Offshoring pays...CEOs

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IBM. ZDNet's pet.

The article defends IBM:
The new report names a number of technology companies in its list of leading offshore outsourcers. IBM is among them. Big Blue has plans to shift about 2,000 U.S. jobs abroad this year, but it also is hiring thousands of employees in the United States. According to Tuesday's report, IBM CEO Sam Palmisano's pay reached $7.7 million in 2003, up 13 percent from 2002.

If you're wondering, that's a $900,000 raise from $6.8 million, if calculated as I expect. Though in context of what other CEOs make, they may not have included all the money raked in.

Note the statement that IBM "plans to shift about 2,000 U.S. jobs abroad this year, but it also is hiring thousands of employees in the United States." Sounds good as a net number, doesn't it? But the link in the story shows a clearer picture:

At the beginning of the year, IBM expected that it would add about 10,000 employees. It later raised that amount to 15,000. On Thursday, Big Blue disclosed that strong demand from its professional services business has prompted the company to boost that number to 18,000.

Roswell said that IBM's practice of internal training has allowed it to redeploy U.S. employees whose jobs have been moved as part of the company's overseas hiring plans. About one-third of new hires this year will be in the United States.

Three weeks ago, IBM said that its plans to move some jobs offshore will result in fewer U.S. layoffs than it had originally anticipated. Initially, the company had projected that about 3,000 U.S. jobs would move overseas. A source close to IBM in July said that the number would be closer to 2,000.

Okay, 18,000 new jobs, one-third (6,000) in the US and two-thirds (12,000) overseas.

Now, the story is unclear about whether a person moved within IBM is counted as among the 2,000 jobs moved overseas. Let's say that all 2,000 jobs lost are counted among the hires. That means 4,000 new US hires compared to the 12,000 overseas hires.

However you want to interpret it, IBM is actually moving a substantial number of jobs overseas. And maybe a less friendly news organization would highlight just how closely the CEO's salary follows the losses of US salaries.

Posted by: Anton Philidor   Posted on: 09/01/04 You are currently: a Guest | Members login | Terms of Use

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