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IBM Businesses The Almighty Buck

IBM Begins Layoffs, Questions Arise About Pact With New York 182

Posted by Unknown Lamer
from the fire-ten-hire-three dept.
dcblogs writes with news that the rumored IBM layoffs have begun. "IBM is laying off U.S. employees this week as part of a $1B restructuring, and is apparently trying keep the exact number of cuts secret. The Alliance@IBM, the main source of layoff information at IBM, says the company has stopped including in its resource action documents, given to cut employees, the number of employees selected for a job cut. The union calls it a 'disturbing development.' Meanwhile, two days prior to the layoffs, NY Governor Cuomo announced that it reached a new minimum staffing level agreement with IBM to 'maintain 3,100 high-tech jobs in the Hudson Valley and surrounding areas.' The governor's office did not say how many IBM jobs are now there, but others put estimate it at around 7,000. Lee Conrad, a national coordinator for the Alliance, said the governor's announcement raises some questions for workers and the region. 'Yes, you're trying to protect 3,100 jobs but what about the other 3,900 jobs?' The Alliance estimates that anywhere from 4,000 to 6,000 U.S. workers could be impacted by the latest round of layoffs. IBM says it has more than 3,000 open positions in the U.S., and says the cuts are part of a 'rebalancing' as it shifts investments into new areas of technology, such as cognitive computing." Alliance@IBM has a page collecting reports from people terminated today.
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IBM Begins Layoffs, Questions Arise About Pact With New York

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    • by Anonymous Coward on Thursday February 27, 2014 @07:01PM (#46363421)

      Obviously, these jobs were cut because there were not enough skilled STEM employees available. This is a clear sign we need more H1Bs.

      • by ackthpt (218170)

        '3000 open positions' .. 'cognitive computing' -- "So do you know how to be replaced by an outsourced position? If so, you're temporarily hired! Welcome to our new 'cognitive computing team'."

      • That's funny (as well as being a good point) but India already got hit with layoffs [wraltechwire.com]. Labor laws in India being what they are, the layoff's there were harsher with employees given hours to return their laptops and leave the premises.
      • Obviously, these jobs were cut because there were not enough skilled STEM employees available. This is a clear sign we need more H1Bs.

        IBM stands for International Business Machine. International means that it does not call USA home. It means it follows the market and where it can find the lowest of the low salaries.

        If you poor down your society (as is happening in the USA and elsewhere) , that society will not have the money to buy your goods and services. I call that aspect, the "Walmarting of America"

  • Why bother? (Score:4, Interesting)

    by LordNimon (85072) on Thursday February 27, 2014 @06:52PM (#46363319)

    Frankly, I'll never understand why anyone would apply for a job at IBM, unless he's already desperate. Here in Austin, I know plenty of people who have left IBM over the past few years, most of them willingly. I don't know anyone who has joined IBM in the last 10 years.

    • by Anonymous Coward

      They might be worth working for in the R&D department, given that they seem to be one of the few American companies left that does genuine R&D rather than mislabeled product development work. (Note: I'm basing this solely off of one IBM employee's research presentation.)

      • IBM has cut back heavily on blue sky R&D. Everything done in the last 10 years or so has been required to have some business case to get funding. If anything, I think MS research is the last institution where people can be fully employed doing whatever interests them.

        • by Grishnakh (216268)

          And that's quite sad, since almost nothing good ever comes out of that group. The only thing I can think of offhand is that panoramic multi-photo stitching process.

          The death of serious research (like IBM's copper-on-silicon process in the late 90s) and the move to vacuous bullshit cloud services is just a symptom of the death throes of American industry, and before too long, the American economy.

    • IBM is hoping to pick some of them again as ripe apples in five years.
      This is one of the steps to that end.
    • Telecommute options. :)
    • by drinkypoo (153816)

      IBM is frankly a whole other class of employer from what people are used to. Or at least, they used to be. Yes, the corporate culture is awful and stifling. It's still a job. IBM regularly hires with one hand and fires with the other, like most big corps.

    • So this!

      IBM Is a terrible company and a completely poisoned culture. You would have to be a masochist with low self esteem to agree to work for them. If you work there and aren't looking for a job you might be the last chump holding the bag.

      I know tons of people that left IBM here in Colorado and the ones still working there, the really hardcore types that bleed blue, even they are completely broken and miserable and ready to move on. Some after 20+ years. I would not agree to work for them under any circu

      • even if you had no job and no one was making you an offer but them?

        I've been in a layoff situation before (for long-term, too, sadly) and once you get within a few months of being on the streets, you start to consider jobs you wouldn't before.

    • by Grishnakh (216268)

      Like many large companies, the only good way to work at such a place is as a contractor, and only for a short duration so you can make extra money until you find a better permanent job.

  • by Anonymous Coward on Thursday February 27, 2014 @06:53PM (#46363333)

    They're constantly looking to move jobs from areas of relatively high pay (USA, England, Australia, etc.) to areas of relatively low pay (India, Philippines, China, etc.) Which is all well and good if the standard of work were maintained - but it's not. They pay peanuts, and they get monkeys - I've worked with some fantastically competent people from India and China, but the salary they'd command back home is more than IBM is prepared to pay.

    I remember an anecdote of a change on a major financial company's test mainframe. It included, amongst other things, an IPL (Initial Program Load - the mainframe equivalent of the three finger salute.) The Chinese staff IPLed the production mainframe. The financial company blew its lid over that, and demanded the work be moved back to their home country, which it duly was ... and two years later, it was back in China again to save money.

    I contracted for them for a while. They don't allow an increase in rates (if you want more money, go elsewhere, and you may be able to get back in later on), whilst frequently demanding that you take extra days off so they can balance the books, with next to no notice, and often unilaterally cutting your rate by 10%. Suffice to say that, if I were told about a contract at IBM, my response would be akin to Jack's in Halting State.

    There are companies I would happily work at again if given the chance. Then there are companies I would only work at if I were desperate. IBM is in the latter group, despite (or perhaps because of?) their name.

    • Re: (Score:3, Interesting)

      by epyT-R (613989)

      If these companies aren't willing to hire local talent and pay living wages, then maybe we should start placing embargoes on their goods and services.

      • Go for it. Strap that JATO unit to Wile E. Coy-US-Economy's back as he already plunges towards the ground.

        The more you tighten your grip, Governor Cuomo, the more tech star companies will slip throuh your fingers.

        • by epyT-R (613989)

          Hey, if these companies don't want to hire americans, they obviously don't give a shit about the american economy anyway. They're more than welcome to sell in china where people make pennies on the dollar.

      • That would need a government in the colloquial meaning of the word.
        As it happens, your government is a Corporation of which IBM is one
        of the constituents. Doesn't have to be that way. Change can happen,
        and relatively quickly at that too. Just needs a bit of momentum.
        • by kbolino (920292)

          Change can happen, and relatively quickly at that too. Just needs a bit of momentum.

          We are just one proletarian revolution away from utopia.

      • If these companies aren't willing to hire local talent and pay living wages, then maybe we should start placing embargoes on their goods and services.

        We tried that in the 1930s. The result was an even deeper depression and a world war. If you embargo other countries, they retaliate and embargo you as well. Trade collapses, unemployment skyrockets, and elections are won by demagogues that blame all the problems on foreigners (like you are doing here).

        • by ebno-10db (1459097) on Thursday February 27, 2014 @08:28PM (#46364075)

          You're taking an overly simplified lesson from the Smoot-Hawley Tariff Act.

          1) It was beyond extreme. It raised the average tariff to 60%. Nobody is talking about anything near that. Even before Smoot-Hawley we had average tariffs of 40%, which is way beyond what anyone is seriously talking about nowadays.

          2) Even as devout of a free trader as Milton Friedman said that Smoot-Hawley had only a minor effect on the Great Depression. It's significance has been greatly exagerrated.

          3) If tariffs are necessarily a bad idea, then why did the US prosper so much for so long with high tariffs that started when Hamilton was the Secretary of the Treasury? (see Hamilton's "Report on Manufactures").

          4) The US at the time Smoot-Hawley was passed was in the opposite situation as today. It was a net exporter, so retaliatory tariffs had a greater effect than our tariffs, and reduced demand for US products. Today the US is a net importer, which means the effect would be reversed, and increase demand.

          • by kbolino (920292)

            If tariffs are necessarily a bad idea, then why did the US prosper so much for so long with high tariffs that started when Hamilton was the Secretary of the Treasury?

            No income tax, no inheritance tax, no property tax, no sales tax, ...

          • Re: (Score:2, Interesting)

            by Tablizer (95088)

            Smoot-Hawley was a bad idea at THAT time because the USA had a trade surplus. Right-wing media consistently omits this important fact.

            Further, the main purpose of tariffs is to encourage the other country to stop dicking with their currency, reduce trade barriers, and allow more consumerism in their own country. It's not to cut total trade. And they should be put in place gradually, not suddenly like they did in the 30's.

      • by anubi (640541)
        I feel what we are seeing right now is the inevitable result of a Congress, lobbied by special interests, passing law benefiting ownership rights and protection rackets of artificially mandated monopolies instead of passing law rewarding job creation.

        We now have an entire nation not very gainfully employed. We outsource our core technologies and manufacturing, instead spending our resources on Finance, Insurance, Real Estate and Entertainment.

        Oooh! Game time! Gotta Go...
        • by sumdumass (711423)

          You can feel all you want. It's a matter of cost of doing business more or less and keeping business flexible to remain profitable. From time to time that means either restructuring or going out of business as costs increase.

          Expect more and more of this as energy costs artificially rise due to global warming control efforts and businesses are attacked with taxes and so on because they can simply pass the costs to the consumer without it appearing that the population had it's taxes increased. There is a reas

    • by khchung (462899)

      They're constantly looking to move jobs from areas of relatively high pay (USA, England, Australia, etc.) to areas of relatively low pay (India, Philippines, China, etc.) Which is all well and good if the standard of work were maintained - but it's not. They pay peanuts, and they get monkeys - I've worked with some fantastically competent people from India and China, but the salary they'd command back home is more than IBM is prepared to pay.

      THIS is the reason offshoring will never give you good results, NOT because of some inherent incompetence of the people in the other country, but because the company is unwilling to pay for good talent!

      I have seen this mentality more than I cared to - "offshoring is to cut cost, so we can't pay enough for qualified people!"

      I mean, this is CRAZY. All businesses complained about the difficulty in finding talent. Considering that the USA (for example), is only about 5% of world's population, while India and

    • I work at IBM in a low cost country (but none of those you mentioned), and I love it, it is really an empowering company that leverages the skills of those willing to, providing the tools, the mentoring and the environment to develop.

      Nevertheless, I think that is not the case in the US and in some other countries that managed to be left behind in the tech skills race, as in the West Europe.

      US workers have completely lost pace in hard skills development but the quietus resides in the fact that most of the po

      • Open your eyes, dude :-) the best talent in the US has left IBM in the last decade, for companies like Google and even MSFT. There are a few skilled lifers left, but IBM, like Battlestar Galactica, has her back broken really bad. She will never jump again.
        The 2014 layoffs in Bangalore caught every one by surprise. Open your eyes, your site will be next before you see it coming.

    • by TheGratefulNet (143330) on Friday February 28, 2014 @03:26AM (#46365703)

      They're constantly looking to move jobs from areas of relatively high pay (USA, England, Australia, etc.) to areas of relatively low pay (India, Philippines, China, etc.) Which is all well and good if the standard of work were maintained - but it's not. They pay peanuts, and they get monkeys - I've worked with some fantastically competent people from India and China, but the salary they'd command back home is more than IBM is prepared to pay.

      as someone who lives and (sometimes) works in the silicon valley area, I could say this about 100% of the places I've been at the past 20 yrs. every damned one of them has done this. not a single exception. 'please work with our china office on this bug' etc. and you dread it.

      my last gig was a silicon valley based company but we laid off 1/3 of the US staff (all americans) and yet everyone who was not US born was left untouched. we had some folks in foreign offices get the sack, too, but much much less than the US.

      1/3 of our office. due to money. they cleaned out of the most senior people and left, well, freshers, essentially.

      software is no longer about quality. its a 'churn and turn' that is just a notch above factory work, at least to the managers and bean counters.

      this is not an IBM thing, its a whole software+hardware+services thing. no one wants to pay western wages when you can hire 10 people back east (way way back east) and get an almost passable product (that you charge the customer the same amount for. and you don't care one whit if he's happy, since you'll find another customer to sell to, etc).

    • An employer needs to have staff to setup,maintain,improve services to others and to itself. It benefits from a motivated workforce, but is obsessed with cutting costs over increasing efficiency. An Employee needs to have a job to allow him to be a consumer at the store, a parent to the next generation and so much more... an element of local society. He/She provides time to the employer who needs to use that resource efficiently as possible for yesterdays, todays and tomorrows challenges. Fast forward to
  • by Trashcan Romeo (2675341) on Thursday February 27, 2014 @06:54PM (#46363339)
    ... sell them to Lenovo?
  • by Anonymous Coward

    The 90's called. They want their web page back.

  • by Anonymous Coward

    I am suprised IBM kept any jobs open in New York state. I would love to see what sweatheart tax break they were given that no other business received.

  • by The Cat (19816)

    How about if you assholes retrain the 3000 people for the 3000 open positions?

    Assholes.

    • How about if you assholes retrain the 3000 people for the 3000 open positions?

      They would like to "retrain" them to open positions with a 50% pay cut . . .

  • by Joe_Dragon (2206452) on Thursday February 27, 2014 @07:17PM (#46363545)

    Time for outsourcing tax?

    Better to at least keep the jobs hear other then paying for all of the welfare for the people out of work.

    • This is a very good idea.

      We could use it to pay for STEM degree tax exemptions for Middle Class American citizens and their kids.

    • by antdude (79039)

      FYI, hear != here.

    • An outsourcing tax would just result in jinking with the books so that it wasn't "really" outsourcing and any money generated would just go to the government. If they had to cut H1B visas they'd have to hire regular employees.
      • by TheGratefulNet (143330) on Friday February 28, 2014 @03:32AM (#46365721)

        a 100% halt on all imported labor. ALL OF IT. stop fucking around, america! if you don't protect your own people, you won't have local people who can AFFORD to buy the shit your company makes.

        forget about taxing to stop outsourcing. just get rid of h1b entirely and the other work visas. there are so many people living here, already, who can't find jobs and who need them badly.

        why not take care of your own? I got news for you, every other country takes care of their own. why are we so 'open' to the point of killing our own people via slow starvation?

        protection of local work force is NOT a sin and it needs to be done now! if we don't, say goodbye to the US being a first world nation. the nation is built on the middle class and if you let the middle class disappear, this will not end well for the US, as a whole.

        • why not take care of your own? I got news for you, every other country takes care of their own. why are we so 'open' to the point of killing our own people via slow starvation?

          It's complicated. The reason H1B workers are desirable is because they're cheaper. They're cheaper for two reasons: 1) they can be threatened into working crazy hours. As if US IT workers don't, though. So, 2) they have much lower cost structures. In the US everything is so expensive due to taxes and mandates that workers have be

          • by Belial6 (794905)
            Just require a US citizen as a trainee to shadow each H1B workers at an equal salary. Even if the company had to hire US workers at 50% greater cost than an H1B, it would still mean that US workers would bring a cost savings. Since the argument for H1Bs is that there are no qualified US workers, it would also work towards satisfying the stated goals of the H1B visa program better than the current system, as it would increase the number of qualified US citizens.
          • every time I mention that h1b salaries are lower, I get into a fight with an indian guy who *insists* that is incorrect.

            they also insist that the servitude is not real, either; and that if they get fired they can still find other jobs and not be sent home right away. maybe it depends on whether the next company is willing to pick up the restart bill of the paperwork.

            I have seen internal jobs posted at my last company and the salaries were all 50k or even more less than what I was making. not sure how to e

      • by Belial6 (794905)
        The solution to the H1B visa problem is pretty easy. The argument for H1Bs is that there are no American candidates qualified for the job. So, just require that every H1B visa worker be shadowed by an equally paid US citizen for the purpose of training. Make rules that require the trainee to not produce any production work.(including R&D work that goes to production)

        This would leave companies open to hire all the H1Bs they want without putting US workers out of work. It would reduce the long term
  • The law [dol.gov]says over 49 people at one site.
    • Laws don't apply to major campaign contributors and other puppeteers. If they did, half of Wall St. would have traded bespoke suits for orange jumpsuits.

  • Why is IBM throwing people away instead of re-training them?

    FAIL, both morally and strategically.

    • Why is IBM throwing people away instead of re-training them?

      My guess it that they are dumping hardware folks, and hiring software folks.

  • by Anonymous Coward

    I did an internship in college at IBM in the summer of 2001 and it was awesome. But by the time I graduated they weren't hiring at that location anymore. And a couple years later they sold that whole facility to Hitachi (when they decided to get out of the hard-drive business). Looks like they've just kept going downhill since then. I'm kinda glad they didn't give me an offer :)

  • What percentage will be tracked
    back to the affordable health care act
    and by who.

    IBM is a massive company but with wide and
    sometimes conflicting product lines. We will
    have to wait to see what this does.

    Some lay offs with "rich" packages have resulted
    in valuable startups. Time will tell.

  • My company hired IBM for an "assessment" and for "process improvement" - yeah now we are sending IT work offshore - I see where OUR jobs are headed... The same place all these IBM folks are going - to the unemployment line!

  • This isn't what IBM says it's doing...

    "IBM layoffs expected. Instead, IBM adds 500 positions."
    http://www.csmonitor.com/Busin... [csmonitor.com]

    I guess it's time for the yearly Communication Workers of America local 1701 to try to unionize IBM again under the name "Alliance@IBM". Don't they usually wait until March for this same old song and dance? Why's it early this year?

  • Just because corporations lie all the time, it doesn't mean they won't stop lying someday ...

    IBM is well known for outsourcing and abusing H1-B and to a lesser extent L1 and L2 visas.

    Mind you, Microsoft is worse.

    • by Alioth (221270)

      My personal experience with IBM says no, they don't abuse L1. I used to work for IBM and went to the US for a while on an L1 visa. I was *more* expensive to IBM than a local worker because they paid a pretty sweet per-diem rate to me for the full duration I was there (in IBM, an international assignment works like this - you still work and are paid by your home country, and it is treated like a very long business trip effectively - so you get an International Service Allowance).

      To give you an idea of how mu

  • by Anonymous Coward on Thursday February 27, 2014 @08:27PM (#46364069)

    Read his latest blog posting on their tailspin:
    http://www.cringely.com/2014/01/23/ibm-sells-intel-server-business-company-doomed/?utm_source=rss&utm_medium=rss&utm_campaign=ibm-sells-intel-server-business-company-doomed

    I got laid off from IBM almost 7 years ago, and my initial reaction was "Free at last!" Luckily I found a good job where I worked before them, and using the tech I learned at IBM. Typically, they sent my job to one of their cheap facilities in Brazil, and expected me to bring those guys up to speed in my last 30 days ... yeah, right.

    My former manager told me a couple years later that the client, a rather large auto company working through a big gummint bailout, got fed up with the scant tech knowledge of the platform, and communications problems (on our "team" phone chats before I left, all the Brazilians used Skype, and there was an annoying constant buzzing sound from that, never mind the thickly accented English I could barely understand, if at all), and demanded the work be done back in the US by the guy I mentored.

    I think Cringe is dead on in his analysis: IBM is run by short-sighted, selfish management that is only looking to the next quarter's numbers, and how soon they can bail out with golden parachutes as they eat up the seed corn. They have even been calculating just how much they can break contracts and labor laws weighing the short-term profits against the penalties and fines they have to pay when caught out by customers or the law.

    Free at last!

  • by Anonymous Coward on Friday February 28, 2014 @12:01AM (#46365183)

    IBMer here posting as AC, yeah I know but. (I do have 5 digit Slashdot ID.)

    So I didn't get RA'd today but would eventually if I stayed, which I will not.

    The real issue here is the boneheaded "Road to 2015 [zdnet.com]" where Ginny Rometti and her predecessor Sam Palmisano pulled one of the most Kafkaesque things I've ever seen at IBM. To net it out, they promised Wall Street that they would reach $20 EPS by 2015, through a combination of profits and stock buybacks. They also promised $20B in revenue growth. That drove the share price immediately from ~$120 to >$200, although it's down to $180 now. But needless to say, all the execs with compensation tied to share price were sweetly remunerated for this. In a true irony, the decision to do this in the first place was because they had successfully done it with a prior $10/EPS goal a few years before, mostly via cost reductions, not value delivery.... so essentially they were doubling down on behavior that was arguably stupid the first time.

    Now it's 2014 and revenue has actually been flat or DOWN since that Road to 2015 proclamation. What does IBM do? Do they say, "Well, we didn't make the revenue number so we can't achieve the EPS target"? Hell no -- they reaffirm the EPS target as though the revenue doesn't matter. So to get there, the whole organization is now run like a hedge fund, comparing numbers on a spreadsheet to define strategy. Naturally that dictates a decision to raise all your prices and slash your expenses. And that means screwing over the customers AND the employees, including the good ones -- which are still the vast majority. Wages are flat, annual bonuses have gone from 15% to 8% to nothing this year. Expense reimbursements (phone, home office, Internet) have been discontinued, and they even changed 401k matching from per-paycheck to year-end, so they get to play with the money all year, and deny it to anyone not actively employed on December 15. (Of course this makes layoffs all the more attractive.)

    The result is the quality of stuff from IBM has gone to complete shit. I am not exaggerating. There simply aren't enough qualified people to deliver on the brand promise that created the "You'll never get fired for buying IBM" mantra. Honestly our technical debt in every important area scares the hell out of me, and customers are catching on. Every decision is based on, "Is there a contract that needs this?" rather than, "Is this the right way to develop product/services?"

    Look, I'm no armchair quarterback and I don't expect any organization to be perfect. Criticizing execs is the classic lazy crutch of the worker. But this is simply the complete raping of an historic American company. We stood for something. Yes the international part was central to it, and we embraced it -- I've been to every part of the planet and met people so talented it is humbling. But now it's just geo-arbitrage and, as some have mentioned, not the top quality talent pursuit that used to be our hallmark. Make it cheap, do just enough to barely keep the customers from fleeing, and dammit MAKE THAT $20 EPS NUMBER IN 2015.

    IBM has too much clout and too many government contracts to crater completely... but the crisis is coming and it's not going to be pretty. Ginny and her clique are going to oversee the hollowing out of IBM, and that's not good for anyone, even them. They'll get rich and move on like Palmisano did, but their legacy will be the destruction of IBM.

    • At one time, Fred Brooks was able to write the dedication in the front of his book, "To Thomas Watson Jr, whose deep concern for people still permeates his company." Those days are over.

      At one time, IBM had their priorities straight. That's why they lasted so long. Their priorities were:
      1) To their customers.
      2) To their employees.
      3) To their shareholders.

      They've gotten away from that, and if they don't remember soon, they will be gone.
    • Another former IBMer here, also with a 5-digit Slashdot ID. But I left years and years ago when I saw where things were headed.

      Way back in the day, IBM was a technology company first. TJ Watson drove the company and took massive chances on things like the 360. IBM regularly bet the company on new ideas and regularly took chances with big projects and big ideas.

      These days IBM management really has no clue where they're driving the company nor about technology. We used to have a black joke that IBM management

  • Have never worked for IBM but I have worked with IBMers on various projects mostly at Sterling Forest.

    Best wishes to all of them.

  • Since they are essentially a "New York Company" they tended to get a lot of state contracts. Because of this, it would be a big mistake for IBM to lay off too many employees within the state. Right now there are IBM consultants working in many state agencies, babysitting mainframes. Consultants are pretty much free money for IBM; if there were suddenly a huge pool of IBM trained individuals entering the local job market, it'd be easy to replace the expensive consultants with cheaper ex-IBM employees (via

  • IBM has decided the only way it can make money is to buy and sell other people's companies. Keep the ones it likes, rebrand them and send most of the workforce overseas. For the ones it doesn't like sell them to foreign companies. Forget making 'things', even forget services. Just buy newer companies, typically software and smaller niche industry companies that combine specialized hardware and a narrow service focus for a specific task. Slap a Websphere or IBM Security or Tivoli name on it, push it out into

  • Earlier this year, slashdot featured an article [slashdot.org] about how IBM is dumping "a billion dollars and thousands of researchers" into a new Watson group based out of New York City.

    Now, less than two months later, they're axing half of their New York work force? And their explanation is that they're shuffling their investments into new areas of technology, such as cognitive computing? Isn't that what Watson is?

    ... What?

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