The Skinny blog is written by Rick Smith, editor and co-founder of WRAL Tech Wire and business editor of

RESEARCH TRIANGLE PARK, N.C. – Can the news really get much worse for some workers at IBM?

After layoffs of an estimated 2,500 North American employees to start the year then the launching of an early retirement plan designed to further reduce its already shrinking ranks in the U.S. and Canada, IBM (NYSE: IBM) on Monday informed thousands of remaining workers that they won’t be receiving a pay raise this year.

Yet IBM continues to make big profits as it strikes for profit goals in 2015 that IBMers have labeled the “road kill” plan.

They learned about the no raise decision – “broad-based salary program” in IBM speak - via email.

Workers in the Global Technology Services group were told by two GTS executives that there won’t be any raises across the board. The email set off howls of protest from Alliance@IBM, the union seeking to represent Big Blue workers. And some angry notes were posted at the Alliance website, which often times is the first place where news appears first about layoffs or other compensation issues.

“The Pig needs the $$$$ earmarked for raises to remain competitive and to attract/acquire skills that are in demand,” wrote one poster.

The Memo

Here’s the memo, a copy of which was sent to WRAL Tech Wire:

“GTS Employees,

“The Employee Salary Program takes into account a number of elements, including compensation competitiveness in markets we serve, our ability to attract and retain people with skills we need, our business performance, and other employee investments.

“It is essential for a services business to provide value-added services to clients at competitive price points. Our objective is to ensure a competitive labor cost structure while moving aggressively into areas that are strategic to our clients and require innovative solutions. This is fundamental to driving clear return on investments for our clients and to increase opportunities for all IBMers.

“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.

“Your manager or leadership team will communicate additional information to you over the next few weeks.”

Alliance: “Salary Increases for ALL”

The Alliance responded quickly with reminders about IBM’s profitability.

“To GTS workers from IBM executives: No salary increase for you!

“After a year of record earnings, profit, revenue and free cash flow, IBM executives are once again ignoring the masses of US IBM employees who helped make those positive financial results possible.

• net income $15 billion
• free cash flow $16 billion
• 2011 compensation for [Chairman] Sam Palmisano $31 million

“And where is the financial ‘thanks’ to employees? To those working in the delivery centers, in offices, at the plants, mobile or at home?

“Any thanks for working all those extra hours to help the customer?

“Any thanks for getting the product out on time?

“Any thanks for making sure systems and networks function properly?

“Any thanks at all for the hard work ALL employees have done?

“It appears not. …

“How much longer will we allow corporate executives to disrespect our value to the company?”

IBM employs an estimated 10,000 people across North Carolina, but the numbers in RTP continue to drop, according to Alliance sources. Big Blue no longer talks about how many employees are working where.

It’s also in the process of selling off the Retail Stores Solution group that’s primarily based in the Triangle to Toshiba.

[IBM ARCHIVE: Check out a decade of IBM stories as reported in WRAL Tech Wire.]