It’s hard to ignore the news these days without wondering how much worse off the economy can possibly be. We’re heading for the “Financial Cliff” unless Washington comes up with a plan in the next few weeks to avert the potential double dip recession. Big box retailers are doing whatever means necessary to lure in the holiday shoppers as Black Friday and Cyber Monday fast approach. I asked myself, “What’s the big ticket item this holiday season?” I thought back a few years ago when the Tickle me Elmo doll was a huge success and shoppers were paying 3x the retail value and I think, anybody willing to pay top dollar now for a tickle me Elmo doll??? What about Best Buy where you can buy a 40” name brand LCD HDTV for less than $200? Technological advancements fed this. Most of these technological improvements we see now are inventions created by IBMers. Those same IBMers that are now looking for work elsewhere because of their own inventions. Computers, laptops, tablets; everything is smaller, faster and cheaper, and it’s no wonder Best Buy is having a hard time staying afloat in what perhaps might be their last Black Friday ever as it struggles to stay ahead of its competitors and the idea of avoiding all that Black Friday has to offer; the madness, the parking, the rude crowds, in exchange for online shopping! This is my kind of Black Friday. Sleep in, spend a little more than the Store only deals, but have peace of mind in my pj’s. But, it doesn’t answer the question of what’s to come. High unemployment still rears its ugly head, and in the Northeast, Big Blue is very prominent.
I spent the first six years of my professional career at IBM, and it was probably the greatest career decision I ever made. Leaving that is. While IBM is vast with some of the brightest, most intelligent people you might ever come across, it’s drastically changed since the late 80’s, when employment was considered lifelong. It’s not “my father’s company anymore.” During my tenure (2000-2006), I saw many different faces of IBM, but I also started to see and hear something I’ve never heard of before, Globalization.
IBM
The lack of jobs, even in an economic recovery, reflects the cumulative impact of structural changes in the employment practices of U.S. industrial corporations. Beginning in the 1980s, plant closings eliminated the jobs of blue-collar workers. The next decade was characterized by the end of the norm of a career with one company, placing the job security of middle-aged and older white-collar workers in jeopardy. And then the 2000’s, the birth of globalization, which was characterized by the off-shoring of employment, leaving all members of the U.S. labor force, even those with advanced educational qualifications and substantial work experience, vulnerable to displacement.
The problem that these structural changes pose for the prosperity of the U.S. economy is evident in the history of employment at IBM. From the 1920s through the 1980s, IBM’s system of lifelong employment offered all personnel — including clerical and production workers — a career with one company. At the end of 1989, IBM employed 383,220 people worldwide. At the end of 1994, just five years later, that number had been reduced by 43 percent to 219,839. At first, IBM downsized by offering voluntary early retirement packages, thus clinging to the principle of lifelong employment. By 1993, however, IBM’s CEO Louis Gerstner, fired tens of thousands outright. By 1994, lifelong employment was a relic of the past.
Over the years, IBM shifted its business strategy from hardware to software and services. This change favored the employment of younger professionals whose higher education was up-to-date and who had work experience at other high-tech companies over older employees who had spent their careers working on proprietary technologies at IBM. It was this fundamental change in IBM’s business strategy that underpinned the decision in the early