IBM's informed its Global Technology Services employees that many of them will be hit with a salary freeze this year. An internal email lays out how the across-the-board good times are about to come to a halt:
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.
Translation: Some employees in the most high-demand areas will get raises, but most of them -- and all executives -- won’t. This strategy plays into a 2015 road map articulated by CEO Virgina Rometty, who laid out an aggressive growth strategy and plans for a sharp increase in earnings. One employee told Computerworld that rather than doing smart product development and growing market share, the company is “maniacally focused on cutting labor costs and off-shoring work to low-cost countries.” In fact, as we’ve reported before, IBM has hatched a plan to ease thousands of workers out the door without having to lay them off by allowing them to reduce their hours by almost half while retaining 70 percent of their pay. In exchange, the employees must pledge to retire by the end of 2013. It’s clear that the company has been cutting its U.S. workforce in recent months while increasing its worldwide head count. What’s unclear is whether that will ultimately help its competitiveness and bottom line.

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