JUST IN: As end of Q2 nears, IBM employees fret 'resource actions'

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Union: IBM layoffs accelerating as employees vent

Summary: IBM's employees' union is delivering blow-by-blow accounts of Big Blue's layoffs tonight. The Wall Street Journal reported earlier Wednesday that IBM is looking to cut about 5,000 positions mostly in its global business services unit as it shifts work to India (Techmeme).

Larry Dignan

By for Between the Lines |

IBM's employees' union is delivering blow-by-blow accounts of Big Blue's layoffs tonight. 

The Wall Street Journal reported earlier Wednesday that IBM is looking to cut about 5,000 positions mostly in its global business services unit as it shifts work to India (Techmeme). 

According to the Alliance@IBM site, 1,674 jobs have been cut in application services with employee reports filtering in. IBM's employee union reckons that 4,000 U.S. jobs are on the chopping block. 

Among some of the notable comments:

A letter regarding the transition of work in the Hartford Insurance account:

"Starting next week several Hartford delivery teams will be working directly with fellow IBM team members from India to begin the second phase of our Global delivery solution planned for the Hartford account. The teams will be engaged in a multi-week effort to facilitate knowledge transfer to prepare for migration of specific work activities to global delivery counterparts later in 2009. Your continued support and leadership is critical to ensure our overall success and to ensure we continue to deliver high quality cost effective solutions that IBM committed to the Hartford. Please ensure you and your teams actively support this effort."

And.

I work for IBM Asia Pacific Region and currently with IBM Australia - a 26-year veteran with IBM. Just been told that I am terminated along with many others here, although the region kept reporting increase in business results!

And.

1st line manager confirmed last week that there will considerable pressure to cut jobs, regardless of current staffing levels, workloads etc. Even if a dept. is under budget they will have to cut staff. Hope they remember to be generous with those severance packages - especially considering some of the directions given to us by our managers.

And. 

I'm an IBM employee who is often frustrated by the secrecy at the top and IBM's unwillingness to be honest about the layoffs.... err, resource actions. However, I don't think IBM is immune from the global economic forces that are leading to a more global workforce, the shifting of jobs from high-paying countries to lower-paying companies,etc. Do you really expect IBM to be the only company not having layoffs in this economy?

Topics: CXO, IBM, IT Employment

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67 comments
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  • Smiling Sam does it again

    It seems to me that the government is overlooking one of the critical components of this economic meltdown - the offshoring of American jobs. IBM is one of the worst offenders in this regard. This one case represents over $500 million dollars of American wages being sent to India. All the while Smiling Sam cuts contractor pay rates (last November), thereby putting more people in financial crisis, and turns around and gets a $60 million bonus for his efforts.

    Greedy people like this are what has ruined our economy. Sending more jobs overseas in the midst of our worst economic crisis is tantamount to treason.
    piapium2008
    Reply Vote

    • Re:Smiling Sam does it again

      What your government understands, but you seem to fail to comprehend, is that "this economic meltdown" is not limited to the United States. It is a global meltdown of the global economy and no country will be able to pull themselves out of it while the rest of the world is still in economic chaos. The US is part of the global market place and implementing protectionist policies will not speed up the economic recovery. The US economy doesn't operate in a bubble. They need their trading partners (as every country does)to be in a position to purchase the goods they produce. Ther US is definitely the major player in the global marketplace, but they can't fix the world economy on their own.

      IBM is a global company. As any company has to do they have to look at growing and shrinking market places and balancing their workforce in order to stay competitive in a global marketplace.

      I agree with you that greed has a lot to do with ruining the economy, but it is not limited to the executives, although they seem to be the worst offenders. Many people are looking to get the latest and greatest flat screen tv, suv, and cell phone. That greed has driven up the wage demands and made many countries in the world uncompetitive in a global marketplace.
      Haligonian
      Reply Vote

      • Not to mention

        the unions themselves.

        How can any company hope to compete in a global economy when the very workers at these US plants threaten to put their employers out of business (via strikes) unless they receive some ridiculous compensation for even the lowest of unskilled jobs?

        Why would anyone in the world purchase my products when they can purchase my competitors for half the price, the difference in cost attributed to nothing more then the employees compensation packages?

        A janitor or stock person position is not a 65 thousand dollar a year job.
        GuidingLight
        Reply Vote

        • True, to a point

          While that is true to a point, unions also helped eliminate child labor and other abusive practices. At least, here in the States. Overseas, where they don't have unions, those things can often be ignored and be leveraged by less scrupulous businesses to keep prices low. After all, no need to pay those kids a living wage, right? And safety procedures cost money, so better to cut them out, too.
          Of course, most people don't care to know that those big screen TVs or DVD players or shoes were made by a kid kept locked in a factory in a Third World country. All they care about is getting the best price.

          But what bothers me most about the off-shoring trend is that it's being done in favor of lower cost solutions which maximize U.S. incomes and employment. There are many small towns that can provide a very good workforce at reduced rates. I used to work for a mortgage company that maintained a call center in North Dakota that was substantially less expensive than operating the same call center in, say, Houston, where they were based. It may not have been cheaper than offshoring, but, I think it was more responsible as a corporation. Such things are possible, if we take the time to look.
          ryumaou@...
          Reply Vote

          • Asia working conditions

            A very large high-tech 12" semiconductor fab was recently built in Asia and after it had been in operation for several months, the European operations executives and a select team of top engineers wen to inspect it. One of the engineers noticed no vent ducts on the gas lockers. After this was explained to the execs, the big boss turned them all around and they left the plant immediately for safety reasons. A gas locker is a cabinet in which a cylinder of process gas is kept. Inside the locker, the pipe that feeds the factory's diffusion machinery is connected to the cylinder. The vent is there in case the cylinder or plumbing should leak, and the vent is constantly evacuated by fans so that if there is a leak the gas is carried away to a disposal scrubber instead of leaking into the work space and killing off an entire floor of empolyees. The problem with killing off all the workers in the fab is that millions of dollars worth of product will be ruined by the time replacement workers can get in there to montor and serve the machinery. Nearly every gas used in making semiconductors is poisonous. In some cases one sniff of a gas you cannot even small is enough to instantly kill. This is an xample of one way money is saved in workplaces where safety regulations do not exist. The contractors saved alot of money by deleting the locker vent system from the facility. A situation of a series of bribes and kickbacks was later discovered. Scapegoats were designated and jailed, with yet another under the table deal that in return for taking the blame and spending a few months in prison, all carefully negotiated with the local authorities, they received a large payment. The deal was kept too, in order to buy silence! Operations continued without most of the empoyees knowing anything, no shutdown as the cost would have been too high. The vents were installed finally.
            Opcom_
            Reply Vote

      • YOU'VE really bought the "global marketplace" concept, haven't you?

        What YOU seem to fail to comprehend can be summed up with one question that I doubt you can provide a good answer to:

        Instead of sending all those jobs (along with their income and tax revenue) to India and resulting in thousands of Americans unemployed, why couldn't IBM have retained all or most of them at lower salaries?

        Hmmmmm?

        Or at least OFFERED that kind of thing to the people being laid off?

        No, better to just kick them out on the street (while mister CEO gorges on his huge bonuses), depriving THEM of their salaries, the American economy of what they would spend from those salaries, and the U.S. government of the tax revenue from those salaries. No, just send it all to some other freakin' country.

        What people with your "the global market should rule all and the United States should just let our economy level out with everybody else on the planet until we're a third world country ourselves" attitude just don't get is that companies like IBM that are pulling this crap are doing it for short-term profits vs. what is good for our country and the American people in the long term.
        Still_Rockin
        Reply Vote

        • Because salaries are just part of the problem.

          The other part of the problem is the cost of
          doing business in America along with the 2nd
          highest corporate tax rate in the world, with
          assurances from the government that it's only
          going to get worse.

          Atlas is starting to shrug. This is just the
          beginning.
          JohnMcGrew@...
          Reply Vote

          • Guess who has the #1 corporate tax ?

            India has the highest corporate income tax in the world. So don't keep listeneing to these pundits that cry about the US having the 2nd highest income tax rate, becuase apparently it doesn't matter if the wages are lower.
            jaygee_z
            Reply Vote

          • Um, I don't think so.

            India, depending on which recent year and
            method, ranks around 10, whereas the US is in
            the top 3.

            http://www.finfacts.com/irelandbusinessnews/publ
            ish/article_10003326.shtml
            JohnMcGrew@...
            Reply Vote

          • It's all in the spin I guess

            People who state the US tax rate at 39% is the 2nd highest in the world are misrepresenting the facts. Using the IRS tax tables for 2008
            The 39% taxation is only on the first 335k of taxable income. From 336k to 10Mil the rate is 34%, and let's face it there are not going to be too many 335k companies offshoring.
            India's tax rate tops out above 40%

            Not to mention that there are enough deductions and loopholes to allow big companies like IBM, Dell, Microsoft Etc to not pay anywhere near the 35%

            http://www.smartmoney.com/investing/economy/high-corporate-tax-rate-is-misleading-22463/
            jaygee_z
            Reply Vote

          • I still don't think so; you're forgetting state taxes

            Federal tax is just part. Most states levy all
            kinds of taxes, as well as many localities.
            It's the sum of all of these taxes that make the
            US #2, not just federal.

            Add to this additional taxes that have been
            promised, such as a "carbon" tax and the
            inevitable "inflation" tax.

            Again, if this is just "spin", they why are they
            so anxious to leave?
            JohnMcGrew@...
            Reply Vote

          • Libertarian/Conservative/Corporatism/Fascist B.S.

            Mr. John McGrew sounds to me like a corporate shill or a follower of the Ayn Rand religion.

            Of course the costs of doing business in the U.S. are higher than the costs of doing business in the country w/the highest corporate income tax in the world (India). Salaries are higher in the U.S. as they s/b for IBM and others, because IBM and other corporations are reaping the benefits a better infrastructure or 'commons' as described by America's founders. W/o the U.S. infrastructure for these corporations there would be not even be an option to cheap-source to India. In addition, a more stable legal system, roads etc. are all worth something real to any business.

            A corporation's purpose is not just to make money they are also supposed to promote goods or services and they exist at society's discretion. Corporations are not natural persons and never were, they have no natural rights, they only have rights that society allows them to have.

            These rights and rules of corporations could be changed tomorrow if politicians were forbidden from taking bribes (a.k.a. campaign contributions) from any corporation as they used to be forbidden.

            We have rules in societies so that one does not have to live in the jungle like animals. Taxes are what corporations and natural persons pay for services to live in a civilized society. One such service is to be allowed to form corporations.

            These layoffs are about nothing, but cheap wages so that the greedy bastages at the top can make more money than they can ever spend. Never forget, the founders of America were against inherited wealth and large concentrations of wealth for a reason. They knew it leads to despotism.
            maxx12
            Reply Vote

          • If you want to play association games, it's okay with me...

            ...if you want to associate me with Ayn Rand, as
            long as it's okay if I associate you with Karl
            Marx and his less than industrious followers.

            So now that the name calling is over...

            India does not have the highest corporate tax
            rate in the world. In fact, their effective
            rate (as so many here like to call it) is well
            below the US, somewhere around 10th.

            But then again, you also probably think that
            corporations actually pay taxes, which they
            actually do not. In order to exist, they must
            pass whatever expenses they have on through the
            cost of their goods and services, which are
            ultimately borne by consumers. So by having a
            high corporate tax rate, all you are really
            doing is making your corporations less
            competitive against other state's corporations.
            But this is hardly a line of thought that's
            popular amongst statists or union cronies.
            JohnMcGrew@...
            Reply Vote

    • "Greedy people"?

      What about the "greedy people" who are currently
      printing trillions of dollars and have promised
      higher taxes for the profitable companies that
      remain? It's almost as if they are begging
      industry to leave.
      JohnMcGrew@...
      Reply Vote

  • RE: Union: IBM layoffs accelerating as employees vent

    Perhaps the sell off of stock by top IBM execs and the layoffs are the result of a Trillion dollar lawsuit IBM is named in. Check it out below, wonder if shareholders know, also Intel named.

    MADOFF + STANFORD + DREIER + SATYAM + ALBERT HU = PROSKAUER ROSE
    Investors who have been burned in these scams should start to seek redress from the lawyers who were involved with these scams. I personally have been trying to notify regulators and authorities of a ONE TRILLION DOLLAR scam that is putting states like New York and Florida at huge risk, as well as, companies like Intel, Lockheed, SGI and IBM. The states and companies involved in the fraud fail to acknowledge the risk exposing shareholders and citizens to impending liabilities. Investigators, courts and federal agents ignoring the crimes and evidence, including a car-bombing attempt on my life. I know how Harry Markopolos felt trying to expose Madoff in a world without regulation.
    Did I hear Proskauer Rose is involved in Madoff (involved many clients too) and acted as Allen Stanford's attorney. Investors who lost money in these scams should start looking at the law firm Proskauer's assets for recovery. First, Proskauer partner Gregg Mashberg claims Madoff is a financial 9/11 for their clients, if they directed you to Madoff sue them. Then, Proskauer partner Thomas Sjoblom former enforcement dude for SEC and Allen Stanford attorney, declares PARTY IS OVER to Stanford employees and advises them to PRAY, this two days before SEC hearings. Then at hearings, he lies with Holt to SEC saying she only prepared with him but fails to mention Miami meeting at airport hanger. Then Sjoblom resigns after SEC begins investigation and sends note to SEC disaffirming all statements made by him and Proskauer, his butt on fire. If you were burned in Stanford sue Proskauer.

    Proskauer Rose and Foley & Lardner are also in a TRILLION dollar FEDERAL LAWSUIT legally related to a WHISTLEBLOWER CASE also in FEDERAL COURT. Marc S. Dreier, brought in through Raymond A. Joao of Meltzer Lippe after putting 90+ patents of mine in his own name, is also a defendant in the Federal Case.
    The Trillion Dollar suit according to Judge Shira Scheindlin is one of PATENT THEFT, MURDER & A CAR BOMBING. For graphics on the car bombing visit www.iviewit.tv.
    The Federal Court cases
    United States Court of Appeals for the Second Circuit Docket 08-4873-cv - Bernstein, et al. v Appellate Division First Department Disciplinary Committee, et al. - TRILLION DOLLAR LAWSUIT
    Cases @ US District Court - Southern District NY
    (07cv09599) Anderson v The State of New York, et al. - WHISTLEBLOWER LAWSUIT
    (07cv11196) Bernstein, et al. v Appellate Division First Department Disciplinary Committee, et al.
    (07cv11612) Esposito v The State of New York, et al.,
    (08cv00526) Capogrosso v New York State Commission on Judicial Conduct, et al.,
    (08cv02391) McKeown v The State of New York, et al.,
    (08cv02852) Galison v The State of New York, et al.,
    (08cv03305) Carvel v The State of New York, et al., and,
    (08cv4053) Gizella Weisshaus v The State of New York, et al.
    (08cv4438) Suzanne McCormick v The State of New York, et al.
    John L. Petrec-Tolino v. The State of New York -
    iviewit
    Reply Vote

  • Short Term Thinking - Long Term Risk

    All it will take is regional civil unrest and/or planned or accidential communications failure. Then these outsource agendas will not look like such a good idea. It is no coincidence that the areas of the world that allegedly offer cheap labor are also among the most unstable or highly government controlled. Thes probability of outage is heightened because of the inept and weak current US administration. Our adversaries see this and will use it to their advantage.
    jdoe2000
    Reply Vote

    • Hear Hear!

      Spot on, jdoe... spot on.
      SAStarling
      Reply Vote

    • agreed!!!

      as soon as food and water wars begin in India -- they will pull all the jobs back into NA.
      darkog
      Reply Vote

      • Mushroom Clouds

        That unrest is a distinct possibility, with the terrorist enclave of Pakistan next door. There is no telling where the animosity between India and their neighbors might end up. A horrific exchange is s definite maybe, if the wrong factions seize control of the Pakistani nuclear arsenal. How would that outsourcing decision pan out then.

        I'll bet IBM hardware was used in that weapons development program.
        teeeceee
        Reply Vote

        • much worse than that

          they have a huge booming population, and its getting bigger by the hour, and no proper infrastructure to support it. food, water, housing... the civil unrest is a result of this poor planning and the massive gap between the handful of filthy rich and the masses of miserablly poor. this is an area that might get a lot worse if no one interfvenes.
          darkog
          Reply Vote
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