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« Appeals Court reverses ruling on Rochester Buffalo Wild Wings dispute | Main | Holiday to close the "runt" of SA C-store litter »

April 23, 2013

Tech columnist on Decline and Fall of IBM

I've pointed out the writings of well-known tech columnist Bob Cringely and his dire (and sometimes accurate) predictions about IBM.

As a long-time tech writer, he seems to have to pretty good grasp of how IBM has changed over the years. He has always been very critical of Big Blue's management, which he sees as creating profits at the expense of their employees instead creating of good technology.

CringleyCringely's latest prediction is that IBM will withdraw its 401K contributions for its employees. They have already made some significant changes in that area, from shifting from making 401k contributions in every paycheck to doing it just once a year.

I wonder what local IBMers think about that. Is it possible? Could that be in the works?

The Decline and Fall of IBM is the headline of Cringely's latest column as well as the title of an e-book that is releasing soon.

Here's an excerpt from the column:

IBM is in trouble, you see, serious trouble caused primarily by executive corrosion from within. Not only did Big Blue miss its earnings target last quarter for the first time in years, if the rumors I am hearing are correct the company’s primary response will be to screw U.S. employees even more than they have already.

The rumor I’ve heard is that IBM, which not long ago changed its 401k contribution policy to push what had been a biweekly payment into an annual one right at the end of the year, may have decided this year (and in the future?) not to make any 401K contribution at all. Since IBM’s U.S. employees can divert up to eight percent of their gross compensation into the 401K and IBM has traditionally made a comparable matching payment, this possible change in compensation policy could save the company close to $1 billion.

In one sense one might ask what’s wrong with that? Companies have to do what they have to do in this economy and workers sometimes suffer. But for IBM it indicates the company is getting near the bottom of its bag of tricks for maintaining earnings growth toward that ambitious 2015 goal of $20 per share. Management seem to be down to three ideas to improve the numbers: 1) savage the 401K plan; 2) sell the low-end server business to Lenovo for a reported $2.5 billion, and; 3) expect a miracle called PureSystems.


 

 

 

Comments

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For cost savings measures related to Rochester, one has to wonder how much longer before they ramp up more production in Mexico and lay-off even more people in Rochester.

Exactly right,Allen.That will be happening soon enough after most of manufacturing leaves next year.I am a former employee that now works for a vendor their and have heard that the remaining manufacturing will eventually be gone as well.I would bet it would be sooner rather than later.

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