Welcome to Watching IBM
In the Belly of the IBM Beast
By an anonymous IBM employee
IBM just released its 2Q 2016 results, and I waited with bated breath to see if the truth would come out this time. I’m used to waiting with bated breath. All of us IBMers do it regularly, as we await the next resource action (round of firings) by the company. As they do regularly with press releases (which have misled investors and the media about things like self-driving cars and other false accomplishments), they again managed to obfuscate the truth. Most of the analysts simply regurgitated that IBM had beat the analysts’ very weak forecasts, with the same drumbeat optimism that the ‘transformation is finally working’ and the ‘ship is turning around’ that we have been hearing for going on five years now. A few managed to look behind the curtain of Ginny and Martin and see the truth (see http://seekingalpha.com/article/3989639-ibms-transition-much-written-many-instruct and https://www.thestreet.com/story/13644848/1/ibm-got-a-little-bit-worse-bernstein-analyst-sacconaghitells-cnbc.html). Reading those, the house of cards that is built on IBM’s financial engineering strategy will ultimately come crashing down-probably by the end of the year, or when the 2016 yearly results are disclosed, since the targets are essentially impossible to meet, and IBM can’t afford to prop up the dividend much longer while it hemorrhages cash and increases debt during a five-year revenue slide.
It makes me a little angry to see them getting away with the deception, and I feel bad about the poor people that are buying this and investing their hard-earned money in a stock that will certainly tank sooner rather than later. It’s never good to invest in a company solely based on the numbers. It’s important to try to find out what’s going on inside, what the strategy is, and other non-numeric factors. A few months back, someone wrote a great Open Letter to IBM’s Board of Directors, which reflected the thoughts of many IBMers. I’m a long-time IBMer too. Until recently, I had always attached ‘proud’ to that statement. I’m sure it fell on deaf ears though, as we live in a time when excessive greed and anti-heroes are put on a pedestal in movies, TV shows, games, and publications. Think Walter White, Donald Trump, Tony Soprano, Wolf of Wall Street, Big Short. The executive leadership of IBM and the Board of Directors are all busy rewarding themselves with massive bonuses, looting the coffers as the ship sinks, and they probably think they are awesome for getting away with it. Let those little people eat cake.
For the average employee, who cannot schedule a family vacation because of fears that they might be caught up in the next round of firings, who is worried about fulfilling that promise to their children about helping them with college, weddings, life, the actions of the leadership are disgusting and demoralizing. Ms. Rometty doesn’t have the courage to appear for the earnings reports, and flaunts that she is building a chalet in France and that a neighbor in her swanky neighborhood can drop a quarter million dollars on IBM stock on a whim. She doesn’t have the courage or care to address the employees that she is systematically dismantling for her own profit. The leadership and board all know well what they are doing.
The average person, even those that are not employees, should care about the actions that are being taken. The barely functional, poorly educated and trained workers that are being brought in-country on H1B visas and are doing work from underdeveloped countries are working on the systems and have views to the data that contain your financial, health care, and other sensitive transactions. That includes developers, call center workers, support staff, and others that can view logs full of sensitive data, write code that could be malicious, and other problematic things. These are the people that are replacing long-time dedicated, knowledgeable, experienced IBM workers who know their customers and their customers’ businesses well. This is all being done for greed and profit, and not only by IBM but IBM seems to be the leader in these shady activities. IBM lies about job openings that either are not real, or are flagged as for “global resources” (from underdeveloped countries) only. They lie to congress about the lack of employee’s skills and the lack of qualified graduates, insulting their employees and all of our children just to get more visas and more profit into their pockets. The people I see getting fired are sharp and have maintained their skills in all of the latest technology. All are eager to take any kind of retraining if it were offered, and this would certainly be less expensive than firing them, but this isn’t about skills. It’s about replacing dedicated employees who are about to become retirement eligible, or who have earned their way to good salaries through hard work and dedication, with barely functional, barely trained workers that will be paid a fraction of the price. And those actions do come with a price, as you can imagine the impact on quality and morale.
To get back the point of this piece, I wanted to provide those “numbers people,” particularly the IBM fan-boys on the financial sites, a view to what is going on inside the company. Morale is, of course extremely bad. I am in a position that has visibility into a number of areas in IBM, and due to my long tenure I have many friends (fewer than I used to, of course) in various areas of IBM. Whereas we all used to speak privately about our displeasure about the company’s direction, they all now speak openly and in a hostile fashion in meetings. Due to reductions in staff, and needing to interact with “new” incompetent workers that were described earlier, product quality has suffered greatly. Essentially, the people who are coding, testing, architecting, working on strategic customer projects no longer care and are just riding out their time waiting to get a layoff package or interviewing with competitors. They are tired of trying to sell or demonstrate bug-riddled products, and increasingly having their compensation tied to being able to do so, an impossible task. IBM has nothing new. It is cramming old products and acquisitions shoe-horned into what are being called new products. Things are being done in a very shoddy manner, with quality control and testing being left up to the customers. It is sloppily painting over top of wallpaper, rather than doing the job properly. The mantra within the company, internally, is that it “should” work and customers are getting fed up with having to expend so much time managing support tickets. There are increasing production outages in big-name customers, and the highly-touted Bluemix cloud environment is down very often. IBM is over exaggerating the capabilities of “strategic” technologies like Watson. There is no longer any will, money, or brain power to create great new products. The fact that they got the vast majority of the media and public to believe they had developed a self-driving car was humorous and depressing. Watson simply provides a Siri-like interface to the driver, and IBM reportedly bought its way into being a part of this, so that they could issue the misleading hype, similar to how they had to pay Global Foundries to take its failed chip manufacturing business off its hands.
There have been very damaging defections at all levels, to major competitors. Technical talent within IBM are sick of being forced to do sales and marketing tasks all day – blogging and tweeting when they would prefer to be heads-down engineering great products. They are sick of the stress on their families and their selves of waiting to see if they are on the next list of firings. The IBMers that are leaving either through RA/firing or their own volition are going out with a major anti-IBM chip on their shoulder and showing up to crater big deals, even at some of IBM’s most loyal customers. They are showing up with the competition and exposing all of the many, many warts in IBM’s products and strategy. The vast majority of very smart, talented, motivated, IBM-loving people I have worked with are now gone, and I’m not going to be around long either. Like most employees, I am biding my time, going through the motions, hoping to get a package on the way out (an insulting package anyway, these days) and hoping to see the company crash and burn for its sins.
To add insult to injury, IBM recently re-organized (yet again) to be aligned around industries, rather than geographic regions. This has stressed and angered employees even more, as they are now subject to much more travel, rather than being home in their own regions with their families. This travel cost will of course be passed on to customers, and work will be done by even more exhausted employees. The employees are being pulled away from customers they know well and have been embedded with for a long time, with strong knowledge of their customers’ business and strategy, and being plunked down into industry areas that they have no knowledge and experience in. This is yet another example of the panicked thrashing that is going on within IBM daily. Employees are angry and openly challenging their management about these destructive decisions in every meeting these days. There are frequent no-shows in meetings, probably due to people being out looking for jobs or simply not caring. Once thriving technology centers, full of engaged and collaborative employees, are now boarded up ghost towns with empty parking lots.
This is today’s IBM, caveat emptor.
That’s my only real motivation is …the fear of losing my job. But you know, Bob, that will only make someone work just hard enough not to get fired. … Good luck with your layoffs, all right? I hope your firings go really well.
—Peter Gibbons, Office Space
Outsourced, Lied to and Betrayed
My experience working with IBM by an anonymous employee.
Like many other GTS employees, I became an employee when my company decided to outsource IT to IBM. At the time it was sold to us as a great chance to work for IBM, a prestigious American company with a long history of innovation.
One year later the reality is that any job that can be shipped to India, will be. Also, that layoffs would continue until the remaining employees are pushed to their absolute limit. A dammed if you do (get fired) or don’t (get fired) situation.
Promised to us by IBM before and during the transition was that our time with the former company would be carrying over and this applied to severance packages if we were laid off. IBM is now giving employees 1 month severance regardless of their many years of service.
The layoffs: my line manager sits down with the many people being laid off but one stands out to me. One of the employees being laid off sits there anxiously while the line manager reads from his HR approved or written script. The moment feels so very surreal as she has worked hard like many others. The line manager reads the script as coldly as he can he can muster since in the past they have been co-workers and friendly. He gets to the part about the severance, which she is expecting several months of severance pay and the line manager explains to her that despite promises made to her she would only get a 1-month severance. Running through her head is probably family, bills, her health, and many more personal thoughts as she starts to weep. Her years of service meant nothing to IBM and the company that sold her off/out.
In other cases, employees were sent to India to help train new helpdesk or network engineers. I am sure many of the employees that went to India to help train the staff in India thought they would be spared from layoffs for their service and willingness to go above and beyond. So much for above and beyond, they were all fired as well. I find this to be so very cold blooded. If IBM knows they would fire these employees anyway then why inconvenience them by making them go half way around the world separating them from their families for weeks? IBM is calculated and cold-blooded.
Is your company selling IT to IBM? I have advice for you – RUN. They will fire you when they get what they need from you and if they don’t fire you, your workload will be tripled in most cases. You will not receive fair raises and the occasional couple of hundred-dollar bonus will just be to somehow justify Ginny and other executive’s ridiculous multi-million dollar bonus while company continues on its downward spiral.
Are you considering outsourcing your IT to IBM? I urge you reconsider. The service provided is poor at best. The helpdesk is very difficult to understand and most cases just not knowledgeable on your company. The support provided is minimal, slow and many levels below the support previously provided locally. Buckle down, sit with IT management. You will need to increase productivity from them and reduce waste where you can. Automate some services where possible and streamline what you can because IBM support is in most cases a serious downgrade.
IBM will entrench themselves in your company making it very painful for you to leave them so even at the end of the contract you will feel pain when you leave. You will most likely be using their servers, VPN, mobile phone management, helpdesk, employees, and cloud storage. Leaving will be almost as painful as the 5-10years spent with IBM.
Our users are the ones who are suffering. Longer wait times, a helpdesk they can’t understand and that doesn’t understand them, much fewer local technicians to help them, massive downtimes and slow turnarounds. The users complain non-stop about the support but they and you will be powerless to improve it once it is outsourced.
Initial survey results of March 2nd RA
For a better view use zoom.
Respondent’s answers to where jobs are being offshored to:
Brazil, India, Costa Rica, Malaysia, Ireland,Czech Republic, Poland, China, Hungary and Romania.
It’s a Disgrace
By Lee Conrad
March 2nd, 2016 started for many IBM workers like any other work day, except there was more than the usual tension and misgivings in the air. Some had heard the drumbeat that bad news was on the way. Rumors of job cuts after another bad quarter had made its way into the offices, to the work from home people and out in the field at a customer site. The cut in severance pay to only 1 month was certainly a bad sign. Workers who had witnessed many years of relentless job cuts hoped the axe wouldn’t swing their way. But it did.
It didn’t take long for the reports to start coming into the Watching IBM facebook page, formally the Alliance@IBM site. And let’s be clear, if IBM employees hadn’t posted job cut information at Watching IBM the news of this mass firing would have gone mainly unnoticed. After Watching IBM alerted the media of a job cut at IBM they came in droves to see what was going on and to report what they saw. It took IBM a long time to admit that yes, a job cut was taking place, but in its usual practice it was a sterile response devoid of any compassion for the thousands losing their jobs.
There was no compassion or apology from CEO Rometty or the Board of directors for these workers who said:
“ I got the RA notice on Wednesday. I’ve worked for the company for 18 years and always received 1 and 2+ on performance reviews. The same week I got the RA notice I got a Manager’s Choice Award and ACE recognition for two separate projects.
Our entire remaining US team, including our manager, are RA’d and our six jobs are being moved to Costa Rica. Lucky me, as team lead, I am now tasked with hiring and training the new team members.
One month severance pay versus the six months that I would have received in any prior RA. This is the “reward” IBM gives those of us who have had the best performance reviews and avoided prior cuts and took on all the extra work as a result of prior massive RAs.”
“I am an SO casualty, after 17 years of service, & a 2+ review, my mgr told me that my job function will no longer be performed by a US resource. And I am to stay professional, continue working my projects and smoothly transition them to the next GR PM… I also happen to be retirement eligible but not actually ready… I am sure that though we get our minimalist 1 month severance, Ginny will still get her big bonus!”
“14 yr employee with IBM in the U.S., 4 yrs with Development with what is now Cloud Managed Services (CMS) Cloud. I was sent an email earlier today by my manager, followed by a phone call. She said effective today I was RA’d due to continued poor performance of the entire Cloud organization, specifically the CMS unit. I was to be allowed 90 days as a remediation period, followed by a 30 day severance.”
“The layoffs are hitting GTS sales teams. I will hit my 19th anniversary with IBM on what is scheduled as my last day of employment, June 2, 2016. I am totally disgusted by the severance change that takes what should be 26 weeks at my 36 mo. average earnings (which means commissions are included) down to 4 weeks of my reference salary (no commissions included). And they expect me to stick around and work for 90 days to get such a pathetic “parting gift”. I have spent my entire career at IBM (I was hired straight out of college) and this is what I get for almost 2 decades of loyalty. I am still sick to my stomach at the lack of decency that this company has.”
Hundreds of similar comments were posted. Many older employees seemed to have been singled out for termination sparking a warranted concern that IBM was still practicing what many believe is age discrimination in job cuts. Numerous comments were written about losing a job and work offshored or H1b visa workers stayed. Others took the cut in severance pay to task and many expressed outrage at the bonus CEO Rometty received, the cashing in of stock options by executives and the “rewarding” of the Board of Directors for keeping a blind eye to the destruction of employee jobs and the company.
Even retirees jumped in and said it was a disgrace what was happening at IBM. But IBM wrote off retirees long ago. No raise in the pension for 15+ years and if they can get away with it IBM execs will figure out a way to get retiree pensions off the books too.
To IBM employees, retirees and ex-employees the continued destruction of the IBM US workforce, while the CEO and her blind followers in the Board of Directors enrich themselves is a disgrace.
To IBM’s morally bankrupt executives it is simply just another day at the office.
Sunrise or Sunset at IBM?
By Lee Conrad
IBM has gone through many changes over the past decades. People who worked for IBM before the 1990’s would not recognize it today. Gone are the family and worker friendly perks and practices. Benefit cuts, pay cuts, and job cuts are the norm and have increased the view that IBM as a great employer has diminished substantially.
As of July 1st, 2015, the number of US IBM employees is 71,000. In the mid 1980’s it was 230,000. Certainly companies can not remain static. IBM has reinvented itself many times and continues to do so, but the changes at IBM for workers, retirees and their communities have been devastating.
For many years IBM has been run by executives whose sole goal has been to increase the stock price at the expense of all else. They failed to realize or simply did not care that IBM is not just a logo or a building, it is also the workers. It is and was their sweat and toil that made it successful. So the question is, will IBM executives once again respect and value its greatest resource, the employees? Or will it continue chasing earnings per share and jeopardize the legacy of a once great company? Time will tell, and this website will attempt to keep a watchful eye on IBM and its treatment of IBM workers and retirees as it reinvents itself once again.