IBM cuts pay by 10% for workers picked for training (employer, work, company)
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IBM is trying to remake itself as software/services company where margins can be in the 30-40% range. Hardware is lucky if it makes 10%. They've shed the last of their x86 products this year. So the company that invented the PC no longer makes one. The z System(aka Mainframe) is still a cash cow, and the Power servers are still doing OK, but not as dominant as it use to be.
Software and consulting are under a lot of pressure here in Europe because of outsourcing and the economy, Hourly rates are dropping and salaries are stagnating. It is hard to imagine high profits there. I seems it's even worse in the US because in addition there are the Indian vendors working with H1B's.
In addition, it seems IBM really has an image problem. You simply do not read much if anything at all on tech websites about IBM. I really can't think of any IBM product except for the cell processor and the former laptops.
Lol @ IBM. It's actually still a decent company considering some of the nightmare places I've worked at since. But it's not been an employee-centric company since Lou Gerstner's time - which is sad. IBM taught me that working at giant corporations mutes your identity, and erases it completely for those whose careers become beholden to their employer. Outside of that, still one of the more professional workplaces, I have to admit. I wouldn't mind contracting with them again - FTE? No way in hell.
My husband quit IBM and moved all the way across the US to work for Microsoft. IBM was making us poor. When he started he was paying $180 a month for an HMO insurance plan. By the time we left he was paying $1200 a month for an 80/20 plan! We were drowning in medical debt. And of course, no raises! By the time he left he was making less money than he had been 10+ years prior.
What IBM fails to address in this sorry story is that for years and years IBM has scaled back on investing in training for their consultants while still charging them out as experts. They have ignored any commitments they made in the past about levels of utilisation vs skill improvement time and forced/bullied people to maximise their billable customer facing time. Then they introduced Think40 and the sigh of relief could be heard around the world as IBMers everywhere welcomed a newfound commitment from Ginnie herself that everyone could have 40 hours training a year "cost was not a problem", that's what she said. By the end of the year it had become a stick rather than a carrot (you must show and prove that you have found 40 hours training - not recognising that technical people had been pleading for training, they made it a punishment). In year 2 it isn't worth toilet paper as every bit of meaningless, cr*p, mandatory 'training' has the tag "you can count this towards your Think 40 target". You stupid male members! Training isn't something that we want to cheat on and get out of the way, it's something we want to do!
I had the depressing task of checking a recent sales pitch to a customer which said "IBM provide 20 days relevant training for their consultants every year". I nearly choked on my bagel as I haven't had any RELEVANT training for 2 years, I don't count Big Data University (university? is IBM trying to misuse every word they can find?) which provides simplistic video introductions as if they are real training.
So - to then tell people their skills are behind is pretty insulting. I haven't heard how they assessed this, how they assessed individual requirements, what training is on offer (would you fly with a pilot that had learnt to fly via e-courses? No? Well I wouldn't trust someone to install my DB2 if they had learnt that way either), or how they know that 6 months is just the right length of time needed.
It is another shameful step on the round to destruction while making sure our executives (are their IT skills upto date?) can still fly their private jets while we take coach class and sleep in bad hotels.
Every time IBM does something even more evil (yes, evil), there are a bunch of apologists saying stuff like 'they have to compete'. It is salami slicing of people because each slice doesn't seem too bad. But the business is being hollowed out from the inside. It's easy to shout "we're investing a billion in Watson or Cloud or somesuch" but the fact is the profits still come from the old products, and there is still plenty of interest in them; but recruitment blocks and lack of training mean we don't have the skills and the resources to deliver on profitable deals - they go to partners instead.
As as the workers rewards, salaries, benefits are cut to make the company profitable, do we see the senior personnel taking similar cuts? No, they refuse their bonus and then sell share options to make up the loss. While people who worked hard all year are told that because the company as a whole didn't meet some imaginary number that a bored executive pulled out of a hat then nobody gets a bonus.
If these executives are so brilliant then explain why Lenovo can make laptops at a profit and will make servers successfully (and almost certainly will squeeze the server range IBM has kept) when IBM couldn't.
the quality employees are not the ones getting the slight cut, the people getting the cut cannot pass their tests and have fallen behind on technology, that is not a quality employee.
Really? You are so naive as to just accept what IBM says at face value without questioning any of it? I'm thinking you aren't an analyst with such an accepting approach as that. Maybe if IBM said "we've decided that the skills are so poor that people should take 5 days off a week to learn everything and we'll guarantee them a job when they have achieved their MBA" you'd still say "yeah! what a great company"
If it was 30%, I'd raise an eyebrow. But 10% isn't that bad.
OMG. So many of you are entirely missing the point. This isn't a company assessing individuals and saying 'you need training'; it is a company looking for another cheap way to cut costs. IBM will not survive by cutting costs and pretending to be the best. It will have to reinvent itself as a cheap supplier (that ain't gonna happen while Ginni keeps her 10 private jets) or it will have to invest in its biggest resource - its people - so they are the best.
So IBM is expanding employment in growing product markets, and maintaining or contracting employment in mature/declining product markets.
Seems reasonable to me, but I just have an MBA and have managed large organizations for the last 25 years. Maybe things have changed since I moved into consulting 2 years ago.
I don't know why you insist on being a glass half full person. The company is trying to cut costs and everyone knows it. Overseas have emerging markets (some like China not doing well at all), but what they also have is cheaper labor. The ones I've worked with from India, on a daily basis, do not deliver on par and there's a ton of turnover. Not only that - their available hours make it tough to support clients here as well. They don't all shift their hours. One guy from Slovakia gets out at 2pm ET - and so what happens when we perform changes at 8pm ET (off-hours)? Good luck, see ya.
But the company simply does not care. They are only trying to appease their shareholders. The company has been going the wrong direction for so long now.
I don't know why you insist on being a glass half full person. The company is trying to cut costs and everyone knows it. Overseas have emerging markets (some like China not doing well at all), but what they also have is cheaper labor. The ones I've worked with from India, on a daily basis, do not deliver on par and there's a ton of turnover. Not only that - their available hours make it tough to support clients here as well. They don't all shift their hours. One guy from Slovakia gets out at 2pm ET - and so what happens when we perform changes at 8pm ET (off-hours)? Good luck, see ya.
But the company simply does not care. They are only trying to appease their shareholders. The company has been going the wrong direction for so long now.
How about considering the entire glass instead?
Just for the record, the post that is being replied to did not come from me. Definitely not me. I have a reputation to maintain and I do not one my good name slanders.
Really? You are so naive as to just accept what IBM says at face value without questioning any of it? I'm thinking you aren't an analyst with such an accepting approach as that. Maybe if IBM said "we've decided that the skills are so poor that people should take 5 days off a week to learn everything and we'll guarantee them a job when they have achieved their MBA" you'd still say "yeah! what a great company"
How do you get that IBM is hurting their employees? Are you so brainwashed that you believe that every single corporation and every single person in charge of a corporation is out to just screw with their employees?
Let's think about this mister analyst, a company cuts some of their employee's workload by 20% while only cutting their pay 10%, while they tell those people they have 5 months to be able to perform their job at a mandatory level.
Maybe I am naive, as I have never heard of a company not only keeping employees that no longer can do their job, but are only giving them a slight pay cut and time off to learn how to do their jobs.
Damn those evil bastards how dare they give their long term employees 5 months to save their job, they should just fire them and go hire a bunch of people from India that they could give 60% of what they are paying those guys that cannot even properly do their job right now. Their CEO should be tarred and feather, how dare they do that.
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Disengenuous IBM
