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IBM Offers Retirement With Job Guarantee Through 2013
dcblogs writes "IBM is offering employees who are nearing retirement — and may be worried about a layoff — a one-time voluntary program that would ensure their employment through Dec. 31, 2013. The program, described in a letter addressed to IBM managers, 'offers participants 70% of their pay for working 60% of their schedule.' Participating employees would receive 'the same benefits they do today, most at a full-time level, including health benefits and 401(k) Plus Plan automatic company contributions.' In 2006, IBM employed about 127,000 in U.S. The Alliance@IBM, a CWA local, now estimates the U.S. workforce at around 95,000. How far IBM will go in cutting is up for debate, including one radical estimate."
Why the heck does IBM need to cut so many jobs? They're actually doing rather well by all business standards.
Yet here they're acting like they're hemorrhaging money and need to cut costs fast.
American Airlines did this sort of thing too, along with voluntary furloughs... But they're actually in trouble and have a reason to.
WTF?!
Just like the auto industry tried to do...
Honestly I am surprised that IBM holds on to employees that are nearing retirement age at all.
I had thought that IBM had a problem with attrition among their mainframe programmers: More of them dying though natural causes than entering the field.
No sig. Move along - nothing to see here.
If IBM were not closing in the US and moving completely to China and India as fast as they can, just like GE and a zillion other companies, lets figure out the crossover point:
Assume one months pay per year of employment.
This is guarantee of 70% of 18 months or about one years pay. Along with 18 months of health insurance, I'd assume.
So if you have more than 12 years in, you should risk it, you'll probably come out ahead. Less than 12 years in, you'd be better off taking the offer.
Most likely they're going to downsize every american citizen in their corporation, so you do appear to be better off taking the offer because its not a random distribution.
I'm also curious in salaried positions if you're expected to put in 50 hours per week for a "40 hour schedule", then what does 60% of schedule even mean, like you no longer work Monday and Friday at all, or you're still expected to put in 50 hours per week, except now on a imaginary "24 hour schedule"?
And a message for the last F500 employee in america, please remember to shut off the lights on your way out of the office...
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
My father was just released from them last year. He was a senior level engineer 3 years away from retiring, and then they come out with this?
Or can you stay in corporeal form?
I work for a large company where the senior folks have an attractive retirement plan. Since work is slowing down and there are fewer exciting projects to work on, more of these folks are deciding to leave. They can decide to pull the ripcord rather abruptly with an email saying they've decided to burn up their remaining vacation pay while waiting for their retirement package to be processed. It kind of sucks to need to talk with someone who is the sole holder of some technical data to find out they had announced their retirement the week before and are now gone.
On top of how their abrupt departure can leave some of us more junior people stranded, a lot of these guys don't know HOW to retire. They're so fully part of the Borg that once they separate, they have no idea what to do with themselves. Some come back eighteen months later as consultants or part time employees. Others sit at home and whither away. I don't think is as much a problem for Gen X'ers and younger, as we've got so much going on in our outside lives we can't wait to be free to pursue those interests. However, a lot of the senior people have given so much time to the company they're lost without it... institutionalized, if you will.
Yeah, I think this is a great idea, whether it's to initiate a RIF or not.
work there, but I'd really like to sign up for this deal! I would like to work 2 12 hour days and have 5 days off a week...
This is purely anecdotal, but from experiences with past co-workers who have been in the IBM trenches, it apparently isn't unheard of to get sacked a few months out from retirement at IBM, thus losing benefits or full retirement or whatever. So I'm guessing to those at IBM in the throes of fear of being sacked, this is perhaps an out to prevent being completely screwed and perhaps from an MBA standpoint a moral stabilizer (or destabilizer depending on your business unit).
Any IBM'ers feel free to chime in? My story is simply hearsay so I'd be interested in knowing how it really is under the various tentacles of that hydra.
'We are trying to prove ourselves wrong as quickly as possible, because only in that way can we find progress.' RPF
about that shit, 4 days straight on drugs and then you sleep for 36 hours and stumble in to work. Friggin sweet, that's almost 100 hours a week on drugs, please hire me IBM and ill show up and look like I'm working to help out the financial sitch.
IBM has not been the same since the group of Neo-Con clowns got a hold of the board.
They went from a flagship on innovation (and not in the M$ sense) to a brain dead bonus machine for executives (kind of like HP).
That's an empty promise. IBM will just keep forcing them to work overtime and now only pay them 70% of their salary.
I know it's idealistic, but you would think companies would *WANT* to treat employees with dignity and actually let them retire when it's time. This constant sending of jobs overseas is going to leave the United States good at making pizzas and delivering them and little else.
One of the reasons I believe in unions is for a simple reason. Yes, they cost employers more, but a company that is raking in the billions should also *WANT* to share with the very people that earned those billions in the first place. Once a company goes public, they lose control (and their soul) to the shareholders. I fail to see to point of even going public sometimes.
IT in this country is dying a slow death. Certain large, popular companies manufacture their very popular phones and gadgets overseas, denying American workers the dignity of having jobs just to save money on employment, but yet have the nerve to *EXPECT* and *DEMAND* these same Americans pay the outrageous costs of the products that were made for a pittance overseas, saving the company billions. Obviously, there are no scruples anymore where money is concerned.
I honestly hope that one day the US government will pass laws that force companies to pay the taxes they are hiding. That close any and all loopholes. That forbid lobbying of any and all kinds from anyone or any group. That state if you are an American company, you will pay up. If they move offshore completely to circumvent the laws, they will be fined accordingly and their products forbidden to enter the country. This country could pay for its infrastructure needs and alot besides if people would simply play honest ball. I hate the fact that everyone is so caught up in money, money, money. It's ruining this country.
Ran "Guaranteed employment through Dec. 31, 2013 and offers participants 70% of their pay for working 60% of their schedule" through Google's Bullshit Translator and got back "We'll promise to keep you on for another year if you'll agree to a 30% pay cut."
What political party do you join when you don't like Bible-thumpers *or* hippies?
If you look at how many companies IBM acquires each year, there is no surprise that there is duplication in the management ranks. Often those let go from IBM find other jobs in the company, seeing the internal job postings, knowing teams that are growing, etc. This seems to be a way to speed up that attrition and get more room to hire people in areas that they need resources in.
it. Its miision is are tied up in
If IBM doesn't want to employ Americans then we as Americans can choose not to employ IBM. There are plenty of other companies that are quite good that provide all the same services as IBM and do want to employ Americans. IBM will only change it's strategy if it COST them sales. Nothing else will change their strategy. Lower quality for example only matters to IBM if it cost them sales and hurts their margin. Keep in mind they are moving jobs to other countries specifically for that reason.
IBM is currently driven by earnings per share (of stock). They have a goal of, I think, $20 per share by 2015. To meet this goal, they can either increase revenue, reduce costs, or buy back stock to increase the price of outstanding shares. They probably won't make it by revenue increase, so they are cutting costs (layoffs in the US) and buying back stock. Check out Cringely's blog from a week ago.
Or, will "those who were responsible for the sacking, have been sacked" . . .?
Back in the early 90's, when IBM nearly cratered, then CEO John Akers hatched a plan to break up the company, because he didn't know else what to do.
Akers got the boot, Lou Gerstner came in, and reversed the break up.
IBM is undergoing an ambitious plan for growth up to 2015, and these cutbacks are part of the plan. We'll know in 2015, if it worked. If it doesn't. Well, those planners will be getting the 70% / 60% offers.
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
run, baby! retirement is *awesome*! retired for first time in '97, second time in '05, now waiting on the pittance from Club Fed with the third
In what way was the breakup reversed? Thinking of Toshiba - LCDs, Lenovo - Thinkpads, Hitachi - Storage, Cisco - Networking Hardware, AT&T (WAN), Lexmark (printers) ..all companies that took over product lines. Thinking of the manufacturing plants that were sold off.
Get real. What do you think a retirement / pension "guarantee" ever was? And what happened to those promises? Chapter 7, that's what happened. Look at all the workers who were promised future benefits in lieu of today's pay and then none of it ever materialized.
IBM is like, the MOST cynical place to work after Intel, which IS the WORST place to work, ever.
howdy y'all,
take a look at this set of articles by the original Cringely.
- Not your father's IBM (I, Cringely - Cringely on technology)
http://www.cringely.com/2012/04/not-your-fathers-IBM/
it's a very well thot out condemnation of ibm and it's planned 75% north america emloyee count reduction. definitely bean counters doing their usual "forest for the trees" gutting of a company.
take care,
lee
You have your facts wrong; IBM has a cash balance plan ("hybrid plan"). They didn't lose the lawsuit, and the Supreme Court refused to hear the appeal after IBM won.
Specifically, July 1, 1999; I was an IBM employee at the time they converted.
In a cash balance pension plan, like a defined benefit plan, there is no favoritism in contribution for tenure, so getting rid of the older workers doesn't benefit IBM, so long as the older workers are productive.
You should read up on cash balance plans: http://en.wikipedia.org/wiki/Cash_balance_plan
You should also realize that ranknfile-ue.org and endicottalliance.org (alliance@ibm) are propaganda arms of the CWA (Communications Workers of America) union, and that the CWA has been trying to get their camel's nose into the IBM tent for forever, ever since they saw the handwriting on the wall about the Internet becoming a big deal. They have their origins in the telephone industry: http://en.wikipedia.org/wiki/Communications_Workers_of_America#History
When I was at IBM, we never gave them the time of day.
* First of all, very few IBM employees are technically communications workers; all of the CWAs historical strikes to date have been against telephone companies.
* Second, we were very well paid with very good benefits, and there was no reason to hold IBM's butt to the fire in exchange for the CWA getting a percentage of our paychecks to line their pockets.
You really need to RTFA and look at who sourced it.
-- Terry
I stand corrected. My memory is playing tricks on me. I remembered that IBM had aggressively encouraged employees to switch from a define pension over to the cash balance account and that things had gone poorly, and thus IBM had a surplus of define pension plans (which are affected by interest rates).
By the way, from my perspective you took a sharp turn with the 2 organizations which I did not follow. I had to look those up.
Is that in IBM and so many other companies, the C-level staff changes, the Board changes, the employees turn over but the top people in HR NEVER DO. And no one even really knows who they are, what their plans are, who they're accountable to or what their direction is. Their job seems to amount to nothing more than creative and stealthy ways to fire people.
To all the libertarians here who are cheering, I'd ask "Why do the HR tools even have jobs if they've done such an astonishingly bad job at OVER hiring in the first place?"
Has anybody been reading http://www.cringely.com/ ? He's just written a series of articles about IBM and done a pretty good job of explaining the where and why's of what's happening.
..IBM prefers to hire cheap people in buttfuckistan instead of America ? Cut through the shit, man.
IBM has indeed a very rich heritage and invented lots of highly important things for the business of processing data. Think of SQL, virtual machines, raster-tunnel microscopes, multi-user operating systems and much more.
BUT, a key part of their business model until ca. 1990 was that they had a semi-monopoly on data processing, Customers and competitors weren't up to the job of doing big-data processing. IBM was essentially doing magical things. But then a large number of computer science graduates and startup companies (such as Compaq, Dell, Microsoft and Oracle) entered the data processing business. Suddenly, IBM appeared to be expensive, old-fashioned and complicated. You can indeed run Microsoft products without a customer engineer on-site, but you still cannot do it with many IBM products.
It does not matter that IBM "invented" the PC. It was actually an assembly of other companies' technologies (Intel, Microsoft) and not much IBM content at all. They were forced to create their own worst enemy and that enemy mutated into something extremely powerful and ate the best parts of their traditional mainframe and minicomputer business. Soon that business will be history, as the most advanced data processing companies (Google, Facebook, Yahoo) don't need any IBM hardware. All the big banks and the old organizations such as the Amadeus airline reservation system required lots and lots of IBM S/360 (and sucessor) mainframes. Google and Yahoo proved that enormous data processing tasks can be done with a large army of simple, cheap and unreliable PCs. If one dies, software simply switches over. Data is stored multiple times so a single failure doesn't matter. Google Engineering ingenuity beats hardware problems.
So IBM already tries to transform itself into something like Tata - an outsourcing company. Others, such as Control Data Corporation tried the same path in the past when their R&D-heavy products wouldn't sell any more. They failed. IBM will fail, too.
The future of American Data Processing clearly lies with companies who (factually, not just verbally !) seek excellence and know they have to pay high wages for that. Think of Google and Apple. And not a billion of mediocre Chinese or Indian engineers will be able to outdo them. Actually, not very much innovative in Data Processing comes out of Asia. There is probably more innovation going on in Scandinavia (think of the Qt toolkit) than in the whole of Asia.
Let IBM die a nasty death and buy a cheap little American tombstone for them. Engrave "Great for 100 years, after that shit".
IBM products cannot be run without a rather costly CE. MS, Oracle, Intel, Google, Apple products can be run without such a person.
IBM failed to become a products company and the economics of being a "solutions" company are not good against the "products" companies I mentioned.
If Google can run several massive operations (search, email, docs) on an army of cheap, unreliable PCs, why do you need a mainframe ?
Try to radically wean yourself off the mainframe ! It is doable but requires some change in attitude. No single, big machine, no single big database, for example.
The most valuable thing people nearing retirement have, especially in management positions, is their client contacts. Consulting companies work in a pyramid shape where making a sale with a smart and smooth talking consultant brings in work and revenue. Many other, lower on the totem pole, people get to work.
By keeping these key sales points, IBM is keeping the sales funnel and only paying 70% for it.
This is a deal even for the people who are near retirement, for some reason my experience working with them has been that they don't like to retire as it ends up being too quiet. Usually they wind down anyway. This is a win-win for IBM.