseudonyms. Some even post from libraries, out of concern their IP address will be traced. IBM has a rep for retaliation and for being rabidly anti-union.
That IBM should expect a generous slab of stimulus is no surprise. Federal, state, county, and municipal governments have been funneling corporate welfare to IBM for decades. Think tax breaks, public utility deals, real estate shuffles, low interest loans, etc. The rationale has been development and job creation– even as IBM was pulling out of the USA in favor of cheap global labor. Not that they’ve disappeared completely; in areas where IBM once employed thousands the threat of losing the last few hundred jobs has a powerful effect on pols who pull purse strings. And IBM has even expanded in some states– while simultaneously reducing overall employment. The primary focus of IBM development and job creation is offshore, not stateside. Nowhere has that fact been made more clear than in Endicott, New York.
Endicott was the birthplace of IBM. Where IBM flourished and grew into an industry giant. Endicott was a true blue company town and IBM was seen as a benign, if somewhat authoritarian, lifetime employer. IBM encouraged (almost demanded) employees to trust the company’s commitment to the social contract. By 1980, 14,000 people worked at the Endicott IBM facility. By 2005, IBM had reduced that number to 1600. The town was devastated. Economically and socially. Meanwhile, the number of IBM employees in India rose from 9,000 in 2003 to 74,000 by 2007.
If IBM could jettison its own hometown why should taxpayers believe the company gives a fig about the need to “reignite growth” in the country at large? Cynics ask if the real deal is the need to reignite IBM. They also ask where profits from stimulus projects will be invested.
No doubt CEO Sam Palmisano would answer “here”.
Palmisano claims that a $30 billion stimulus injection would enable IBM to do what supporters of global sourcing (aka offshoring) declare to be impossible. Create large numbers of tech jobs in a country where the workers are just too darn greedy and lack high-level skills. And oh yeah– where government doesn’t do enough to help business.
Big Blue Slumdogs
Whether IBM gets stimulated or not, its recently laid off workers need not despair. They can sign up for IBM’s “Project Match” and do a tour of duty in the Big Blue Foreign Legion. According to an IBM internal memo Project Match is for “satisfactory performers who have been notified of separation from IBM US or Canada”. IBM will provide immigration assistance; possible outposts include India, Nigeria, China, Turkey, Mexico, and the United Arab Emirates. Only folks excited at “the prospect of contributing to a developing economy” and “potentially taking on different job responsibilities” need apply. And applicants must be “willing to work on local terms and conditions”.
Back in the 1950’s, comic and jazzman Jimmy Durante recorded “Dollar A Year Man”. The song’s refrain goes: “I’ll work for the government for a dollar a year, but I have to get paid in advance”. Substitute IBM for government, make it a dollar a day, and you get the picture of what those terms and conditions could be. However, the Project Match memo makes no promise about being paid in advance. Better wait before taking out a mortgage on a McHovel or making a down-payment on a pallet. Then there are the “different job responsibilities”. Could this mean hauling CEO Sam Palmisano and other IBM mandarins around in a rickshaw? If so, would IBM provide the rickshaw gratis? Or would employees foot the cost of leasing?
Finally, after serving for a set period (say 10 or 20 years) in a developing economy under local terms and conditions, will Project Match vets be rewarded with an H-1B visa so they can re-enter the USA as foreign guest workers for IBM? As H-1B workers the vets would make less than the skilled employees they replace. But they’d enjoy their jobs more. Anything beats hauling cans through a traffic jam.
Taxpayers shout “I hear ya!”
In 2007, Sam Palmisano made $24.35 million; $5.8 million of which was in bonuses. The better IBM does, the more Sam makes. The song “Dollar a Year Man” takes its title from the manufacturers, bankers, and other patriotic professionals who volunteered to serve in the federal government for a dollar a year during World War One. Imagine how much more credible Sam would seem when seeking stimulus if he offered to do likewise! Also imagine how much more compelling IBM’s job creation fever would be if they hadn’t been shipping out the back and keeping mass layoffs secret.
Carola Von Hoffmannstahl-Solomonoff
Mondo QT
Sources include but are not limited to:
IBM Still Mired in Layoff Spiral, Darryl K. Taft, eWeek/IT Infrastructure, 02/03/09
Update: Applied Materials Warns Of Weaker Results As Sector Swoons, Dow Jones Newswires, 02/02/09
As IBM layoffs mount, company eyes government billions, Christine Young, Times Herald-Record, 01/30/09
President Decries ‘Shameful’ Bonuses For Wall Street CEOs, Michael D. Shear, Washington Post, 01/30/09
IBM workers group seeks changes, Dan McLean, Burlington Free Press, 01/29/09
Obama says workers ‘need help right now’, USA Today, 01/28/09
IBM layoffs now 4,200– may go higher, Patrick Thibodeau, Computer World, 01/27/09
IBM Silent About Layoffs, Jeff Kiger, Post-Bulletin, Rochester MN, 01/23/09
I.B.M. Has Tech Answer for Woes of Economy, Steve Lohr, New York Times, 11/06/08
Cutting Here, but Hiring Over There, Steve Lohr, New York Times, 06/24/05
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11 users commented in " Stimulus IBM Style: Take the Jack, Ship Out the Back "
Follow-up comment rss or Leave a TrackbackAlliance@IBM is not a reliable source of figures for job losses at IBM, since A@I is a failed attempt to unionize IBM – mainly because IBM HR policies and process are far better than anything that any union could offer.
In addition, these figures are not true, because many of those affected have already found new jobs (I helped one of them to do so). The true numbers won’t be known for several weeks and will be much less than you say.
I was one of 116 laid off on April 4, 2008. My then job for IBM is now in Brazil. My current job, lucky though I am to have it, pays about 20% less.
Go Sal!
BG4ME is clearly and obviously lying. The figures about the current ongoing job eliminations posted by Alliance at IBM on their webpage are culled directly from the required documentation provided to the affected workers who receive a list of the job positions, locations and ages of the affected and not-affected parties. HR policies and procedures fail to provide adequate protection to the workers in one very important and specifically related regard – part of HR’s mission is to offshore our jobs. Finally, despite IBM public relations claims to the contrary, very few of the people whose jobs are eliminated will ever find employment inside IBM. There are a series of controls and freezes that could not have been designed better to prevent that from happening. This past month, many people have reported that applications for internal positions were denied by automated computer emails in the middle of the night. Given that BG4ME has stated that he or she helped one person find a new position, I have no doubt that he or she is a management or HR shill and not at all interested in objective truth.
I agree with the previous responder….BG4ME had no clue….and I can say first hand…as a recently “Resourced” IBMer and still in contact with many of my peers….most IBMers have NOT…repeat NOT found new jobs…GREAT FOR YOU BG4ME you found on person a job….but I happen to know… the Alliance site reports numbers based on responses from IBMers that have been laid off..period…also, I was imformed by my manager, while having to state that I would be given a chance to look for a new internal job….I was also told that all the jobs would be frozen before we really had a chance to apply. So, BG4ME…come into the real world…. IBM has sold out and that is that.
I am a current IBMer, and I agree with others who say that BG4ME is either misinformed, or intentionally obscuring the truth. The 5000 layoffs reported at AllianceIBM.org represents only the numbers that IBM actually admits to in writing in the separation packages — the real number can only be higher. For example, the 5000 does not include contractors laid off in this “resource action,” nor does it include folks who have been forced out of the company through mistreatment and/or trumped up, “poor performance” reviews, nor does it include others who have been let go in the past year in much smaller resource actions that escaped the eyes of the press.
I have traditionally been a “let supply/demand run its course” sort of person, and sympathetic to the notion that IBM is merely trying to maximize its profits for the sake of its shareholders. This latest round of layoffs in the wake of what even Palmisano characterizes as a “terrific” annual report, IBM’s lack of disclosure of its current layoff (5000 is comparable to or even greater than the numbers reported by other companies), and the alarming rate of transfer of American IBM positions to BRIC countries has forced me to reconsider that position. I now believe that IBM is willfully and knowingly circumventing the existing safeguards such as the H1B visa system through a loophole that allows the creation of virtual sweatshops. IBM prides itself on “innovation,” and I must reluctantly admire the power of the money-making machine they’ve created. Yes, IBM is turning in great financial numbers, but they’re doing it with the blood of American workers.
This article totally hits the nail on the head. I encourage everyone to forward this to their friends and family to show folks what the once admirable IBM has become today.
I don’t know what my brother is doing but he’s really messed up this company.
Sam, please make sure you lock your windows workstation when you leave your desk.
The article is great. As a 25 yrs IBMer the conditions of work have greatly deteriorated and the movement of jobs to low cost countries has accelerated. This is not limited to USA. The latest round of resource actions (yes : RA) has hit IBM Germany too. There, jobs will and have been moved to India as well. EG. DEVELOPMENT LAB IN BOEBLINGEN has been cut many positions.
The 5000 doesn’t include the folks who will be voluntarily resigning after they choose not to to show up in the new GDC’s. Yup, that’s right, folks. Either uproot your family and take a job in a new locale, with likely further band-downing and pay cuts, or don’t choose not to, at which point IBM considers this your resignation. No severance for these folks. All verbal communications, nothing in writing. IBM’s become a master of the underhanded, under-the-radar no-deal.
This article is actually tame in it’s representation of the treatment of it’s employees. As several have said the 5000 number is VERY low as it is only the number listed in the various seperation packages issued in writing. It does NOT include the employees who IBM have been forced to quit or “retire” (by moving their jobs with no moving aid) or falsely accused of “poor performance” or told that if they can’t find their own contract work outside the company (with no way to do so and even cases where folks found work but were denied the opportunity to do it) that they are fired for being idle employees. Oh, and coincidentally 60-70% of those being RA’s or forced out are “older workers” 50+ whom IBM no longer wants to pay since they can now hire two college interns to replace… Couple that with the elimination of a retirement plan and NO medical coverage for retirees except a “lump sum” which at best would last the average person a couple years, and you get the picture…
March 25th: The Wall Street Journal is reporting that IBM “is expected to inform a large number of U.S. employees..that that their jobs are being eliminated with the work of many of them being transferred to IBM employees in India”. The announcement will be made on March 26th– which has been dubbed “Black Thursday” by posters at the Alliance@IBM message board. IBM’s “resource actions” will target employees in the company’s global-business unit. Two months ago CEO Sam Palmisano, in an internal email, praised the unit for their impressive profit performance. That and a nickel…
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