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back to article IBM job cuts: Big Blue starts 'slaughter' of Indian and European workforce

IBM has begun slicing away at its workforce in India and Europe, as the company tries to shift its business to more lucrative, higher-margin technologies. The job cuts were confirmed by a representative for the IBM Union Alliance to The Register by email on Wednesday after a report was published describing a mass layoff in India …

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Anonymous Coward

"slaughter house"

Hello India,

Welcome to life in the first world.

From a 30+ year veteran of layoffs, downsizing, rightsizing and watching job after job go to India.

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Anonymous Coward

Re: "slaughter house"

Not really their fault. Its companies greed and profiteering thats to blame. IBM are no different. If they can cut costs and avoid tax they will. Even if this is to the detriment to the long term well fare of the company and its employees.

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Headmaster

Re: "slaughter house"

Dear doublethink AC: avoiding taxes is GOOD for the workforce and the employees. It is BAD for the state, taxfeeders and their associated fat cats. And who cars about those?

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Anonymous Coward

Re: "slaughter house"

As a citizen of the state, shouldn't I be bothered by companies doing things which are bad for it? Also, I'm not entirely clear how companies avoiding tax is good for the workforce.

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Holmes

Is he a slumming producer from FAUX "news"?

Whenever I see such a moronic comment, I wonder who's paying him to be so stupid.

The actual way the system works in today's America is that most businesspeople are fine and upstanding folks who just want to play by the rules. Unfortunately, they don't write the rules.

The rules of the business game in America are encoded as laws. The laws are written by the most cheaply bribed professional politicians. The pols are working for the least ethical and greediest businessman. These are basically sociopathic human scum who could NEVER have enough money and whose only interest in peasants, bums, and assorted poor people is whether any more blood can be squeezed from the turnips. Their only interest in middle class people is in turning them into poor people.

What they pay the politicians for are laws that support a cancerous model of growth. Unfortunately, cancer is NOT a sustainable business model, but they don't care, since their only objective is to have more toys next quarter.

IBM used to stay above this sort of thing, and the company nearly collapsed, at least as Wall Street saw things. Wall Street now thinks that IBM has gotten better, but I have my doubts. However, I think the best model of death by "doing the right thing" was actually Sun. Oracle is still choking on the corpse, but Ellison is too greedy to write off $9 billion the way the google recently did. I insist that cancerous greed is NOT a long-term survival strategy. It always ends with the death of the host--and the death of the cancer, too.

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Anonymous Coward

Re: "slaughter house"

In what possible way is the government taking money from people to spend on its friends and useless projects "beneficial"? With such goodies as the Iraq war, the Common Agricultural Policy, the Great Leap Forward, the Stasi, HS2, the euro and the licence raj in India, who could possibly dispute that governments are in almost all cases and under almost all circumstances the worst and least effective spenders of money.

I am sure IBM like all companies, has made mistakes, wasted money and failed to benefit its employees, shareholders and the countries where it operates, but just compare this with US government involvement in Vietnam, Afghanistan, Nicaragua. Or the brilliant success that is Cuba, where dissent gets you banged up permanently, or Venezuela with the same population as Saudi Arabia, loads of oil, and third world poverty everywhere except in government circles.

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Re: "slaughter house"

@AC What? So governments are appropriate vehicles for optimum employment of capital? So IBM should just pay tax so one government or another is able to squander it?

Of course IBM are doing the right thing *for the majority of their workforce*. If IBM retained individuals working on projects that no one wants (judged on the basis that no one is buying the kit at a price IBM can afford even using lower cost labor from India) then it will jeopardize the employment of other company employees.

Is that what you are advocating? In Britain we've seen the consequence of this kind of thinking. Before WWII Britain was leading shipbuilder and using rivets to bind steel plates. During the war the necessity of producing merchant ships quickly to replace those lost at sea lead to the introduction of welding the plates together.

After the war British shipyards did not change their working practices and, guess what, buyers wanted the cheaper welded ships. So instead of adapting to change British shipyard started threatening to layoff workers which successive governments continued to support through unsustainably large amounts of tax payer's money in a futile attempt to keep the industry afloat (pun).

So instead of taking the tough decision to confront the issue, retrain workers (in the teeth of union opposition) and be competitive, The British government squandered £billions.

In my view this one example shows why a) IBM has to adapt; and why b) governments are not organizations that should be given cash unless absolutely unavoidable according to law.

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Anonymous Coward

Re: "slaughter house"

IBM, Google, Apple, Amazon and co all have built their profits on taxpayer funded R&D. The stored program digital computer and the Internet were invented and developed on the taxpayers' dime. Without the State, these companies simply wouldn't exist.

Avoiding tax now and demanding low taxes is basically ensuring that new disruptive technologies don't appear. Because companies spend very little on fundamental research. Commercial spaceflight depends on research done by NASA and the DOD. Pharma makes use of work done by the NIH.

It's simple: either technology companies should pay taxes and shut up, or they should pay royalties for every bit of taxpayer funded research they have made use of.

Ayn Rand knew squit about science and technology. If she had understood its economic background, the world would have been spared some of its worst written books.

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Re: Is he a slumming producer from FAUX "news"?

These are basically sociopathic human scum who could NEVER have enough money and whose only interest in peasants, bums, and assorted poor people is whether any more blood can be squeezed from the turnips.

Those words accurately describe Thomas Watson, IBM and their behaviour in the run up to WWII.

You should read IBM and the Holocaust sometime.

As for present-day layoffs in India? What goes around comes around. Where next for 1st line support I wonder?

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I'm trying to feel sympathetic, seriously I am.

I know that the Indian who's just been made redundant had nothing to do with the policies that made India such an unpopular word in the West over the last few years, and he/she is probably reeling from the news as much as the Western person did who's job he probably took, but I'm afraid I just can't bring myself to feel too sorry.

From somebody who (so far) has avoided the swinging axe personally, but has seen many many talented friends and colleagues hung out and left to dry as a result of relentless rightsizing over the last years of chasing the Wall St dragon.

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Yet the pitiful...

global economy loved by the Yanks continues to rear its ugly face

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Anonymous Coward

Re: Yet the pitiful...

> global economy loved by the Yanks

Minor correction: "global economy loved by <= 1% of the Yanks"

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Re: Yet the pitiful...

Right, you keep telling yourself that. Maybe you wanna ask the Yanks?

Either the guys being fired are shit, or they will find other gainful employment. That's the way the cookie crumbles.

People who assume there is some magic entitlement to "lifelong job protection" are just fscking confused about the whole thing works. They generally are also union members and believers in the nanny state.

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Trollface

Re: Yet the pitiful...

" continues to rear its ugly face"

Wrongo. You're facing its ugly rear....

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Stop

@ Destroy All Monsters

"People who assume there is some magic entitlement to "lifelong job protection" are just fscking confused about the whole thing works. They generally are also union members and believers in the nanny state."

You must be a supporter of the golden parachutes and the obscene salaries that CEOs et al are used to. Because they really deserve it right?

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Anonymous Coward

Re: Yet the pitiful...

> Either the guys being fired are shit

I honestly hope that when you get a pink slip because of "rightsizing", your helpful Human Resources Representative - who will guide you through your "transition period" by linking your severance pay to your signature on a "I will never sue you for wrongful termination" contract - tells you to your face that you got fired because you were shit, and that you'll find gainful employment elsewhere no problem - for example at Burger King, and that there's no magic entitlement to lifelong job protection, because you don't live in a nanny state.

And then you can post again here and let us all know how that feels.

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Devil

Re: Yet the pitiful...

Come on, get with the program Granddad , times have moved on.

Its now:

When you are targeted by a "resource action", due to "returning value to shareholders" your "Human Capital Management Specialist" will guide you through the "Fully Transparent Consultancy Period"

You have to remember to change the terms you use every few years, in much the same way as insulting and unacceptable words evolve, and probably for the same reasons.

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@ Destroy ... Re: Yet the pitiful...

Did you see the people they are letting go?

Those jobs are going to people in China.

When IBM sold off Lenovo... good buh-bye people working in STM and others in the hardware division.

Not many other companies in India are doing that type of work.

Not to mention many firms in the US are figuring it out that they can hire people in rural and midwestern communities for less than they thought as Indians have routinely wanted raises and bringing up their costs.

So as it gets more expensive to do work in India... its dropping in certain parts of the US...

Sorry guys, you work for IBM... they routinely fire people who happen to be in the wrong place at the wrong time. You are all drones/borg bots. To the bean counters at IBM... you all look alike, sound alike and are disposable...

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Re: @ Destroy All Monsters

"You must be a supporter of the golden parachutes and the obscene salaries that CEOs et al are used to. Because they really deserve it right? "

JahBless ... If I am the CEO of my own company, I take on all of the risk.

I work 60+ hour weeks months on end.

I forgo vacations.

So when things take off, yeah I want the salary. I want the total comp package.

I think I deserve it.

Now if you're talking about the tosser who comes in to help grow the company... sells you a bill of goods? His parachute is golden because he's taking on a lot of risk to come lead your company. If he fails... you toss him out of the plane and he's not going to find his next job as easy as the techie who has head hunters calling him 24/7

Think about it.

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Re: @ Destroy All Monsters

"If I am the CEO of my own company, I take on all of the risk."

Then you should do all the work by yourself.

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Anonymous Coward

Re: @ Destroy All Monsters

@Ian Michael Gumby:

You took risks with other people's money: either VC or shareholders. Not yours.

You work 60 hour weeks? Big Deal. Ask a compiler or kernel engineer how many hours they put in a week, every week.

Even if you screw-up big time (which you most likely will), you'll have a golden parachute waiting for you. You'll make out like a bandit with other people's money. Not yours.

After you parachute out, you will land another golden parachute CEO job. Being an incompetent CEO does not hinder your future employment prospects: quite the opposite.

You've managed to delude yourself into believing that having a CEO is somehow an indispensable function at a company. Reality check: it isn't. There is not a single company on this planet who wouldn't function just as well, if not better, without a self-important, delusional and clueless gasbag at the top of the totem pole. It's likely that no-one ever told you this: people who technically work for you spend most of their time working around you, and not for you. Your only demonstrated core competency is to get in the way.

In other words: STFU.

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Anonymous Coward

Re: Yet the pitiful...

Less than 1% of the Yanks?

Boy are you wrong. Anyone in the US with a 401K (or its equivalent) will want the EPS and the share price of their holdings to increase. Just like the Pension funds elsewhere in the world and that includes the Union Pension funds. That last point is something that most Union Leaders tend to forget about when they talk about huge pay increases without productivity gains or layoffs.

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Anonymous Coward

Re: Yet the pitiful...

There have been huge gains in productivity over the last 30 years (see IT, see automation of assembly) with no gain in income for the average worker net of inflation.

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Anonymous Coward

Re: Yet the pitiful...

> Anyone in the US with a 401K (or its equivalent)

I don't know which US you live in, but it's definitely not the one I live in.

For one, most compatnies canceled their matching 401(k) contributions after the financial crash from 2008. Pensions in the US no longer exist. The current US Bankruptcy Code allows companies to enter Chapter 11 for the sole purpose of raiding their pension funds under the guise of "restructuring". When they exit Bankruptcy, the pension fund no longer exists, and the employees are forced to accept the same job with lower pay and less benefits. Every single time over the past 25 years a corporation re-negotiated contracts with Unions, the Unions had to give up something on their pension guarantees.

Second: those who invest in a 401(k) index fund (as to minimize risk, believing that an index fund is a sound investment) don't realize that, for the past 40 years, inflation-adjusted average gains in the S&P500 (the most popular index for index-pegged funds) have eked out a measly 2% growth on average. Google for it.

This translates into 0% gains in real money because of "friction costs". I.e. everyone at some point or another is forced to make a withdrawal from their index-pegged fund, out of necessity (unexpected medical expenses, etc), and pays a penalty for it.

Between March 2009 and today, the S&P500 has tripled in value. Did your 401(k) do the same? At best, it's back to where it was before September 15, 2008. Meaning, it didn't keep up with inflation, in inflation-adjusted dollars. So, in reality, you lost money on your 401(k), based on the time value of money theory. The same exact thing will happen to your 401(k) at the next crash. By the time you retire, your 401(k) will be up about 2% in inflation-adjusted dollars. Good luck retiring on that.

You would've been better advised to invest all your 401(k) money in Nike trainers. Some sneaker models increase their value between 1000% and 2000% in a matter of only a few years, if you keep them in the original box and in brand new mint condition. It's only a matter of picking the winning models. Just like picking winning stocks. Only difference being that you can buy Nike trainers at the sports store, but you can't buy pre-IPO stocks, because those are only for the select 1%, and you aren't one of them. If you were one of the select 1%, you wouldn't need a 401(k).

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Anonymous Coward

Re: Yet the pitiful...

Are we talking about car factories here? IT salaries are not driven by Unions' demands.

At least in India.

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Re: Yet the pitiful...

"loved by the Yanks"

I don't generally quote the dumb and stupid, but for you I'll make an exception.

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Re: @ Destroy All Monsters

"I work 60+ hour weeks months on end.

I forgo vacations."

Me to the CEO: Meaningless while crashing the company. Here. Let me cut a few holes in that golden chute of yours that you're hanging from.... Now that's what I call vertical marketing... ;)

Try not to land on a house!

kthanksbai!

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Anonymous Coward

Re: Yet the pitiful...

> IT salaries are not driven by Unions' demands.

Neither are they in the US. In the US, software engineers - or IT workers in general - aren't even allowed to Unionize, by law. Although technically we would be eligible to join the IBEW.

This law is courtesy of Bill Clinton and his miraculous dot-com era.

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Devil

Re: @ Destroy All Monsters

" you toss him out of the plane and he's not going to find his next job as easy as the techie who has head hunters calling him 24/7"

Do you know a guy by the name Setphen Elop? That kind of CEOs are a must have in any head hunter list. Imagine this conversation:

Board director: "Hello? I'm speaking with <head hunter>?"

hh: "Yes, how can I help you sir?"

Bd: "We need a someone to be our new CEO. As usual, the person to be hired must be clueless, stupid, ignorant and who can carry all the blames if something goes wrong, because its the board members who are in charge you know?"

hh: "Sir, you are a lucky chap, we have 3 great names to recommend: Léo Apotheker, Stephen Elop and the cherry on the top...Steve Ballmer!"

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Anonymous Coward

Re: Yet the pitiful...

Come now. Human capital management is so noughties - nowdays we realise that humans are a cost centre, not an asset.

The current euphemism is "Delivering best value transition manager".

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Anonymous Coward

Re: @ Destroy All Monsters

The inner circle of Greek frat members and the children of the entitled even have a theoretical justification for how they can jump from one job to another without ever succeeding: companies in trouble need people who have been through the company failure experience, so that they will recognise the signs, know what doesn't work, etc.

I have no objection to people who build up companies from scratch. I've worked for two of them. They may be anuses, but when, in a recession, you're recruiting so fast that people with three months experience are becoming supervisors, people will try to kiss their feet as they walk past.

But people who come in from outside to manage an existing company do not take anything like the risks. They can generally already afford to retire on a pension that most people would consider unimaginable. If they fail, too bad. The truth is, they really don't need the money, they just want the status. There are exceptions, like the guy at J P Morgan who was given a massive promotion and immediately quit to become a boatbuilder, but they tend to be exceptional individuals anyway. The cost of failure is just to their egos; the kids won't have to leave their private schools.

Consider how much a general gets paid for putting his life on the line, and tell me why the person who runs Apple needs to be paid more than a thousand generals.

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WTF?

Re: @ Destroy All Monsters

Its very easy for you to make a comment because you don't know what it takes to run a company.

You are responsible for making the payroll happen. You pay your employees first, even if that means you don't get paid.

You have to deal with HR issues... (hiring, firing, health insurance... ) You have to deal with sales and bringing in the business. You have to deal with accounting issues like making sure that the taxes are paid and you're withholding the right amount...

So you have all of the risk. Your employee? His risk is that if you go under, he's got to find a new job. He's not the one who's got to pay off the creditors...

Clearly you don't have a clue about the business side of the shop.

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Flame

@AC Re: @ Destroy All Monsters

Its easy to hide behind an AC, but your post shows just how clueless you are when it comes to running a company.

As a consultancy... I have to make payroll even when the client hasn't paid me or delays payment.

I have to provide health insurance and vacation time to employees.

I have to handle the HR and work with the accountants to make sure taxes are paid on time, payroll runs and everyone is happy.

On top of billing hours to help drive revenue, I also have to meet with clients and get contracts signed.

Yeah 40 hours billable, then additional time doing the networking, handshaking, lunch meetings ...

Then there's the research to see what's hot, what's up and coming and also plan for the future.

I've done the 180 hour sprints... that's more than a month's billable in two weeks time.

In addition, if we're short, I don't get paid because I have to pay my employees first.

My risk. My name on the door. My responsibility.

Outside of Silicon Valley where some dumb schmuck tosses money at the 'next big thing' the real world is a tad different.

I've seen a couple of boom/bust cycles in Silicon Valley and I'm still standing...

I suggest that you think about what it takes to even manage a handful of engineers who have egos and mouths that write checks they can't cash.

I've also seen many people step up in to the CEO role who couldn't do shit. They get bounced after a year or two and many times they are out of work for years... They may survive, but for the good CEOs, you're not only buying them, but their rolodex. (You do know what a rolodex is, right? )

And yeah, I've written custom RTOSs for embedded systems, and worked in telephony where I got the late shift on the test bed. You know where you're so tired at the end of a long day, its safer to sleep at your desk than to try and drive home... Been there done that junior.

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Mushroom

Re: @ Destroy All Monsters

@ aaronj2906_01

You have this bizarre concept of what it means to run a company that you founded.

I've done the 'work for a big comany' gig [HAL] Been there, done that. Too many incompetent fscks and bureaucracy.

Try running your own firm.

You talk about the CEO crashing the company.

Guess what... when 2008 hit, and things ground to a halt... lots of small consultancies floundered. As things slowed down, you still had to make payroll. And you had to make payroll for everyone else while you didn't get paid.

You need the golden parachute to attract top talent.

In the US... paying 100% of health insurance for you and 50% for spouse and family is a benefit to attract talent. (Do you realize what that costs per employee?) Vacation, quarterly bonuses, bump's in salary while rates are getting slashed? Do you know what Net60 means to your cashflow?

Or having to buy equipment, office space, phone?

It aint cheap junior.

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Devil

JahBless

"Do you know a guy by the name Setphen Elop?" [sic]

Actually, I do. ;-)

More to your point... anyone with half a brain in this industry has at least a dozen or so head hunters in their contact lists.

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Anonymous Coward

Re: @AC @ Destroy All Monsters

> I have to make payroll even when the client hasn't paid me or delays payment.

> I have to handle the HR and work with the accountants to make sure taxes are paid on time

BOO-HOO-HOO. Tears are running down my cheeks.

That's your job. You signed up for it. You have to do your job because the law requires you to do your job. Your job comes with a statutory fiduciary responsibility towards:

- the people who gave you the money (shareholders)

- the people you employ

- tax assessment and collection

Most of the time the likes of you are able to elide that statutory responsibility, and run away with the money even though you were a colossal incompetent failure.

If you don't do your job, i.e. you don't pay your employees, or you don't pay taxes, you might go to jail. That's a very remote possibility. Most likely you'll get a "tsk-tsk, don't get caught next time" letter, and you move on. Very simple.

Doing your job doesn't make you a hero. So, quit whining about having to do your job.

I don't whine when I have to go for a full month with only 4 hours sleep/day because I'm tracking down a nasty compiler bug and I have to make it work correctly and exactly the same way on 12 different ISA's. I don't get comp time and a shareholder-paid vacation to some tropical island after I fix that bug: I just move on to a new bug, or implement a new feature.

I don't consider myself a hero just for doing my job. Neither, I suspect, do any of the other engineers, sysadmins, etc -- i.e. people who actually do real work - who read this board.

I don't expect a golden parachute if I screw up, either.

STFU.

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Re: Yet the pitiful...

>IT workers in general - aren't even allowed to Unionize, by law.

I have to call BS on this. If any such laws exist, they are not federal and they don't exist in any of the states I am familiar with (certainly I only have a good familiarity with %10 or so of the 50 states, but I do business in more than one U.S. state.) I agree with your statement that IT salaries are not driven by Union's demands. But it has nothing to do with laws.

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Re: @ Destroy All Monsters

If I am the CEO of my own company, I take on all of the risk.

Bullshit. As a systems administrator I was at constant risk for job loss for any number of reasons, many of which were not related to me screwing up. Company politics, market turnaround or just a manager reading the wrong magazine could all screw me and my family in an instant. That's real risk.

As the CEO of my own company, I don't understand what risk you're talking about. Corporate debts are not my debts. If the company goes under, I'm sitting pretty, with no more risk than my employees (that of having no job.) I put capital into my company to get it going, but I get to recover that through various means ranging from shareholder loan repayment to reimbursements for equipment, software and purchased services.

I'm not out of pocket for starting my company, and I feel I shoulder less risk than when I was a sysadmin. I can always give myself a raise and fire someone to make up the cost. I can hire someone else if my workload gets too high, bring on consultants, get an accountant to do magic with the books or anything else. The reigns of power are mine, but the corporate veil means the consequences aren't.

I work 60+ hour weeks months on end.

And you think that's a lot, do you? Wimp. I've done way more than that for over a fucking decade. Sysadmins get burnt out like candles. I dream of 60 hour weeks. I haven't had those since I was 14.

I forgo vacations.

My only vacation in over a decade was my honeymoon. I attended a VMware conference in Palo Alto while the wife stayed at the hotel. We bought a car and drove home, stopping at a few points of interest along the way. I still worked 40 hours that week, not counting the conference.

Sorry, diddums, but I cry no tears for you.

So when things take off, yeah I want the salary. I want the total comp package.

I think I deserve it.

No, you don't. No more so than any of the billions of others who put the same kind of time and effort in, while having way less control over their lives and bearing the very real risk of getting "rightsized" on a whim. You have done nothing to deserve it that they haven't. You have not sacrificed more, you have not "given" more, you have not risked more.

Now if you're talking about the tosser who comes in to help grow the company... sells you a bill of goods? His parachute is golden because he's taking on a lot of risk to come lead your company. If he fails... you toss him out of the plane and he's not going to find his next job as easy as the techie who has head hunters calling him 24/7

Bullshit. He just moves on to the next company and can say "I've learned from my past mistakes." It happens all the time. Even CEOs responsible for spectacular failures manage to get back in charge of multi-billion-dollar companies on a regular basis. Why? Because experience really does count. Just like any other job.

Besides, he can always work at Burger King. Just like all those people he fired. There's nothing about his past as a CEO that means he should be treated any differently in that regard. He needs the exact same amount of air, water, food and shelter to live as the poor bastards working the cashier. Not one iota more.

Think about it.

I have. And I've lived it. All sides of it. From the dude manning the till to a "professional" through to a CEO. I've done retail, call center, manual labour, systems administration, development, journalist, marketeer and more. Many of them side-by-side.

I've worked 5 jobs at the same time and I've focused on just the one. I've worked myself right up to the grave and stared into the abyss. I've put my time in at the coalface and behind the desk.

There's nothing about being a CEO that entails any more risk than being a wage slave. In fact, because the CEO has more control over the company he works for, he has more control over his own remuneration and thus more control over his own life.

I suggest that you need to think about it. And maybe - just maybe - you need to have some goddamned compassion for the human beings who work with you.

Don't think about it. Live it.

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Re: @ Destroy All Monsters

Its very easy for you to make a comment because you don't know what it takes to run a company.

Maybe he doesn't, but I do.

You are responsible for making the payroll happen. You pay your employees first, even if that means you don't get paid.

That isn't a requirement. That's a choice. It is the choice I would personally make, but it is absolutely not a legal requirement. The CEO is an employee of an incorporated company and is entitled to all labour protection laws that apply to other staff. By rights, if salaries must be cut he is entitled to make % cuts across the company. He does not have to forgo paycheques.

You have to deal with HR issues... (hiring, firing, health insurance... ) You have to deal with sales and bringing in the business. You have to deal with accounting issues like making sure that the taxes are paid and you're withholding the right amount...

Yeah. That's the job. There's no risks there. In fact, it's the accountant who bears the risks. They are a certified member of a professional association. The reason they are hired is that they accept as part of their profession official, legal responsibility for everything from payroll calculations to making sure the tax amounts are right.

How the fuck do you not know this if you run your own company? We only have to pay our accountant like $300 a month for that service. (Our books are not very complex.) That's less than we pay for mobile phones!

So you have all of the risk.

WHERE IS THIS THEORETICAL RISK YOU KEEP TALKING ABOUT?!? I have to accept none of these risks as a CEO. Not a goddamned thing you've talked about in this thread is a real-world risk born by any CEO who isn't a complete fucking numpty. Jesus H mother of fucking-a Christ, man...this sort of information is in "so you want to start a business" pamphlets available from my local municipality, my provincial government and at least a hundred different places on the federal cloud.

My company has five people in it (three of which are shareholders) and we managed to incorporate on day one. We contract with a dozen people from around the world. We have customers on three continents...and there is zero fucking risk to myself or the other shareholders. So what the flaming monkey fuck are you babbling about?

Your employee? His risk is that if you go under, he's got to find a new job.

THE RISK OF LOSING YOUR JOB IS A BIG, HUGE, AMAZINGLY LIFE-ALTERING RISK. Even in "socialist Canada" the so-called "safety net" is virtually non-existant. EI is virtually impossible to claim and the CPP doesn't even cover rent these days. Loss of a job, especially in a more capitalist nation or during a recession can cost you everything. That's a great big fucking risk hanging over anyone's head. Sword-of-Damocles stuff, right there.

He's not the one who's got to pay off the creditors...

Neither are you. Those debts belong to the company, not to you. At worst you are on the hook for loans made to the company during it's startup phase. At which point you have all the same rights and privileges as any other creditor and you will receive the same % from the carcass of the company as any other creditor.

In fact, in most civilized countries there are any number of government programs to help small business owners cover the costs of bootstrapping a company. These vary form outright grants to government loans all the way through to government insurance and/or regulation allowing the private sector to offer shareholder loan insurance. I have shareholder loan insurance. I presume any marginally competent business owner would. Mine costs me like $9.50 a month and covers up to $100,000 in shareholder loans.

Clearly you don't have a clue about the business side of the shop.

Really? Because so far all you've demonstrated is that you don't have a goddamned clue about how to set up a business in a manner that allows you to take advantage of even the most basic protections for entrepreneurs that every western nation has.

But hey, I'm a putz, right? Please do enlighten me as to how I'm wrong. If there's a flaw in anything I've said, I want to know about it right away, and I welcome the concept of someone else doing research into this topic for free. Do you know what the bounty both my lawyers and my accountant have on anything that proves any of the above wrong? I'd get free work out of them for the next 5 years!

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Anonymous Coward

Re: @ Destroy All Monsters

> You are responsible for making the payroll happen.

That is true: in the US, paying employees wages is a statutory requirement, and not a choice, unless there is a written and valid contract stipulating that the employee will work for no pay. In some States, this type of no-pay contract is not valid - for example New York State.

Penalties for failure to pay employees wages due vary in severity from State to State: in the US, the Northeast States are the most punitive. Again, in New York State, not paying employees wages due can result in penalties for the company officers which include prison time and forfeiture of personal assets, even though the corporation itself may be a LLC or LLP.

This isn't meant to justify that self-pity "OMG it is so difficult to be CEO, you do not understand my unbearable pain" rant. I find it fascinating that the 1% ruling class always views itself as this select group of entitled victims.

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Re: @ Destroy All Monsters

"That is true: in the US, paying employees wages is a statutory requirement, and not a choice, unless there is a written and valid contract stipulating that the employee will work for no pay."

Unless the laws that the barbarians to the south of us have chosen are substantially different, then the CEO of a company is an employee. As such they are entitled to the same protections, unless he has signed them away in his employment contract.

Shareholders are not entitled to dividends, and nobody is entitled to bonuses. Shareholders are no more entitled to loan repayments than any other creditor. The CEO may or may not be a shareholders. Shareholders may or may not hold a position in the company. The position of CEO, however, is that of an employee. He answers to the board and the board to the shareholders. As such - here at least - the CEO enjoys employment law protections for his wages too.

The risk is born by investors and shareholders, not by the CEO. Unless the CEO is a shareholder and/or investor. Even then...

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Re: @ Destroy All Monsters Addendum

In some jurisdictions board members may be liable for company losses, but they are the rarity. Also, where you incorporate is a choice. It's like the whole line about "where you work is your choice," isn't it? Except that wage slaves generally have to choose whatever's available to them because there aren't a hell of a lot of options. Founders can choose to incorporate anywhere, and CEOs can even choose to reincorporate elsewhere.

In certain - very rare - circumstances I can see it being worth paying a CEO extra to cover risks imposed by specific laws, but that doesn't cover "all CEOs" or even "most CEOs." It certainly is no reason for "woe is me, the poor CEO."

A CEO is aware of the risk before they accept. A wage slave has to work, or they can't afford to live. One is a choice. The other is a lack thereof.

Also: how much of a wage delta and/or bonus delta would such a risk entitle a CEO to? 2x? 10x? 1000x? 10,000x? Why? What maths support this assertion?

Why should a CEO get stocks and not employees? Doesn't the same rationale for motivation apply to them? I could go on, and on...suffice it to say that CEOs as a class are largely overcompensated and underexposed to risk whereas wage slaves generally live in terror of the "rightsizing" axe.

That bullshit about "if you're good at your job you have a hundred job offers lined up?" Well, "if you're good at your job as a CEO, there is zero chance of you bearing any risk from corporate failure."

The power to address the few and largely insignificant risks a CEO faces are in the CEOs own hands. The wage slave has no power to address the risks they face, as their lives are determined by nothing more than the vagaries and whims of their "betters".

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Anonymous Coward

Re: @ Destroy All Monsters

"Unless the laws that the barbarians to the south of us have chosen are substantially different, then the CEO of a company is an employee."

This is where there might be a big difference between the US and other countries: in the US, a CEO, or CIO, or whatever C*O is not necessarily an employee. All these titles ending in "O" mean that they are an Officer of the Corporation. That is different from being an employee.

Officers have some privileges and rights, and some responsibilities that general-population employees do not have: they can sign legally binding contracts on behalf of the corporation, they can sign checks on behalf of the corporation and they can represent the corporation during a judicial due process. Employees cannot perform any of these actions or duties, and cannot be held accountable for the corporation's liabilities.

Speaking of liabilities: in the US, the debts of a corporation are rated by seniority - meaning the pecking order in which the debts must be resolved in case of bankruptcy. Guess who is first in line, meaning, who holds the most senior debt? Employee pay. Technically, and under the law, whenever a corporation goes belly-up, employee pay should be the first debt settled. Officers are not personally liable in any way when the corporation enters bankruptcy. They are only personally liable if they default on paying employees wages due *and* the corporation has not entered bankruptcy proceedings. I.e. "I don't want to pay you because I don't feel like it". That's a no-no.

In reality, it never happens that way: regulators work around the law, and always pay the bondholders first - although the bondholders knowingly assumed the risk when they underwrote the bond. If there was zero risk, the bonds wouldn't yield any profit in the first place. Talk about that 1% entitled victimhood.

But, you are absolutely right in saying that the risk is born by investors - bondholders and shareholders - and not by the CEO personally.

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Re: @ Destroy All Monsters

"This is where there might be a big difference between the US and other countries: in the US, a CEO, or CIO, or whatever C*O is not necessarily an employee. All these titles ending in "O" mean that they are an Officer of the Corporation. That is different from being an employee.

Officers have some privileges and rights, and some responsibilities that general-population employees do not have: they can sign legally binding contracts on behalf of the corporation, they can sign checks on behalf of the corporation and they can represent the corporation during a judicial due process. Employees cannot perform any of these actions or duties, and cannot be held accountable for the corporation's liabilities."

This really is different. I can assign the right to sign cheques to employees in my company who are not officers. Anyone I deem fit can be allowed to do so, but I need to retain paperwork within the company to prove that they have this right, should we be asked about it. Indeed, I can add non-officers to corporate credit or debit cards as well.

As a systems administrator I signed legally binding contracts all the time. Most were known as "end user license agreements," but this also covered purchase orders for goods and services and even agreements with customers about the level and quality of service we would provide them.

As a systems administrator I bought - and still do - things all the time on my personal credit card and submitted them for reimbursement. This has to be carefully documented, of course, but it's actually no different than the method I employ as a CEO.

As a shareholder, however, I have the option of loaning money or assets directly to the company. This is a shareholder loan that the company is then on the hook for.

"Technically, and under the law, whenever a corporation goes belly-up, employee pay should be the first debt settled."

I believe this is also true in my jurisdiction, and frankly, in most. This makes my statement about "all debts being equal' erroneous, and you are quite correct in pointing it out. I was wrong there.

That said, I do believe that barring some interesting legal trickery, in most places all other debts are equal. Legal trickery can include contracts wherein one lender is senior to all others, however, in my jurisdiction I believe that only applies if all other lenders have signed their agreement to this arrangement.

"Officers are not personally liable in any way when the corporation enters bankruptcy. They are only personally liable if they default on paying employees wages due *and* the corporation has not entered bankruptcy proceedings. I.e. "I don't want to pay you because I don't feel like it". That's a no-no."

Here, this would go straight to an ombudsman. I would have to double check, but I am pretty sure the CEO's personal assets cannot be dug into by the ombudsman. If - and I have to stress the rarity of this - it goes to court, then under extreme circumstances the judge can pierce the corporate veil. These sorts of things are not done lightly and each case would probably result in a national shitstorm as the conservatives went loony tunes and the unions went thermal.

What almost always happens is the ombudsman sits the parties down, pulls out a bunch of well-worn charts and explains to the corporate officers refusing pay exactly how expensive a trial is. If my friends who work in that office are correct, each session lasts an average of 15 minutes and the staff getting paid occurs in over 80% of circumstances.

The other 20% are usually an issue of the employer having grounds for "termination with cause" and not having filled out the federal paperwork correctly. I have not heard of a case of this actually going to trial in a very long time.

Still, laws differ. Sometimes wildly. Maybe, somewhere, who really does betide the CEO. Maybe...

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Stop

Trying to re-use an all-used-up tired old line.

Ian Michael Gumby writes: "Now if you're talking about the tosser who comes in to help grow the company... sells you a bill of goods? His parachute is golden because he's taking on a lot of risk to come lead your company. If he fails... you toss him out of the plane and he's not going to find his next job as easy as the techie who has head hunters calling him 24/7"

I've thought about it for thirty years, is that enough? I used to spout that exact line back then, in the early eighties (when I was young and naive and affiliated with a conservative student organisation)... So that line is actually all used up already.

Only difference is, we used to use it in defense of the obscene salaries themselves, not the golden parachutes: "Yeah, a CEO earning ten times as much as a worker on the factory floor _is_ kind of obscene, but you have to remember, these guys don't have the legally-guaranteed employment safety a labourer has. If they screw up, they're out on their ears immediately, so they need this high salary in order to be able to save up for their own safety net."

Now they want to eat their cake and have it; the obscene (far worse now than then) salaries, and the just-as-gross golden parachutes.

It's a scam and an outrage. It needs to stop.

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Anonymous Coward

India too expensive

Indian salaries have been going up fast for years. The only thing keeping them competitive is the falling currency.

My employers are expanding in the Philippines. People prefer the accent.

Anonymous to protect the guilty.

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Anonymous Coward

Bloodletting will occur each quarter all regions

The bloodletting wil continue in all regions for all 4 quarters of this year. My manager was asking us just yesterday what were our strongest skills (looking for what skills my team needs to retain) and under the guise of 'cross skilling' telling us we need to ensure we all know each others specialist activiities. Which would make it easier to get rid of someone and offload the work to various team members (if we had the capacity)

They are carrying out stack ranking to work out who to keep in the Australian part of the business and the only good news on my part is that I'm not on the radar for this quarter... My team is down to our last 6 members (of a team that peaked at 24) while my indian counterparts number at 64 (with them managing less than half the server fleet we managed previously). The directive is that all the Australian teams lose minimum one person per quarter as part of 'rebalancing' so by the end of the year it would be down to 2 technical staff here.

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