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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."
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
Heh, I'm sure you're being facetious.. but in the tiny event that you're not...
A while back we had some IBM big iron on campus, and our regular IBM tech was a guy in his (estimated) high 50s. Never have I seen someone who so *intricately* knows their shit as this man. He casually explained to me, while working, exactly what the capacitor cards do in the p690, why the system is designed the way it is, and so on. His troubleshooting ability was amazing, too.
This is expected when you have three to four DECADES of experience. A newly minted college grad may be able to sling C# code like there's no tomorrow but he won't have this experience.
I think IBM is making a mistake by letting these people go, and I'm betting they'll suffer down the line for it.
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.
They've painted themselves into a corner. They experienced rapid "growth" by decreasing the bottom line. Now investors expect that, and so in order to keep up, they must continue aggressively decreasing the bottom line. If they stop, their stock price will drop as growth slows dramatically. It sucks for all involved, because eventually they'll run out of bottom line to cut, and then everybody's screwed except the investors (and executives) who sell just before that happens.
This is exactly the sort of thing Steve Jobs was talking about in the quote about bean-counters taking over the company and loss of product focus. Making enterprise software on an IBM scale, and doing it well enough to grow constantly, is really super hard. Short-term gains through off-shoring are easy.
-- 77IM
Student: Is it true that the foundation of the universe is paradox?
Master: Well, yes and no.
The longer people on the payroll
That's an odd way of making the decision - there are very few businesses where how long somebody is has anything to do with their job performance.
I am officially gone from
Provided, of course, that these are actually jobs that aren't needed. Corporations sometimes suck at that part.
Several years ago, the entire project team I was on was notified we were being let go. As we got closer to our final days, Sales had their knickers in a twist because they had a huge business deal on the line for the product we built.
Trying to explain to a panicked salesman that fixing that bug or adding that feature wasn't going to happen because your last day is the end of the week is always fun. It boiled down to "wow, how unfortunate for you to be trying to close a multi-million dollar sale when the company has decided they don't need any of the people involved". Of course, the salesman was frantic about the sale and his commission -- couldn't quite understand why that was no longer our problem.
I've seen several instances where the bean counters decided to get rid of certain people without actually knowing what their role was.
Lost at C:>. Found at C.
I used to work at a company and they decided that each department needed a 50% cut in staff. This was calculated on actual staff, not on people actually being there.
One department should have 4 people. It was 2 people understaffed, so they fired one. Person got a nice handshake to leave. I believe several months (7 or 8) pay.
That person was re-hired after a month. I would not be surprised ig that person was hired with a higher pay then before.
Don't fight for your country, if your country does not fight for you.
Difference between education and training:
Educated guy has stuff to think about and do; hobbies; lasts a lifetime.
Trained guy has nothing to do but go to work, nothing to do at home but watch TV, maybe drink.
I've seen both types retire... uneducated retirement isn't pretty and they don't live long, educated guys have a freaking blast after retirement.
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
Where do you work? Most every state in the US has at will employment; you can fire whoever you want whenever you want, as long as you aren't doing it in retaliation or to discriminate, and even then the burden is o the fired employee to prove. Maybe your company signs contracts with their employees, or explicitly states that you won't be fired without cause, or (more likely in general but given your 'playing solitaire' comment pretty unlikely) maybe they're unionized. But outside of those situations there's no reason your company couldn't fire 90% of their workforce tomorrow morning without warning.
Who wants to work? You sit in your cubicle. With your fellow cow orkers. You've got things to do - things so odious that others have to actually pay you to valuable money to do it. Better to just sit in your house, working on some project that you, personally, found so interesting you'd do it even though nobody's paying you, and share your knowledge/skills.
A prime example of theoretical vs practical.
The legal costs of defending someone filing a lawsuit, even a completely frivolous one, are so high compared to the cost of some salary that its cheaper to collect a folder of signed disciplinary actions and formal gathered evidence than to just toss them out on the street like a bouncer in an old western movie tossing a guy outta bar.
There are also numerous legal issues with your exaggerated example of firing 90% of your company... here we have "at will" theoretically, but the company has to pay a rather substantial fine to the state if they fire more than 50 people with less than 60 days warning. I really have no idea why. Technically its not "at will", in the same way that our financial system is not a "free market" but we pretend it more or less is.
Never forget than 50% of management is below median. You might think they would want to dispose of the deadweight, but they may be idiots.
Finally, or they may realize if they get rid of the peons they won't be able to justify their empire based on # of direct reports. One place I worked at, the manager really wanted to be a director, and he's not getting that promotion unless he has the minimum of X front line employees, so lots of solitaire was played. Out of business now, of course, but it was a rational strategy for that boss at that time. I'm sure he's a VP (if not higher) somewhere now.
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
This is the sort of attitude that permeates the computer industry today. This is why we have people building software that absolutely and faithfully recreates the problems that were solved in the 1960s and 1970s - the people doing the work have absolutely rejected the idea that there is anything to learn from the past. History is dead to them because they think everything they are doing is new and different. They think they are striking out in unknown territory when in fact they are just walking alongside the same path that was covered 40 years ago.
Today, many of the same problems that are encountered are simply recreations of things that happened before. A huge problem is file systems that do not have sufficient robustness to deal with unexpected outages and hardware errors. If you have a file system that fails if you shut the power off unexpectedly at the wrong time you have something that was designed from a blank piece of paper. This kind of problem was dealt with in the 1970s in several different environments but nobody working on recent file systems have any experience with those solutions. Mostly because "it is all new" is an attitude and considering anyone over the age of 40 to be outmoded and incapable of dealing with all this new stuff.
Companies think they can build systems to retain the knowledge that actual experienced employees would give them. And they end up spending multiples of their salaries to do it. And it never works, and always gets torn down for the next management book of the month.
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
But that is expensive. A company could go out and buy the exact same benefits for their employees via a life insurance company – but at much higher cost.
Life Insurance companies (effectively) have to discount their liabilities at government bond rates – which are guaranteed. I mean, if you are going to guaranty a rate, and returns are linked to risk, that implies a low risk, and thus a low return.
I think you are a bit off on Social Security. Currently benefits are tied to Average Wage Index, not inflation. (And yes, Congress will sometimes step in a goose the figures up a bit when inflation goes up faster then the Average Wage Index, but that is the exception, not the rule.)
But back to pensions – and those are expensive. A company could go out and buy the exact same benefits for their employees via a life insurance company – but at much higher cost.
Life Insurance companies (effectively) have to discount their liabilities at government bond rates – which are guaranteed. I mean, if you are going to guaranty a rate, and returns are linked to risk, that implies a low risk, and thus a low return.
Private companies can use a much higher rate, usually a blend of stock market rates and corporate bonds – and thus are much freer to take risk.
It’s not that I am against pensions – it’s just that I am against the bad actuarial assumptions that most company plans make.
I will point you to a contra example. When AIG blew up, and the government had to bail out corporate, you might have noticed that they did not have to bail out the fixed annuity arm. That’s because 1. the life insurance was segregated out with their own accounts, 2. the pension obligations were conservatively modeled – by state regulators who are not interested in bailing out life insurance companies.