2012 Wage Freeze for IBM Global Technology Services Workers

July 18, 2012

Oh, oh, we think IBM is a harbinger of more economic gloom.

Over the last several years many industries have undergone pay cuts, layoffs, and hiring freezes. In spite of the evidence of a downtrodden economy, top executives have for the most part remained unscathed. Well it appears that, for one company at least, that is all about to change. The Register’s Timothy Prickett Morgan recently reported on a pay freeze that will be affecting the higher-level executives of Big Blue’s Global Technology Services Unit in the article “IBM Chiefs Order Pay Freeze at US Services Tentacle.”

According to the article, despite 14 per cent growth in the 40 growth markets outside of the United States and Western Europe, IBM is putting pressure on American employees to get more work done for the same amount of money. Global Technology Services employees will not be receiving broad-based salary increases this year.

In a note sent out to GTSU employees Bob Zapfel, general manager of Global Technology Services for North America, and Richard Patterson, general manager of GTS strategic outsourcing delivery for the Americas, wrote:

“To balance our ability to remain competitive with the need to invest in people who have high-demand skills, there will not be a broad-based salary program in GTS in 2012. Instead, we will target the 2012 investment to skill groups or focus areas as identified by each GTS line of business, based on local market needs. These decisions do not affect the significant investments IBM makes each year in talent in addition to salary, including bonus programs, recognition, promotions, and skill development.”

After former CEO John Akers nearly ran IBM into the ground in the 1990s, is the company simply trying to remain cautious or are revenues softening? regardless of the intention for the potentially company-wide wage freezes, this is a big deal.

Jasmine Ashton, July 18, 2012

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.