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."

Comments

Reduce expenses by cutting executive salaries?

[guyfromindia]

They could save a ton by doing so...

Re:Reduce expenses by cutting executive salaries?

[Dekke]

It's a sad thing these days but cutting executive salaries often hurts the company in the eyes of the economic elite. I suppose it's for two reasons:

1. Top-rank executives wouldn't want to work there because they wouldn't get treated like diamond-encrusted platinum-plated gold.
2. Investors might see it as the company dying, when worker layoffs means "streamlining" or some other mumbo-jumbo.

Even though cutting back executive salaries just a tiny bit would suddenly make up for all the workers laid off...

Re:Reduce expenses by cutting executive salaries?

[BoomerSooner]

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.

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.

Re:Reduce expenses by cutting executive salaries?

[Muhammar]

Comparison to US is misleading.

The average salaries in Europe are lower compared to US but overall cost is higher because of HUGE hidden taxes. It works like this: A company wants to give your employee a bonus, say 1000 euro, but the company will have to pay additional 800 euro to the government also. If the real taxation was included in the paystub, the average salary taxation level would be around 60-70%.

Re:Reduce expenses by cutting executive salaries?

[Carewolf]

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.

Re:Reduce expenses by cutting executive salaries?

[nate nice]

The executive produces a better golf handicap which in turn proves to other wealthy golfers that this company can be trusted as a partner on competitive gold tournaments between wealthy executives. Anyone can code. Not many people can keep their average under 80.

Re:Reduce expenses by cutting executive salaries?

[superpulpsicle]

Higher or lower depends on the hrs. Are you wealthier if you worked 20 more hours for extra $$$?

US corporations can push American salaried employees to infinite number of hours.

US corporations cannot do the same for European salaried employees. A European working in a US corporation, depending on the country, can be limited to x-number of hours a day with tea time in the afternoon.

Now, I am not saying Americans are automatically harder working, but you do the math. You can slave-drive 1 and not the other.

Re:Reduce expenses by cutting executive salaries?

[PenchantToLurk]

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.

Re:Reduce expenses by cutting executive salaries?

[prockcore]

Your opinion might change if you ever work 20 years at a company and actually become an executive.

The percent of money the average worker makes versus an executive has drastically shrunk in the last 20 years.

In 1980, the average CEO made 42 times the average salary of the regular workers at his company. In 2000, the average CEO made 419 times the average salary.

The pay gap between executive and regular workers has drastically gotten out of hand. We're at the point where nearly 40% of an entire company's payroll is going to one person.

Re:Reduce expenses by cutting executive salaries?

[marktoml]

Yes, it basically boils down to expenses (-) and revenue (+).

If you are having troubles with the (+) side of the equation then you work on the (-) side. Of the expenses there are fixed costs and variable costs. Usually the largest *controllable* fixed cost is the cost of your staff. It is more impressive to lay off the big dogs, but more of an immediate profit to lay off a lot of little ones (and investors in public companies seem to react positively to that) as you save various and sundry tax obligations as well (varies by country).

Re:Reduce expenses by cutting executive salaries?

[Lemmy Caution]

The reasons are socio-cultural, as much as economic-rational. The executive class is pretty much the same type of people who are the economic elite. E-staff sit on the boards of other companies. They remind themselves of each other. Even fund managers are just that - fund managers who percieve themselves as largely in the same class as E- and C- level management.

In a word, it's log-rolling. It's the logical consequence of shareholder capitalism, and its leading to winner-take-all screw-the-worker approach.

Re:Reduce expenses by cutting executive salaries?

[mankey wanker]

The parent makes an excellent point and should be modded up. This same point has been made ad nauseam by traditonally conservative sources like The Economist.

You have a real problem when even The Economist thinks those at the top are being too greedy - The Economist is practically the propaganda arm of capitalist elite "free trader" psychopaths.

Re:Reduce expenses by cutting executive salaries?

[NardofDoom]

So lay off 7,500 employees and three executives. With 2,500 people still getting paid, you have 2,500 people to create demand instead of three, which means an economic downturn doesn't last as long.

Economically, it makes more sense to lay off as few people as possible. However, humans rarely make logical economic decisions.

Re:Reduce expenses by cutting executive salaries?

[Anonymous Coward]

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.

Re:Reduce expenses by cutting executive salaries?

[Kadin2048]

And you're still mystified as to why IBM is cutting 10,000-plus jobs in Europe, while still actively hiring in the U.S....?

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.

Re:Reduce expenses by cutting executive salaries?

[drsmithy]

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.

A person who has worked at an executive level for even a relatively short period of time can comfortably live the rest of their life without ever have to work again (or, if they can't, they don't deserve to).

The same cannot be said for the average grunt worker.

I don't mind people being paid what they're worth, per se, but there's no way any "executive" is worth a wage 100s to 1000s times that of the people who actually keep the wheels of the machine turning. The CEO remuneration orgy is no different from politicians who vote themselves pay rises every year, and should be treated as such.

I'm not a huge fan of government intervention, but the state of executive remuneration packages, coupled with treatment of the average employee has passed into "obscene" territory.

On another note...

The employee's at my company cost roughly 1.3 times their salary.

That's actually pretty damn impressive, usually the "cost" of an employee is closer to 2 or 3x their actual wage.

Re:Reduce expenses by cutting executive salaries?

[TeraCo]

The Europeans have priced themselves into obsolescence as workers.

Or maybe the American's have priced themselves into slavery as workers. 40 hours weeks, paid over time, 4 weeks leave a year, these are all things that other countries take for granted. How much leave do you get again?

Re:Reduce expenses by cutting executive salaries?

[Carewolf]

You always include payroll tax when comparing across countries. Europeans have higher salaries put has to pay a larger portion to the government and end up with less to spend for themselves.

I didn't even include all the other hidden cost for hiring in the US. When hiring anything more than a slave a company in the US needs to pay for all the basic services the US government fails to provide, such as health care, pentions and various insurances.

Re:Reduce expenses by cutting executive salaries?

[Hast]

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.

Re:Reduce expenses by cutting executive salaries?

[kraut]

Which is the only sensible political standpoint.

Don't fuck with my money, and don't fuck with my life.

Re:Reduce expenses by cutting executive salaries?

[fbjon]

Exacly. The options are two: either burn out slowly (or quickly) or work sensible hours. I don't think it makes sense to allow any employer to slave-drive their employees, since they evidently, if allowed, will do so.

Re:Reduce expenses by cutting executive salaries?

[mankey wanker]

Uh...yeah...

Listen, I only have time to make this simple statement to you: "free trade" is a myth. Please show me one place on earth engaged in 100% unencumbered free trade. The answer is you can't. What that means is your economic ideal doesn't exist and never did.

Welcome to Reality 101.

Plcs

[Scruffeh]

That's the problem with plcs though, they always seem to need to make more and more profit. Especially in the computer industry share prices can drop so quickly with a few bad moves from the company. It's sad that people's livelihoods have to be jepordised just to constantly applease shareholders...

Re:Plcs

[uf22]

YES. I've been saying this forever. A public company can't be content with constistently doing a great job and providing a good service. They have to always be growing, growing, growing. That's why we end up with all these mega-mergers. The system is the problem if you ask me. Google will clearly be the next major victim of this vicious cycle.

Re:Europeans go on strike

[IdleTime]

Corporations don't give you vacation days in Europe, governments do. It's regulated by law. I know the word "law" is a difficult one for Americans to grasp. :-)

Who cares what IBM's profit margin is?

[BoomerSooner]

Isn't their job to be certain they can provide profit in the future for their shareholders (the owners of the company). 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?

I'm not a fan of layoffs either but a company is there to make money, nothing else. If these 10~13K people banded together and started a competing company maybe they could make IBM pay in that direction. In the end employment is voluntary. I don't hear people screaming about someone quitting IBM when they take their experiences there and help another company use that knowledge. What about all the training and investment IBM made in those people, do they think it was free?

Seems like every time I'm in Europe there is a major strike happening.

Re:Who cares what IBM's profit margin is?

[spiffy_dude]

I think this is a funny point of view considering how many Slashdotters have complained about offshoring. This is almost the same situation as a company deciding they would be better off moving their jobs to India. When they offshore YOUR job they're simply being "certain they can provide profit in the future for their shareholders". I think some sympathy is in order for these folks.

Re:Who cares what IBM's profit margin is?

[ElMiguel]

I'm not a fan of layoffs either but a company is there to make money, nothing else.

You might be surprised but many people believe that ethical behaviour should also be a priority for a company. Perhaps this opinion is more common in Europe.

Re:Who cares what IBM's profit margin is?

[kindbud]

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.

Re:Who cares what IBM's profit margin is?

[Anonymous Coward]

Speaking as a European who owns a business, exactly what compels me to employ people I have no use for, and why have I not heard about it until now?

Re:Who cares what IBM's profit margin is?

[Medgur]

Employment is NOT voluntary.

Feel free to try and attempt to choose unemployment, or to become unemployed when feeding a family and paying off a mortgage, I'm sure it'll work out well for you.

In a market where jobs are a commodity and prospective employees must compete for positions the notion of voluntary employment or unemployment is pathetically out of touch with the harsh realities of being middle or low class.

Re:Who cares what IBM's profit margin is?

[Anonymous Coward]

There's nothing unethical about laying off employees. Some high level executives should go with them too. If 13000 employees are unneeded then some high level mangagers screwed up long ago.

Re:Who cares what IBM's profit margin is?

[EnronHaliburton2004]

I don't hear people screaming about someone quitting IBM when they take their experiences there and help another company use that knowledge.

Oh bullshit. I hear plenty of people screaming and complaining. That's why many companies require you to sign a non-competition clause before you take many jobs involving the companys intellectual property.

Re:Who cares what IBM's profit margin is?

[Bamafan77]

Isn't their job to be certain they can provide profit in the future for their shareholders (the owners of the company). 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?

I'm not a fan of layoffs either but a company is there to make money, nothing else

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).

Re:Who cares what IBM's profit margin is?

[BoomerSooner]

I was laid off last year. After working for several companies I came to the conclusion that I'm better off failing by myself than working for companies that could give a shit about their clients or employees. I'm liberal on social issues and conservative on fiscal policy & economic matters (so I really hate this POS fucking administration we have now because they are shitty on both fronts). As such, before my company hires a new employee we make certain that 1) the job cannot be integrated into someone elses position, 2) that the person philisophically (sp?) matches our beliefs and 3) that no matter what the financial situation of the company that person will not need to be laid off. My companies profit sharing works different than most, since I own the company outright I don't distribute shares. We take a percentage of our semi-annual profit and distribute it according to a formula to our employees based on length of service, job position and overall attitude/work relationships. The pool for all the employees doesn't change if we hire someone new. So if the employees say they need someone to assist in a specific position they know it will cost them money (bonuses) if they don't make up the slack as a group and get more customers that generate profit to allow a larger bonus pool of cash. It is great incentive and people are rewarded based on the company's profit and their contributions.

Sometimes getting laid off is the best thing that can happen to a person so sympathy isn't necessary.

Re:Who cares what IBM's profit margin is?

[ribblem]

Think about it this way. Companies used to dump their waste into the nearest river because it was cheaper than properly disposing of the waste. Then society figured out that while this is cheaper for the company it costs society as a whole a lot more. I'm not saying that cutting a bunch of jobs is as bad as dumping waste into a river. I'm just saying I do think there are similarities as far as costs to society.

Re:Who cares what IBM's profit margin is?

[Byrneseyeview]

Well... if the company exists entirely and exclusively to make a profit -- as American corporations do -- anything else would breach that contract. And breaching a contract would be an ethical lapse. So, in a sense, it's just as much a priority in America; we just have a different vision of what ethical behavior for a corporation means.

Re:Who cares what IBM's profit margin is?

[wheelbarrow]

ElMiguel, your sentiment is good hearted but naive. IBM, in this context, has several competing ethical interests. For one, IBM has an ethical obligation to the employees that survived the layoff to maintain a viable business. Perhaps if those 10,000 are not laid off, IBM will not have enough reserve cash to fight a brutal price war with their competitors. When that price war is lost then all IBM employees will lose their jobs. It's simple, lay off 10,000 to protect the remaining 100,000.

Re:Who cares what IBM's profit margin is?

[Bellyflop]

That really works well when you can evaluate how much a particular division generates in hard numbers. It works great in consulting firms since revenue is tied directly to hours billed. However, in a lot of large firms, entire divisions of people are support people who are not in a position to generate revenue for the company. They may be there to book the revenue or to prevent losses from legal issues or theft, etc.. The value that they add isn't so easy to measure. Now, you could argue that each division could hire their own set of such people, but many companies find that they get an economy of scale from having them all in one divison.

That being said, not every layoff is a terrible thing. I have some friends who were dying to get laid off from Deutsche Bank because of the generous termination packages and the abundance of positions elsewhere.

Re:Who cares what IBM's profit margin is?

[Jeff DeMaagd]

So you don't think it is possible for a company to need an employee, and then some time later, not need that employee any longer? Employment shouldn't be considered a lifetime entitlement.

Re:Who cares what IBM's profit margin is?

[rewt66]

I see your point. Well, not really a point... maybe a half a point... well, there's at least a tenth of a point in there.

Yes, when the citizens create the rules that allow for corporations to exist, they do so in the expectation that they will get a better society to live in. And the point is that if the existence of corporations is no longer a net good for the citizens, the citizens have the right and the power (and maybe even the responsibility) to eliminate corporations.

But saying that the corporations must increase the net welfare of society is not the same as saying that the corporations have to continue to employ deadwood. In fact, the overall welfare of society is increased by no longer wasting those individuals where they currently are, but rather making them find jobs where they can do some work that is genuinely useful.

Re:Who cares what IBM's profit margin is?

[smallpaul]

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.

Re:Who cares what IBM's profit margin is?

[mpcooke3]

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?

Re:Who cares what IBM's profit margin is?

[gregorlowski]

So you say that the workers' jobs are to provide profits for the owners of the company. Why do you think the "profits" of the company's shareholders are more important than the livelihoods of 13,000 people who work at the company?

If you trace your argument to its roots, it boils down to the idea that people in society should work for the profits of the small percentage of people who "own" companies. I agree with you that companies in our society exist to make money and nothing else, but maybe people who have worked hard to make the company run feel some sort of entitlement afterward and think that their needs are more important than the future profitability of the company.

Maybe you're among the group of owners. But if you're not, then your point of view to me seems pathological. I think anyone who works at a company and then just passively accepts that they can be discarded inconsequentially is crazy. And it strikes me that our society seems pretty screwed up when programmers posting on /. espouse the view that there is something WRONG with their fellow programmers organizing to protect their own interests.

If I were in Europe now, I'd go to the picket line and show my support.

Re:Who cares what IBM's profit margin is?

[hng_rval]

The idea that the only stakeholders in a company are the shareholders is a common slashdot myth.

Actually, a company has many stakeholders, including customers, suppliers, employees, the environment, the government, and shareholders.

While shareholders do own the company, not all decisions are made in the best interests of the shareholders. There are plenty of companies that will install more expensive, but more environmentally friendly devices, because the employees at that company care. And it's not just about marketing or building a brand - sometimes people just care.

In the end, a company is comprised of people - people who make decisions. Sometimes those decisions are at the expense of the shareholders and in favor of other stakeholders. That being said, I'm not advocating keeping employees whose jobs are no longer necessary, and I don't know the situation at IBM well enough to comment on whether or not this is the case.

Re:Who cares what IBM's profit margin is?

[LordNimon]

IBM will not have enough reserve cash to fight a brutal price war with their competitors

What brutal price war? IBM has billions of dollars in profit! If they were losing money, I would understand the need for layoffs, but that's not the case here at all.

Re:Who cares what IBM's profit margin is?

[mcg1969]

Speaking as a citizen who votes and pays taxes, exactly what compels me to permit my government to grant you a corporate charter or a business license?

There is a balance of interests here, of course.

Sure, you can prevent IBM from laying people off if you choose. But they will also be less likely to hire in the future, or will hire less than their balance sheet might initially suggest, because the company knows it will have to retain those employees well past their usefulness, thereby increasing their expected cost to the company.

Re:Who cares what IBM's profit margin is?

[jhoger]

You are so bold as to use a professional athlete in your example... are you saying that a professional athlete does not take a "holistic" view of work, that they are not doing what they love?

Hey, you've got a finite number of hours on this planet. To get by, you sell x number of hours of your time in the marketplace per day, and you get 24-x to spend on leisure time, a normal good.

If you had your druthers you would spend all of your time on leisure time, period.

Is it such a bad idea to try to find work where you are doing what you would be doing in part of your leisure time at work?

Listen, I did the whole "work is just work" thing. You will burn out with that kind of attitude. You have to like it to some degree.

The mercenary attitude, being ready to move on and sell your time to the highest bidder is absolutely right though. None of these companies owe you anything, and you don't owe them anything except for the brief period of time every week where they have accrued a Wages Payable liability to you, or they have accrued a Vacation Wages payable to you. That's pretty much it.

The only real exception to that is DO NOT ditch a customer or employer in mid-stream, i.e. in the middle of a contract or project. Otherwise, your reputation will take a real hit and you're going to have trouble finding future work.

Re:Who cares what IBM's profit margin is?

[fupeg]

Ethical behavior? Are you kidding me? First off, WHOSE ethics? That's an entirely subjective matter. More importantly, we're talking about a company here. If they don't do what is best for them, from a purely monetary standpoint, then very bad things will happen. There's this thing called compettition. We all enjoy its benefits (better, cheaper things) but it's flipside is that if you can't do what's best for your bottom line, then you will be put out of business by somebody who is. So if you are IBM, you can keep those unneeded 13K employees around today, but them and the rest of your hundreds of thousands of other employees will all be out of business tomorrow. Similarly, if my employer can get the same things done by terminating me or by replacing me with somebody in India or China, or by replacing me with a machine, the my employer should do this. It may suck for me, but so what? I have no "right" to employment. I didn't get into this business looking for a handout.

Re:Who cares what IBM's profit margin is?

[sydb]

I often wonder in these massive union/company disputes - does the company ever approach the unions *first* to discuss these kind of issues?

This is your best point. So often these decisions are presented as a "done deal". Why is there no flexibility and room for negotiation? Perhaps the IBM staff would be willing to take a 10% pay cut. I've heard of it happening in other companies (Agilent).

Re:Who cares what IBM's profit margin is?

[chris_mahan]

Except of course that it is.

Europe more than any other area in the world has tried to follow the American Way. (I know, I am French)

The Euro: Compete against the dollar.

Europe: Try to do with 30-odd countries what the US has achieved with 50 states.

Follow the rule of democracy until the bitter end (rise of fundamentalism).

Trust me, Europe is like America's lost big brother. China, on the other hand, is like the smart little brother that's gonna beat them both at their own game.

Mod me down if you like, you know I'm right.

Re:Who cares what IBM's profit margin is?

[Duhavid]

How did they get to the point where 10 to 13k people were "suddenly" unneeded?

My arguement is that that did not just happen, management had it's eye off the bubble for a considerable period of time.

So, if management had been paying attention, perhaps they could have delayed some hiring or layied off few over a period of time, sometime a bit kinder to those being layed off.

Which brings up another point. The company wants to make money. To make money, you need productive workers. Workers that feel that management will treat them as people, with some modicum of kindness and respect will be busy working rather than looking for other work or worrying about being laid off, etc, etc.

Re:Who cares what IBM's profit margin is?

[bnenning]

I'm not saying that cutting a bunch of jobs is as bad as dumping waste into a river. I'm just saying I do think there are similarities as far as costs to society.

And I'm saying that's silly. Look, IBM has (rightly or wrongly) determined that certain employees are not producing sufficient revenues to justify their salaries. If IBM continues to pay these people (at their current salaries), they are engaging in charity. And if it's your view that they are ethically required to be charitable, why should the recipients of this charity be upper-middle class IT workers? Why not starving peasants in Africa?

Severing a voluntary relationship that is no longer mutually beneficial is hugely different from actively damaging public property. I find it baffling that anybody can make that comparison.

Re:Who cares what IBM's profit margin is?

[Qzukk]

There is/was a view out there that somehow you could do things like raise your kids while simultaneously working in a holistic fairyland where you live and work in the same place.

The view that people are desparately clinging to isn't some weird crap like this, though there was certainly a period of time where telecommuting was in vogue.

The view they want is "I Matter". They want to be in positions where they are irreplacable. They want to be recognized for that special thing they bring into the company. They want that special thing to bring them fame and fortune.

Unfortunately, in reality people don't matter. Labor is replacable. Skills are replacable. Everyone from the lowest position even to the CEO is merely a cog, spinning in place until they wear out and another cog comes along close enough in shape that a few turns wears it down to a correct match. CxOs are certainly larger cogs, but even executives turn in their own dance to their own tune, and even though their steps aren't familiar to the smaller cogs, one misstep can still lead to replacement.

Wouldn't you rather believe the first? That someone out there other than your direct family cares about you, not merely how well the machine turns this quarter?

Re:Who cares what IBM's profit margin is?

[magarity]

If they were losing money, I would understand the need for layoffs, but that's not the case here at all

Just because the company as a whole makes a profit does not make sense to keep divisions/facilities open that do NOT make a profit. Look at it this way: Let's say a company makes a 10% profit. Division A returns 15%, Division B returns 5%. You have to look at the big picture and say that the average player in B's market is getting 15% but we're only getting 5%. It just isn't worthwhile for us to bother with it. B is dragging us down. That's the case in the facilities in question; there's no company that will close facilities and lay off workers who are making a return at a good level. Sure, it's none of those line level employees' fault but the rest of the company is not in business to provide them with a welfare job, which is what it becomes.

Re:Who cares what IBM's profit margin is?

[mdfst13]

"If for economic reasons IBM is outsourcing jobs to india"

That raises a side issue that a lot of people here are missing. Europe's currency is way high against the dollar. It's quite possible that they are moving the jobs to the cheaper *US*. I.e. instead of cutting jobs in the US so as to make room for cheaper workers in India, they have chosen to cut workers in the expensive EU.

If enough companies did that, the Euro would stop rising versus the Dollar. I.e. the exchange rate may finally be beginning to have an effect.

Re:Who cares what IBM's profit margin is?

[roman_mir]

I have worked for 5 years at a permanent position at a startup where I was the first employee hired by the company.

For the last 4 years I've been doing contracts only.

--

I'm three years into employment with a startup, and (after watching how hard it is to find more people with my skillset willing to work at the pay levels we can provide) am rather convinced that I do matter - nonsense. There is always someone who will do your job for the same or even less money. Skill sets are acquired.

if I walked out the door, the company's chances of success would go down somewhat - if that is the case your management is not doing their jobs properly. Otherwise it is also nonsense. Success is about correct management. In some cases correct management means the manager must leave the engineers to do their jobs by themselves. Good managers will make sure that there is no single irreplaceable person in the company in a position to seriously reduce success of the company by leaving. You can matter when the management is not doing their job at all but it does not mean that you get the appreciating you deserve anyway. Don't expect other people to believe you are irreplaceable no matter what you believe yourself.

Sure you have good people but none of them are in fact irreplaceable. Some people are better than others at certain things but on average the project will either ship of fail due to correct/bad management decisions.

You in fact are correct - you do add something to the company but you are sacrificing your own interests for the good of the firm. Unless you get some form of profit sharing you are getting the short end of the stick. Unless you get something extra for the extra work you are putting in you are not making a wise decision by sticking around. You are just a cog, don't be naive to believe otherwise.

Some people can become indispensible for short periods of time here and there but it does not mean that these people will be in such positions all of the time. Some people become irreplaceable for the company during periods of change - growth or shrinkage or something like that. People are not irreplaceable in companies where growth and change are minimal. As your company growth you will become less and less irreplaceable, less important to the overal success. Prepare for that otherwise it may come as a shock.

A trim and a hair cut.

[Anonymous Coward]

"The union also questions if other cost cutting mechanisms could achieve the same effect without cutting so may jobs.""

Give upper-managment a pay cut.

Thought for the day

[kawika]

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.

Re:Thought for the day

[Alejo]

Your personal experience is not enough to make a rule. Many have problems getting a proper job.

And remember, your taxes/tribute cover unemployment checks.

Re:Thought for the day

[owlstead]

Bet you aint 50 yet.

Re:Thought for the day

[jafac]

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.

. . . either way, 13000 less ably-employed consumers is bad for ALL business.

Re:Thought for the day

[Rich0]

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.

Sure, if one person gets fired they'll bounce back - especially if their former employer gives them half-decent severance and all that.

On the other hand, if IBM closes down an office or otherwise terminates 2000 IT folks in the same town, there is no way that most will bounce back without relocating. No job market can absorb that many people when they have specialized jobs.

Cuts of that scale really are tragic. I'm not saying the solution is government regulation, but that doesn't mean that everything is swell either...

Re:Thought for the day

[Anonymous Coward]

Yeah, once you're 50, you have to beg for jobs. I'm watching my dad go through this now, he even went back and completed his P.E. so he can call himself a Chemical Engineer instead of just a chemist, and I make more money than he does.

My parents will probably end up living with me. Kinda puts a damper on the party plans.

Re:Thought for the day

[peachpuff]

"The limbs on a tree can always come up with a reason why they shouldn't be pruned."

The tree can also come up with a few reasons not to cut off its limbs. Usually, it's the gardener who wants to cut--so things look nice and neat.

Some sympathy

[Realistic_Dragon]

Corporations should have some social responsibility attached to their privilages - after all they are granted permission to exist by the people.

No 'make work' jobs should be encouraged, it's just a waste of economic resource, but strongly suggesting to such companies that they should look into retraining and redeploying their workers rather than just firing them en mass would be a good idea as the shock of such large events can permanently damage communities and economies.

That and I seriously hope the board of IBM is taking a huge pay cut. Lead by example and all that.

Re:Some sympathy

[jafac]

Governments know NOTHING about running business and should keep their noses out.

Judging by the crappy corporate performance and layoffs (along with massive runup in exec compensation) over the past 5 years, I'd say private business knows NOTHING about running businesses either.

If an employer makes a bad decision letting a good guy go, his competitors will benefit.

. . . and the exec who oversaw the layoff will also benefit with a fat bonus. . .

Re:Some sympathy

[jafac]

How is running a corporation a privilege?

Roosevelt said so over a century ago:

It is no limitation upon property rights or freedom of contract to require that when men receive from government the privilege of doing business under corporate form, which frees them from individual responsibility, and enables them to call into their enterprises the capital of the public, they shall do so upon absolutely truthful representations as to the value of the property in which the capital is to be invested. Corporations engaged in interstate commerce should be regulated if they are found to exercise a license working to the public injury. It should be as much the aim of those who seek for social betterment to rid the business world of crimes of cunning as to rid the entire body politic of crimes of violence. Great corporations exist only because they are created and safeguarded by our institutions; and it is therefore our right and our duty to see that they work in harmony with these institutions.

People can freely do business all they want. But a Corporate Charter exempts one from certain rules and taxes, and more importantly, liabilities (ie. RESPONSIBILITIES) - and it is, indeed a PRIVILEGE granted (and FAR too infrequently, revoked) by the government.

Shepard has one hundred sheep because...

[Toby The Economist]

...if even one goes missing, he spends ages searching for it.

IBM make so much money because they keep themselves efficient. If you stop doing that, you eventually stop making money. It's not reasonable to argue "we're doing well now, so we don't need to fire people". Anyways, since these are the people who are going to lose their jobs, you can know a priori their perception of the state of the company is biased; they'd be inhuman for it not to be.

Personally, my take in this is very simple; you enter into a contract with another person (a company, as it happens, in this case, which makes no difference) and either of you are free to behave as you like as long as you honour your contract.

It is improper for one individual to use extraordinary means (going on strike in this case) because they don't like what the other person is doing, when they've agreed to the contract between them.

--
Toby

Re:Shepard has one hundred sheep because...

[neil.pearce]

It is improper for one individual to use extraordinary means (going on strike in this case)

Where exactly are the extraordinary means here?
Their right to strike is enshrined by law, provided due ballots have taken place (which I believe is the case)

Re:Shepard has one hundred sheep because...

[owlstead]

That contract will be a contract to be employed for as long as the employee sees fit. It's pretty hard to fire people when the company is running fine in the Netherlands, as in many European countries, and it should be. Currently if you have been one year employed, you'll get a full contract.

It can be pretty hard for employees to find a new job, especially when they are older. Companies are required to be looking for the best of their employees, not just profits. Fortunately in Europe companies still exist as benefits to the people instead of the other way around. We should be on guard to keep it that way.

If IBM is willing to fire so many people when they still maintain profits, they should pay, and pay dearly. Especially if they haven't looked at alternatives, though I imagine that would be cumbersome for such a number.

And as said, going on strike is actually a right that has been secured ages and ages ago. It's frequently used in Italy, France, Germany and the Netherlands. You might discover this if you travel to Europe - public transport is known to exercise the right slightly too many times (since it has a big impact, and unions are strong in those quarters).

Re:Shepard has one hundred sheep because...

[chriso11]

A union essentially exists to obtain for its members pay and priviledges in excess of those warrented by the work they do.

Surprisingly, CEOs and other high-level execs don't seem to need a union to do that - they can get on average 419x as much as the average worker. And when they leave, they get a great deal (Carly F. got $21million to leave, after doing a crappy job at HP).

So don't lecture about how unions are unfair without acknowleging the whole system is unfair, and so a union is an approach by labor to gain leverage. Remember, the lowest guys on the rung are the easiest to push around.

/.ed

[jzeejunk]

looks like IBM paid the poster to slashdot union website.

Re:Europeans go on strike

[Anonymous Coward]

Yes, so IBM is trimming the most expensive european divisions. Welcome to outsourcing. Of course those workers will go on a pretty generous european dole.

Not that I see much problem with that dole. I used to, but then I looked around in my country and I'm seeing all my tax dollars fall out of bomb bays and literally going up in smoke, all to support some stupid politician's lies. I just can't honestly say a welfare state is any more inefficient or evil than that.

Strike?

[jrumney]

I go past an IBM campus on my way to work every day. This morning the carpark looked as full as it ever does. Someone needs to tell these people that a strike means you don't turn up at work. Wearing black and blue is what people normally do, it does not constitute a strike.

Outsourcing

[dutt]

The plain truth of this is that the jobs being cut in Europe are not gone, but transfered to India and other low wage countries.

IBM just wants to make it's profit even bigger. By employing Indian's and sacking European's, they are doing just that.

Sad but true.

Re:Outsourcing

[Chris Y Taylor]

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?

Re:Outsourcing

[Edward Faulkner]

IBM just wants to make it's profit even bigger. By employing Indian's and sacking European's, they are doing just that. Sad but true.

Sad if you're a European. Excellent if you're an Indian.

How should a poor country try to get richer? By building up skills and capital to attract industry, which is exactly what India has done. More power to them. TANSTAAFL.

I find it amusing that many self-avowed liberals decry economic inequality, but then they complain when the market starts to shift wealth away from their own rich countries.

Re:Outsourcing

[MasterOfUniverse]

The problem is that its not the case that rich people in wealthy nations are losing thier jobs. Its the middle class people. So basically total sum of poor people still remains the same. They are just getting transfered from india to europe. So who does it benefit? ofcourse the very few rich folks who owns these corporations. Face it, middle class folks does not own millions of dollars of stocks. Its the very few rich people. Globalization is suppose to help everybody. It is suppose to create jobs. But globalization is only helping very rich to move jobs of the middle class very easily. But whats happening is that the middle class people are sacrifising. And just wait few years, when they find more cheaper countries than india/china, they will just move thier.

ps: I'm an indian.

Re:Outsourcing

[Chris Y Taylor]

"I have been overwhelmed by the quality of the people who work there" Isn't that sweet.

"Let's have argument, not invective."
Frankly, I'm tired of arguing these things over and over. At some point you just have to say, "keep your delusions if you want them but don't tell me what I can and can't do, if you know what's good for you." Since you seem like a nice guy, though, I'll counter offer. Forget your argument. Let's both look for the truth.

Let's start with this: "Wealth is limited by virtue of us living on a planet of limited resource that's hard to leave. Happiness and ideas do not suffer from such limitations." First things first. Define terms and state assumptions. What do you think 'wealth' is. Seriously. Is it gold? Bits of paper with numbers? Something people will trade for or make an effort to get? Do writers produce wealth? Singers? Painters? Yoga Instructors? If I am paying a prostitute for sex every week, is the total wealth of the world the same or greater after each exchange? What if we get married and she stops charging me. Does global wealth decrease? Even if we're both happier? If wealth is not tied to human happiness, what use is it? I suspect you have bought into a zero-sum game, philosophy that I'd suggest you carefully re-examine. I suspect you'll be less enamored with wealth redistribution and more focused on wealth creation if you defined wealth in a more modern way. Maybe not. But we obviously aren't meaning the same thing when we use the word "wealth."

""Pursuit of an efficient workplace deserves punishment? Inefficiency will make society better?" At the cost of the host nation, yes. Efficiency at the expense of your friends is wrong. Or perhaps you have no friends"
Aw, I thought you didn't want invective. Well, I'll let it slide. Isn't India a "host nation" too. Isn't failing to give jobs to Indians that offer a better deal in order to give preferential treatment to Europeans doing a disservice to India as a host nation? How do you pick which host nations you should screw your customers and/or business partners to give benifits too? I'm serious. Should you ask your customers to pay higher prices to avoid paying tax money and building the infrastructure of a totalitarian state? What if the choice is between two democracies, but you like the culture of one better? Personally I think India is just as good a host nation as those in Europe or N. America. What makes you prefer European ones? Is that objective?

BTW, I have friends. But business is business. Whenever my friends do business, we are very careful to spell out specifically what the terms are. We don't want a disagreement over to either hurt the friendship, or force one of us to suffer economic losses out of a sense of loyalty. I wouldn't want my friends to buy a product from me at a higher price; I would want my friends to get a good deal. IBM doesn't have friends; it is a company. But the investors and the customers of IBM do. Do you expect one of both of them to suffer economic losses out of a sense of friendship to the people who work in the European IBM facilities? If so, are the European IBM workers really friends, or are they just manipulative jerks playing the "friends" card for their own benifit? Isn't that cronyism? What if IBM's customers and/or investors have friends all over the world? Why shouldn't they. Do you think EUians are the only ones who deserve friends? Personally, I think that it is dangerous to confuse business with friendship or relations. I'm not saying don't do business with friends, btw. I'm saying don't expect cronyism or nepotism, and spell out everyone's obligations and payments very carefully. Do you still think this is a matter of IBM investors and/or customers taking unfair advantage of their friends?

While we're on definitions and assumptions:
What do you mean by "nation." Do you mean society? Or do you mean government?
Do you think something that the words "ethical" and "legal" are equivalent? Do

Re:And you were expecting what...

[Anonymous Coward]

and as an american company, it should follow the american ideals of shitting all over everyone outside its borders.

Re:Oh yeah!

[IdleTime]

That is how it works in USA, but IBM is a registered company of UK too and they have to follow the laws of the country. UK, as all the rest of the European cuntries have laws that regulatre what a corporation can do when it comes to layoffs. You can't simply dump employees for no reason and this is a no reason.

Re:Europeans go on strike

[jqcoffey]

It sure would be a sad day if it doesn't help. Unions are what got us the 40 hour (cough, cough--50 hour work week if you're in the tech sector) work week, minimum wage, benefits, etc.

With US corporations able to force employees to TRAIN their outsourced replacements to receive their 4 week "notice" period, someone|thing|group needs to be able to fight for employees rights. The best, though clearly not perfect, solution we have currently are Unions.

Mayhaps, us slashdotters could come up with a technological replacement :).

I'm a grassroot programmer

[3770]

I'm a grassroot programmer.

And I feel bad about the general situation for programmers and loss of jobs in Europe and the U.S.

But their arguments aren't going to fly.

The workers say: The company is making money. Well, the company is constantly trying to make more money. Management will never keep people on the payroll just because they can afford it.

The workers say: There are other ways to save that amount of money. The managements reply will be great. What are they? Will do them too.

Smart companies don't wait for losses

[G4from128k]

Yes, IBM may be profitable now, but that means nothing. IBM depends on long-term trends and long-term plans. If the company can't win service contracts or lets Dell get corporate contracts for servers, the impact isn't noticeable for several quarters or even years. That is why IBM is taking action now.

The point is that smart companies don't wait for trouble, they solve problems before anyone thinks they have a problem. If anything, IBM may even be late to the "solving" stage. Q1 2005 was not pretty for IBM because the future prospects looked dimmer than expected.

Another Lying Statistic

[Anonymous Coward]

To say that "IBM is a wealthy company" with "$9 billion in profit in 2004 is completely misleading. What IBM made in absolute dollars is not really relevant.

Let's say I offer you an investment. If you give me $X, I'll give you $X + 100 a year from now. What a great deal - you are guaranteed a profit. How could you possibly turn that deal down?

Sure, it's great if X = 100. Then you'll make a 100% return in one year. Cool.

What if X = 1,000,000,000. You give me a billion today, and I'll give you 1,000,000,100 in a year. Suddenly it doesn't sound like such a good idea, does it?

IBM made about $4.87 per share last year. At the current share price ($76.51), that means IBM's return was about 6.4%. Not too shabby, but not really all that great when risk-adjusted.

In fact, IBM's share price has gotten RIPPED in the last few months. A year ago it was trading ~90, which gives us a return of only about 5.4% - not very impressive.

Sure, $9 billion seems like a lot, until you realize how much capital is being employed to generate that $9B. And how many shareholders need to divide that up. Shareholders like pension funds, university endowments, and widows and orphans.

I'm not saying the workers are wrong here, I'm just pointing out that it's completely fallacious to call IBM a "rich company" just because it made a large number of absolute dollars last year. That money comes from or goes to someone - to everyone who holds an indexed mutual fund, for example.

Re:Another Lying Statistic

[Rich0]

Shareholders like pension funds, university endowments, and widows and orphans.

You do neglect the fact that other than pension funds, the items on your list hold virtually no stock at all (compared to the total value of the market).

The vast majority of stock is held by people who individually make well over $100,000 per year.

The pension funds are of course the exception, but if you ask a worker which he would rather have - his 401k savings or a guaranteed job for life, he'd pick the latter. Collectively 401k's are still large, but most workers they make up only a small part of their total earnings.

If you give a billionare a choice of losing his stock or losing his salary, he'd drop his salary in a heartbeat.

If you give almost any other person picked randomly off the street the same choice they'd drop their stock in a heartbeat.

This is why anything which is good for stockholders isn't necessarily great for America - at least not directly.

Don't get me wrong, investment has all kinds of benefits to the general public. However, the whole "most people own stock" argument is really a falicious one. "Most people" would throw away their stock in an instant if it kept them from losing their jobs...

Re:Another Lying Statistic

[johansalk]

"orphans", huh?

Trying to appropriate my sympathy for "orphans" to a global corporation mighty enough to dismiss 13,000 European workers, the most protected in the world, in a single decision, only earns my disgust.

It's curious that these days orphans are mostly mentioned by the rich or their mouthpieces; I am yet to hear an orphan make much noise about his property, generally because real orphans usually live under the care of the state, or, if lucky, are supported by their relatives. Whenever I heard much mention of "orphans", it's usually been by the rich, about millions upon millions of dollars, and the "orphan" being someone in his forties suing an entity.

Perhaps big business should know that their lobbying of Washington to limit their social responsibilities is hurting the orphans. Perhaps the religious right, many of which regard the majority of real orphans as the abandoned fruit of "wicked" acts, should care more about orphans. Perhaps folks like you should stop mentioning them when discussing megacorps.

I am really disgusted.

Re:And you were expecting what...

[PornMaster]

As someone who quit his job at HP today, I'm not sure if I'm suffering from prefrontal lobe issues and missed the sarcasm, or if you don't know how it is to work for HP these days...

Take a look at the insider stock trading !!!

[gelfling]

http://www.marketwatch.com/tools/quotes/insiders.a sp?symb=IBM&vc=0&siteid=mktw&dist=dropmenu

$13 million in the proceeds of a stock grant sale and options exercize to J. Bruce Harreld alone.

Bruce Harreld came from Boston Market several years ago where he also helped drive that company straight into the shitter.

Most IBM employees got no annual increase last year and variable pay e.g. bonuses which is what most people count on, were cut to the bone - average awards were half what they were the year before and about one fifth of the people got them. This year IBM suspended annual increases to executives but stock and other equity awards were not frozen. In the meantime the employees are bracing for another year of no increases and no variable pay. Simultaneously, benefits cost were increased about 15-20% to employees. Moreover any employees sitting on options that were awarded after 1998 have worthless paper - priced around $132 which is where the stock was headed in 1999 before it had its relentless crash since then ($76 as of today). And there is a strong push to force employees to work from home so IBM can sell their real estate. Employees are expected to give up one room of their house to for a home office and the reimbursement of their office supplies to the employee is now imputed income.

Re:Take a look at the insider stock trading !!!

[johansalk]

"$13 million in the proceeds of a stock grant sale and options exercize to J. Bruce Harreld alone. Bruce Harreld came from Boston Market several years ago where he also helped drive that company straight into the shitter."

The US is diseased and along this line may eventually be deceased. This is something that I had observed for a long time; a short-sighted corporate culture in the US that rewards executives for self-serving, soul-sucking practices. US company after US company are being driven into the shitter; the exceptions seem mainly those companies that are run by their founders or their family, but for those in which management is recruited, there's too often a streak of executives whose sole concern is their rewards during their term, and to hell with any hint of a future for the company or anyone else. The US will pay for this, as US company after US company will fold. Look at GM and Ford suffering now thanks to the shenanigans of the 1980s and since; you could develop products that people want and grow a viable business, or you could cook the books, sacking left and right, playing with numbers to show what you want, and too often US executives have chosen the latter. It's a shame for Ford and GM; they've done every henious thing, from addresses in the Cayman Islands to blaming unions and social responsibilities and lobbying washington, eventhough their competitors in Europe and Japan face bigger social responsibitilies and higher costs of doing business, yet their companies have prospered and are taking US carmakers to the cleaners, thanks to a stricter set of legal rules that forced their executives to focus on the essential and true ways of running a company. Warren Buffet, a man whose preferred holding period for a stock is "forever", has been yelling for a while now that executives need to be disciplined by a new set of rules encoded into law; and I wholeheartedly agree.

Re:US company / Euopean strike

[Anonymous Coward]

What most Americans don't realise is that French workers are virtually equally as productive as American workers. It just so happens that the French workers don't work so many hours, so more people are required to do the same amount of work. There are other reasons why European economies aren't doing as well, including less flexible labour laws, but productivity isn't one of them. Personally I think the Europeans are happier as people because they're not slaves to their jobs so much as us here in N. America. Another thing when evaluating the cost of business ties in to last night's 60 Minutes: companies don't have the cost of providing health benefits. You might might sit there with your superior attitude laughing at the Europeans and their quaint militantness, but I think the last laugh is on you, the corporate slave monkey.

Info on the union web site.

[winkydink]

Does this look familiar? US union, Euopean issue. YEt another attempt by the CWA to organize industries that have little interest in unions.

Domain ID:D9294190-LROR
Domain Name:ALLIANCEIBM.ORG
Created On:20-Aug-1999 14:42:38 UTC
Last Updated On:15-Apr-2005 14:30:15 UTC
Expiration Date:20-Aug-2006 14:42:38 UTC
Sponsoring Registrar:Network Solutions LLC (R63-LROR)
Status:CLIENT TRANSFER PROHIBITED
Registrant ID:5621098-NSI
Registrant Name:Communications Workers of Amer
Registrant Organization:Communications Workers of Amer
Registrant Street1:Attn. Beth Allen
Registrant Street2:501 3rd Street NW
Registrant Street3:
Registrant City:Washington
Registrant State/Province:DC
Registrant Postal Code:20001
Registrant Country:US
Registrant Phone:+1.2024341000
Registrant Phone Ext.:
Registrant FAX:
Registrant FAX Ext.:
Registrant Email:ballen@cwa-union.org

Re:Info on the union web site.

[redbeard_ak]

The unions (multiple) in Europe are doing the striking. They are faced with these layoffs and are responding.

The IBM employees in this country that have joined CWA through Alliance@IBM (a grassroots group that _choose_ to affiliate with CWA) are simply supporting their fellow employees - at the very least by publicizing the strike. That is what workers in unions do - they help each other out. That's the point. To work together to make things better for everyone at the workplace, even in the industry. Instead, the parent chooses to throw stones. Nice guy.

s/on strike/wearing black and blue ties/1

[sparkz]

That is not a strike. A 10 minute break at lunchtime and wearing black-and-blue ties.

RTFM (strike-HOWTO-1.4.23, by N. Kinnock)

Mod up insightful

[geekee]

I just saw Roger and Me, a Michael Moore film where he criticizes GM for laying off workers in Flint Michigan. He starts the movie showing the place where the UAW had a major victory in the 30s, but didn't seem to see the connection between the union activity and the fact that the plant were being closed in Flint because Mexican workers will do the same job for much less. American and Eurpoean workers have been priced themselves out of the market. To continue receiving these exorbitant salaries, they need to be more productive than people who are willing to work for less.

Re:Mod up insightful

[ndansmith]

To continue receiving these exorbitant salaries, they need to be more productive than people who are willing to work for less.

Indeed. The US and Europe need to be leaders in R&D to maintain their worth in the new global economy. For instance, the US is still a major agricultural leader because of genetically altered crops, pesticides, and harvesting technology. In the US, a single farmer can work hundreds of acres while growing the same crop in other nations can be much more labor intensive.

Since workers from other nations (China, India) can have the same output (or greater) in tech jobs as Americans and Europeans, it makes sense (according to a free market economy) to hire the workers with the highest efficiency (as measured by output per wage). That is the nature of the global free markey beast.

Re:Mod up insightful

[Tom]

What an excellent strawman!

That's a great argument if you think shallow, it really is. I'm sure it convinces a lot of people.

Until, of course, you start realizing that the very same companies who don't want us "expensive" europeans as workers at the same time crave us as customers. Ironically, for the same reason - high income.

So, from a "tragedy of the commons" point of view, these companies - collectively, mind you, not individually - are destroying the very market they need to survive.

Unfortunately, we have quarterly statements and quarterly business reviews, and stock prices changing by the minute and second. If we would count in years and decades and estimate share values at similar intervals, a lot of things would change.

Re:US company / Euopean strike

[Salinger]

I work in Europe although originally from NYC. Europeans get 2 weeks paid leave a year. THAT IS ALL! You are spouting typically ignorant US Anti-European sterotypes.

My guess is that you come from a part of the US that doesn't really get out much.

If life is so good over here then why not make the right career move and get a job here?

I'll bet you starve to death within the year.

can someone answer?

[the-build-chicken]

what happens when a company buys back all it's stock? Is it answerable to no one?

except IBM GS isn't putting money into employees

[cecirdr]

My spouse just left IBM global services. They've laid off so many people and had talented people opt to leave the company, that the folks who are left are *way* overutilized. Before she left, my partner was pulling 60 hour work weeks as the norm, while 70-80 were frequent. The endless round of meetings was taking it's toll since the folks who've been spared the ax aren't the doers. They're terrified to make a decision so they just waste time twirling and having meetings about the same issues over and over. They appear to be under the illusion they can keep doing the same old "nothing" every day and wake up one morning and somehow the work will magically have gotten done.

There may have been some dead wood in the company that needed to be culled, but quite a lot of those people are brown nosers who have figured out how to misrepresent their skills to managers who have no technical experience. Laying off massive amounts of people, hoping to cull these folks is like playing a shell game. It ain't working. It's demoralizing the employees that are left and the people with real talent are jumping ship...fed up with over work, pathetic management, endless meetings, and not enough talent left to actually implement designs.

So...if that's the results of appeasing stock holders here in the states, why in the world would you want to do the same thing in Europe? Yeah, there's a lot of peple just getting by; never really doing anything. But if management is not competent to figure that out and the en masse layoffs to get rid of them are failing and demoralizing...then you're possibly causing more harm than good by doing it.

IBM is too full of processes, too top heavy (duh as if y'all didn't know that already), and people are constanty job hopping in the company every year or two (or being restructured) with the result that no one know how the hell to do their job.

Let's see here...

[rewt66]

According to IBM's website, they have 319,273 employees. Laying off 15,000 would be 4.7% of their employment.

So, um, doesn't Intel lay off 5% of their employees every year? So why is it different when IBM does it?

Re:Let's see here...

[ultralame]

FYI, Intel has not laid of employees for years and years (1983 I think?). Intel is an extremely well-managed company. When they need to reduce workforce, they have done so by attrition (not replacing people when they leave). Now, if you are talking about Applied Materials or most other semiconductor companies, that is true. They will spend like mad when things are good, and inflate their employee numbers with dead weight. Then when the cycle turns down, they dump these people on their asses.

Re:Europeans go on strike

[Aldric]

Agreed. Most Americans seem to feel resentful about Europeans because we don't let employers walk all over us. If a US corporation wants to have a branch in Europe, they have to deal with European work views. They don't get to import the US view of work your emplyees like slaves then fire them when they complain. IBM can either accept this or piss off back where they came from.

Hardworking Candlemakers

[KrackHouse]

This is outrageous. The fact that a company is allowed by government to fire innocent workers is unacceptable. Evil corporations have a responsibility to put food on my table and dammit they had better be held accountable if they're not doing their job.

I make candles for a living and I need your help. Please join me in emailing our legislators in my bid to regulate sunlight, it's putting hard working people like me out of business.

Why you should care

[redbeard_ak]

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.

Re:Flawed Logic and More

[MemoryDragon]

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.

Absolute numbers

[vlad_petric]

Sure, IBM has made a profit of 9 billion, with a global workforce that's estimated at around 300K

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.

Re:Absolute numbers

[Tom]

Profit per head is not the only measure of efficiency, you know?

Yes, it is one. But it is applied way too easily by managers whose salaries depend on short-term profit instead of long-term viability.

For one, your headcount depends a lot on the business you are in. Two, headcount doesn't scale linear with company size. You have overhead, you have automation and many other factors. Two people might dig a hole in half the time, but 50 people don't take 1/50th, they'll likely take forever. Likewise, 4 people can build something in a day that one person alone could not ever build.

And let's not even get into the questions of the kind of people you employ. There's a huge difference between having a few highly paid specialists and having a large workforce of minimum-wage slaves. Especially when it comes to efficiency per head.

So in summary, 9 div 300000 does not even begin to compare to 1.73 div x-thousand because there are a lot of other factors in that equation that you can not ignore - unless you're driving an agenda.

Conveniently Ignored Facts

[Lawrence_Bird]

Profitability
Profit Margin (ttm): 8.51%
Operating Margin (ttm): 11.02%
Management Effectiveness
Return on Assets (ttm): 7.97%
Return on Equity (ttm): 27.82%

A 10 year note yields about 4.1% and was over 4.5%
earlier this year and is risk free. Certainly people
who invest in IBM are taking risk. What profit margin
do our friends in Euroland think is fair for the company
that employs them to earn?

Re:Europeans go on strike

[ctr2sprt]

No, it's not difficult. The way I see it is as an alternate form of compensation. When the government doesn't mandate vacation days, you, as an employee, can negotiate with a prospective employer to get something that you both think is fair. For example, you can agree to get one less week a year of vacation time in exchange for a slightly higher salary. If the employer doesn't agree, then you go find one who will.

Believe it or not, most people do not take jobs based simply on salary. They consider the benefits package, location, and a host of other factors. It's very common - in the States anyway - for someone to take a lower-paying job because it doesn't require him to move or because it has a better health insurance program. The employee says, "It'll cost me $X to move and get insurance on my own, and that's more than the amount I'm 'losing' by taking the lower-paying job. So this is the best job to take."

It helps out the employee by letting him choose the best job for his unique situation; it helps the employer by giving it the freedom to offer the package it can afford. Thus people who are maybe "marginal" applicants can get jobs where otherwise they couldn't (because nobody could afford to take a chance on them). That's how I got my job. No severance package, retirement, or anything else, but in exchange I got a job, with zero experience, that usually needs five years of experience.

Note that I'm not saying our way is better than the European way. But many Europeans don't seem to understand that there are some advantages to the free(r)-market approach, and I wanted to explain some of them.

Re:US company / Euopean strike

[grahamsz]

Hmmm i moved from the UK to the US (with the same company) and didn't notice much difference in my paid vacation.

In the UK i got 30 days + xmas and new year

In the US i get 16 days + MLK Day + Memorial Day + Presidents Day + Independence Day + Day after Independence day + Labor day + Thankgiving + Day after thanksgiving + 5 days for xmas and new year.

UK Total 32 days
US Total 29 days

Plus once i hit 8 years of service i'll get another week, bringing the us total to 34.

Now i rather the european model of not giving you pointless days here and there, and actually giving you enough to take a 1 month break every year... but that's just me.

May not be the same everywhere but i'm looking at another US company that's going to offer me 30 total.

Re:Hardworking Propagandists

[Anonymous Coward]

I suggest you re-think again. Preponderance of the evidence is that both parties are essentially identical in their economic ideas, except that Republicans are blunt about pissing people off.

Can you really say we are the wealthiest nation in the world, given that about 40% of us can't go to a doctor? Or that about half of us can't take any vacation in a year? Or that we have a savings rate of 0.6%, a consumer credit debt of $2 trillion, and a government debt approaching $8 trillion?

Does our economy end at our borders? Do Malaysian and Central American sweatshops count as part of our economy? How about the gazillions of goods sold at Walmart made in China?

Will you be able to retire before you are 60 and enjoy the same standard of living as you had at 40? Can you take more than two weeks vacation without jeopardizing your performance rating? Is your house paid for? How about your car?

Re:Hardworking Communists

[Anonymous Coward]

What are you, some kind of communist? Our forefathers bled and died wishing to secure for us as rights corporate life, liberal profit margins and the pursuit of the almighty dollar, not your bleeding heart life, liberty and the pursuit of happiness. And we're all better off for it. Just consider the $8,000,000.00 USD a year CEO who improves the company's bottom line by getting rid of 250 of us who make $32,000.00 USD a year. It's better for everyone because the CEO rents or buys 250 houses and 350 cars, buys enough groceries to feed 750-1,000 people, buys enough clothing to clothe 750-1,000 people, pays on 350 auto insurance policies, buys 1,200 magazine subscriptions, goes to see thousands of movies, eats a couple thousand meals at local restaurants, and so on, all of which dumps tons of money into OUR local economy, whereas the 250 of us all live in one giant house and spend most of our time out of the neighborhood on the beaches of sothern France. Oh wait...

Re:Europeans go on strike

[Anonymous Coward]

Umm sorry, but that's the way it's done in Europe too. It's not like the governments assign you jobs and force you to work somewhere. It's just that they regulate some things which they believe should be the same for everybody. Like medical insurance and holidays.

It's called a Standard of Living

[Urusai]

I don't want to live like a Mexican peasant in a maquiladora. Neither does he; he would rather live like an American. We will BOTH be forced to enjoy the peasant lifestyle if wealth becomes too polarized, and that's what's happening. The rich are only rich at the sufferance of a populace that either cannot or will not give up its wealth to them. Democracy is the great pacifier in this regard. However, with the present oligarchical manipulation of democracy, it is failing.

Rich people tend to use their money to take money from other people (consolidation of wealth), and fundamentally this activity is antisocial and evil. Disguising it in layers of Adam Smith pie-in-the-sky theories about invisible hands and shareholders' value doesn't justify activities that harm many for the benefit of few.

Geez, these bleeding heart conservatives...

Fire 'em in France...

[rice_burners_suck]

I hope most of the people fired are from France. There is a big shortage of available technology workers here, and 10,000 job cuts from IBM will help my business tremendously in acquiring skilled people.

Management/Employee Relations

[cmholm]

All unions do today is drive a wedge between employees and management.

This is a classic anti-union argument, and can be quote verbatum back to the "robber barron" days of the late 1800s. On its face, it assumes that the union leadership dictates, and the rank-and-file follow like sheep, being too stupid to consider their "best" interests. If true, then one might as well eliminate the middle man since management is already perfectly capable of dictating.

On the other hand, it just might be that the rank-and-file are as capable of recognizing their best interests as a stock market is at allocating capital resources.... that is to say, usually they can, occasionally they lack 20/20 vision to think through new circumstances, and sometimes a small clique can fool everyone for a while.

Circumstances since the end of the Cold War shows that you can only count on management (and stockholders) to look after their own interests. Now that there's not even the mirage of "another way", w/in the US at least quite a few of them seem to feel that putting the screws to their employees isn't only possible, it's a mandate from the Almighty.

I'm sure that a portion of the labor pool doesn't want to work in a union shop. The size of that portion is difficult to assertain, given the tread towards smaller work sites (you're easier to single out) and legal roadblocks (in legislatures, executive branches, and courts).

Equity Strike

[Doc Ruby]

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.

someone please explain to me...

[spirit_fingers]

Why should a publicly traded corporation, which is profitable, even be PERMITTED to layoff anyone? Why should the desire for higher profits be allowed to trump an employee's livlihood? Why should profitable companies be allowed to inflict hardship on their employees? Even if a company is losing money, why shouldn't they have to submit to an independent audit to determine the lowest number of layoffs needed to restore profitability? Why should corporate greed take precedence over jobs? WHY???

Re:someone please explain to me...

[omega9]

Let's say you have stock in IBM, maybe not bought right out but as part of something like a 401k retirement fund. You're counting on that fund to build as large and fast as it possibly can for a comfortable old age. You receive a letter in the mail, as a shareholder, explaining that IBM needs your help making a decision.

Even though they've been acceptably profitable in recent quarters, IBM has determined that it's in their best business interest to cut 12,000+ jobs. They could want to do it for any number of reasons: newly discovered efficiency, poor localized market performance, wanting to exit a portion of the market, or simply because they *want to*. This move would contribute to the financial wealth and/or stability of IBM, therefore potentially increasing their stock value and by extension your fund.

Or, they can continue to employ those 12,000+ people... just because they can. Even though they've concluded that they're unneeded for whatever reason, you could tell IBM to keep it up at the expense of your retirement.

Quite simply, what do you honestly think most people are going to tell IBM to do?

How about this: IBM becomes extremely profitable, and discovers that they're able to stay that way without hiring new people. Should they hire new people anyway based on the idea that they can afford it? Of course not. So why should they keep people employed just to keep people employed?

unethical my ass

[EccentricAnomaly]

when you are making $9 billion in profit a year it is bloody unethical to lay off the people who help make that profit

It isn't unethical if those people are just free riders. What if that $9 billion in profit was mostly because of the work of the people who didn't get laid off?? Is it ethical to to keep on extra people who aren't really contributing to that profit at the expense of those who are doing the hard work??

If those people who are laid off were contributing to that profit, I'd expect to see IBM's profits to go down in the long term. If they weren't I'd expect the profits to go up. We can wait and see what happens and find out if IBM is making a mistake... but either way they aren't being unethical.

I know what it's like to work with dead wood. And I think it's perfectly fine to get rid of the dead wood. Now, some of those laid off are probably not dead wood, but they can get another job (maybe even with IBM). Skilled, hard working people are always very hard to find.

What is unethical is how so many people think a job is an entitlement and drive whole companies under with their selfishness. When whole divisions fail, it's because of a pervasive culture of this selfishness. It's because of free rider leeches who do nothing but enrich themselves at the expense of the common good.

(bracing for negative mods... but please look up what troll and flamebait really mean before hammering away at my rant)

Sympathy doesn't mean IBM is wrong

[Mr. Underbridge]

I think some sympathy is in order for these folks.

Yes, sympathy is justified. And I say this as my brother in law was just laid off. But just because we feel sorry for them - and I do - doesn't mean IBM is wrong to let them go. The unionists point to the fact that IBM is making a profit to justify their jobs. But that's irrelevant - should IBM wait until they're in the red overall to reduce their payroll? Is the situation of the overall company more important than individual divisions? What if IBM is okay but they have a division hemhorraging money? Can they get rid of that division or not?

Bottom line, there comes a time when a company needs to change direction, and unfortunately that means bad things for people. And yes, we should feel sorry for them. And yes, IBM should provide them with decent severance. But it doesn't mean that IBM has to keep them on forever.

there's a limit to cutting executive salaries

[EccentricAnomaly]

There is definitely a pervasive looter mentality in corporate boardrooms in setting these outrageous salaries... these salaries are for the most part too high. However, barring the current abuses, good leaders should make a lot more than most other employees. There is a severe shortage of them, and they can increase profits by way more than they're paid.

Just look at Apple pre Steve Jobs vs. post Jobs. How much was his leadership worth? Apple's massively turned things around... not only protecting the jobs it had, but adding tons of new ones around the world.

Of course, since they're on such a hiring binge now they surely are not always hiring the best people... and they will probably lay off a lot of people as soon as their growth slows enough to let them do so. If such layoffs are unethical, they should not be hiring people that they don't plan on keeping around... but that sort of wrong-headed ethic would be bad for Apple and bad for the people who are going to get laid off (they wouldn't have a job right now).

atavistic thinking

[Chris Y Taylor]

"The problem is not with indians getting jobs, but people who were already employed getting laid off in order to find cheaper labor outside of the country."

Ah yes. The I-was-here-first school of playground ethics. Derived from the "I call 'dibs'" axiom if I recall. I'm at a loss. Everyone knows there's no ethical rebuttal to the statement "I had it first."

Re:can you IMAGINE this happening in modern Americ

[gatkinso]

You have obviously never heard of GM.

US == Highest Corporate Taxes?

[cmholm]

How on earth did you deduce that? Consider the rate structure. As a whole:

Corporate income tax: US < EU

Individual income tax: US < EU

Public retirement tax: US < EU

Public medical tax: US < EU

VAT/Sales tax: US < EU

That you pick out the corporate (presumably income) tax is particular egregious, since the US as always been known for having a considerably lower rate than virtually any nation in western Europe.

Strikes work well in Europe.

[Husgaard]

I live in Denmark, and here strikes have really helped reaching a reasonable balance between the rights of employers and employees.

We now have a 37 hour work week, and 5 week of paid vacation.

The last (like most previous) extra week of paid vacation was due to a general strike. It basically shut down our country for a few weeks, but most people in Denmark were supportive of the strike.

As an employer (owning part of a company employing some employees) I guess I am supposed to oppose this. But I am also employed by the company I own a part of, so I also gain the advantages.

Re:Europeans go on strike

[dcam]

This assumes that you are bargaining from a position of equal strength. While this might certainly be the case, I think that more often than not the employee is at a disadvantage.

US is low-tax compared to EU

[BreadMan]

Here's an cite (you may need to watch a ad) for this claim. This is % of GDP taken by taxes, thus avoiding the corporate/sales/income tax shell game.

From the article:

The average tax burden throughout the OECD was 37% of GDP in 1998. In the European Union it was 41.3%, whereas in America it was 28.9%. Sweden takes the prize for the highest tax burden in 1999, at 52.1%.

The data's a bit old, but I don't think things have changed that much since the survey.

Corporate Morals

[MrKaos]

The first thing to remember is that a Corporation, like IBM, is legally bound to put profit ahead of ALL other considerations. Executives may have the same considerations as employee's but they are legally bound to behave in the shareholders interest.

The second thing to remember is that the operational basis of for profit, liability limited companies and corporations is minimising risk to shareholder return by externalising it.

Or simply put "A corporations first loyalty is to profit and considers only minimising risk of losing profit"

For example if the projected amount of available work over the next, say two years, is in decline or an indian/chinese outsourcing option is available then the directors are legally bound to maintain profitability (for the next 8 quarters), shed 13000 workers and let the former employees shoulder that risk (and also all citizens through unemployment benefits paid) - it's has nothing to do with thier ability, it's all about externalising risk.

If something changed that risk equation, for example the government of EU imposed a "mass unemployment levy" where the company had to contribute some percentage of the projected unemployment benefits to the government then the decision may be different as the risk to profit equation changes.

It's situations like these that illustrate one of the many flaws in the first industrial revolution. All employees suffer the same threats (not just IT workers) where first world countries with established pay and working conditions are now competing with third world countries that do not have those conditions. Implementation of free (mercantile in reality) trade agreement's do not include creating the same legal framework for third world workers that exists for first world workers.

The downside of all this is that it is inevitable that working conditions in first world countries will continue to deteriorate until the contracts that make global trade possible factor in those conditions. This decision is another symptom of that problem.

Re:Ok, wait a minute...

[Lemmy Caution]

What should happen is that you should have to compete with people willing to work for a fraction of your income, and then the market will decide that you are overpaid.

That's the scenario we are moving to: a few very wealthy executives in the first world essentially making money off of work done by people in the third world. You think that CEO's who are making in the low 7 digits aren't getting paid enough, and that Europeans getting paid in the mid-5 digits are overpaid. I thik this suggests a kind of fascination with authority and power that has distorted any sense of fairness, or any idea that economics should serve people, not vice-versa.

Re:Ok, wait a minute...

[EccentricAnomaly]

I thik this suggests a kind of fascination with authority and power that has distorted any sense of fairness, or any idea that economics should serve people, not vice-versa.

That's like saying gravity should serve people and not vice versa!

Economics isn't just a philosophy... it's a mathematical description of reality. If economics tells you you are inefficient, then you should listen or risk going out of business... or worse yet in managed economies like North Korea and the old Soviet Union risk people starving.

If you want to have the highest possible standard of living for the most people, then you should develop a plan with economic rigor... don't just rely on wishful thinking.

Re:Ok, wait a minute...

[Lemmy Caution]

Don't be disingenuous. There is a real prescriptive aspect to economics, as well as the analytic one. The prescriptive one is the one that treats people as both completely rational and completely instrumental: as both agents and resources, and advocates for political choices based on the optimization of certain statistics. The term "standard of living" is just one of those statistics, since often, in practice, it relies on some standard of gross productivity over lifetime, or gross income.

There's nothing wrong with efficiency, but turning efficiency into an end rather than a means is part of the pathology of the modern.

Re:Ok, wait a minute...

[Lemmy Caution]

Often, people are starving because of efficiency: of someone else's, or because of the efficiency of an abstract entity (a "nation", for example) which measures the goal as increasing GDP, rather than making sure that local markets are met. Children are starving because many locales thought it would be more efficient to convert the national economy to goods and crops for export. And, if you conglomerate the income of the wealthy, and the wealth taken by the kleptocratic governments in those countries together, you'd be numerically right. It would be "more".

But economics regulary chooses abstractions as its objects of analysis, knowing that they're wrong (and tweaking the models numerically, like medieval astronomers adding more and more little concentric circles to explain the movement of the planets) but doing it anyway.

On strange thing...

[JollyFinn]

How much they save?
700M$ a year estimated.
How much it costs for the action to happen?
Do they loose the good ones instead of bad ones?
There has been more or less common to loose the people you don't want to get rid off because there are layoffs.
Next question is that DO they loose some of their business because of layoffs, by loosing more talented persons willing to jump ship?
Are competitors getting insights by hiring people IBM just lost?

They are risking 9B$ profits by cutting 0.7B$ thats the effect. They cut costs but same time they cut their sales. Now there is risk of loosing more in sales than getting by cutting employees.

No shame anymore

[pkphilip]

At one time not so long ago companies took pride in not laying off people. The boast was that X company hasn't laid off a single work in so many decades.

Management tried not to layoff people as much as possible because laying off people was seen as a shameful thing to do - an admission of failure on the part of the management to run the company profitably.

To avoid this loss of face, companies resorted to cutting management pay, selling assets and so on. The moment a company announced a layoff, it would appear all over the papers - the market will see it as a sign that the company is down in the dumps.. analysts would rate the company down.

But now the situation has completely reversed. When a company announces huge layoffs, analysts actually rate the company higher. Also, the management will now gloat about how they have "streamlined" operations.. cut of the extra "fat".. become "lean and mean".. etc.. The implication is always that the layoffs were a smart thing to do.

There is no shame anymore..no accountability on the part of the management. The fact that thousands just lost their jobs because the business strategies framed by the suits came up a cropper does not seem to fill the management with a sense of shame or remorse. Fact is, after a round of layoffs, the executives might even give themselves a pay hike!! They will also announce proudly about how they have "increased" their profitability and worked on the "bottomline".

It is quite sad. There is very little honour anymore.

Re:No shame anymore

[zero_offset]

Very well-said. I have long held the opinion that the decline started roughly about the time we began hearing the term "Human Resources" -- a concept which, in effect, treats a human being as having roughly equal individual value to a box of pencils.

In the US, this closely coincided with the near-total elimination of small business employment over the long term (roughly 30 years, ending with what now appears to be a leveling-off in the late 90s). Another trend which I believe is suspicously coincidental is the "get in / get out" mentality amongst the higher levels of management. Their involvement is purely financial and short-term; they are essentially hatchet-men, which directly supports your conclusion.

Humbug

[DABANSHEE]

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.

Re:Humbug

[BreadMan]

>> never get counted because they're not universal nation wide
The report shows tax collections as a portion of GDP, so the figure includes all taxes, no matter how the taxman tries to hide them.

>> Then there's the local land taxes to fund local public schools (that can vary by a huge degree
This is true, letting market forces work, muni's with lower taxes that provide similar services compared to others attract residents. This trend is writ large in the migration of folks out of the high-tax/poor-service cities into the suburbs. I'd rather live in town too, but even after paying for a commute, my kids get a better education in the burbs than in the city at a lower cost. Where I'm at, the property tax is 1/3 that of the urban center, plus the services are better, or they muni doesn't provide services I don't want anyway.

>> employers in the US have to pay for the employees healthcare insurance
Employees pay for insurance in the form of lower wages. Health benefits provided by your employer are not taxed so this is a nice way of compensating people without paying taxes. Furthermore, employers aren't required to offer health benefits (some don't!), it's a way of attacting and retaining good employees.

>> highest health costs in the world
I'd also argue that the costs pay for better services. Let the price system ration medical services not the gov't.

What is a Right?

[spotvt01]

This is what differentiates European and (traditional, although changing) US beliefs. In the US you have the right to pursue happiness, not the right to happiness. There's a critical distinction there. In the US you have the right to work and that does not extend to the guarantee of a job. Bluntly put in the American psyche: It's the owners' company and the E-class was put into position to execute in the best interest of the owners, NOT the employees. Because .... the owners OWN the company. By virtue of working FOR them, you have at -some level- subjugated yourself to their decisions, which inevitably revolve around how to make the owners happy. Such level of subjugation of course depends on cultural norms and legal process and THAT is where the European model is different than the American model. Europeans feel they have a right to continue working for a company once they have been hired. Which is why new jobs are far more uncommon in Europe than in America. This is because it is far harder to get cut jobs in Europe than in America. In almost every manner that I have ever seen (and I have spent a 3rd of my life in Europe), European companies and their governments are FAR less flexible than their American counterparts. They tend to favor equity and process whereas the American system tends to favor flexibility and results. Here's what it comes down to: America respects and rewards risk takers. Europe (by and large) wants to look after the little guy. Here's a case in point: In America the corporate cleaning crews go to work after I'm done my day. In my European experience, they have always been working a 9-5 and based on my American way of thinking, they get in my way ... I do not like hearing a vacuum running while I'm trying to work, it's disruptive. When this happens, my European co-workers don't have a problem, they go take a coffee break. This whole scenario would never fly in an American office (of the type I work in). -Spot

Re:What is a Right?

[spotvt01]

This basically sums up our view of each other: SOCIALISM : You have 2 cows and you give one to your neighbor. COMMUNISM : You have 2 cows, the Government takes both and gives you some milk. FASCISM : You have 2 cows, the Government takes both and sells you some milk. NAZISM : You have 2 cows. The Government takes both and shoots you. BUREAUCRATISM : You have 2 cows; the Government takes both, shoots one, milks the other and throws the milk away... TRADITIONAL CAPITALISM: You have two cows. You sell one and buy a bull. Your herd multiplies, and the economy grows. You sell them and retire on the income. AN AMERICAN CORPORATION: You have two cows. You sell one, and force the other to produce the milk of four cows. Later, you hire a consultant to analyze why the cow dropped dead. A FRENCH CORPORATION: You have two cows. You go on strike because you want three cows. A JAPANESE CORPORATION: You have two cows. You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk. You then create a clever cow cartoon image called Cowkimon and market them World-Wide. A GERMAN CORPORATION: You have two cows. You reengineer them so they live for 100 years, eat once a month, and milk themselves. AN ITALIAN CORPORATION: You have two cows, but you don't know where they are. You break for lunch. A RUSSIAN CORPORATION: You have two cows. You count them and learn you have five cows. You count them again and learn you have 42 cows. You count them again and learn you have 2 cows. You stop counting cows and open another bottle of vodka. A SWISS CORPORATION: You have 5000 cows, none of which belong to you. You charge others for storing them. A CHINESE CORPORATION: You have two cows. You have 300 people milking them. You claim full employment, high bovine productivity, and arrest the newsman who reported the numbers. AN INDIAN CORPORATION: You have two cows. You worship them. A BRITISH CORPORATION: You have two cows. Both are mad. -Spot

Quick fix

[BlightThePower]

I agree with you about the laughable statement quoted: All unions do today is drive a wedge between employees and management. That wasn't even true at the time of the birth of trades unionism in England when the boss was known to all and wore a big black hat just in case you weren't sure. Further, management themselves are usually in professional unions in Europe, the problem is defence from the boardroom and faceless institutional shareholders whose only contact with the corporation is a cell in their spreadsheet and by definition care only about the bottom line. Health & safety and the implementation of national laws aren't things they care anything at all about.

I think what people in the US object to is the "closed shop". The fact its American synonym is "union shop" speaks volumes. Simply outlaw the closed shop (or if its already outlawed then actively impose the law) and problem solved. Workers representation without the perversions and excesses of American tradesunionism which is barely recognisable as the same thing we have here in the UK. I support trades unions but I must say what I read from the US is a bit shocking (the crap as regards teamsters and construction workers especially). Thats not trades unionism, thats mob rule at the behest of another boss you have to obey. It could be certain unions will need, frankly, dealing with. Thatcher did this in the 1980s in the UK. Its not nice but it can be done.

Re:The Realities of Globilization

[zero_offset]

While anticdotal, notice that IBM is cutting jobs in Europe, but not the US or developing nations.

In 2002 they whacked about 16,000 people in the US.

And it's "anecodotal".

Re:This is the EUs fault

[bhima]

I'd rather take a dead end, minimum wage job here in Austria than go back to the US and work.

And before you say "Just another Eurotrash Dimwit who hates the US". I am a naturalized US citizen, and I lived, went to school, and worked in the US for over 14 years. Quite frankly the US is not what it used to be. Sure some companies lay people off, sure in some areas of Europe unemployment or inflation are high. But things move on, new companies hire workers and people get jobs. I'll take the over 5 dollars per gallon fuel cost and the higher taxes with a huge grin on my face, just to get out of the insanity that the US has become.

Fabrication not Insightful

[Martin Spamer]

The figure of 80% for employers national insurance contribution is a complete fabrication.

The employers NI rate for the UK is between 11% and 12.8% and that is without any allowances which typically reduce this by more than half.

Most businesses *DON'T* comply.

[Richard Steiner]

Executive pay is increased when things are good, but only rarely is it decreased, and senior executives are rarely held accountable for mistakes.

The example of Carly at HP has already been given, and airline executives are still making big bucks even as their companies are flirting with (or are already in) bankruptcy.

I don't know that caps are the best idea, but some concrete level of accountability would be nice. If a CEO screws up and costs the company millions of billions of dollars, they should have to pay a real price, not a purely symbolic one.

Re:No shame anymore (Why?)

[bored]

Cutting the fat is seen as acceptable because people assume that there is fat. That is accually a mangement failure too. It seems to indicate that there are a large number of people in the company that arn't doing their fair share of the work. This is probably true in a lot of these companies, but that accually stems from bad managment. If managment was accually keeping tabs on what everyone was doing they would know who just shows up and surfs /. all day instead of being productive. That situation would either be corrected or the person would be let go. Having people who were useful 10 years ago just sit around and surf is a bad idea for profitibility.