Posted on 08/21/2003 9:44:06 AM PDT by ZeitgeistSurfer
Veteran IBM-watchers know how testing it is to read one of the company's financial statements. In the early days of the cold war, Churchill described the Soviet Union as "a riddle wrapped in a mystery inside an enigma". But compared to earnings releases from companies such as Apple and Sun - who provide terse and lucid declarations - you can be forgiven for thinking of IBM's announcements as a cloud wrapped in a fog containing a temporary heat-haze.
However, this much is clear: IBM has shed 15,000 jobs in the past quarter: 1400 from the microelectronics division and a staggering "14,213 Global Services personnel" in response to "the recent decline in corporate spending on technology-related services". To balance the books, IBM also bunged its recent acquisition, PwC, by almost $400 million.
In an SEC filing posted last week, IBM maintained that demand was strong. So strong, it had to conduct a private pogrom in its own services division. Clearly, something doesn't add up - even by IBM's own admission.
Perhaps an email from a soon-to-be redundant HP employee to The Register sheds some light on the situation. HP announced earnings this week that fell below expectations and added that it would make 1,300 "unexpected" human sacrifices to cover the shortfall. In contrast to previous "sheddings" of fluff in the "labor market", the middle class now feels the pain.
"Sorry but I'm due in early Sunday to train my replacement in Bangalore," the (almost) ex-HPer explained. "It's because of the time difference."
Offshore drilling
Hidden beneath the already hard-to-find news of job cuts is a massive transfer of IT resources to India and China. While only a few years ago we were promised a "Long Boom" of infinite prosperity, by "gurus" such as Wired executive Kevin Kelly, it now appears that every tech job can be cut or outsourced with impunity. Kelly is never happier, by his own admission, than when he's lying down in Pacifica dreaming of insects.
For the rest of us, needs are rather more pressing.
Not to appear to be picking on IBM or HP in particular, there doesn't seem to be a tech job left that's safe.
This has yet to emerge as an election issue, although it represents an assault on middle class expectations that's unparalleled in peacetime. But it is important and needs some context.
As the world's largest democracy, and with a philosophical and scientific tradition that (outside the Muslim world) is second to none, India has every reason to look upon the recent occidental outbreak of what we call "capitalism" as a temporary aberration.
It's worth nothing that in common with his fellow Victorian political economists, Marx found the oriental model so strange that he excluded it from his theories entirely.
But outbreaks of tech independence abound. The People's Republic of China has shown both a cavalier disregard for Western IP (aka "intellectual property") and boasts a proud confidence that its own homegrown talent can transform a pay-for "IP" import into an indigenous social resource. [See Trade Wars II: China shuns Qualcomm - no CDMA tax! - EU frets over China's 3G plan and Motorola gambles big on Linux, Sinocapitalism for more details].
Given China's astonishing historical legacy of engineering excellence, this is far from foolish. Dammit, weren't our kids supposed to bring home the bacon?
On this side of the Gulf, we're sure to hear cries of anguish, as the parents of expensively educated middle-class kids learn that their investment (and, in the US, this can be upwards of $120,000 per child) has gone offshore.
Which brings us to a particularly anxious conundrum. The prosperity that we felt was assured, and by rights, ours in the West no longer belongs to us. Those college dollars look like a poor investment, when a cleverer Indian can perform the same task for a tenth of the salary. So why did we spend all that money? Who, at what point, added enough "value" to justify the investment?
It's a good question. In a historical perspective the Indian, Muslim and Chinese engineers whose forefathers created so much of this intellectual infastructure are only reaping their due rewards. For Western kids, however, this does seem a bum deal. "Weren't we supposed to be clever[-er] than everyone else?" a recent graduate asked me recently. Well, er, actually no.
Smarts is as smarts gets.
Forget your O'Reilly PERL course, and follow the money. A course in Mandarin or Arabic is probably the shrewdest investment a parent can make right now.
Go west, my son... and then keep going
The inexorable logic of digital capitalism has rewarded companies such as Dell, which add no value, and pare costs to the bone, and ruthlessly punished systems companies such as Sun and Apple, which invest in R&D. For reasons best known to themselves, these companies invest in the hard stuff that can't easily be commoditised. Logic suggests that such companies are the bulwark against copy-cat Oriental opportunism.
While you might think much of the above is facetious, the West faces a very real problem: we have a surfeit of well educated kids who, if we accept the orthodoxies of asset-stripping capitalism, simply can't compete with foreign competitors without tilting the playing field.
When capitalism went digital, the first casualties were manual laborers. Now that skilled engineering jobs are being transferred offshore, the middle class is in the firing line, and this poses a very real crisis for a large and not-entirely unimportant section of society. Go to college, learn tech skills and - oops, sorry - you're job has just gone offshore. Please accept this redundancy slip and some small token that your worthless (hard-earned) contribution has enriched the global economy. Or as the creepier types insist, the global "eco-system".
Technology once promised us vistas of endless prosperity, and saw itself aloof from the obligations of political economy or globalisation. Now these pigeons are coming home to roost, and "technology" is more of a liability than it is a blessing.
It's dry, academic stuff to be sure. But when jobs are being lost on such an extraordinary scale, scarcely reported, is there a politician bold enough even to raise the issue?
Was it as good for you as it was for me?
exactly.....now the sh*t has hit the fan....
but at least the blue collar job loss had an upside....you could better yourself by going to college....
what do these people do now...
I do think that the white collar jobs for the most part are leaving behind nice severance packages and othe benefits....true for my brother anyway...
its going to be interesting when we don't have all these big salaries to kick around anymore...
where will all the taxes come from?
no taxes mean there will have to be cuts in social spending and government employment....it will just have to be....
Do you have any links to articles or just personal annecdotes? It'd be nice to hear that it's a fad that some companies will reverse the trend down the road... but I'm concerned that even though there'll be problems with it, companies will still do it anyway.
They've gotta keep an eye on the bottom line.
At a macro level... first it was the manufacturing jobs that moved to where they could be done cheapest.... this time 'round it's the IT jobs (i.e. mostly the mental ones).
His insensitively about people losing their jobs has nothing to do with myself... or any others that go to church. Jesus instructed us to feed the poor and help cloth the naked and visit those in prison. When we do those things we are credited as if we have done it for Jesus himself.
So if you're gonna blast the guy for his jerky remarks, at least do so without your (possible 'Pagan') biases.
Geeks have supported capitalism through the Nineties, but after they lose their savings and their houses, we could be looking at the election of '92 all over again. We could even see an 'alliance of opposites' between the geeks and the Greens. I envision this starting as a barter relationship: geeks will need to learn subsistence farming to survive, while Greens will admit the need for elementary communications and computer technology to spread their message.
I wish. Unfortunately, the incumbent will be blamed. I'm already hearing, "The Republicans have a president and both houses, and I'm still out of work..." President Clinton, here we come.
Completely aside from IT, I'm running into a phenomenon lately all through our "service economy": all the experienced employees are being replaced by 19-year-olds who cost little and know nothing. I go to the bank with my monthly Form 941 payment and find that my payment now evokes stupefaction from some kid who just graduated from Burger King ("Uh...we don't do those"). The same kid has to get three managers to approve a deposit over $100.
And these are the human-interface jobs, the ones they can't outsource!
You've got to be kidding!!! In 1960, the average high school graduate could buy a house and expect to pay for it in 15 years, support a family of several kids on one income, with a high school diploma, he could expect to be comfortably middle class and employed. The average guy wasn't in danger of becoming bankrupt or foreclosing on his home mortage and probably had very little credit card debt. He could expect to retire at 62 and almost everyone had private health insurance. Contrast with today's average high school graduate ---- no way to support a family on one income for most.
WELL SAID!!!!
That's the truth --- the same exact house my dad bought in the 1950s for $15,000 with a 15 year loan and he only had a high school education, bunch of kids with a stay at home mom now sells for over $100,000 and not many high school graduates could afford it on one income. Today it would very likely take two college graduates bringing in two incomes to buy that same house ---and its not a new house anymore.
Interesting you should mention .NET . I love the system, and I'm writing a financial Web application in it now. The problem we ran into is...where's that booming market in third-party Web services we were promised? My application needs a stock quotation service, which would seeem to be an obvious offering for SOAP - why are the pickings so slim out there?
Good question. I've needed to put together a number of interfaces with other companies. Many are happy to handle SOAP or generic XML. Many have expressed an interest in creating an interface that is .Net on each end. Thus far, only Webraska has offered a single .Net interface to their IbDN product. Microsoft offers a wonderful .Net interface to MapPoint for geospatial services. The Webraska geospatial platform is based on Java with SOAP messages both ways. No WSDL file, so I was forced to suck the SOAP message into DOM parser and pluck out the necessities the hard way. Ditto for generating the outbound requests to them. There are also little hiccups in the way SOAP works on Apache vs IIS. SOAP is still a bit of a moving target. Once we have reliable tools for generating WSDL and a range of other tools to consume WSDL for generation of client/server code in Java, C++ and C#, things will get better. The Java folks are behind the curve at the moment. I really want them to catch up so SOAP isn't so labor intensive.
People that are this dumb or care that little about anything conservative or look to the federal government to help them that much, are not going to be persuaded into voting Republican because of even worse economic ideas (like trade protectionism). It's all luck (depending on where the economy is in it's cycle) with these people.
That being said, Bush will win easily in 2004.
Straight out of the Democratic Party doom and gloom handbook. Unfortunately, as I've shown with the economic facts (using links to the official data) earlier in this thread, it's just simply not true.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.