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Cutting 'Old Heads' at IBM (propublica.org)
An anonymous reader shares a report: As the world's dominant technology firm, payrolls at International Business Machines swelled to nearly a quarter-million U.S. white-collar workers in the 1980s. Its profits helped underwrite a broad agenda of racial equality, equal pay for women and an unbeatable offer of great wages and something close to lifetime employment, all in return for unswerving loyalty. But when high tech suddenly started shifting and companies went global, IBM faced the changing landscape with a distinction most of its fiercest competitors didn't have: a large number of experienced and aging U.S. employees.
The company reacted with a strategy that, in the words of one confidential planning document, would "correct seniority mix." It slashed IBM's U.S. workforce by as much as three-quarters from its 1980s peak, replacing a substantial share with younger, less-experienced and lower-paid workers and sending many positions overseas. ProPublica estimates that in the past five years alone, IBM has eliminated more than 20,000 American employees ages 40 and over, about 60 percent of its estimated total U.S. job cuts during those years. In making these cuts, IBM has flouted or outflanked U.S. laws and regulations intended to protect later-career workers from age discrimination, according to a ProPublica review of internal company documents, legal filings and public records, as well as information provided via interviews and questionnaires filled out by more than 1,000 former IBM employees.
The company reacted with a strategy that, in the words of one confidential planning document, would "correct seniority mix." It slashed IBM's U.S. workforce by as much as three-quarters from its 1980s peak, replacing a substantial share with younger, less-experienced and lower-paid workers and sending many positions overseas. ProPublica estimates that in the past five years alone, IBM has eliminated more than 20,000 American employees ages 40 and over, about 60 percent of its estimated total U.S. job cuts during those years. In making these cuts, IBM has flouted or outflanked U.S. laws and regulations intended to protect later-career workers from age discrimination, according to a ProPublica review of internal company documents, legal filings and public records, as well as information provided via interviews and questionnaires filled out by more than 1,000 former IBM employees.
How much money could they have saved if the 40+ folks were still around to point out the historical mistakes they were making?
The tech industry doesn't want to face the fact that its pro-immigration, pro-outsourcing, pro-get-it-done-no-matter-who-gets-fucked culture makes this necessary. Most of the clamoring for a UBI is essentially this if you read between the lines:
If we punished outsourcing, H1B use, etc. with hefty FICA taxes levied on their users, we could not only create more domestic jobs, but help reduce the deficits in our welfare system.
Enforce the H1B laws and up the H1B min wage to at least 80-150K based on COL.
If your cost out weighs your production you are expendable, if you are on the other side of the ratio get a raise of find someone who will pay you your market value. Cut throat policies can cut both ways.
Knowledge = Power
P= W/t
t=Money
Money = Work/Knowledge so the less you know the more you make
I was a contractor at IBM ten years ago. I wasn't hard to find accounts from IBM FTEs about how it was nearly impossible for an experienced IBMer (i.e., the older people) to be considered for open positions---all those jobs were getting filled by IBM India, IBM Argentina, etc. Even contractors were feeling the bite: frequent furloughs (four times during the last year I was working with them), no rate increases from year to year. Unless you're a Ph.D. in a field IBM is doing basic research in or maybe a bean counter, I cannot imagine that anyone would consider Big Blue as a career option. I certainly laugh after I get off the phone with recruiters looking to fill contracting positions with them.
IBM has been doing this for 30 years now and it is working quite well - unfortunately. So, don't kid yourself or let anyone tell you that they are failing at it.
When you're tech worker who's thrown on the street in your 40s, you're out of the game.
Retraining is a fairy tale - I have thousands in debt to prove it. A retired manager confided to me, "The reality is if we have a choice between two candidates with similar skills, we're going to go for the younger one."
Notice the word "similar".
And the adage that if you have the skills, you'll get a job is just a feel good phrase that gives comfort to the folks who still have jobs and allows them to delude themselves into thinking it won't happen to them.
Tech is a shit field if you want to work in for the rest of your life.
This shouldn't be news. IBM has been laying off older workers for a while now. My dad was a senior DBA in his group and was used as a model for some of the DB/2 certifications, but was released by IBM due to age. He never had any performance issues and was well liked. As a further blow, IBM laid him off a few days before Christmas. Thankfully he found another job quickly, but not until the new year and a very stressful holiday for the family. Any IBMer approaching middle age should worry about their longevity with the company.
No, I mean Social Security, Medicare and Medicaid are going bankrupt because companies can send all of those taxable positions overseas without facing any consequences. Employers should be given a good set of choices:
1. Be part of society, participate in the safety net and pay very low corporate income taxes.
2. Exist on the margins to hedge your bets and pay through the nose.
If IBM had another 50k American workers tomorrow, all of those employees would be paying income and FICA taxes. IBM would be paying employer share FICA. IBM would then be justified in demanding a 5-10% tax rate and not a 25%+ rate because they're putting a lot of people to work and funding the safety net which is the lion's share of the budget.
Will always overcome youth and skill. Beware, millenials, you won't know what hit you.
This report sounds legit, although I'm automatically-skeptical because every article I've read by ProPublica (except the one where they mentioned my Congressional campaign in a favorable light) has been deceptive and misleading, arranging facts in such a way as to draw incorrect conclusions and create unfair attacks on organizations people trust.
With the American Red Cross, they've repeatedly published the organization's leaked Lessons Learned--memos which state where they encountered difficulties and problems, and what to do about it in the future (or what to have further discussions over)--and claimed Red Cross is hiding and ignoring serious operating problems and generally wasting money. With Amazon, they went as far as claiming Amazon's offer being the cheapest was a lie because Amazon's offer has free shipping and "let's suppose shipping costs $6--now the competitor is cheaper!" Both of these roll off into bigger discussions that get heavily face-palmy, but let's avoid that here.
The first thing that sticks out here is IBM's memo, shown in part in the article:
Just as importantly, businesses need the gray hairs just as much as the old heads need and want the work. What businesses can't afford to do is simply rehire their experienced workers and put them back into their old jobs. Businesses have to think smarter than that. They need to leverage the experienced and practical intelligence of mature people, and get them to work with younger colleagues and reinvest their experience back into the business.
ProPublica adds:
While recognizing that older workers were important to high-tech employers such as IBM, it concluded that “successor generations are generally much more innovative and receptive to technology than baby boomers.”
These are not mutually-exclusive facts. They can both be true. That doesn't seem to get in the way of a good story:
The message was clear. To succeed at the new technologies, the company must, in the words of the presentation, “become one with the Millennial mindset.” Similar language found its way into a variety of IBM presentations in subsequent years.
I'm not saying IBM did nothing wrong--I need more facts for this--but the tone of the ProPublica article is one centered around generating a certain bias, a way of thinking about statements. "We need to appeal to a younger crowd"? "We need to bring in newer college graduates and their familiarity with new technologies"? Are these discriminatory? Well, okay, yes. So is selling youth baseball bats. Are they discriminatory in a manner of attack, or a manner of trying to extend business to meet modern trends?
I see here IBM making an up-front statement that the future is not throwing out the old and bringing in the new, but rather that the world is changing and that they must bring in the new and adapt to that change without making the mistake of discarding their experienced and important engineers. Yes, they're saying, "Hey, we specifically need to hire younger people to draw what they know and how they think into our corporate culture and organizational knowledge." That's a valid technical concern, although some old folks do behave as outliers and keep up on technology while also having that mindset common among the younger--and they should be hired if qualified.
None of that excuses abuses like this:
Paul Henry, a 61-year-old IBM sales and technical specialist who loved being on the road, had just returned to his Columbus home from a business trip in August 2016 when he learned he’d been let go. When he asked why, he said an executive told him to “keep your mouth shut and go quietly.”
Or especially like this:
Encouraged employees targeted for layof
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Same here although I am still holding on and the company seems to value few remaining greybeards enough to put them in 'unaffected' departments during layoffs so that there is no misunderstanding as to who is wanted to leave and who is not protected species. They tolerate my no PC comments only because I do not care enough about my health to dig in and deliver no matter what. I am not afraid because I am so old I do not give a f. and on top of that I am still better that the monkeys I am training - most of them are intelligent but not willing to dig or not capable of digging. The air is getting thinner here too.
But then, maybe I am a survivor. I got laid off and never seemed to bounce back. I saw some of my friends languish and eventually become unemployable.
I decided to "retrain." I now teach at a middle school. Depending on the students or the class, I teach Word, Photoshop and Excel, which substitutes for a High School class that teaches the same. In another class I each robotics, starting with the Lego EV-3 and expanding into the Arduino boards. no, it isn't exciting; but it is keeping me from unemployment.
All that being said, there needs to be a reworking of the labour relationship in the US. The Social Security retirement age is unrealistically high and private pensions have evaporated. At the same time people are seen as "used up" at earlier ages with each passing decade. Someone will inevitably chime in with some small exception; but the reality is that the labour potential of people 50-70 is being unrealized at the same time that they are treated as being too young for most forms of retirement safety nets.
H1Bs are currently handed out by a lottery. Instead, hand them out based on the salary of the employee, highest-paid first.
Really need an H1B employee? Gonna have to pay more.
Not about what you need.
If you can't imagine new tasks with a literal army of experienced pros behind you, but all you can come up with, is to fire them, then I'm sorry, but you're the epitome of management failure.
It is one of the few cases where failure might literally be epic!
Hell, let *them* come up with new ideas, ventures, hell, you could create entire new fields, take over whole industries, and still have 100k people to do more!
You don't want them?
Give them to me!
Five years and I will buy your entire damn company, fire you, and give the entire newer workforce jobs *on top of that*, to achieve even more!
How about a damn Dyson swarm of space robots of all kinds, harvesting resources and creating things that will create so much wealth, nobody even *needs* a job anymore! (Not that anyone would be blocked from pursuing their dreams!)
With that amount of people it could be done!
In europe, the competition between unions, and the freedom of workers to join them or not (pay dues or not) means that unions stay truly interested in worker rights.
In the US, we have a number of such laws, called "right-to-work" laws, although the only thing required to establish a right to work is to prohibit union security contracts from denying or terminating employment if a worker is willing to join the union and pay dues.
These laws have lead to reduced payment of union dues by workers who enjoy union tenure, union collective bargaining, and union grievance processing: the worker pays nothing, yet when his manager tries to discipline him he calls the union and demands representation--for free. To cover the costs, union dues have skyrocketed, so much so that while UAW workers (who all work in union shops where everyone joins and pays at least the core dues, but not necessarily strike fund dues or political fund dues) take 1.4% of your paycheck as dues (half an hour per week), some communications workers pay more than 20% (8 full hours) of their paycheck as dues.
In effect, it's like opting out of the union.
I don't want a US mafia style union in my workplace. I'd rather just go it alone
With union tenure clauses, all covered by the union are granted tenure after (usually) 60 days, and have a right to recall and protection from lay-offs. If we stop supporting freeriders, then freeriders will be the first to lose their jobs when lay-offs come--which is actually quite frequently. That would ensure that non-union workers have trouble holding their jobs for more than a year or so, while receiving lower wages, less-robust benefits, and a complete lack of representation in grievance. Union members, on the other hand, would enjoy high wages and long tenures--as well as 401(k) vesting, since the revolving door only applies to non-union workers and those workers never make the 3 years for 401(k) vesting period (and never get off the 60-hour vacation plan, while union members get 5 weeks per year once they're around for maybe 5 years).
Do you really want to play this game? Because you'll lose.
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Let's face it, the tech industry just does not like us oldbies. We have to come to terms with it. IT is highly driven by fads, and it takes a suspension of common sense and reason to fake enthusiasm for silly fads. Microservices for non-web-scale projects that bloats the app by 300%, no-sql for medium projects, Node.js, flat UI's where you cannot tell what a button is, "responsive" Bootstrap that wastes screen space AND still doesn't shrink right on mobile devices without 93.28 hours of fiddling per screen on 7 brands.
Nobody uses mobile for our software anyhow: it's for office work. The user even complains about the wasted space, and the youngie says, "But that's the new thing! See, it can reformat on smart-phones! Isn't that neeto!?" The user then says, "nice, kid, but we use desktops here. We intentionally purchased big monitors so we don't have to scroll. Your bloated rewrite makes us have to scroll." The kid ponders a few days, and then says, "We'll, we can toss Bootstrap and start all over again learning the latest UI Javascript gizmo that wastes 3% less space than Bootstrap. Rinse, repeat when a new one comes that wastes 6% less space..."
Old people can spot BS and waste better, but PHB's don't like their BS being exposed. They want kissup, not logic. Trumpish egos and attention-spans are the rule, not the exception in management. He got rich by following, dishing, and catering to bullshit and architecture/redecoration fads. It's why he watches so much TV. The PHB's want young naive snot-nosed kids who think every dumb fad is the greatest invention, which to them it is because it's all they know: they haven't seen the other 27 fads that got dumped on the trash pile or squirmed into tiny niche corners where they belong.
It would be more satisfying having a career where long-time knowledge and experience is actually valued. Although doctors have to face new medicines and treatments, the human body hasn't changed in 150,000 years. Per lawyers, the laws don't change that much either, roughly 1% or less a year.
Our eyes and fingers get slower with time, we cannot realistically keep up with ever changing IT fads like younglings do. Young people seem to have a Fad Lobe in their brain that older people have lost over time.
Table-ized A.I.
I didn't suggest anything to the contrary. You just missed my point which is that every foreign worker doing an American market-related job is a) not paying FICA taxes (employee or employer) and b) not contributing to the welfare of our national community.
The more a company that does business in the US chooses to export to the US instead of creating jobs in our market, the more they should face in taxes. The more they provide services to our market, the more their native clients should pay in FICA-related taxes. Specifically, I am saying that offshored work should incur punitive FICA excise taxes. A company that sacrifices $5m worth of native worker jobs to offshore to a $800k team supporting them should incur bare minimum a 100% FICA excise tax on the value of the contract. Plus the year end percentage of the company's total workforce based abroad who support the American market should factor into the overall tax rates of the company.
In other words, a company like IBM should be largely treated like a foreign company because it's about 75% foreign employees (citizenship + location) and heavily supports the domestic American market. Accordingly, it should be taxed in a way that privileges companies that have a higher ratio of American citizens to foreign employees.
IBM couldn't evaluate the value of it's workers. In a lot of places senior management really didn't understand what groups did so they came up with different metrics. Unfortunately the metrics often didn't make sense and were eventually gamed. One metric, the amount of time people spent on billable work got totally out of control. Secretaries were all fired because they never did work directly billable against a customer. Company meetings were held at lunch so they wouldn't count against total time. Training budgets were left unspent. IT was internally outsourced, sort of. IT became so incompetent each group had to maintain there computers on their own in spite of it. Older workers had more vacation time which would lower the billable percentage of a group. You could be the most amazing worker in the company but if you had 5 weeks of vacation you were toxic to your groups metrics.
I worked in a secure lab in Ottawa. We were screwed because we didn't fit in the metrics correctly. We billed up to $6000 USD an hour but lost money according to IBM accounting. We had to do our own sales but since we were classified as a delivery group had to give half our revenue to another sales group so that the sales could be counted by a sales group. When we made a sale in another geographic region we would give half the sale to a local sales group and half to the one in the other region. 4 guys, 1 weeks worth of work, bill the customer $250K and we are getting grilled for losing money. Oh, and the grilling counted against our billable hours.
Who posts there is no age discrimination.
There's always one. Probably from Google (currently being sued by over 200 people including one their automated software picked 4 times only to be rejected by young managers). You know, google employees have posted here in the past that old people wouldn't fit their culture.
Something familiar about that statement..
"Women won't fit our culture"
"Blacks won't fit our culture"
"Irish won't fit our culture"
We need to bust these companies. but also we need to move health care away from companies. A young employee costs the company much less than an old employee and it creates a perverse incentive to lay off older employees. There are other reasons, but that one would be easy to fix. National health care also helps older people, and younger people (who are sick), to start their own businesses.
Part of it is simply oncoming automation.
Part of it is simply much lower wages in other countries.
It is a complex situation. But I know a lot of *50* year olds who got laid off and never worked in the field again. Some still were not working 5 years later.
Listen up young folks- I started saving *hard* at 33. I lived on half of what I made after I saw this stuff happen and after i went thru a struggle with cancer. I retired at 51. My date was one day after my corporation laid off 500 people and went to Infosys. I kept it close to the vest and they had no idea why I was so happy (severance and unemployment free on top of my already sufficient retirement). Be in the same boat. Keep working on your skills but save hard.
I think age discrimination is going to get much worse as automation increases. And safetynets are already being cut by Republicans. I don't know why *anyone* who wasn't wealthy that was over 40 would vote republican for any reason outside of guns and abortion. It's like slitting your own throat. But I can respect people who vote republican because they are opposed to abortion (even tho I'm not opposed myself). The guns have gotten a bit more iffy. Gun enthusiasts are supporting weapons with killing power exceeding that of weapons we already ban or regulate heavily. If gun enthusiasts don't get reasonable, they are going to lose big after a few more massacres of children.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
The problem with your logic, and the place where all such arguments inevitably fall down, is that employees don't get to choose their pay level. If older employees could say, "I don't need this stress. Demote me to junior grade and reduce my pay accordingly," and then slack off, their experience would make them worth keeping. They can't, and their higher pay grade is basically tied to their age, which means canning the people because of their pay rate is age discrimination, just under a different name.
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The gig economy didn't create the problem. The outsourcing and free trade cult is the source of the problem. Read an overview of Ricardo's "famous arguments" that are parroted by every smug free trader on the Internet and laugh hysterically at how out of touch with reality they are. FFS they didn't even survive the 19th century when banks began to accept remote money transfers.