As IBM weathers the storm, will U.S. employees be left out in the cold?

Updated March 16, 2009

As IBM weathers the storm, will U.S. employees be left out in the cold?

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By Lee Conrad, Alliance@IBM

Editor’s note: Lee Conrad is national coordinator for Alliance@IBM CWA Local 1701, which is seeking to represent IBM workers. The Alliance does have some members and a local leader in the Research Triangle area, where IBM has some 11,000 employees.

In a letter to investors regarding the worldwide economic crisis, IBM CEO Sam Palmisano said that the global economy is going through a profound disruption, but IBM “will not simply ride out the storm. We will take a long-term view and go on the offensive.”

In the midst of the economic crisis IBM achieved record revenue, record pre-tax earnings, record earnings per share and record free cash flow.

To top this off, as the U.S. faces high unemployment, disruption of workers lives and a downward spiral of wages and benefits, CEO Palmisano was rewarded with compensation of more than $20 million

Palmisano also stated that IBM will continue to invest in its people.

This was being said just weeks after firing almost 5,000 U.S. and Canada IBM employees.

This was being said as IBM executives plan and execute the shifting of work from the U.S. to offshore locations.

This was being said as manufacturing workers in Burlington, Vt., and East Fishkill, N.Y., look at paychecks that are short 15 percent due to pay cuts.

This was being said as older employees and those who have illnesses find themselves targeted for job cuts.

So what are IBM employees, indeed the country, to make of CEO Palmisano’s grand scheme of a new era for IBM?

What is the reality for IBM U.S. employees in the Globally Integrated Enterprise?

Here are some of the IBM employees' words:

[“March 31st ends Internal Account work for some GBS employees. But there is utter silence regarding what happens to them afterward. Bench time and/or Resource Action is still unclear. March 31st is also end of 1Q09. Thoughts are that it's all tied together to try to give a 1Q09 earnings that won't reverse the '09 Outlook by implementing a culling of the Human Capital. This Satyam news, however, might shift the 100% GR resourcing of Internal Accounts to happen sooner than later. First thought was 1Q10 would finish up the Internal Accounts. Now I am not so sure. Replacements are from Brazil, none appear offered to US citizens (new or otherwise). I think Big Blue miscalculated the strength, or rather lack of strength, of the US economy. February job losses were staggering for a month of 28 days. I anticipate the loss of my job within 3 to 6 months since I'm training someone. If you haven't heard much chatter it is because the next 'action' will be on 03/31 when some internal account workers are benched. How long between a bench and a resource action is unknown but as some have mentioned it is expensive to have people on the bench. As was also stated by a poster...the silence is deafening. The lack of clarity (and information) is the polar opposite of those highly touted IBM values.” -Internal Accounts are Dead-]

[ “I was on med leave last year. On the day I was released to come back to work, IBM told me to turn in my stuff that afternoon. They counted my sick leave time as adequate to find another job within IBM...like that was going to happen....I'm still recovering and hope to get back in to the job market shortly.”]

[ “I returned to work today from 10 weeks medical leave. My manager had scheduled a meeting with me today so I drove in even though we had a foot of snow today... Wanted to make a good impression on my first day back..... Well my manager didn't show up but did call me on the phone to tell me that I had been RA'd back in January... I was a manager with several 2+ ratings. I was informed that I was put into another job code while on medical leave and that this job had been eliminated. I have 30 days to find a job and please make sure I'm back in the office tomorrow so I can get my formal RA package... I asked about a bridge to retirement and was told I was 12 weeks short of being able to bridge so I lose my Health account money and my retirement benefits. I was sent the flyer to apply for "project match" as my manager thinks it could be my best option right now... wonderful company... Does anyone know what the impact is to someone on the old defined benefit retirement plan if they are RA'd at 28.8 years instead of making it to 30 years??” -in shock-]

[“In SEA&T (Application Services under GBS), we are starting to train our replacements on IGA contracts both in Test and Systems Engineering. Brazil and India are primary destinations for our replacement. Some of the people we work with have no idea of basic concepts since they have learned everything in schools or fly by tech schools - these people have no real project experience. There is no cost savings here Sam - get out there and walk the floor. We keep hearing rumors of a big RA coming in a few months. I had my meeting to discuss the GDP and got nothing even though I had a 2+ rating. Now I am told there is a freeze on all discretionary spending.” –Concerned About RA-]

[ “And it continues. Coworker in my department is now training his Polish replacement. The rest of our staff is anticipating our jobs going to China or Poland before end of the year. Our program manager won't share anything with us. He's keeping us in the dark. At least have some decency for your fellow human beings!” -anonymous-]

[“Of the approximate US S&D RA total of 1,435 let go about 1,149 were over 40 (80%).” -Deep Blue-]

[So I was RA'ed, and my last day is 02/23. My work is going (has gone actually) to India. I was also just informed my account was selected for an audit, which is supposed to begin on 02/16 and last into March sometime. My manager informed me to get the documentation in order, etc, etc. I replied back "this is India's responsibility now, they signed off on the transfer of duty as being completed last week. Not to mention I will only be employed 1 week after the audit starts. Please consider this email my notification of being unavailable to participate in the audit. Please contact the India support team for further assistance." We'll see how far that goes, but what are they going to do me? Take away my crappy severance? Let them have it. -stickin_it_to_IBM-]

This is the reality inside IBM. Morale has hit rock bottom. No one is sure how long their jobs will last.

What of the impact of job cuts and offshoring to the United States?

Obviously, more IT workers will be scrambling for fewer and fewer jobs or they will join others in the unemployment line.

When manufacturing moved offshore, workers were told to retrain in the high-tech field. They did. Now they see those jobs being offshored at an alarming rate.

And it isn’t just IBM internal US jobs being offshored. Take, for example, the Advanced Auto Parts call center in Roanoke, Va.

Advanced Auto Parts outsourced to IBM. IBM then offshored the work to India. Ninety workers in Virginia lost their jobs.

How many other examples are there?

We don’t know because like the “resource actions” of 2008 and 2009, IBM “the information company” isn’t talking or giving out any details.

No one is holding the company accountable and no one is demanding this be reported except for Alliance@IBM CWA Local 1701.

Meanwhile, IBM is already looking for stimulus money. IBM has become good at grabbing taxpayer money. They have managed to grab millions in various states while promising job creation that never quite meets the mark.

Where is the outrage? Where is the political will to penalize companies and their CEOs that are destroying the American fabric and the lives of countless working families?

Rob a convenience store, you go directly to jail. Rob a state or a country, you get a bonus.

The IBM future that CEO Palmisano envisions certainly has some positive points. No one can argue that the US IT infrastructure needs an overhaul and that projects to take us through the 21st century are worthwhile.

But as advocates for IBM employees and working families, we will ask the tough questions and demand clear answers.

A future for IBM U.S. employees must include: employment; job security; decent wages and benefits; collective bargaining and union representation in the workplace; and an end to the shifting of U.S. work offshore.

The successful future of IBM must include an American IBM work force that is valued for its experience, loyalty and expertise.

Anything less diminishes IBM.

Tags: China, India, Layoffs, IBM, Brazil, Canada

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