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Some workers claim IBM is making layoffs in small numbers to avoid notification laws

New layoffs are announced each week as the global economy worsens and companies are cutting back to ensure that they can remain viable. The layoffs and job cuts are becoming common even at some of the largest and most well known companies in the technology industry.

EWeek reports that IBM is being scrutinized for its layoff practices in America. The reason for the scrutiny is that IBM has been making layoffs a little at a time rather than announcing one big layoff. A possible reason for IBM to be making its cuts in small numbers is to avoid laws that require warning of pending layoffs.

A law called the WARN Act requires a large employer to give employees advanced notice of layoffs. The act requires employers to give at least 60 days notice of a site-specific plant closing or layoff of more than 500 people at a single location or for the cut of at least 1/3 of the workers at one site. Some states also have specific laws requiring layoff notification by employers.

EWeek reports that on January 20, IBM CEO Sam Palmisano said that IBM would be "investing in its people" while other companies were making job cuts. The next day IBM reportedly announced layoffs and so far estimates claim 4,600 jobs in North America have been lost. Some IBM employees are claiming that the company is using the poor global economy as a reason to cut jobs and boost the numbers for the year.

Some of the cuts that IBM is making are unannounced according to The New York Times. Part of the problem with unannounced and sudden job cuts by companies like IBM is that it gives the employees no time to find other work or prepare for the loss of their job.

Harley Shaiken from the University of California, Berkeley told The New York Times, "The twin goals are transparency and decency. The issue becomes all the more pressing in this downward economic spiral."



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By Mitch101 on 3/9/2009 1:15:12 PM , Rating: 3
How IBM Conned My Execs Out Of Millions
http://www.kuro5hin.org/story/2005/9/27/95759/4240




By ice456789 on 3/9/2009 2:18:43 PM , Rating: 5
EVERYONE should read that article. It exactly mirrors my experience with big blue, except I was the hired subcontractor. Fresh out of college with 2 degrees, I got hired by a small-midsize consulting firm. After a few weeks of training on various development platforms, I was picked to be part of a group of 5 to join a brand new eCommerce project funded by some of the biggest retailers in the world. We were hired by IBM. There were 2 actual IBM employees and the 5 of us. The two IBM employees were not technically proficient so they instructed us that our first job was to become experts at this software package and then teach it to them. We spent a week taking it apart and then another week preparing a class to teach it to the IBMers. A day before 'class' was scheduled to begin, the word came down that we would not be teaching anyone... our course was changed to develop the entire marketplace, run auctions, deal with all the buyers and members, and function as tech support. We were NOT however able to have any contact with the actual client of IBM. We were kept in a separate building and were intended to never be seen by the client. We were being billed out at $180/hour to IBM.

One day we were all at lunch discussing the project when a lady heard us talking and informed us that she was an executive with the client company. She talked with our project manager and was devestated to learn that we were not actual IBM employees. We were also being billed at a rate of between $250 and $300/hr. We were described as 'an expert team with multiple implementations under our belts'. The truth is we had 1 week with the software and taught ourselves. What happened to that class we developed to teach the software? IBM had been billing the client for developing that content for the past 3 months, and they were told it was about 60% complete.

Long story short, IBM got caught with their pants down. They were fired from the project and our team of 5 was hired. As part of the deal, we sold them the complete class content that IBM had been withholding. It turns out the two IBMers on the project were salesmen. They had put about 20 more resources onto the project in the 8 months they were on it, including my team of 5. At the time they were kicked out, they barely knew how to navigate the software much less work with the code.

IBM has one goal once they get on a project. That goal is to increase their footprint and grow every project as large as they possibly can. Their goal has nothing to do with the best interests of their clients. Surprisingly, it's a plan that has worked well for them. My company failed despite having fantastic successes, beating deadlines, and meeting proposed budgets. IBM leaves a trail of carcasses in their wake, drags out projects as long as possible, and maximizing costs.


By Chadder007 on 3/9/2009 11:04:23 PM , Rating: 2
Need a bump to a 6 in here for an Interesting read.


By teckytech9 on 3/10/2009 1:25:08 AM , Rating: 2
Thanks for the post. kinda reminds me of all the legal beagles I ran across as an engineer (no relation with IBM). I remember a 10:1 ratio at most industry meetings. All the suits charged exorbitant fees to review contracts.

Service, maintenance, head-hunter, insurance, and legal fees coupled with company employee benefits all add up. A company maximizes profits by exploiting its internal and external customers. Doesn't the contractor do the same thing?

A project that gets over budgeted and delayed is always better than one that's under budgeted and completed early. The bonus is always tempting, but by delaying the project and inflating its budget leads to greater returns.


By javiergf on 3/10/2009 1:41:26 AM , Rating: 3
that's not just IBM, that's every single consultant company I have seen in my life: schlumberger, Cap and Gemini, accenture... etc.


Mismanagement?
By ice456789 on 3/9/2009 1:38:38 PM , Rating: 1
As I'm reading this article about IBM laying off workers, I'm watching one of the pointless IBM commercials on TV. IBM would rather keep running silly commercials featuring cartoon forest animals than retain workers. I would venture to guess that not a single company exec saw those commercials and thought to themselves 'man, I should give those guys a call for this multimillion dollar project I'm working on. Those squirrels are cute'.

So to all those hard working people who were just laid off ninja style by IBM, I wonder how you feel every time you see that commercial.




RE: Mismanagement?
By FITCamaro on 3/9/2009 2:33:44 PM , Rating: 2
IBM and GE have jumped right on board with the whole global warming train of business.


RE: Mismanagement?
By ice456789 on 3/9/2009 3:39:26 PM , Rating: 3
Smart tolls. SMART TOLLS!!!


Louis Gerstner
By nbourbaki on 3/9/2009 8:10:31 PM , Rating: 2
Ever since Louis Gerstner's turn around of IBM in the 90's, the accounting department runs IBM. There have been rolling layoffs at IBM since Gerstner's reign. The layoffs are not based on merit, because the accounting department has no idea who merits dismissal. I'm sure the layoffs are accelerating under the current economic conditions, but it's been going on for decades. Are they trying to avoid a trigger of the WARN act? I'm sure.

One of IBM's core business sectors is the financial industry and with the hammering that sector is taking, I can't believe that IBM won't shrink significantly.




RE: Louis Gerstner
By TA152H on 3/10/2009 5:54:24 PM , Rating: 3
I was a developer at IBM when the cookie monster (we called him that because this twit came from Nabisco) became CEO, and the damage he has done to the company is profound, and enduring.

Before Gerstner took over, there was so much employee loyalty to the company, it allowed them to pay significantly less than the market value for employees. They lost this permanently, while the fix was temporary.

In the early 90s, they were caught unaware by the growth of the PC (shocking, isn't it?), and were still a mainframe company that thought mainly about high margin machines like the mainframes and AS/400 minicomputers. The competition there was much less, and the computers were more proprietary, so they could sell at high margins there. They foolishly tried to get the same margins from their PCs, and this caused them to lose market share every year, despite having the best microcomputers ever made (the quality of the PS/2 line was superb, far better than the junk sold today).

Having already made the foolish mistake of using an Intel microprocessor and Microsoft (OK, there were initially two choices for the PC, but neither were from IBM) operating system, they gave away the system architecture with the bold, and stupid move of making Microchannel too expensive to license (they didn't license Microchannel, but the technology to develop it added 5%), and didn't even give any help to a company that licensed it in developing the product.

So, they went to EISA (which sucked, bad), and then to VESA and then PCI. At that point, IBM had no control over the market, having already refused to license XGA, or make that instruction set a standard.

Instead of realizing that microcomputers would succeed, with or without their approval, they tried to make them high margin products that would not steal from their very high margin and profitable products. Clearly, it didn't work. They made the best PCs on the planet, and could have done very well in that market against cardboard box stuffers like Dell, but they never adjusted to the realities of the market.

Gerstner took over, and pretty much got destroyed most of what was IBM, instead of making precise changes. Up until he discontinued the PS/2 line, for example, they were STILL the best selling computers in the world. He killed them, and moved towards "industry standards". He was on the watch when OS/2 died. Both of these were almost forgivable, except it really wasn't IBM's way, and it made the company look weak and less reliable, since people invested a lot of money in those technologies. When he started the layoffs though, that was the one step that destroyed the company. I left when I saw people get layed off, because I could increase my salary by 60% by working elsewhere, and it was no longer a lifetime job, with job security. Many, many people did. The "one of a kind" company no longer was, and lost all the good will, and consequent lower wages they could pay because of it.

Now IBM is just another company. They went from the pinnacle of everything good in U.S. business, an innovative, technological marvel with the highest quality products on the planet, with exceptional employee moral, and exceptional reputation for doing the right thing, to a typical, row run, computer company with only a vestigal resemblance to its former greatness.

It still makes me sad to read stuff like this, because leaving IBM felt like a divorce to me. There was such a strong connection between the employees and the company, it's hard to convey since reality has changed so much. Our wife turned into a whore, and she's still doing tricks.

It's just sad.


For the people that work at IBM...
By Marlin1975 on 3/9/2009 11:32:21 AM , Rating: 2
this is common knowledge.
My SO works at IBM and hears this all the time due to the law and I think 1 state had a agreemnet with IBM to get tax credits they had to do something if the number got high. So they just cut right below that number every couple pay periods.




By FITCamaro on 3/9/2009 12:27:13 PM , Rating: 2
The company who produces the tool I work with was bought by IBM last year. We're still waiting to see if the product stays around or if it's development team is fired.


Layoff double speak
By wallijonn on 3/9/2009 1:30:43 PM , Rating: 2
quote:
IBM CEO Sam Palmisano said that IBM would be "investing in its people"


That must be the new half-truth metaphor for laying off people and doubling the responsibilities on the remaining employees. Wall Street will probably see this as a good thing and Palmisano will probably get a big fat bonus.




RE: Layoff double speak
By dsraa on 3/9/2009 3:04:08 PM , Rating: 2
Oh totally, its IBM's WHOLE buisness model. I work for them as a contractor as well, and before this whole fiasco of recession, I had 3-4 additional responsibilities added to my cue, and no raise to show for it. And every month or so, there's another cut or so somewhere, and more responsibility gets pushed over to me and my team....ridiculous! I guess this is why they name it I diots B ecome M anagers!


what about the fact that
By stilltrying on 3/9/2009 6:54:34 PM , Rating: 2
Also IBM is offering some of its employees to relocate to another country to remain an IBM employee and IBM will even pay for the move. Whats the catch? Oh yeah you must accept the local peasant rate of pay. I know that I will never buy any IBM product whether software or hardware.




RE: what about the fact that
By DM0407 on 3/9/2009 8:46:59 PM , Rating: 2
Me either, becuase they are a service driven company now. They dont sell hardware or software.


some of these things are derder
By MadMan007 on 3/9/09, Rating: 0
By MadMan007 on 3/10/2009 6:51:51 AM , Rating: 1
Hah, downrated for what? No one replied. I guess making fun of obvious statements and promoting financial responsibility isn't popular.


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