What Does Ibm Do When All The Outsourcing of Jobs to Bric Countries No Longer Works?
For the past five years IBM has been outsourcing all the jobs it can to the BRIC (Brazil, Russia, India, and China). But some day those countries will not be cheap enough either. The economies of these countries cost of living are going up precipitously. They all want cell phones, houses, western clothes, McDonalds food and Starbucks Coffee, and to drive gas guzzlers. Right at this moment, union efforts are under way with demands for more money asking for the same pay and benefits as US workers.
Indian programmers are saying their skills are as good as or better than US workers, and are demanding more money and benefits.
IBM is cutting back on employee and retiree benefits to satisfy some of the increases in pay for the countries who received the outsourced jobs from the US.
Sure some IBM employees are complacent and say well the company needs to do this, these are the lightly brain washed and the first to take on the cause when they get their pink slip. Keeping Wall Street happy is a critical component and yes keeping cost down the next two years or so is critical to Sam Palmisano’s retirement, so he gets his bonus in preparation for his retirement to posh Greenwich, CT and his home on the ocean.
Frankly, IBM like many employers are outsourcing now because they know they can, jobs are hard to come by and people who might leave in the US if the job market was better, can’t now in this recession.
Recently at a dinner party I heard the sister in law of a laid-off IBM employee complain that her IBM executive VP husband did not get his bonus this year. How insensitive, she said IBM is taking it off “their” skin. She does not even work there. Yes it’s so sad her husband who makes over $250,000 a year, benefits and stock options did not get his bonus. This couple has a home in wealthy Wilton, CT, a farm in MA, a summer home on the Cape and a condo on the ocean in Sanibel Island in Florida… And she sits there and talks about tightening her belt.
The laid-off employee is 56 years old no job prospects and no income. Yep this is a great example of how selfish many IBM employees are until it happens to them. It’s a recession when your neighbor is laid-off and a depression when YOU’RE laid-off.
It’s time for everyone to wake up and smell the coffee about the effects of outsourcing jobs out of the US. Yet Obama seeks Sam’s advice on getting US people back to work. What’s wrong in this equation? This is like asking the wolf to watch the chicken house.
Image via Wikipedia
Image via Wikipedia
Image via Wikipedia
21 Comments
I be interested in your feedback.
What happens? They outsource to the next cheapest country. This is a fact, I was told by some guy in a presentation to the IBM UK talent community. The psychopathic disregard for people as humans rather than resources to be consumed by the corporation was literally chilling. Course I knew it in theory, but to here the lick of the lips and excitment about the prospect of “somewhere even cheaper” was really vile. I just wondered “what about your kids/grandchildren?”. As well as “what a c—”.
Btw, Indian guys, most of you I’ve worked with – developers, ‘architects’ and ‘project managers’ just aren’t very good….yet. When I see 25 year experienced PM’s being let go and being replaced by people who just aren’t ready yet, it makes me sad.
Excellent article… you might want to add in the actual numbers to better make your point:
At IBM in 2002 there were 240,000 US employees = 80% of it’s Global workforce.
Currently in 2009, offshore jobs have reached 283,000, or 71% of IBM’s 398,000 total.
The US workforce has shifted from 80% to a mere 29%.
IBM has laid off at least 10,000 US workers this year (per IBM’s official documentation)
2009 lay-offs are estimated to grow to 17,000 in Q4 (7K more)
The India workforce alone has increased by close to 20,000 this year. Almost DOUBLE the US layoffs.
Funny article . Must have been written by an IBM union shill .I wonder why people have such resentment. Must be they have been unsuccessful in their careers and need someplace to gripe.
@technocrat -do you have any FACTS to discuss, or to refute what has been stated? You’re the one who comes across as a shill, or a naive blinkered corporate whore.
Hey Gordon I don’t refute the firings but the slant of the way the article is written. It should focus on the positive aspects of the what it takes to make a business profitable. But this is not the unions message .Apparently you have never run a business or know little about how to make a profit. A large percentage of people don’t care about the emotional carnage of people getting fired they only care about their investment. If IBM or any other major company carries expensive overhead and doesn’t cut costs they go out of business. It appears all that complain never come up with a solution. Maybe you’d like IBM to close it’s doors and fire all 300-400K employee’s. That’ll fix them and teach business a lesson. I don’t care what IBM or any major company does as long as my stock portfolio is in a positive trend. After all isn’t profit the reason for having a business.Next you’re going to tell me that CEO’s and athletes and move stars make to much money.
What will IBM do when the BRICs are exhausted?
Go to the next cheap labor area where IBM can plunder the paid slaves: Central Africa.
Hey, maybe Cuba if Sam Parmicrapo can twist Obama’s arm about opening Cuba up.
If you think working at IBM is bad, just be glad you are not an IBM customer.
We have dumped all IBM products and services – to name a couple – Lotus Notes, what an expensive piece of bloated crap, DB2, what a low functioning expensive POS. And support ? NADA. The Support people have a “don’t give a damn” attitude. Just because they can speak broken English doesn’t mean they comprehend what you are saying.
Dumping IBM has saved us over 50% on our IT budget and we now have an IT infrastructure that works.
The person who recommended IBM has been fired for making such a bad decision and taking personal kickbacks from IBM.
Whow this is terrific feedback we welcome more. Thanks best wishes and regards
I understand what technocrat is saying about a company being profitable. A company must make profits but at what cost? There has to be a balance. After all IBM does preach “Work-life balance” doesn’t it? ” I don’t care what IBM or any major company does as long as my stock portfolio is in a positive trend”. That says it all right there. YOU DON’T CARE! Well someone HAS to start caring about how employees are treated. Morale is at an all time low in IBM. How is that good for a company? If a worker can’t keep his head in the game because he was told to take 5 days off next mon’th and he doesn’t know how he’s going to buy food next month, how is that good for the company? Downward spiral I’m afraid…..
To the stockholder: When you start losing clients, when your executives start breaching confidentiality agreements by insider trading, when attrition is at an all time high in BRIC countries, when BRIC countries start to pay salaries equal to the US, I am thinking you wont be on boards like this because at that point, you will have shorted this stock for your own gain. So do me a favor – short it now, cause IBM is losing clients, IBM is seeing executives breaching confidentiality of clients, attrition is at an all time high, AND salaries are going up. You cannot show a decline in sales but show a profit through cost cutting and stock buybacks and hope this keeps your stock a Wall Street darling rising quarter after quarter. Wake up and smell the coffee. The company is relying on cost cutting and other manipulations to taint their lack of sales. Ask around, you will find that IBM is losing clients left and right. Don’t believe me? Keep watching their sales numbers versus operational costs in their quarterly numbers….
As an IBM employee, I can tell you work is miserable. No one is happy in the U.S. IBM cut over 10,000 employees this year. Raises are minimal to a few favorites. Any work that provides recognizable skills goes to the favorites. People can beg for opportunities, but they are giving skills that are not valued. This is on purpose. It is extremely anti-family. They only value those who do not have kids or whose kids are grown up. They want the person’s full committmment to IBM. Many employees start working on Sunday afternoons without any monetary compensation. It’s a way of life at IBM U.S. Yet, this does not guarantee people will not be layoff. Reviews, regardless of how well someone does, does not matter.
Investors need to realize that the only way IBM is keeping their chin up is by cutting employee costs. Sales are down and yet profits are up. Hmmm… it doesn’t take a rocket scientist to figure this one out.
You are all dolts. Yes, even you technotard. I’m glad you have a profitable portfoli. Enjoy it while it lasts because I’m about rape you in such a financial way that you’ll never recover. They’re going to replace the term “Ponzie scheme” with “Palmisano scheme” when I’m finished. And you current and ex-employees need to quit whining. Just be glad you were ever employed by IBM. It will likely be the highlight of your pathetic lives anyway. Your constant babble and lack of action is a joke. I dare you to do something about it. We’ll crush you like the worthless ants on the sidewalk you truly are.
Tnks Mr Palmisano for giving poor slumtard millionaire wannabe a chance. I’m grateful that IBM will allow someone in India to walk into a datacenter fresh off the street with no knowledge or experience of technology other than 2 cans connected by a string and wake your US teams up to wipe our butts at 3:30 AM EST because our primitive minds can’t comprehend timezone differences either. I am just as good as US worker. Please give me more money for masks for my family members to wear on the backs of our heads so the bengal tigers won’t attack us when we’re crusing through the marshes in our boats for hippo droppings to eat. TNKS!
Anyone know what Vijay was trying to say? No idea?
Best wishes and regards
It’ll all come full circle. I’ll give you an example. I went to India last year, and I asked the people in the building why there are so many security guards around the building. They said because there it is cheaper to hire people to be security guards than to put in an badging system, alarm system, video cameras, etc. to manage building security. While a good PM from a major country can do the work twice as efficient as someone from India, a PM in India will cost 1/10 of the PM in a major country. So they can hire 2 or 3 to do the work and still come out ahead.
In this day and age, everything is about making wall street happy, stock price, and GP. Screw quality of service… who cares about risk… they are willing to sacrafice this as long as the the numbers look good and the company does well on the market. Sooner or later though, it’ll all catch up with them. Not just IBM, HP, Dell, any tech company who thinks outsourcing is the path to survivial. Unfortunately, this is a band-aid to a problem that will never end.
Technorat, you have no idea what you’re talking about. As an IBM’er, walk a mile in our shoes before you dare say we are simply “griping”. I take great offence to this. If you think for one second the workers in BRIC are equally qualified, you’ve got another think coming, because they don’t. The workers are responsible for training them, and then get the axe, do you think that’s griping? NO!!
I think outsourcing is the only thing keeping IBM afloat these days. They cut costs by outsourcing their own talent and I guess profit by helping other companies sell out America by doing the same. If all their work is going outside the US, why not just dump IBM altogether and go with their foreign competitors? What can IBM do that their foreign counterparts can’t do even cheaper? It’s not as though the IBM brand matters anymore.
According to IBM, cutting costs=profits. Seems for some years now, that is IBM’s motto. I’m an ex-IBMer too as of this year, and In the Know, you are correct. IBM is losing clients left and right. I saw it in the last few years, and I continue to see that now. It will catch up to them. There’s only so much cutting a company can do. They are selling off groups too, hoping that will help them profit. But the clients of at least one of the sold off groups are p’od. I can say that firsthand. IBM has to figure out how to start ramping up sales, and it’s not happening. IBM is a lumbering giant, and it cannot move fast enough to compete in this climate. All they can do is cut costs hoping to continue making a profit. But it will only last so long. I heard just today from a client that many customers believe IBM is not recognized for cutting edge technologies, and they are looking elsewhere for their technology needs. No big surprise. But IBM isn’t getting it. Word has definitely gotten out that the days of loyalty to IBM employees are long over. And it looks like word is getting out that the days of truly meeting the needs of the IBM clients is over, too.
What ever happened to Technocrat? Guess he got un-numbered in his logic or maybe he got the surprise Holiday gift from Sam Palmisano.
I am an ex-IBMer from India. It is a great brand and company, company legacy and history is great compared to any company in the world. For that reason make any one proud to work for the company. For eg : You tell your grandfather or a common man whom you find in your train who do not know any thing about technology and IT companies that you got job in IBM/you are working for IBM – he will tell “Oh great – you made your life” – That says it all about the brand. But i think now a days IBM – is good only for brand. Recuritment process and hr and hiring process is pathetic- they conduct 2 normal types of interviews(1 technical round taken by some average techie who thinks he is great bcos he got job in IBM and then PDM round which is nothing but HR round in which they will negoitate maximum to hire you at the chepest rate) and hire all average people – where as other MNCs like Oracle,MS and so on and tier 1 companies like infosys,hcl, tcs has stringent hiring process and they pay pretty good salaries. For this reason – IBM is filled all average people and less competent people compared to other MNCs and Tier 1 companies from India – exceptions are there – there are good managers and good technical people in ISL etc… but on an average it is filled with average people – who thinks great about themselves bcos they got job in IBM – but do not know any thing much compared to their peers in the industry. This huge bulk of cheap labour/average people will definitly reduce the quality of deliveries, quality of people,client experience for IBM in the long run. IBM in terms of its legacy,technologies /IPs it possess,Brand etc.. great in all respects than any other company in the world but definitly it will go down and loose clients – they might go on because of huge legacy,good will and brand name amoung customers but at this rate it will collapse because of the cheap labour policy,attitude of people inside so many other stupid policies. Any company is made by people – if the quality of that goes down definitly it will collapse once day how much mighty it was one day…