A true WTF. The comments are especially revealing. I look forward to the day a displaced IBM-er takes a gun to their "GDF" and gets some retribution.

"IBM’s 2015 plan was hatched to deliver $20 earnings-per-share to the delight of Wall Street. IBMers were offered a carrot, a few shares of stock granted at the end of 2015, as a reward for helping them achieve that target. It appears that IBM’s goal is not to issue any of those grants as they continue to conduct resource actions (IBMspeak for permanent layoffs) and remove talented and valuable US employees in favor of moving work to low cost countries such as Brazil, Argentina, India, China and Russia.

Work that stays onshore is mainly sent to what are called Global Delivery Facilities (GDF’s), two of which were created at heritage IBM locations (Poughkeepsie, NY and Boulder, CO) while starting new ones in Dubuque, IA and most recently Columbia, MO. IBM’s public position is they are creating jobs in smaller towns when in fact they are displacing workers from other parts of the US by moving jobs to these GDFs or to offshore locations.

In the case of Dubuque and Columbia, IBM secured heavy incentives from state and local governments to minimize their costs in these locations and are achieving further savings by paying the technical team members, most of whom are new hires or fresh college grads with no experience, a fraction of what experienced support personnel would require.

Let’s look closer at Dubuque, not because it is any different from the rest of IBM USA but simply to characterize the company at a finer scale.

When IBM opened the Dubuque center the people of Iowa were expecting great things.  The center was staffed by a small number of US IBMers in management positions.  IBM then brought over people from India for “training,” then sent them back.  Few H1B visas were even required.

Every time IBM sent a batch of trainees back to India from Iowa they laid off US workers.  While Dubuque was led to believe they’d get an influx of highly-paid new residents, what the city actually received was a transient workforce of underpaid people — workers that may well be invisible to local government.  It would be interesting to know how many permanent hires in Dubuque have been Iowa residents or graduates of Iowa universities?  How many workers spend less than a year in Dubuque?  Is Iowa seeing any benefit from the investment they made to open the IBM Dubuque center?

Whenever IBM has a big project they now have to bring in extra workers, usually from India.  I have been told they plan the arrivals over several days to a few weeks.  They route people through different airports.  They make sure there are never more than two or three workers coming on the same flight, effectively avoiding notice by Homeland Security.

Are any of these people paying FICA or US income taxes?  Good question. Why is IBM sneaking around? Better question.

With hundreds of thousands of laid-off IT workers in the USA, why can’t American workers be hired for these positions? Because IBM doesn’t want US employees. Or, for that matter, European employees, though these are harder to jettison.

Layoffs at IBM are rarely due to job performance, though complaining will get you sacked. IBM tends to position these actions as job eliminations, but jobs aren’t usually eliminated, they are just relocated to GDF or GR locations staffed by cheaper workers. IBM manages to skirt the Worker Adjustment and Retraining Notification (WARN) Act requiring advance notification of layoffs or plant closings by structuring these resource actions to stay just below the numbers required to provide notifications at given locations. In this way IBM has managed to avoid the mainstream media and touts itself as a good corporate citizen while continuing to expect remaining employees to work 60-70 or more hours per week to keep up with the amount of work.

These draconian tactics might be justified if survival of the company or the best interests of the customer were involved, but they aren’t. It’s mainly about executive compensation. Meanwhile IBM’s work for customers is becoming increasingly shoddy. Contract terms such as vulnerability scanning, ID revalidations, and security implementations are routinely late or not done at all. Account teams are under continued pressure to meet revenue and cost targets regardless of how poorly the contracts were structured by the sales team. Each business sector has a target to move a certain percentage of their technical work to an offshore Global Resource (GR) or onshore Global Delivery Facility (GDF) as mentioned above.

IBM’s goal appears to be to have as few employees in the US as possible, maximizing profit.  But doing so clearly hurts customer satisfaction.

Major IBM customers such as Amgen, The State of Texas, and most recently the Walt Disney Company have cut ties with IBM in favor of other providers. Many other customers are scaling back the services they’re buying from IBM as the perceived value continues to drop. Customers are starting to realize that they can directly hire offshore companies such as TCS, Wipro, HCL and Satayam and book the savings directly instead of paying IBM top dollar for support and then seeing that support fulfilled from BRIC countries.

When IBM first started its big push to offshore technical work, the account teams were asked to make a list of reasons why customers’ work couldn’t be offshored, but were not allowed to use skills as a reason. That makes no sense in a rational organization but it makes perfect sense to IBM."


Comments (13) -

Canada ezygoer
April 20. 2012 11:32

Ho hum zzzz ... nothing new here that I did'nt know about 6-7 years ago and started to accumulate IBM stock in the 40's and now sold in the 200's when exposed to IBM's strategy "to build a better planet" as laid out by Cringley.

Someone had to pay and who else but the N.American/European worker. Only 1 top guy went to jail in the Wall St. Raj Rajaratnam insider trading case - rest of the pricks made much more than I did.

This is what outsourcing or labor arbitrage is all about and nothing else.

IBM saved billions in taxes and benefits + profits to shareholders. Is'nt capitalism a wonderful thing when you're on the top and have a boatful of IBM stock ? And as a stockholder do you care if working stiffs are replaced by cheaper ones ?

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United States bork5k
April 20. 2012 12:23

Reasons not to offshore that are not skills-related.

A: You cannot arrest someone in a foreign country and put them in jail if they screw you.  Example:  You hire an company specializing in global accounting services for a major ERP Package.  They build your new ERP system.  Your new ERP system ships, you start using it, and after 12 months you notice your profits are down.  You look at the books, all is in order, but you notice there are a lot of duplicate enteries for buying toileteries, and computer parts, and spare servers?  So you ask around, and everyone says they have no idea.  You hire a forensics analyst, he finds out they rooted the code and made off with the cash.  Can you have the people in India, or Romania, or Russia arrested?  Answer: "We don't have any idea who committed THAT change, we don't use source control".

B: IF A happened, how would you know?  Answer: You wouldn't until the money, contacts, customer lists, etc were gone or your competition had them.

C: Once everyone else outsources, the competitive advantage of doing so is effectively zero.

D: If a Disgruntled, Disenfranchised Indian deleted all of your data off of your virtual server on Amazon Cloud, would you get reimbursed by Amazon Cloud?

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Kuwait Anonymous
April 20. 2012 20:48

In the comments section an Indian called desi13 says " it is payback time ".

This has always been their attitude which James understood very well.

At Toronto airport Canada I was so alarmed to find not Canadians but many desis including ( Pakistanis & Bangladeshis) at various food courts , coffee shops etc.One such Indian desi was extremely rude to a Canadian girl ( White) who presented a ten or five dollar bill after purchasing a small container of fruits.
That desi behind the counter demanded exact change. In fact she there was lot of change in the till. When it was pointed out that ugly looking uncouth dark skinned desi shouted back :-

" Chill baby...No fruits for you ".

I just could not fathom why you people are putting up with these scum giving them jobs or even entry into your country. As they swell in numbers they keep bringing in BollyKollywood scum to present some tamasha.Countries like Canada & America look as shabby as India in many places.

I was gratified , at least in Kuwait during one such programme there was some ruckus. And some of these Indian expats received some lashes. Diwali jamborees also have been curtailed. Much more needs to be done.  

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United States dean
April 21. 2012 00:50

I've had the misfortune to work with IBM G/S two times - both very messed up. One for an ERP implementaion, and the second time when they operated the help-desk support center at a company I was contracting at ( they have since been kicked out ).

Let me tell you in simple terms: they suck fucking shit.

The ERP implementation was a complete disaster ( 1st experience ), half way through the project we jettisoned them and just did the rest ourselves. When they come to pitch the project, they have these slick non-slum-dogs come in with their fancy suits to tell you how great it's all gonna be. But, that's not who shows up to "do" the work. They send you the worst, most stupid tatti-job-robbers from mumbai, and that's about the same time that your project goes into the toilet. Most of the people they sent over couldn't even speak English, or they were "senior level experts" that had six months in training at best.

The worst part was, you would have a job-robber here for six months doing the mumbai-mumble ( you couldn't even understand them, communication being very important with IT projects of course ), but then they would just leave - and you would have to start all over again with some new "senior-level" mumble-mouth idiot. It really sucked.  

At the second place, where IBM G/S manned the the help-desk, it was nothing but aggrivation. Everytime I knew I would have to open a ticket, my blood pressure would go up. I knew my ticket was either going to be assigned to someone who didn't know what they were doing and/or who wouldn't be able to communicate, usually both. Pretty much everyone at work had the same exact experience. I would say that about 1/2 the time, I would just give up on what I needed to get done, as the environment was set up so that you could only get tasks done via the shitty IBM G/S help desk. Managers would get angry, tasks would fail to be completed on time, people would sit around and wait for days for simple access grants to be completed, back and forth with the mumbai-morons over and over again, trying to get them to do simple things. On one occasion with a fellow contractor, the IBM G/S help-desk dumb-ass wouldn't even talk on the phone ( again, they can't communicate ), and insisted the my friend only communicate via instand message. That ended up making the whole expience, that should have lasted about 5 minutes, take over and hour...

If Thomas Watson could see IBM today, he would most likely get sick and throw up. IBM is nothing compared to what it used to be. It's gone the way of H/P, and become a haven for AN pieces of shit. I would never recommend them.  How's that for saving money...???

One other thing, if india is so great and full of "super smart" people, how come they all want to come over here? I don't want to go there, and no one I know wants to go there....seems odd...

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United States James
April 21. 2012 03:40

The silent undercurrent here is not that IBM is rejigging its strategy - it's that the ruined cred of IBM can no longer support such a massive workforce. We've seen this happen at every company slumdogs take over: PeopleSoft, Sun, Bell Labs: first they take over when the company is at the top of its game. Then there's a decade or so of massive screwups and destruction, lawsuits, decline, finally some execs realize the company's rep has been wrecked and no one wants their services/products anymore. Sales start plumeting and the mass layoffs ensue as the company circles the drain. In the final stage the smouldering wreck of the company gets sold off to Oracle.

The good news is IBM is 71% slumdog workers. That means when the mass layoffs come, it will be mostly slumdogs getting axed! Yay!

IBM is being sued by the State of Indiana for $867 for a fail solution. They are also being sued by the Sate of TX for failure and half a dozen other entities.

Guess who caused all the failures that caused all the lawsuits!

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United States James
April 21. 2012 08:55

Sorry about that last one: I meant $867 MILLION not $867!

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Kuwait Anonymous
April 21. 2012 11:49

@bork5k's comments very effectively conveys the  inherent dangers of depending upon not just unskilled but also corrupt people & countries bereft of values.

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Canada ezygoer
April 21. 2012 12:02


Well with IBM the hardware business is growing which is why the stock is worth it  - the consulting side brings in the easy, quick money with offshoring and helps evade taxes boosting the stock price. So it's still worth it for IBM even with about 2T in lawsuits which they may end up settling for a fraction according to a lawyer friend of mine by the time it winds it's way through the legal system. It's image may get a beating but then every major Corporate entity is dealing with one or the other of the well known outsourcers and do not see that changing for sometime. According to an industry veteran who has shuffled thru all outsourcers they are all the same i.e IBM is no better than say Infosys but he still cant understand why his top management cant do IT in house. They just dont want to spend the money and have no long term view at all !!

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Kuwait Anonymous
April 21. 2012 14:27

There is one Indian actor called Suman ( Telugu but has also acted in Tamil movies the infamous Kollywood industry) His mother -Principal of a well known school in Tamil Nadu. It is an open secret Suman  fed drugged alcohol to many girls he abducted by the lure of promising entry into films. Raped & photographed them. By blackmailing them made porn movies.

On being caught & tried in court he could easily buy his acquittal. This is India.Recently the playback singer SP.Balasubramanian's son called Saran  (Charan?) molested a not so influential starlet called Sona in a party WITHOUT her CONSENT. Despite several eyewitnesses testifyting to the culpability of Saran , he was NOT punished.Instead Sona was given threats called 'warnings' by many among lawyers , police , judge whatever. Public sympathy is also for SP.Balasubramanian (SPB) because Indians overwhelmingly WORSHIP only Indian filmstars & CRICKET.

Even today you can hear this SPB's voice blaring in high decibels HaraHaraSsivaSsivaNamaSsivaya Annamalaiyae Saranam all over Thiruvannamalai while you circumambulate The Holy Hill.

That Suman has acted as Lord Venkateshvara of Thirupathi Hills in a movie which had another kollybolly actor called Nagarjuna playing the role of Saint Annamacharya.

Very recently soon after Navarathiri puja celebrations by uber pious faux Indians in Kuwait , this Suman visited Kuwait. The same Indians were there ogling at him , presenting bouquets & cash as Suman  solicited "donations for some noble cause".

Now you understand dividing people on the basis of religious belief systems & governing on that basis is the cause of chaos in India. CREDENTIALS is the word that cannot be overemphasized.

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Kuwait Anonymous
April 21. 2012 14:39

@dean ,

I am glad you mention the dismal communication skills of Indian morons. You are understating the dangers involved I maintain.

Where Tamil , the mother tongue is involved also it is the same. None other than Swami.Omkarananda ( Theni-Chidbhavananda Ashram) has captured it better:-

" Today if I ask these people ( Tamil speaking crowd wannabe superpowers)to fetch a coconut , they bring a raw mango & tell me " Swamiji , here is the coconut you asked for...How can I ever share the Holy Epigrammatic Verses of Kuthambai Siddhar encapsuling Adhvaitha (non duality) with these people ".

Most Indians are blown up fuses but aspiring to become gigantic Transformers.  

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United States gobacktoandhra
April 24. 2012 05:03

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United States snowwhitey
April 24. 2012 11:38


It's called "shucking and jiving". If I tell you to show up 8, you show up at 10. If I tell you to work till 4 PM, you leave at 2 PM.

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Canada ezygoer
April 24. 2012 12:51


So Infosys is on the dock with the DHS - more money for lawyers and lobbyists for now. Knowing the US legal system quite well - some fines,noise and then business as usual as Infosys will lower billing rates to get market share. IBM and others will watch the fun and learn how to avoid scrutiny from the DHS. More loopholes will be discovered to outsource without breaking laws.

Dont see how this will benefit the US worker though !

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