IBM to U.S.: Headcount Is for Us to Know, You to Find Out
If I was an IBM stockholder, I'd be mighty confused about Big Blue's reluctance to break out its workforce numbers for North America in its annual report. IBM has stopped informing shareholders of regional breakouts for its employees. The company only lists total number of employees, which is now at 399,409 worldwide--an increase of 954 employees from 2008.
Recent news in 2010 showed IBM continuing to lay off North American employees. Last year, it was estimated that IBM eliminated over 10,000 jobs in the United States and Canada while the work for those jobs has been moved to other countries, according to former employee reports and reports from the Alliance@IBM, an organization trying to unionize U.S.-based IBM employees.
IBM will not confirm the eliminations.
You see "global integration" of IBM operations mentioned a fair amount in the report. If you are wondering what that means, put it in the context of what IBM calls "workforce reduction actions"--something it has done with regularity in 2009, but gets no more explanation than this in the following statement: "In response to changing business needs, the company periodically takes workforce reduction actions to improve productivity [and] cost competitiveness and to rebalance skills."
IBM is a global company, indeed, but what harm is there in telling your valued stockholders the locations--even regionally-- of your headcount? What's the big deal? You used to provide that information. Why the pull back?
It's easy to focus on earnings, but it's harder to focus on what you did to get those earnings in a year where you admitted revenues were down. Why can't you let shareholders know that you are chopping U.S jobs and replacing them overseas to benefit from foreign tax deferral and improve the bottom line?
Here is how Samuel Palmisano, chairman, president and CEO of IBM, put it in his letter to shareholders (PDF) in the annual report:
"We delivered strong results in 2009, once again achieving record pre-tax earnings, record earnings per share and record free cash flow -- despite reduced revenues. At the same time, we continued to deliver superior returns to you, our owners... The explanation for this performance -- and for our optimism about both the near-term and the longer-term future -- is threefold. It rests, first, on the ongoing transformation of our company; second, on our focused strategy to capture the large opportunity of a globally integrating world..."
IBM is becoming a model company for killing good U.S. jobs while it supports the need for more H-1B visas within the United States and benefits from foreign tax laws. Kill off U.S. jobs, keep the dividend strong and keep your marketing "smart."
Here is what IBM boasts to its shareholders:
Since the dot-com crash in 2002, we have added $12 billion to IBM's pre-tax profit base, increased our pre-tax margin 2.5 times, quadrupled our earnings per share and more than doubled our free cash flow. Cumulatively, we have generated about $80 billion of free cash flow.
Did you add up how many lives you have ruined?
"By hiding its offshoring, IBM is doing a disservice to America--through omission the company is providing misleading labor market signals and information to policymakers," said Ron Hira, a professor at the Rochester Institute of Technology, to Computerworld's Patrick Thibodeau.
If this is what all this "smarter planet" marketing is about, then, yes, IBM, you have outsmarted many, and are helping to make the United States a poorer part of the planet.