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IBM Europe Workers Strike
csimoes writes "IBM employees in Europe are on
strike today. This is in response to the 10,000-13,000 job cuts that IBM is planning, most of them in Europe. Strikers will be wearing black and blue to signify their struggle. Here is their main union web site. Now I can't say I'm big union guy, but they do make some interesting points on their site. Such as: "IBM is a wealthy and successful company. Its first quarter profit for 2005 was $1.4 billion, and $9 billion for the whole of 2004. It increased the dividend to its shareholders, recently bought back $5 billion in IBM stock, and acquired 19 companies in 2004." The union also questions if other cost cutting mechanisms could achieve the same effect without cutting so may jobs."
The limbs on a tree can always come up with a reason why they shouldn't be pruned.
If IBM thinks they don't need these workers, they should be able to eliminate them. If IBM is wrong then the company will suffer and the worker will find a better job. If IBM is right they will benefit and the worker will need to get their sorry ass in gear or work at a crappier job.
After being through a half-dozen jobs in my life I realized that a capable person losing a job is an opportunity, not a tragedy.
I bet there are a couple of executives being laid off. Your opinion might change if you ever work 20 years at a company and actually become an executive.
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Laying off 10~13K employee's will no doubt save a lot as well.
The employee's at my company cost roughly 1.3 times their salary. So if I have a support person that makes 36K a year they cost my company around 46K a year with benefits (we pay 100% at my company so there is no matching) and govt program matching, unemployment, workers comp,
Lets say these are the averages:
10K people, 30K salary, 36K salary with benefits
How much does IBM save? 360 Million a year.
That is a very low estimate not including any workspace costs, energy consumption, vacation, bonuses,
Start your own business then you'll see where most of your expenses are, in your employees. So make damn sure you need someone before you hire them.
Why would a company want to keep 10~13K employees that are obviously not necessary in the daily business? Simply because they are making a profit?
Because their corporate charter is a social contract, issued in the expectation of receiving some societal benefit, like employment for citizens.
I'm not a fan of layoffs either but a company is there to make money, nothing else.
Not in Europe. They actually retained some ideals from the Enlightenment, beyond their immediate usefulness in fomenting rebellion. You know, things like human rights come before other considerations, like profits.
Seems like every time I'm in Europe there is a major strike happening.
Their workers are not as cowed as ours.
Edith Keeler Must Die
I'm not sure this would be considered "sad" by either IBM stockholders or Indians.
Do you expect them to pay more for the same work just to get people with the "right" nationality or ethnicity?
The problem is that we still have a nostalgic view of employer loyalty to its employees. The way it's supposed to work is that you "do your time" and in X amount of years, you retire with a golden watch and pension.
Of course, in the 21st century, this is a myth. That's why I'm a proponent of Stephen Pollan's methodology in Die Broke -- be ruthless and mercenary about your approach to employment. He calls this the "Mercantile Ethic". Always be looking for your next job, and always take the job that's in your best financial interests, not because it's a better fit for your interests. While you should work hard, you shouldn't buy into the "holistic" view of work. Your work is not your life, no matter how much you love it or how many hours you put in. Work is work. It's an income generating stream, period. Don't get caught up in company politics because in the end, you'll be standing in the unemployment line right alongside the kissup and the quiet hardworker. You're a bean. He uses professional athletes as examples we should follow when pursuing jobs in this new reality.
Lots of other good advice there too, much of it traditional (e.g. live beneath your means, kill your consumer credit, etc) and some definitely non traditional (e.g. lease your car rather than buy and never retire).
No, it is the other way. The wages are the same or higher in Europe, but there are fewer hidden taxes.
The US hides it taxes by keeping a very low income tax, but having the worlds highest corporate tax.
Any tech worker, employed or not, should care when 13,000 tech workers get laid off. No, I'm not talking about moral sympathy, I'm talking plain old self-interest.
Because 13,000 more unemployed will be 13,000 more competing for what open jobs there are. Knowing that there are 13,000 more desperate workers, companies will adjust the salaries they offer at whatever openings there are.
Furthermore, the same amount of work, or more, is going to be done at IBM Europe (unless they are closing a division, which I'm not aware of in this case). That means the standard job at IBM will either be that more intense or require more of that wonderful unpaid overtime. That also changes the job market, as other companies will begin to expect that same work load out of you.
Even if you work over here, as I do, better believe that conditions in other countries effect the job market here. Can you say India?
It's the prisoner's dilema. Remember your game theory? You succeed together, or you both fail. That's what the job market does when it's moved by the invisible hand job. Said invisible hand job being the result of decisions like these by IBM management.
. This sig unintentionally left blank. I meant to put something here, but I'm busy.
Actually unions are important, otherwise we will run again into manchester capitalism at its worst, but the main problem is that unions used to be effective, but are not anymore because they only act on a local scale, they need to act globally nowadays, companies do, unions do not. A local strike only causes a laughter, a global strike really could hurt.
By comparison Google had a gross profit of 1.73B last quarter, with a couple thousand employees.
While IBM is doing fine, it's NOT very efficient these days.
The Raven
Because their corporate charter is a social contract, issued in the expectation of receiving some societal benefit, like employment for citizens.
Is IBM laying off everybody in Europe?
Not in Europe. They actually retained some ideals from the Enlightenment, beyond their immediate usefulness in fomenting rebellion. You know, things like human rights come before other considerations, like profits.
If a lifelong job with IBM is now a human right then where do I sign up? I'm not much for big companies but you can't beat the job security of an ethically mandated JOB FOR LIFE.
I'm one of those torn citizens of the UK wedged between crazy euro farm subsidies and the US capitalist pigs ;) I like to think a balanced a approach is possible.
I don't think it is a good idea to subsidise a loss making aspect of a country or a company indefinately but obviously the pros and cons should be weighed up and people should be offered alternative roles and retrained where at all feasible.
If for economic reasons IBM is outsourcing jobs to india they should look at what the european work force can offer that india cannot and consider retraining where possible as this will be cheaper than re-recruiting over the next few years. Also in some european countries legal action could be taken if IBM finds themselves trying re-recruit for the same jobs at lower salary levels.
Ultimately if these people don't have suitable skills for the region in which they work then they should retrain. If they stay at IBM and IBM doesn't offer retraining then they get fired in 5 years time they will be in an even worse situation as IBM will have sheltered them from the realities of the job market.
Although it seems incredibly harsh there may be some morale arguments in favour of a large cut if they fear the alternative is gradual cuts over several years. No one works well when they think their job is on the line every month.
I often wonder in these massive union/company disputes - does the company ever approach the unions *first* to discuss these kind of issues?
In the spirit of comparing european salaries to US, one must consider the current strength of the euro in relation to the dollar. European jobs are more advantageous to cut for an american firm simply by virtue of the exchange rate.
Their union should invest their pension plan in mutual funds that own IBM stock. Then they'd be owners, and the company might listen to them. Especially if firing them meant they might dump all their shares, sending IBM's price down. That would, of course, hurt the union, but the union would be diversified through the different funds, multiplying their power by joining with all the other owners, too. Labor strike brinksmanship would change to equity strike brinksmanship. And actually be based in laws and economics the corporation can't really ignore.
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make install -not war
You can't really talk about "taxes in Europe". That doesn't make sense because taxes is out of the EU's jurisdiction, and there's MASSIVE discrepancies between the countries within the EU, never mind outside it.
Having said that taxes ARE huge in France, Germany, Italy... So , yeah, okay "in Europe".
However, what you're talking about is not hidden. It's all there on your payslip - more on that later...
If you're looking for hidden taxes, look at the health system in the US. Before somebody chimes in about welfare state this, communist that, I'm not arguing here that one system is better than the other. The life expectancy is pretty much the same on either side of the Atlantic, and up north in Canada and that's that. However, in Europe, nobody needs to sue to have somebody pay their medical bill, no money is wasted on lawyers, or medical personnel making you sign a contract before treatment... or consultation! That's what I mean by hidden taxes.
Now, the real problem in "Europe" is the monstrous bureaucracy. Here in Ireland my payslip is 8 lines - I got one today. That includes pension, health care, welfare, income tax, everything. In France it would take a fucking A4. Money goes all over the place to various agencies doing god knows what. Of course this means that people have to manage that stuff: write the law, write software to help do it, type the forms, look for fraud, the list goes on. In the end that's a whole lot of money spent for absolutely *no* work being done. That's what's hidden. And that's the real brake.
If you tell somebody who wants to start a business he has to pay even 80% tax on the payroll, that's huge, but if it's just one 80%, always, one check to one agency, and you get value for money, it might hurt the free market in you and me, but that would be okay. If it's 100 laws, statutes, whatever, to digest, 10 checks to write and then you're fined because you forgot an obscure one, even if the average is 30 to 40%, people won't even try. There's an article in The Economist this week (p 30, dead tree), that says it costs $306 to setup a business in France. Not expensive, now, is it? Pocket money! The catch is it also take 8 (eight!) days! For fuck's sake, what untold amount of paperwork do you have to fill in? Who with? And trust me, it gets much worse after you start growing. Companies are actually refusing business because of the unknowns of getting bigger!
That's the real drag on this Europe you're talking about.
I'm not. The writing's on the wall. If you have to fire one employee, given a choice of one who will only work 35 hours a week and 10 or 11 months a year and has a union that demands raises annually regardless of individual performance, versus someone who'll work 45-50+ hours a week without being asked, 50 weeks a year, and only expects a performance based bonus if anything...it's hardly even a choice. An executive wouldn't be doing due diligence to the shareholders to hang on to the former employee at the expense of the latter one.
The Europeans have priced themselves into obsolescence as workers.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
First off, Europe is not one country with identical rules. I live and work in Sweden and we have 40 hour weeks. There are weeks when I work more than that, and not many that I work less. OTOH I get paid for the overtime I put in. That seems somewhat optional in the US (re articles about working at EA studios).
In addition to my long vacation each year, when I get childen I have the opportunity to take time off work to spend time with them during their first years.
Besides it would be interesting to see some research regarding if more than 40 hours work week 50 weeks a year actually produces more in the long run. I do kind of doubt it.
Life is short and it shouldn't be wasted on holiday. It should be spent with family first and at work on something meaningful second.
God forbid that you should spend you holiday or extra time off with your family.
Currently economics is limited since it only place value on the bottom line. There is no concept of getting more work out of your employees since they are not over-worked and content with their life. I'm sure the rest of the world will catch up to European life-standards sooner or later.
The US is full of hidden local & state taxes that can really addd up, that of course never get counted because they're not universal nation wide. Do any sort of transaction in the US & it always worked out higher than the agreed price because all of a sudden these state 'n county fees, surcharges & taxes pop up from nowhere. Even things like a county road surcharge & a state emissions surcharged added to cab fares in some places. Then there's the local land taxes to fund local public schools (that can vary by a huge degree between even 2 neihbouring satalite towns with similar socio-economic mixes), where as in the rest of the world public schools are mostly simply funded directly from consilidated revenue of the national treasury.
Ontop of which employers in the US have to pay for the employees healthcare insurance, in a country with the highest health costs in the world, both per capita & as a percentage of GDP, both by a significant margin than anywhere else too. Where as in much of Europe employees healthcare is covered again by consilidated revenue of the national treasury.