back to article IBM asks contractors to take a pay cut

IBM is not just banning the hire of new contractors and telling existing contractors they won't get new gigs: now it is telling some current contractors they will have to take a pay cut. Multiple IBM contractors in Australia have contacted The Register to say IBM has told them their rates will be cut, by ten per cent or more. …

  1. Ian Michael Gumby
    Boffin

    So...

    When Rometty sat in w Trump and pledged to keep people employed here in the US she was talking out her arse.

    The larger issue is that IBM never really learned their lesson. You can't keep cutting people and costs and that something is going to give. Now you have it. This is clearly a decision made by a senior manager and their bean counters who are on the hot seat and have no clue on how to turn things around.

    IBM is still slowly sinking and they will end up being yet another Unisys

    1. Anonymous Coward
      Anonymous Coward

      Re: So...

      Senior manager indeed! Only that type of "person" can smile at such a hot pile of crap such as...

      "... shifting its service delivery model to be heavily weighted to providing services with our dedicated employee workforce. We believe this will help IBM accelerate the benefits of cognitive technology services for our clients around the world."

      It's just piled on there, real, real HIGH. I guess it's still tethered to Earth...slightly.

      FYI, I don't believe Rometty is a real person. She might be an out of date pleasure model for politicians. She clearly fails the Voigt-Kampff test with any other human "interactions".

      1. Anonymous Coward
        Anonymous Coward

        Re: So...

        I have met Gini and can assure you she was never an in-date pleasure model for politicians.

      2. Ian Michael Gumby
        Boffin

        @Back Door ... Re: So...

        By senior manager, I mean 3rd tier exec or higher in each region all under a directive from the chief bean counter to cut costs.

        W.R.T shifting service model to use IBM dedicated employees... that means that they will use the offshore staff that they have been hiring all along. Note that clients see the cheaper labor being shipped in and will either immediately demand the contract to be renegotiated, threaten to sue, or will wait until the contract is up for renegotiation and will lower the boom on IBM further reducing the payments for services.

        Rometty is real. I've actually met her at an EBU event many, many moons ago. She's in a bad place because those surrounding her don't know life outside IBM and can't think for themselves. So they fall back on the same old tricks that Sam used... only there's nothing left to cut.

        1. 2Nick3

          Re: @Back Door ... So...

          I know a few IBM lifers, and they are all afraid of trying to move outside the company. They realize a lot of the culture they are used to won't fit well anywhere else.

          IBM even has it's own internal Resume/CV style that doesn't work well outside the company.

    2. a_yank_lurker

      Re: So...

      A fare on the Titanic looks like a better bet.

  2. Anonymous Coward
    Anonymous Coward

    Ever heard of contract breach?

    You can't have it both ways IBM... The whole reason companies rely on external contractors is "company security": when you don't need them then you can more or less dispose of them (depending on the contract) but there are certain areas where you cannot go.

    A contract is basically a (legal) agreement in which both parties agreed that x amount of work would be performed for y amount of pay. You can't just change the deal and expect people to roll over. Because if this is how things worked then the contractors themselves would also be able to do the same thing: "Gee IBM, I think you're not paying me enough anymore and I now demand 10% salary increase. For the same pay of course, and the duration of the contract". Yet that's not the way it works because that's not what you agreed on.

    Of course this is also assuming that there are no loopholes within those contracts.

    Sure, it's a shame that things aren't going too well, but shouldn't you have thought about that beforehand? You can't have it both ways though: no employee obligations (contract can be terminated at any time) and still apply control over their payment? Sounds like foul trade to me.

    Look... If a company gets into trouble and asks this from their employees then I think its definitely something to respect and consider. As an employee you also have a certain job security (at least in some countries). But as a contractor? No way! Business is business, and that's not what you agreed on.

    I hope this backfires on them.

    1. AMBxx Silver badge

      Re: Ever heard of contract breach?

      Not sure about Aus, but in the UK there'll be a term in every contractor's contract giving right to terminate at any time. Once you have that in place, anything can be done.

      1. eldakka

        Re: Ever heard of contract breach?

        Not sure about Aus, but in the UK there'll be a term in every contractor's contract giving right to terminate at any time.

        That is pretty typical in Australia as well.

      2. Anonymous Coward
        Anonymous Coward

        Re: Ever heard of contract breach?

        I've hired many 000's of contractors whilst at IBM.

        The contracts are asymmetric, IBM can fire you at any time, the contractor doesn't have that right. What IBM would do is say, take a new contract with a pay cut OR we'll just fire you in a weeks time.

        1. Gordon 10

          Re: Ever heard of contract breach?

          Thats odd - who would want to work for Rotten Blue under those circumstances. All my companies contacts are 2 weeks notice each side.

          1. Ian Michael Gumby

            Re: Ever heard of contract breach?

            And clauses like that are in place here too.

            Why would you sub to IBM?

            For the money or to gain experience.

          2. Anonymous Coward
            Anonymous Coward

            Re: Ever heard of contract breach?

            I just figure I'd give IBM exactly as much notice as they've ever given me. Which means I would tell them at 5PM on Friday that I was starting a new job on Monday.

        2. Jonathan 27

          Re: Ever heard of contract breach?

          That's a real shame, when I worked as a contract worker a few years ago my contracts always required the client to pay me out if they wanted to cancel. That is, pay the entire amount owned on the contract if they want to cancel, of course no one did.

      3. Anonymous Coward
        Anonymous Coward

        A friend...

        ...who is a contractor in the UK, has twice had his contract cancelled with one days notice (through no fault of his own). In one case the project was cancelled and in the other I think he was exposing too many shortcomings in the (dysfunctional) organisation. Standard UK contracts seem to give employers the power to do this.

    2. joeldillon

      Re: Ever heard of contract breach?

      I assume the deal is 'agree to this or your contract won't be renewed' (or you'll be disposed of as mentioned).

      'I am altering the deal; pray I do not alter it any further'

    3. Anonymous Coward
      Anonymous Coward

      Re: Ever heard of contract breach?

      .. The whole reason companies rely on external contractors is "company security": when you don't need them then you can more or less dispose of them ...

      A contract is basically a (legal) agreement in which both parties agreed that x amount of work would be performed for y amount of pay. You can't just change the deal and expect people to roll over.

      Exactly, IBM terminates their contract and offers them a new one for 10% less.

      1. jelabarre59

        Re: Ever heard of contract breach?

        Exactly, IBM terminates their contract and offers them a new one for 10% less.

        They don't terminate contracts, they "cancel the purchase order".

    4. Ian Michael Gumby
      Boffin

      @Shell_user Re: Ever heard of contract breach?

      Ever you ever read any of the contracts IBM has you sign?

      (Yes, I have. And I've also written service contracts (SOWs) for IBM ...)

      There are always out clauses and early termination clauses. IBM is notorious for having clauses which are trivial to bust, however, they will scare the uninitiated.

      The worst case is that you have a 30 day out clause. So if you don't agree to a cut, they will notify you that your last day of service is X and you're to train up your replacement. (Not said, after you leave, if the replacement can't do the task, IBM will blame your inability to train your replacement as to why he or she failed.)

      Some times the period is less. That clause is there to also protect you so you have an exit plan if SHTF things happen.

      As to this backfiring on them... it will. IBM is in a no win situation. They subcontract to skilled people who can do the work because they lack the skills internally. Now you're out, they increase risk, create a customer sat issue, and the cost savings are negligible.

    5. Anonymous Coward
      Anonymous Coward

      Re: Ever heard of contract breach?

      I'm not about to dig out the paperwork I had with IBM (through one of their spin-off staffing firms) but I'm certain that I wasn't guaranteed a given amount of pay; only an hourly rate. I went through 4-5 furloughs during my last year of work with them only working 15 days on some months. Unless there was an ``emergency''.

    6. Anonymous Coward
      Anonymous Coward

      Re: Ever heard of contract breach?

      I hope this backfires on them.

      Their dumbass plans backfire so much it sounds like a machine gun.

      I got let go shortly after my 1-year time, and I *know* the contract with the customer was already seriously behind even when our group of contractors was still there. Letting us go can only have put it further behind, and the contract was coming up for renewal. How much you wanna bet that customer isn't an IBM customer much longer. And being an ITAR customer meant IBM couldn't readily "offshore".

  3. Notas Badoff

    Fuzz testing

    Since you Simon zeroed in on that word again I think I'm thinking what you're thinking, that the absurdity would have been even more transparent if they'd said "... accelerate the benefits of cognitive rational technology services for our clients around the world."

    Or intelligent, or beneficial. Actually any of the other words that managers might actually understand would serve also. As it is re: management 'cognitive' is a foreign word to them, almost best defined as "what you ain't."

  4. Anonymous Coward
    Anonymous Coward

    I don't see how this ends well for IBM...

    Who ends up with IBM's business? HPE, Oracle, or someone else?

    I'm not saying IBM is going out of business, but someone is going to pick up a lot of their clients...

    1. Anonymous Coward
      Anonymous Coward

      Who?

      Well HPE is continually getting rid of headcount. Oracle is as well according to a friend in Texas.

      The ONLY people increasing their headcount are the likes of TATA, NIIT and other Indian bodyshoppers/sweatshops who promise the earth and usuall fail to deliver.

      Boy, am I glad I retired when I did.

      1. Anonymous Coward
        Anonymous Coward

        Re: Who?

        "Well HPE is continually getting rid of headcount." Really? That calls into question why so many IBM Technical Staffers are escaping to HPE's Storage Unit. Wonder how long they will last, there?

        1. circusmole
          Happy

          Re: Who?

          Not long, from personal experience.

    2. Anonymous Coward
      Anonymous Coward

      Who ends up with IBM's business?

      Well, in some cases work gets brought back in house when clients realise that they can do it cheaper themselves. How do I know ? Well, my employer recruited me and my colleagues specifically to replace their IBM team - they looked at the costs and measured the quality and realised it was cheaper to do the work in house.

      1. Anonymous Coward
        Anonymous Coward

        Re: Who ends up with IBM's business?

        they looked at the costs and measured the quality and realised it was cheaper to do the work in house

        It usually is. The outsourcers win the contract on the basis of promised savings, the customer signs after lots of vendor-to-vendor bid comparisons, yet carefully not asking any questions about the vendor's average labour rate, their overheads, contract set-up costs, current margin, balance sheet capital and return on capital, and investor commitments for margin growth. A few scant years later the customer is paying far more than they did in house, for a worse service.

        That is the problem with professional procurement functions and finance teams. They're very good at comparing the price of apples with apples. Unfortunately they never consider that next year you might need a pear, or the consequences of agreeing a price for the apples is below the cost to the seller.

        Outsourcing works when you want a pure commodity service that won't vary much, you're not fussed by the delivery standard, and you're equally not fussed by the price you end up paying.

        Interestingly, this isn't just ITO and BPO. Big companies often can't procure commodity outsource deals competently. Big, multi-national companies I've worked for have been repeatedly screwed on catering and cleaning, because the same rules apply: The winner bids a price well below any sustainable margin, and then has to build up to that level, either by "variations" or by hiding other profit streams. In those commodity examples, the commonest way of squeezing out profit is by making sure that the contract is labour and materials - in which case the vendor either directly hikes up the prices, or more commonly negotiates bulk discounts with their own materials suppliers that are taken centrally, and don't appear on the site invoices that the client companies see.

    3. Anonymous Coward
      Anonymous Coward

      "Someone" isn't just going to pick up "Clients". "Someone" has already raided IBM for Technical Hardware Staff. A bunch of them, in the USA, to be exact. Customer's certainly are not happy about that. Senior Managers, don't care. Pretty soon, there will be more Team Leads and Senior Managers than Technical Staff to provide Technical Support. That won't work out well, for IBM...

    4. Anonymous Coward
      Anonymous Coward

      It seems like a mixture of groups.

      - The Indian body shops who are offering the same category of services at cut rate prices.

      - Insourcing has become popular as the big outsourcing contracts often fail to deliver on the huge cost takeouts they promise

      - Cloud computing. Many, not all, of the low level admin tasks can be largely automated with a public cloud provider. Especially if you use a PaaS as opposed to IaaS.

      - Some combination. For instance, cloud and then insourcing the relatively smaller staff as it isn't a huge cost to bear and improves agility of the organization. I think this option is bound to be the most popular over time. It is kind of crazy that companies with these billion dollar outsourcing contracts haven't gone to Google or AWS and just said 'here is what we do with outsourcing providers, tell us how we can do this, or a some portion of this contract, better, faster, cheaper with cloud.' It's not like there should be any internal politics with those contracts... as they are done by third parties anyway. I think may of these companies with outsourcing don't even have the internal expertise to source a new solution anymore though.

    5. Anonymous Coward
      Anonymous Coward

      look on the bright side...

      ...somebody is going to buy their shares and take control of IBM. That's when the money will be made.

    6. jelabarre59

      Who ends up with IBM's business? HPE, Oracle, or someone else?

      I'm not saying IBM is going out of business, but someone is going to pick up a lot of their clients...

      NTT America is expanding their operations. The business will end up going to the less obvious players, and those players won't be wedded to particular HW/SW platforms either.

  5. Anonymous Coward
    Anonymous Coward

    A lesson in Corporate Economics 101

    * Gut the company, get your multi-million dollar bonus and then leave... Let the 'lifers and temps' live with the fallout after... I worked for these f*cks once. But the state of the tech industry overall is a joke.

    * Its all about whining about 'we just can't get the material', and at the same time all the material is being sh1t-canned so that entire divisions can be moved to low-income countries.

    * Dear CEO's & Snr Execs in general, there are systems that take time and intelligence and familiarity to learn along with top training. You can't just outsource all of that, or you end up getting gutting, by clients and hackers and ultimately investors (Warren Buffet etc).

    * And once all the good and irreplaceable developers have walked away, they won't ever return. In fact they'll quite enjoy watching you rot...

    ===========================

    http://www.cnbc.com/2017/05/05/ibm-shareholders-criticize-rometty-salary.html

    https://www.bloomberg.com/news/articles/2017-04-24/ibm-says-ceo-pay-is-33-million-others-say-it-is-far-higher

  6. Mark 85
    FAIL

    Not a new management process...

    We've seen it before. Get rid of all the grunts and anyone below management. Everyone in management gets nice fat bonuses for "reducing costs". Suddenly (seems like only management will be surprised) revenue dries up as there's no one doing the actual work. Company goes down the tube and is broken up at fire sail prices. Management grabs all they can from the sales and then moves on to another company because of their great reputation. Rinse and repeat at the next company.

    I guess they don't teach managers that worker bees are the backbone of any company? And without them doing what they do, there will be nothing to sell? A pox on all them.

    1. kmac499

      Re: Not a new management process...

      Yes all horribly familiar,.yet another example of "imbecile with an MBA" or i-WAMBA syndrome.

      Senior managers manage the Share Price not the Business. With some of them it's almost a badge of honour that they don't need to understand the underlying technology of the business. As long as the share price (and occasionally the divi rate) matches or outperforms the market sector average, (ugh) they are a success.

      The fact that in doing so they have sown the long term seeds of destruction of the business doesn't matter. .

    2. Anonymous Coward
      Anonymous Coward

      Re: Not a new management process...

      Need to get me one of those sails for my boat!

  7. Anonymous Coward
    Anonymous Coward

    > If you're an IBM contractor or client impacted by these changes, feel free to write to me.

    Leading to a web form? Ugh. Not going to happen.

    1. ssharwood

      Will signal suffice? My number is on the contacts page

  8. Justin Clift

    IBM have done exactly this before in Aust

    IBM pulled this exact same stunt (10% haircut for all contractors, otherwise your contract is terminated) a few years ago while I was working for the EBR team in Australia.

    That was the last time I ever worked for IBM, as it demonstrated their contracts are literally not worth the paper they're er... printed on.

  9. FozzyBear
    Happy

    In all honesty the best thing that can happen to IBM now is that they spin off all their main tech Areas as separate companies.

    Have these separate tech companies run by. Oh I don't know lets call them Technically capable people with a bit business acumen thrown in.

    Leaving those half-wits that call themselves Executive managers in the US to manage IBM's highly productive original product "typewriters"

  10. Anonymous Coward
    Anonymous Coward

    HP tried to do this with me years ago

    I was contracting with them (through an intermediary company, not directly) and they were in their post Compaq acquisition cost cutting phase.

    The intermediary called me and told me I'd need to take a 10% cut, I said no way and went to talk to the guy at HP who had brought me in. He said he was under pressure from some SVP to reduce his spending on contractors by 10%, and had sent a notice to the intermediary to cut everyone's rate by 10%. I told him I'd quit immediately (in the middle of a big project) if my rate was cut, and he said he'd fix it and the intermediary called me later to tell me I wouldn't get cut after all.

    You should never let a company cut your rate, because if they need more savings the next quarter they'll know who is willing to roll over and take it!

    1. Paul Kinsler

      Re: You should never let a company cut your rate

      It's nice to be indispensable, because it means you can easily stand up to such tactics. However, there are lots of less-indispensable workers who might well find that a refusal to take the cut would result in termination. They have to make a more difficult judgement call, make a choice, and hope. Taking (only) a 10% hit, and then hoping to later jump ship might look like the best option.

      1. Sir Runcible Spoon

        Re: You should never let a company cut your rate

        Every contractors first priority is to secure the next renewal (preferably by fair means, such as making yourself indespensible).

        I understand that not everyone gets to fit into that bracket, but if your job security is based on your skillset and ability to deliver (i.e. reputation). If you don't stand up for yourself, no-one else will.

        1. Doctor Syntax Silver badge

          Re: You should never let a company cut your rate

          " if your job security is based on your skillset and ability to deliver (i.e. reputation). If you don't stand up for yourself, no-one else will."

          And if your reputation is good enough you'll be able to walk into another job elsewhere.

          1. Sir Runcible Spoon

            Re: You should never let a company cut your rate

            "And if your reputation is good enough you'll be able to walk into another job elsewhere."

            100% Agree, although it can sometimes be a bit of a ball-ache when you are vested in the projects you are working on (not the done thing I know, but someone's gotta care).

            Also, I sometimes don't push for rate rises (it can make things awkward for the team manager come renewal time); as an alternative I push for things that the team manager has discretionary decision making powers over - such as remote working (which can often be equivalent to a healthy rate rise, in addition to reduce hours travelling etc.) - if I've built up some of those kinds of benefits I find myself reluctant to just push off somewhere else where I'd have to start building the trust again.

            Having said that, if things get sticky all that goes by the wayside and I will just bugger off and they know it :)

            1. Doctor Syntax Silver badge

              Re: You should never let a company cut your rate

              "I find myself reluctant to just push off somewhere else where I'd have to start building the trust again."

              It helps to work on multiple company projects and being able to liaise with staff in the others. That way you can collect a number of contacts who trust you before you even work for them.

              1. Sir Runcible Spoon

                Re: You should never let a company cut your rate

                "It helps to work on multiple company projects and being able to liaise with staff in the others."

                This is basically what I've just done, I've moved into another role with an established level of trust right from the off, but you're always having to deal with all the exclusion clauses in the contracts these days - even if they aren't strictly enforceable, if both parties are aware of the restriction the new client won't take you on if it's going to piss off one of their major accounts.

                Developing projects and contacts at other companies is much harder these days as well, since most of the projects I'm running are pretty involved and I'm not sure I could cope with page-shifting whole networks & designs in and out of my head several times a day - my brain just can't cope with that anymore - I'm getting old! :)

        2. Justin Clift

          Re: You should never let a company cut your rate

          > Every contractors first priority is to secure the next renewal (preferably by fair means, such as making yourself indespensible).

          Not true. When I used to contract (for many years), my first priority was to get the job done well. Preferably very, very well.

          In the interviews I also made it very clear I'm not a long term contractor. eg if you're wanting someone to stick around for multiple contracts or go perm, I'm not your guy.

          Clear communication up front + an established skill set, good reputation, and good references are what worked for me.

  11. Anonymous Coward
    Anonymous Coward

    Bewildered

    How is this going to help those companies that are a customer of IBM?

    All the gurus are leaving in droves and what we are left with isn't impressive at all.

    The English spoken/written by the "low-wage nations" is sub par. The amount of time wasted with miscommunication is ludicrous.

    Also the lack of responsibility between the rotating offshore tech team is also another nightmare that everyone is being forced to deal with.

    1. Anonymous Coward
      Anonymous Coward

      Re: Bewildered

      > The English spoken/written by the "low-wage nations" is sub par.

      With the exception of the Philippines. I think it's something to do with their education system being based upon American English. To the point where many speak with a clearly US accent.

      1. Anonymous Coward
        Anonymous Coward

        Re: Bewildered

        > The English spoken/written by the "low-wage nations" is sub par.

        With the exception of the Philippines. I think it's something to do with their education system being based upon American English

        I would have thought they'd be better off based on real English.

        After all, even the romans had British accents.

        1. Anonymous Coward
          Anonymous Coward

          Re: Bewildered

          > I would have thought they'd be better off based on real English.

          It seems to be related to the US presence during the 2nd world war, and the aftereffects from that.

    2. allthecoolshortnamesweretaken

      Re: Bewildered

      "How is this going to help those companies that are a customer of IBM?"

      If I may point out the fallacy you seem to be commiting: whatever reasoning is behind IBM's actions, the needs of IBM's customers are not part of it in any way. You ask how this is going to help customers? The answer is: Not at all. You ask how management can ignore the fact that they need customers (and preferrable satisfied customers) in order to generate revenue and stay in business? Well... the best answer I can offer is that it's some sort of self-induced schizophrenia. You know, like in most cults. Oh, and it looks good in a PowerPoint presentation.

      ----------

      "Some factual information for you. Have you any idea how much damage that bulldozer would suffer if I just let it roll straight over you?"

      "How much?" said Arthur.

      "None at all," said Mr. Prosser.

  12. Anonymous Coward
    Trollface

    "the IBM client at which he worked has insisted he stay on.

    IBM has therefore had to hire him as a permanent worker to satisfy the client."

    This contractor must be a paragon of self-sacrifice, to take a hit like that to make a customer happy :)

    Many condolences...

  13. Gordon Pryra

    The consequences of refusing the pay cut are unclear.

    Really?

    And when its time to renew the contact, who gets the roll on? The one who accepted the cut or the one who said "Pfft My Rates are protected by my contract!!"

    1. 's water music

      Re: The consequences of refusing the pay cut are unclear.

      Really?

      And when its time to renew the contact, who gets the roll on? The one who accepted the cut or the one who said "Pfft My Rates are protected by my contract!!"

      Duh. Both of them. The former because he is desperate and will accept the renewal (at another -10%) and the latter because he is essential and he knows it (because otherwise he would have been terminated at the time

  14. HmmmYes

    Word of the day: Fungible

    On low skilled jobs, people are pretty fungible. Joeski Pavloa goes back to Poland? No problem. get Ilana from Romania, show them the ropes of buttery sandwiches or digging a hole. Training over by morning tea break.

    As you go higher + higher up the skill ladder, the people get sparser + sparser. Suddenly you get to the point where there isnt a pool of talent out there. There's no horde of people banging o nthe door to do it at half price. Or xGOV does not want foriegn nations working on a site - you know maybe itll upset Trump, maybe their experience of Joe Xin who sent all the info back to Beijing was a bit of a problem. Maybe X Corp are still sat waiting for an a judgement from the Bangalore court who defrauded all their clients 5 years ago.

    I really dont know why anyone would want to outsource to HPE or IBM. I say that with my boss head on.

    1. fandom

      "On low skilled jobs, people are pretty fungible"

      Many people seem to think so, but it's not really true.

      In my experience there is a big difference between people are good at something and people who aren't in just about any job.

      If you don't believe me think about something as menial as cleaning staff, haven't you noticed there are people who leave things sparkling clean while other just seem to move the mop around to no effect?

    2. Anonymous Coward
      Anonymous Coward

      I really dont know why anyone would want to outsource to HPE or IBM. I say that with my boss head on.

      Many companies have bosses that believe the outsourcers' marketing, you know. Rather than ask themselves what the reputation and performance of these companies is, or examine the economics of outsourcing, they actually choose to beleive that somehow IBM. HPE etc can somehow do a better job for a lot less money, and these companies will, out of the goodness of their heart, share the copious bounty of those savings with the client.

      Quite how anybody that stupid even knows how to breathe I can't really say. Ask Bombardier, who signed up with IBM a few weeks ago. Then again, Bombardier are a troubled company, bailed out by the Canadian taxpayer, and whose execs then tried to award themselves a 50% pay rise, even as they shed over 16,000 workers. How do these people know how to breathe? And why doesn't somebody stop them?

  15. Only me!
    Trollface

    HELP

    Maybe she can helicopter in some help later!

  16. HmmmYes

    Id add, contract depending, Id take the 10% cut for 6 months and spend the time selling myself to the client at 30% more. Or stop working and just spend the contract looking for my next gig.

    That sort of behaviour would remove IBM from my list of people who Id work for.

    1. Anonymous Coward
      Anonymous Coward

      Had a conversation like this a year or so back, and told the agency I would agree to a days cut to average of a 4 day week, rather than a rate cut, but they had to confirm in writing it constituted a material change to the contract between my company and the agency,

      The end client company said yes, agency said no.

      1. Justin Clift

        >The end client company said yes, agency said no.

        Have you used that agency since?

        Personally, that'd put them on my "will not work with again" list.

    2. Anonymous Coward
      Anonymous Coward

      Id add, contract depending, Id take the 10% cut for 6 months and spend the time selling myself to the client at 30% more. Or stop working and just spend the contract looking for my next gig.

      Or, as I said the last time they pulled a 10% reduction, "I guess I'll just have to make a 10% reduction in effort/giving a shit to match it."

  17. Anonymous Coward
    Anonymous Coward

    Opportunity Knocks

    Seems like a perfect opportunity to cut out the middle man and go direct with your client. Independent contractors are in business in their own right, right?

    Got a clause that says IBM won't let you go direct? Fuck 'em, change company name and see line one of this comment.

  18. Anonymous Coward
    Anonymous Coward

    As a contractor...

    I have a canned response for these situations.

    It goes like this:

    "No".

    Usually because the rates are already hammered down before the contract starts.

    If they insist, I tend to insist on a contract extension at the same time.

    1. Doctor Syntax Silver badge

      Re: As a contractor...

      "If they insist, I tend to insist on a contract extension at the same time."

      You insist on a contract extension at a reduced rate?

      Why?

  19. Nolveys
    Windows

    IBM Contractor Traning Video

    There's actually a video available about being a contractor at IBM, you can find it here.

  20. Anonymous Coward
    Anonymous Coward

    So far, out of my colleagues who are contractors, 2 are looking elsewhere before their renewals come up in the next two months, 1 has said he'll re-sign at the lower rate (contract runs out within the next couple of weeks) but will be spending the duration of his contract looking for other roles. We've got project managers demanding more resources as we've lost contractors and full timers in recent actions - not only are we at risk of losing revenue from these projects we also have penalties applicable for not meeting milestones in the order of $700k in one instance.

    Account team members that I talk with are frustrated as they are the ones dealing with the fallout from customer and find themselves robbing one project of resources to prevent a penalty on another. Under-resourced BAU support teams are having resources pulled out to help rescue projects then having to deal with escalations resulting from the clients noticing a person allocated to support is suddenly working on a project while their support queues are growing.

  21. Alistair

    @AC

    "Account team members that I talk with are frustrated as they are the ones dealing with the fallout "

    You are describing the situation I left behind three years ago. Not new.

    Gini has a mandate to fix the *stock price*. NOT fix the company or its overall value, performance, morale, or products. The most valuable corporate stock will have 0 employees, other than the c suite and a herd of lawyers, and craptons of IP. This is what Gini will end up with.

    1. Anonymous Coward
      Anonymous Coward

      Re: @AC

      It's interesting isn't it? If IBM are taken over because the share price drops too much then the axe will swing anyway.

  22. Anonymous Coward
    Anonymous Coward

    I can confirm this happened in the US as well. We were also asked to furlough contractors for 25% of the month of March with no pay. I was asked to do this at the end of February. Some contractors in certain divisions seem to have been exempt from that one, but I don't know what the determiner was.

  23. Anonymous Coward
    Anonymous Coward

    Confirming this happened in Canada in 2015 - started in September, went on for a couple of quarters -after which they reversed it.

    (Unpaid) Furloughs were common - we were exempt from it after special dispensation from above (being on a very large, very important account - where the client would tear IBM a new one)

    Probably happened afterwards too - but I don't know - I wasn't there any more. But I did hear from the agency that IBM was squeezing the agencies for another reduction and reduced number of payable work days.

    The quality slide continues - IBM India (to whom many functions were outsourced within IBM) are just terrible to deal with - both in terms of competency and urgency.

    It's a sad situation - but hey, you pay peanuts, you get monkeys. And it seems firms like IBM are more than glad to have that.

    Their clients get to shift capex to opex - and as long as the overall quality doesn't "suck too much", they will keep paying companies like IBM / HP etc, these glorified hosting and support desk costs

    1. Anonymous Coward
      Anonymous Coward

      ``IBM India (to whom many functions were outsourced within IBM) are just terrible to deal with - both in terms of competency and urgency.''

      Oh, god, yes. I had to train folks in India to take over a function that I had been providing to a former employer---I had been retained by IBM as a contractor to do a small subset of my former responsibilities. The term in India was largely incompetent and easily offended. Trying to explain something to them took an inordinate amount of time, they'd attend training conference calls for training without reading any of the materials that we'd be covering. I'd send them instructions on how to install software--with a note to call if they encountered any difficulties--they'd need to perform the function that they'd be performing. When the conference call time rolled around, it turned out that they'd all blown off installing the software so the conference call turned out to be a waste of time. In the end, only one member of the team in India showed any initiative at all. Nice single-point-of-failure that turned out to be. If that team is still representative of the quality of overseas technical employee IBM is using then I can't see them surviving for much longer.

      1. Frank N. Stein

        The quality of IBM's foreign Technical Support is Sub-Par at best and outright terrible, in most cases. Barely able to speak English. Most of the time, they'd be calling Hardware Warranty Support get Software, Hardware Or Network Config assistance that no one should be on staff tech should be calling anyone to get assistance with. Chatting with them was easier than talking with them over the phone, but what they'd be popping into chat for is to try to convince us to take their cases, claiming they were US Gov cases that they couldn't handle, or cases for Server hardware that they weren't trained to support. Why the hell were they hired and not train to support products? Counter productive to the whole point of "cost savings", with outsourcing, idn it?

    2. Sir Runcible Spoon

      "IBM India <snip> you pay peanuts, you get monkeys."

      <CinemaSins voiceover>

      Thaaat's racist

      </CinemaSins voiceover>

      1. stephanh

        There are plenty of good people in India, but they don't come cheap either. And they want some career perspective too and not some sweatshop with conference calls with the US-based manager at 3AM.

        Pay peanuts, get monkeys is a universal truth.

  24. Florida1920

    Deja vu

    In early 1970 I was a contractor at IBM's new chip foundry in East Fishkill, New York (now owned by Abu Dhabi-based GlobalFoundries -- now that's outsourcing). The state even built an exit from Interstate 84, "Lime Kiln Road," to serve the plant, which was huge and employed thousands of people. There were so many contractors on six-month gigs at that plant and other IBM facilities in the county, that the standard apartment lease was for six months. Around April or May 1970, IBM pulled the plug on contractors, putting thousands of people out of work. Most of them (I'd already quit to move down to NYC so I could be laid off there later in the year) worked through agencies, so the ripple effect was devastating to the area.

    I spent about 12 years of my career working as a contractor. There are no "permanent" jobs in high tech anymore, but using contractors only benefits the company. The downstream economic perils are incalculable. Almost 50 years later, I'm not surprised to read that IBM is doing it again. Maximizing profit by periodically throwing workers over the side is what we've come to expect from our economic model.

  25. Anonymous Coward
    Anonymous Coward

    Make hay when the sun shines.

    If you don't like it then go somewhere else, I did as an employee and then as a contractor for IBM. You don't have to work for them. A contract is an agreement which can be terminated by either side. I might suggest that if you can't go elsewhere to match your rate then IBM have been overpaying you. It's a marketplace and with IBM you have to play hardball, they do. Hard to swallow I know, but it is a marketplace (meat market) and there is a balance to be had that is mutually agreeable to all. If enough contractors disappear and IBM is losing money on it's contracts due to failure to deliver that is their business and there's little point in complaining about it. However, as a shareholder and pensioner in IBM I will complain to them. It won't be long before there is a change at the top.

    1. Florida1920
      Thumb Down

      Re: Make hay when the sun shines.

      If you don't like it then go somewhere else, I did as an employee and then as a contractor for IBM.

      Personally, I reject the idea that working for a living requires entering a dog-eat-dog world.

      1. Anonymous Coward
        Anonymous Coward

        Re: Make hay when the sun shines.

        Good luck with that one.

        I agree with you but this is the real world.

      2. mark 177
        WTF?

        Re: Make hay when the sun shines.

        This isn't "working for a living". If you want to do that, get a job as a permie.

        This is contracting, i.e. running a business. You don't get what you deserve, you get what you negotiate.

    2. Anonymous Coward
      Anonymous Coward

      Re: Make hay when the sun shines.

      I might suggest that if you can't go elsewhere to match your rate then IBM have been overpaying you.

      Not in the Mid-Hudson valley of NY State. IBM had been one of the major employers before they went in the crapper. Considering the tax-and-regulatory nightmare that is New York State, any companies that *can* leave NY have left or are in the process of leaving. And every time the state squeezes harder (to make up for lost revenue) it makes it that much more economically attractive for yet another mass exodus of jobs and money. The only reason IBM (and various other leeches) haven't left is because politicians in Albany have bought them off with taxpayer money.

      No, if you're stuck here (for various reasons) you're S.o.L. Besides, the reason I automatically ask for a higher rate from IBM in the first place ( than I would ask for from any other company) is specifically *BECAUSE* I know they'll screw me over sooner or later.

  26. Anonymous Coward
    Anonymous Coward

    Why outsource?

    Often, the main driver behind outsourcing is to close out the pension liabilities associated with the more highly paid staff and in most firms this is the IT staff.

    IBM is doing the same as all the firms that outsourced to IBM, offshoring is just their version of it. If IBM fails then everyone loses anyway.

  27. Anonymous Coward
    Anonymous Coward

    IBM must be losing a lot of money.

    If they think it is better to jeopardise their existing business than to generate more there must be a problem. I'm sure their potential and existing clients read this too, whether they care is another matter.

  28. tbouts

    It's difficult to understand all this discussion of lifeboats and eddies and currents after the ship is already foundering. Ginni and her team of meerkat executives must be hoping for two more cycles of bonuses. The ship won't be out of money, but the turmoil around lawsuits and charges will discourage any hangers on. What's the BoD doing?

  29. Anonymous Coward
    Anonymous Coward

    I doubt I could ever work for IBM again anyway...

    ...because I don't live in one of IBM's new `chosen' cities but one could see that their support model was pretty awful and something to avoid if at all possible. Not allowing remote work makes that easy now.

    I contracted with IBM for about 4 years (early '09 through late '12) after my employer outsourced their data centers and support to them. Even while I was a contractor I was prohibited from providing the same level of service I had been providing before the outsourcing agreement began. IBM's support model required five different overseas teams to provide the same support I had somehow been providing. You can imagine how that made my former customers feel when I had to tell them "Sorry, I'm not allowed to do that any more. You now need to talk to ...". I actually had a discussion with the team supporting an important application and heard them express their dismay and disgust on the sort of things that the outsourcing agreement would support and, most importantly, what it would not. Anything not on the spreadsheet had to be negotiated and paid for separately. Great fun that was. And ridiculously time-consuming. Several customer migration projects missed their target dates because of not allowing former employees from contributing as contractors. Oh, and no rate increases whatsoever as part of the multiple contract renewals over that time. I am not surprised that my former employer is cutting back--way, /way/ back I'm told--on their use of IBM's services. Halfway through the outsourcing agreement it was apparent that they were in the process of implementing new systems internally rather than jump through IBM's hoops. I've been watching IBM's decline with no small amount of schadenfreude. (Almost as much as I enjoyed finding out that the execs who bought into the IBM agreement were all fired or fled.)

    1. Grunt #1

      Re: I doubt I could ever work for IBM again anyway...

      Me too, I expect we worked together before we were outsourced of course.

  30. 2Nick3

    How often are these outsourcing contracts renewed?

    You hear a lot about outsourcing contracts ending, with either a new supplier involved or things going back in-house, but how often are they actually renewed? After outsourcing to IBM/HP/CSC/Patheon/Accenture/CapGemini/etc for 3-5 years, what do companies do next?

    1. Anonymous Coward
      Anonymous Coward

      Re: How often are these outsourcing contracts renewed?

      In my company's case, a lot was brought in-house (although to Easter Europe and India) and some went to another outsourcer.

      Luckily the service is bad enough that groups like mine (ie shadow IT) seem safe for the time being.

  31. CujoDeSoque

    That the execs are screwing over everyone they can? Old news.

    The last time I'd talked to them, I had a contract all signed and I ready to start. They changed the terms on me a week ahead of time and sent over the paperwork to the contracting shop I went through. Needless to say, I never signed and never showed. When they called, I told them I'd already taken another contract and for more money.

    The kicker was that they called me a few more times. I always quoted rates that were 30% higher because it was IBM.

  32. Anonymous Coward
    Anonymous Coward

    A cunning plan to weed out the competent

    I imagine those who will not accept the pay cut are those who know they can get another position without too much trouble.

  33. Uncle Ron

    The "MBA Syndrome"

    Companies around the world--in every category of every industry--are falling ill due to a ailment which I call, "The MBA Syndrome." This rapidly disfiguring and slowly fatal ailment is caused by the infusion of individuals into an organization who are trained in nothing--nothing--but cost cutting, expense containment, downsizing, outsourcing, contracting, resource action, marketing double-talk, revenue enhancement, and related, growth-negating concepts. These infectious agents know -nothing- about the actual business the company is in.

    The disease is spread from the actual carriers to surrounding non-MBA individuals. Upper-level decision-makers are particularly susceptible, as, in most cases, these decision-makers know nothing about the actual business either. The death spiral is well underway as the carriers jump to another host, or are absorbed into a consulting firm to infect other, sometimes smaller, companies.

  34. lars.r

    or simply not pay contractors at all ..

    Back in January I left a gig as a subcontractor for IBM at a major UK government institution. The biggest institution of all in fact. I have still not been paid for January and part of 2016.

    Clearly IBM is going to pot. Which is a shame since they used to, and to some considerable extent still do, have quite good products. But terrible middle management, or higher, will ruin any organization. Still, not paying you bills.

    IBM. Drain. Circling. Etc.

    1. Doctor Syntax Silver badge

      Re: or simply not pay contractors at all ..

      "I have still not been paid for January and part of 2016."

      Court judgement then if they still don't pay take your pick: apply for a winding up order or send in the bailiffs.

  35. Anonymous Coward
    Anonymous Coward

    Should I actually return to IBM?

    My first ever post anonymously for a reason. I am in a 2-year sabbatical from IBM and if I want to retain my position I need to return to work either 1. July or 1. October this year.

    I have heard from my old colleagues there has been a number of changes making the work environment downright awful.

    I would like to hear from someone currently working is a there point to come back? I have a position lined up elsewhere and plenty of freelance work, so I am in a position to make a chose.

    On the actual topic. I have been working on few IBM contracts as a contractor during my sabbatical for irregular hours. Essentially hot fixing issues.

    I've got no news that my indication that my rates would be touched. If they do I just drop them.

    1. Anonymous Coward
      Anonymous Coward

      Re: Should I actually return to IBM?

      Honest answer - head for the hills and don't look back. Unless you have an extremely valuable skillset to IBM's current flavor of the month it is highly unlikely you would retain the rate to which you are used to receiving. Two of the contractors with whom I work were asked to take a 12% pay cut - told on the Friday, response due Monday - if they didn't respond they were deemed to have said No and their contract would be terminated in two weeks. With so little forewarning (current contracts didn't end until Oct), they had no choice but to agree - they are going to spend most of their remaining contract looking elsewhere.

      Between permanents being cut, contractors not being renewed, contractor hours being capped and offshoring, many permanents are working much longer hours to keep the wheels turning in some cases or putting out the constant fires that are springing up. Permanents can't take time in lieu they have acquired because taking it will make things worse for their team. Managers are moving people around to whichever project/issue is causing the most customer noise - it quells things for a little while but hides the true impact of the cuts that have been made. Managers are doing this to protect their own jobs by avoiding the customer complaining enough that it gets to senior management, senior management gets no complaints from customer so they think there is still more they can cut.

      Now that they've cut individual accounts to such a level they can no longer deliver locally there is now talk of 'service pooling' so that resources can 'seamlessly' move between customer accounts to where they are needed and provide better career progression - translation from manager speak: We don't have the people left to look after our customers so we plan to dump them in one big pool and move them depending on which customer screams the loudest...

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