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Put not your trust in multinational corporations

by: jvwalt

Tue Feb 28, 2012 at 19:51:58 PM EST

(With apologies to Psalm 146.)

Someone I know lost her job yesterday. Worked for most of her adult life at IBM in New York State. She's now in her mid-50s, got a month left on the job, then six months of severance pay. (Furloughed workers get one week of pay for every six months of seniority.)

Thank goodness she'll get her 30 years and qualify for a pension. Some of her colleagues will fall just short, and they're well and truly screwed. But the pension isn't nearly enough to live on, so she has to find work. She's got some good computer skills and a strong work ethic, so her chances are pretty good. But it's still a real shock, like suddenly stepping into an unseen abyss.

IBM laid off an unstated number of people yesterday, mostly in white collar jobs, many at its Poughkeepsie headquarters or nearby. The company refuses to give a number, supposedly for competitive reasons -- but the real reason, obviously, is that the bastards don't want the blast of bad publicity that comes with a mass layoff announcement. (There were enough layoffs for IBM to have the police on hand outside its headquarters in case trouble started.)

Alliance@IBM, a union local, is counting layoffs on its own and keeping a running tab on its website. As of this writing, the total is 1202. According to Alliance, IBM's American workforce has shrunk by 35% in the last seven years, from 134,000 in 2005 to an estimated 98,000 now. (IBM ain't telling.)

After the jump: I'd call it evil, but it's really amoral.

jvwalt :: Put not your trust in multinational corporations

In a way, this is a relief for my friend. In recent years, IBM has been ratcheting up the pressure on its staff. Every year, the bottom 10% in her area have been let go. For a while, that meant losing the deadwood, but eventually you're cutting some pretty damn good workers. And everyone knew that they had to stay out of the bottom range, which meant working harder and harder. And the harder everyone worked, the more it took to stay off the bottom. IBM used to be a really good place to work; now it's an anxiety-laden anthill.

So where's the work going? Two places: Developing countries with cheap labor, particularly China, and contracted workers with no consistent hours or pay.

Accompanying the cuts is a blizzard of management doublespeak. From InformationWeek:

An IBM spokesman on Tuesday declined to answer questions about the layoffs, but provided the following statement in an email to InformationWeek: "IBM is constantly rebalancing its workforce. That means reducing in some areas and hiring in others--based on shifts in technology and client demand.

We're not firing people; we're simply "rebalancing our workforce." Guess they really aced that Newspeak course in business school. And here's a real doozy from North Carolina TV station WRAL concerning the move away from full-time staffing:

"Internally the restructuring has been dubbed 'Generation Open' and staff that work for IBM on projects but are not full time are called 'liquid players," according to an internal document seen by Reuters.

"Liquid players." Otherwise known as "people." People who will have no steady income, no benefits, no regular hours, and absolutely no security. And "Generation Open," as in "there's a trap door under your desk." But hey, you gotta break a few eggs to rebalance a workforce. Back to WRAL:

Big Blue likes to say that it is expanding its overall work force and hiring. True. Numbers are well above 400,000. But what IBM no longer discloses is how many people it employs where. By hiding that fact (it says for competitive reasons), Big Blue escapes harsh criticism about offshoring and outsourcing jobs.

Here in Vermont, there's constant concern about the health and attitude of IBM. Conservative and business types are constantly pushing the line that we need IBM's jobs, we need to make them happy. We need fewer regulatory burdens, we need lower taxes, we need dependable (read: VY nuclear) electric power, we need whatever IBM wants, basically.

Well, maybe. But looking at IBM's recent history, I must conclude that someday they're going to say farewell to Vermont. And it won't have anything to do with the cost of a KwH or the corporate property tax bill or the business-friendliness of state agencies. It will be due to the exigencies of a global corporation running itself on the principles of Ayn Rand. And any amount of bending over backwards won't change that ugly truth.

If I were doing economic development for Burlington or the state, I'd spend less time catering to a fickle multinational and more time crafting a broad-based economy with a lot of prosperous small businesses.

If I worked for IBM, I'd keep my resume updated.

Tags: state and local, Nation and World, economy, Downsizing, Outsourcing, (All Tags)

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Put not your trust in multinational corporations | 4 comments

When my (4.00 / 1)

Dad got 'layed off' in the 70s and 80s in the auto industry, there was always the sense that things sucked, but that he would go back to work in a few weeks or maybe a few months. And he always did.

I wish they'd just change the language to 'we are letting you go, you have been terminated'. Funny how that has slid from 'temporary' to permanent. Layed off, it means we are firing you. Good bye.

by: bmike @ Wed Feb 29, 2012 at 01:05:32 AM UTC

Exactly. (0.00 / 0)

IBM was Jim Douglas' favorite excuse for everything. But the writing has been on the wall for some time. IBM, like all corporate giants feels loyalty only to its quarterly bottom line.

Not delivery of a ruinous circ highway, nor cheap power from VY (essentially subsidized by Vermont), nor any other perks and promises on taxes would buy a longterm commitment from IBM.

That fable won't float.

IBM stopped reporting numbers when they "laid off" employees a couple of cycles ago. It's growing harder and harder to track the impacts of these giants on the state economy as they institutionalize stealth practices to avoid the glare of bad publicity. It is our fault if we continue to allow this to happen.

When big corporations seek incentives to locate their stores and factories in our communities, all we ever hear about are the jobs that will be created. There seems to be little follow-up to see how good a bargain we have made over the long-term.

And, when corporations are allowed to conceal actual job data, as do IBM and Walmart, local planners in the next community to be targeted are deprived of important tools for evaluating the long-term economic impacts of a proposed development or business location.

by: Sue Prent @ Wed Feb 29, 2012 at 02:46:20 AM UTC

any state (0.00 / 0)

that is so dependent on a single employer is at great risk; although not a perfect analogy, there is at least one similarity with Vermont Yankee

we've known for decades that the time will come when IBM will leave; instead of sticking our heads in the sand, we should have been preparing for that eventuality

the cost of IBM's departure to the families, the communities, and the state will be immense; we should have asked IBM to contribute a bit each year to a jointly funded decommissioning fund to help make the transition

where are the plans for how to deal with the staggering impacts of closure? and what, if anything, did we learn from similar events in other cities (e.g., Buffalo and Bethlehem Steel)?

no governor wants to be the one who loses IBM but the wheel has to stop somewhere; isn't it time to start planning?

by: Doug Hoffer @ Wed Feb 29, 2012 at 03:17:29 AM UTC

Ibm (0.00 / 0)

stopped reporting because they learned how to fly under the SEC radar. The numbers aren't large enough to throw a red flag. There is a layoff every year this time of year and frequently another mid year and one in the start of fall. This one is typically the bigger of the three. It's usually timed near the end of the month, but not the end of the month which makes it so the employee can't accrue vacation time for the month.

It's a slow bleed of jobs to BRIC and there are plenty of stories of US people training their BRIC peers and then being laid off (fired whatever you want to call it). There also has been plenty of management level documentation passed around that clearly shows this bleed of people is a strategy.

It's not the bottom 10%. It's a broad brush stroke. Sometimes entire departments. For some it a choice of moving to Indiana or another of IBM's support hubs and taking a job at half the pay or being laid off.

People at IBM Burlington are in a different set of circumstances than others. Finding work with IBM skills and a baffling job title is a lot harder here. We're no Austin, Beaverton, or RTP. Workers here are caught by the fact that there aren't many places to go and keep their noses down and work for as long as they can. However, they do themselves a disservice in the long run.

There are many IBM'ers who eat, sleep, and breath IBM. They haven't had a dose of reality yet. In the world outside of VT, IBM is just a fair place to work. Money, benefits, etc are always better elsewhere. Life is better out of IBM.

by: pete_n_vt @ Wed Feb 29, 2012 at 16:16:22 PM UTC