Why would anyone ever leave IBM ?

I start IBM some 21 years ago in 1979. This was well after the reign of the Watson dynasty. One of Thomas J Watson's principles were strongly upheld, respect for the individual. He felt if you took care of the employee, they would take care of the company.

Most people knew that IBM didn't pay well but there were good benefits. And you had a job for life as long if you performed well. If you worked your 25 years, you could retire to enjoy your 'golden years'. You were secure in knowing a decent retirement would come each month and you had good medical coverage.

This changed. When Lou Gerstner took over as CEO, IBM was in dire straits. Something had to be drastically done. Employees received letters from directors saying action is required. IBM in the mid-hudson valley was hit hard. Some 15,000-18,000 people were laid off. Those left behind were asked to work harder and smarter. Our benefits were slowly eroded one-by-one with each announcement of an enhancement to the IBM corporation. Work schedules changed to cover the gaps left by the surpluses employees. Work related stress increased and our family lives were impacted. Employees accepted this since we knew we need to help our company.

IBM slowly recovered. The decisions made by directors and the efforts of those remaining 'harder and smarter' employees started turning the company around. But then, in a record profit year, Lou announced another enhancement. Our pension was going to be converted to a cash-balance plan and our pension medical was no longer lifetime. Employees felt betrayed. A union movement started to help regain our benefits and respect.

Most IBM'ers are hard working people. They are knowledgeable, dedicated, innovative and get the job done. If tools don't exist, they make them. They sacrifice time with their family and friends for IBM. Things that worry me about the company are :

  1. Benefits were aligned with other industries but not the salary
  2. Future employee 'enhancements'
  3. Then number of foreign assignees in IGS that on H1 visas. Are they learning the US job to take it back to their country ?
  4. The rising debt load. Look at the P/E ratio history
  5. The moral of the employees
  6. The attrition rate

Vested employees are eligible to collect their pension immediately after separating with the company. This can be in the form of a single lump sum or monthly payments. Of course, this will be a lower amount then if they wait for age 55, 62 or 62. And of course, there are the tax liabilities.

The comments above are just that, my personal comments.
Dennis Kloepping Sept 10, 2000