back to article IBM's contractor crackdown continues: Survivors refusing pay cut have hours reduced

IBM's efforts to crimp the cost of its contract workforce are continuing, The Register has learned. Big Blue recently stopped hiring new contractors and asked those who remained to take a 10 per cent pay cut. Now it's trying to cut contractors' hours, in three ways. We were told today that some contractors have been told they …

Lloyds Bank & Bombardier?

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"does IBM keep winning outsourcing contracts if things are that bad?"

You might recall a recent story about Lloyds outsourcing to IBM.

https://www.theregister.co.uk/2017/06/06/lloyds_confirms_ibm_cloudy_outsourcing/

Somehow IBM salesy bullshitters seem to be able to convince upper management of large corporations to sign up, in this case for ten years, and ~£1.3 Bn . You really have to be naive to sign a contract of that duration.

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Re : How does IBM keep winning outsourcing contracts if things are that bad?

If it is anything like some of the pre-sales meetings I had to endure when I was at IBM, it's (A) because the IBM salesmen are full of bullshit, and (B) because for some strange reason I guess the 3rd parties still seem to be enamoured and impressed by that fact they are talking to IBM perhaps??? In that case you have a bizarre, strange and self fulfilling relationship.

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"You might recall a recent story about Lloyds outsourcing to IBM.

https://www.theregister.co.uk/2017/06/06/lloyds_confirms_ibm_cloudy_outsourcing/"

However, there's also https://www.theregister.co.uk/2017/06/20/ibm_xeon_only_discount/

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Won't hurt winning new contracts

Because the customer will be fleeing someone else they were unhappy with, such as HP. It is easy to assume things will be better with a new partner. Kind of like how you are giddy when you start a new relationship and it takes a little time to see each others flaws and annoying habits :)

Where it will hurt is renewals and references. The impact on those won't be felt for a few years, but I'd expect to see IBM's outsourcing revenue begin to make a steep dive around 2020 as a result.

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Holmes

Kickbacks are a very big incentives to the executives who are actually signing the contracts.

Did you think those offshore tax shelters were JUST tax shelters?

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"You really have to be naive to sign a contract of that duration."

Or taking a very large sweetener. Follow the money.

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And yet IBM are hiring contractors

I wonder if it may be to replace people who have walked, but JobServe is currently awash with agencies advertising for C++ contractors to go into IBM Hursley. All demanding a current SC Clearance, which is in clear contravention of guidelines issued by the Ministry of Defence (not that such things bother IBM of course).

The more I read and hear about IBM, the less I want to have them as a client.

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Anonymous Coward

Re: And yet IBM are hiring contractors

To be fair that's because the rest of government don't give a toss what MoD think about security regs. MoD have a very weird security culture.

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Re: And yet IBM are hiring contractors

It's an overall government policy as laid out in the Cabinet Office code of practice document 'Recruiting for vacancies requiring National Security Vetting Clearance'.

Trouble is, being merely a code of practice, it can be completely ignored quite legally.

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Anonymous Coward

> An IBM staffer who asked to remain anonymous tells The Register that the company has now told senior management that those contractors who refused the pay cut will “be forced to reduce their claimed hours by 15 per cent.”

And this is why IBM should never, ever, be considered for critical infrastructure.

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"The Register has also seen a document in which team leaders are offered a new tool for analysing and projecting the number of hours worked by contractors in order to “improve forecast accuracy” and achieve a “Utilization Delta +/- 10%”. Contractors are therefore are being asked to submit their expected working hours two weeks in advance."

Submit the hours you are going to work two weeks in advance, how does anyone know that?

"Another told us that “The most recent cut of contractor labor has left me the sole supporter of one business critical system which supports part of the information security for many clients.”

This person goes on holiday and through sods law the system falls over, what are you going to do then IBM?

"“In several cases they had to obtain a quote for services from IBM as a comparison and have had to wait months just to get back a quote that was twice the price and three times the duration, and could not be started for months, due to a lack of available staff. In one instance, I was even approached by IBM to do the work my client had asked them to quote for!”

You wonder why you are losing money when you leave a client waiting for three months for a quote, seriously on what planet is this acceptable?

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Anonymous Coward

"Submit the hours you are going to work two weeks in advance, how does anyone know that?"

That's nothing; a few years ago one of the other, now equally troubled, tech companies used to ask consultants to forecast their time up to three MONTHS in advance. Managers maintained spreadsheets of weightings and probabilities in a futile attempt to make this work.

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Meh

@adam payne: "This person goes on holiday and through sods law the system falls over, what are you going to do then IBM?"

At 4.30pm on the day you leave for your holiday, your manager says "Keep your phone on Adam, we might need to call you while you're off."

That's why my fictional holiday destinations don't have a phone signal...

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Submitting expected hours

Depends on what they're going to do with it. If they're using it to budget for your expected labor, expect the most hours you can get away with so you don't have to worry about them telling you to cut back if you've exceeded your "budget", and if you work less than expected/budgeted no one is going to complain. If it is to determine who is the 'most expensive' and therefore who to get rid of, just say 40 hours a week and stop working when you reach that limit and if they ask why you weren't working Friday tell them why - "I submitted expectations for 40 hours a week, so I didn't think I was allowed to exceed that".

When you get weird questions like this, you just have to figure out why it is being asked. Then you'll know how to respond.

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Anonymous Coward

> That's why my fictional holiday destinations don't have a phone signal...

Some parts of Cornwall, on the beach even :D, have no mobile signal, and the local population refuses all attempts to install them.

It's actually pretty wonderful in summer. :)

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Anonymous Coward

I actively seek out these locations.

It's the only time the kids look up from their phones and engage in real conversation.

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Anonymous Coward

It's on

in silent mode and in the safe which is an effective Faraday cage.

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If I could forecast the future 2 weeks ahead, I wouldn't have to work for IBM or anybody else.

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Facepalm

This is just another proof...

... that unbridled Capitalism has managed to create an environment in which the company's own management is also the company's worst enemy.

Seriously, this is a perfect shitstorm, and won't get fixed until it has already demolished most of our economies.

It's also another proof that our governments are either criminal or criminally stupid.

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Re: This is just another proof...

that unbridled Capitalism has MBAs have managed to create an environment in which the company's own management is also the company's worst enemy

"It's also another proof that our governments are either criminal or criminally stupid."

Governments appoint MBAs to run companies? Some businesses have been run well, some run badly since businesses existed. Good businesses have fallen prey to bad management. What's it to do with government?

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Re: This is just another proof...

MBAs do -mostly- what the laws allow them to do. Some regulation regarding things like golden parachutes, bonuses, financial engineering and executives' personal liability would go a long way towards fixing these issues.

To work, these regulations would also need a serious effort in enforcement.

I agree nonetheless that what is taught in these MBA degrees is seriously lacking in ethics, but the problem would fix itself after a few of these managers find themselves jailed or personally bankrupted by fines.

And IMO, bad management due to incompetence and stupidity shouldn't be punished, as people don't usually choose to be noobs. Consider it as a form of Darwinism, both for companies and shareholders. You hire scum to run the company, you face the consequences. No bailouts, no "too big to fail", no bullshit.

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Re: This is just another proof...

"MBAs do -mostly- what the laws allow them to do."

Theoretically, they are also constrained by the shareholders. In practice, the shareholders are the infinitely smart masters of the universe who manage our pension funds, so the actual level of oversight is not experimentally distinguishable from zero.

Can the system be described as "broken" if the actual problem is that no-one is bothering to implement it?

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It is a compensation problem, not a capitalism problem

If senior management is being compensated in a way that encourages short term thinking - quarterly results, stock price, etc. then they'll manage the company accordingly. When management is compensated using long term measures, they'll manage with a long term viewpoint and you won't see them pursuing strategies that will hurt the company in 3-5 years just to make this quarter/FY numbers.

So long as you realize everyone is going to pursue their own self-interest, and set goals that align the long term interests of the company with people's self-interest, you'll be fine. When their self-interest conflicts with the long term interests of the company, then it is the fault of people who set their goals (or in the case of management that sets their own goals, the board that approved it or the shareholders that stood by the board)

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Re: It is a compensation problem, not a capitalism problem

"If senior management is being compensated in a way that encourages short term thinking - quarterly results"

This is an area where governments could actually make a difference: ban reporting at less than annual intervals. Yup, I know the arguments. But consider the possibility that the benefits might outweigh the disadvantages.

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The cuts are impacting morale

Well, no offense, but you have a choice.

As a contractor myself, I constantly get annoyed by listening to other contractors complain about pay/working conditions etc

In this case it seems that the IBM contractors see themselves as IBM staff, just on more cash than the full timers, tough go full time or deal with it.

We are NOT talking about the poor sods on zero hours contracts that are forced to become "self employed" but the upper levels where they don't seem to want to take the negatives along with the cash

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Re: The cuts are impacting morale

Alot depends on how the cuts are implemented. A reduction in working hours isn't too bad if you can restructure your week/month to create usable time, ie. time that you can use working for another client. The problems arise when the job's worth's managers decide that you need to be present 5 days a week for "core hours" of 10:00-16:00 in the expectation that most people will actually be onsite and thus work 9'ish to 5'ish...

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Anonymous Coward

Re: The cuts are impacting morale

9 to 5? More like 8 to 7 due to lack of resources.

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Anonymous Coward

The 'Hours Plan'

Ah yes, the 'Hours Plan' where both FTE's and contractors have to predict their hours for the following two weeks on both project and BAU support work (if in that space). It's base number is a 40 hour week and if you predict you will exceed 50 hours during a week it questions it (I suspect if someone put 30 hours it would question it too.)

I have the dubious honour of working on both BAU and project work thanks to cuts of both FTE and contractors in both the BAU and project teams. So I now have to predict how many hours I may spend on BAU support work and how much will be spent on individual project work.

Of course, being BAU and escalation for offshore resources inevitably means that my BAU predictions blow out, project managers underestimate the hours for various activities or push to get more done over the course of the week and weekends than I may have predicted.

Then there is the customer yelling about this project or that project not being done so a delivery manager pulls me off the project I predicted my hours for to work on a different project (and different code) which then makes what I end up claiming differing significantly from what I had predicted (unless I remember to request an ad hoc plan to modify my existing prediction and I seldom have time to remember to do that.) I was once moved between 3 different projects in one week as my 'top priority' due to customer escalation - the deciding factor was which one resulted I the highest cost in penalties if not delivered on time.

Generally missing a specific predicted sub-code doesn't cause problems for the hours plan as it looks at total numbers for a week but I did get an email once or twice for the subset of hours that I had predicted but not recorded as actual - it was unclear as to which tool actually generated the email.

We also get emails that report the 'forecast accuracy' compared to actual claimed and if this was outside the expected bounds (> -10% or > +10% predicted hours) it highlights the forecast accuracy yellow if > 20% red if > 30% or higher - my team are consistently appearing in 'red' for working more hours than predicted.

I (amongst several hundred other plebs) got the recent missive about discrepancies between predictions of hours and what was eventually recorded. They want accuracy within 10% + or - of our predicted hours vs claimed and everyone was listed on a spreadsheet recording the last 4 weeks or so of hours predicted vs hours actually claimed. If a person was within the range of +/- 10% of predictions they were marked green, everyone else got marked as red. This applied even if you worked well above your predicted hours - all of my team appeared as red for exceeding our predicted hours by more than 10% (all of us had exceeded 50% above our predicted 40-50 hour work week every week of the period they looked at but that has been the case for over 12 months now.)

We now are getting questioned about our 'excessive' hours worked each week as someone is doing some sort of analysis and noted we work 55 hour weeks on average and it's often around the 60-70 hour mark. The questions weren't about working long hours impacting health or anything like that, it was more questioning why we were working so many hours because of the internal costs it generated As FTE's we don't get overtime so essentially we are each providing between 15 and 40 hours of 'free' labour each week (depending on workload.) There is an internal cost to an account when we bill to it and we guess they've got some base number of hours they anticipate that we would work and not based on anything on actuals.

Taking time in lieu only hurts the team (especially when your team has been reduced from double digits to single digits) as it means trying to find someone to take on your project work or BAU work and it's not really practicable when most of us are working days, nights and weekends.

As to why I am still here? I seldom have enough spare time to dedicate to study to update my certifications so that I can make an escape before the inevitable happens.

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Mushroom

Re: The 'Hours Plan'

A long post, but worth the read. It's a vivid example of how much trouble a bunch of fuckwits with a spreadsheet can cause. Can we introduce some kind of licensing system, like for guns? Even if we have to prise the "metrics" out of the cold, dead hands of the fuckwits who invented them.

I remember when I used to spend my working day developing, testing and supporting clients. Rather than doing some weird kind of improvised contemporary dance routine through the hoops and labyrinths imposed by Process. Or Process Management. Or the Process Management Process.

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Re: The 'Hours Plan'

Pogs, it's all about Pogs. Wooden Dollars. Pretend money.

Fictional costs that don't actually exist when people are not getting paid overtime but that still get billed internally at the hourly rate without any cap even after you’ve done your 5 days. I remember working through a Sev1 where I booked a straight 38 hours because that was the hours it took to do the fix. That was 38 hours at £80 an hour on the internal rate card. Over £3k when I was not clearing amount a month. My resource pool lead looked good that month. I got bugger all.

Aside from distorting the real costs of project and live service delivery it also sees funds sucked off into areas that should not be doing anything other than break even on the resource they supply. Is it any wonder that those not delivering have more budget to waste than those that don’t?

Typical that it is the costs rather than the physical effects on individuals that bother IBM (and HPE and CSC and etc ) the most.

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Windows

Re: The 'Hours Plan'

@AC 3600 Steeles was in this state 4 years ago. Don't bother polishing anything just start asking. There is *MUCH* better work out there. For what its worth, I *never* specced a code on target hours. Don't use lotus notes behind the tool, switch to LO spreadsheet, fill it out, save it, pop it open in lotus and submit.

Stupidity of the worst sort, and the reason I left.

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Re: The 'Hours Plan'

" it was unclear as to which tool actually generated the email"

One wonders whether the tool in question is software or wetware.

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Re: The 'Hours Plan'

Can sock puppets be considered tools?

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Re: The 'Hours Plan'

"Or the Process Management Process."

Or the Process Management Report Process Report.

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Anonymous Coward

"regardless of the business case or impact to clients"

Yeah, that's never a good sign...

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Windows

You know...

...I haven't seen the film "Titanic" in a while. Remember when those people fell off the stern and hit the propellers on their way down to the icy water below? Yeah, that was great.

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Sounds like IBM is screwed

It sounds like the haemorrhage of money at IBM has reached the "OH FUCK WE'RE GOING UNDER" point.

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Anonymous Coward

“This has been communicated to senior IBM management as non-negotiable with no recourse for exclusion, regardless of the business case or impact to clients.” At the beginning of May, 2017, half of the High End Server Hardware Warranty Support Team left IBM to go to HPE. That left the Team decimated. The following week, they laid off three of us, leaving only three Techs to support Lenovo and IBM Server hardware customers. Now, there likely isn't any contractors left to get the work done. Meanwhile, the over abundance of managers and Team Leads aren't the ones taking inbound calls and providing customer service. Apparently, they matter more to IBM than serving customers. How long before IBM merges with "someone else"?

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Half the team left, and then they laid three off the following week? Makes me think that the half who left got wind of the layoffs and decided to make their own plans first, but the layoffs were already in motion and couldn't be stopped in time. Whoever manages that team presumably begged his boss' boss to stop the layoffs, but probably they were ordered to "make x layoffs in your unit" and were being measured on a metric that didn't take voluntary exits into account.

Shitty management!

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Unhappy

The IBM Logo

......displayed outside their main offices done in stainless steel should be replaced by inflatable polyuerethane with some of air deliberately left out.

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$100+/hour Multi-Client Contracting + Continuity Income Guide

My last, single client, contract gig was a 10 year engagement with IBM.

Over a 6 month period my rate was cut from $69/hour to $35/hour + hours reduced from 60+/week to 40/week.

After this I started doing multi-client work from home for $100/hour.

If I lose one client, there's a line of others on a wait list waiting to pay me.

My first contact gig was 1982 + with net connectivity, contracting is better now than ever.

Trick is...

1) Work from home.

2) Network big time - Attend Meetups. Speak at Meetups/Conferences. Participate in forums.

Effective/Lucrative Networking relates to providing such massive value to so many people, a few really smart ones will clearly understand your value + keep you on permanent payroll.

3) Target having many clients, rather than one or two big ones.

4) Ensure your hourly work drives to some sort of continuity. Example...

My work tends to revolve around setup/tuning/maintenance of LAMP Stacks running WordPress.

After wrestling with badly broken + outdated hosting setup, I started doing private hosting.

Now I only do hourly work for my hosting clients. Since all runtime setups are the same, I can do in an hour what it use to take me 10-20+ hours in random runtime environments.

So my continuity is private hosting.

Consider services you offer + work out some form of continuity.

Having $1000s/week continuity income, to me, makes the old school contracting I use to do look like a joke.

And thank you IBM, for royally screwing with my income years ago, so I was inspired to dump big clients for multi-client + at home work.

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Re: $100+/hour Multi-Client Contracting + Continuity Income Guide

So, unlike IBM, you have a profitable cloud business?

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Re: $100+/hour Multi-Client Contracting + Continuity Income Guide

"2) Network big time - Attend Meetups. Speak at Meetups/Conferences. Participate in forums."

Let me add another to that. Work on jobs for one client that involve collaboration with other businesses future clients.

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WTF?

team leaders are offered a new tool

I'm sure they and their subordinates already know where to find the tools.

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Re: team leaders are offered a new tool

"I'm sure they and their subordinates already know where to find the tools."

Don't be too sure. They may be unable to find their arses with both hands and a map.

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Life after DIC

Time to brush up your EBCDIC, retirement compadres, for a new career as a very private consultant!

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Anonymous Coward

I've come to expect weekly, or more frequent, articles about IBM's race to the bottom. For twenty years I competed against them, partnered with them, worked for them and faced-off against them in negotiations on behalf of clients. Every experience was uniformly poor. I've discussed IBM with many people in my industry (enterprise systems) and the most common thread is the bewilderment that the company has managed to get away with price-gouging and under-performance for as long as it has. It does seem that their story is coming to a predictable end. Arrogance coupled with unjustified prices, poor service and cutting delivery resources can only result in its demise.

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Hoping

Could a beneficial side effect of IBM's implosion be the death of Lotus Notes? Please?

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