The CWA’s (Communication Workers of America union) Alliance@IBM Employees jobs cuts website has an interesting view of what’s going on inside IBM from its union employees in lieu of all the constant layoffs that are going on despite record quarterly profits.
Seems like no matter how good the quarterly numbers come in, more employee layoffs result in the U.S. and the number of employees increase in India and China.
In 2000, IBM had a U.S. workforce of 153,587; in 2014, it’s an estimated 83,000.
Lately, it looks like IBM HR is manipulating annual employee performance review scores as a way to cut workers and then skip paying full severance to those they lay off. This was GE CEO Jack Welch’s favorite way to keep employees on edge and goose up earnings.
It’s been a mess over at IBM since back in 1993 when Lou Gerstner was hired by the Board to run IBM. One of his first actions was to cut 60,000 jobs to the tune of $8.9 billion in write-offs.
There continued to be layoffs throughout his tenure, but IBM kept numbers low enough to stay off the news programs and out of the main news pages; at one point IBM estimated that keeping layoff numbers just under 7000 per month would avoid excessive scrutiny and bad press for a company that was allegedly rebounding.
Gerstner was strictly a numbers guy. He went to Harvard and came to IBM via McKinsey & Company management consultants, American Express, and RJR Nabisco. KKR (Kravis Kohlberg Roberts &Co.) is the notorious leveraged buyout firm who acquired RJR Nabisco and installed Gerstner as its CEO. The RJR Nabisco takeover inspired the book and movie “Barbarians at the Gate: The Fall of RJR Nabisco“, an ode to corporate greed and stupidity. After the acquisition was completed, RJR Nabisco was broken up and sold off piece-by-piece until it stopped operating as a single entity in 1999.
While he was at IBM, Gerstner implemented a lot of gimmicks to increase the stock price and company valuation including enacting stock buybacks when the stock price was at its highest, which is a very stupid use of money, unless of course it’s being done to increase one’s own bonus.
In one of his numerous grabs for taxpayer dollars for corporate welfare, there was Gerstner was on-stage with Bush collecting a huge government handout (well over $1 billion) for “business interruption” compensation resulting from the 9/11 attacks. IBM increased the amount of local, state, and federal tax breaks and subsidies it collected during Gerstner’s term. Some states found out too late that IBM would grab the money and then close their facilities at a later date leaving people unemployed and taxpayers holding the bag.
In another Gerstner move, employees were classified as management (staff) in order to avoid paying overtime; most employees regularly put in between 50-60 hours per week for 40 hours pay.
One of his final acts was to convert pension plans from traditional defined benefit pensions to 401Ks. They did this over a weekend to attract as little attention as possible from employees.
Continue reading What has IBM Wrought?