Big Shrink Bulks Up in India, Guts US Jobs, to Please Wall Street

But IBM’s strategy isn’t working out. 

In its long and illustriously checkered history as technology pioneer, IBM has more recently become famous for three things:

1. Apparently endless revenue declines.

IBM has booked 21 quarters in a row of year-over-year revenue declines. Annually, revenues peaked in 2011 at $106.9 billion and have now dropped relentlessly five years in row, for a total decline of 25%:

2. Massive share repurchases and soaring debt

Over the past 10 years, even as revenues have been swooning, IBM has repurchased $116 billion of its own shares.

To counter falling revenues, IBM has become an expense-cutting machine, thus generating cash flow, but not enough to pay for the share buybacks. So it has been borrowing to buy back its own shares. In 2006, IBM had $22 billion in debt. In 2011, it still had about the same, $23 billion. But then revenues began to decline, and IBM tried to prop up its shares by increasing its share buybacks, borrowing ever more to do so. From 2011 to 2016, even as revenues fell 25%, its debt nearly doubled to $42 billion.

3. Its ever shrinking footprint in the US

IBM still discloses its global workforce – now at 380,000 and about flat with 2007 – but stopped disclosing its US workforce in 2009, after it became apparent what was happening, and it wasn’t pretty. According to IBM’s annual reports:

  • In 2007, IBM had 387,000 employees globally, including 121,000 in the US, “down modestly” from 2006.
  • In 2008, IBM had 398,000 employees globally, including 115,000 in the US. It explained: “The company continues to add resources aggressively in emerging markets, particularly in the BRIC countries,” which include India.
  • In 2009, IBM had 399,000 employees globally. But suddenly it was silent about employees in the US. It was getting too ugly. Instead it said it “continually assesses its resource needs with the objective of balancing its workforce globally….”

In congressional testimony in 2010, it was revealed that in 2009, IBM’s US workforce had shrunk to 105,000. And after waves of quiet layoffs since then, the employee count has been whittled down to “well under 100,000” by now, according to the New York Times, citing “outsiders.”

Now IBM employs 130,000 people across India, according to The Times. That’s 34% of its global workforce, and substantially more than in the US:

Their work spans the entire gamut of IBM’s businesses, from managing the computing needs of global giants like AT&T and Shell to performing cutting-edge research in fields like visual search, artificial intelligence and computer vision for self-driving cars. One team is even working with the producers of Sesame Street to teach vocabulary to kindergartners in Atlanta.

And there’s more:

Indians perform consulting services, write software and monitor cloud-based computer systems for many of the world’s banks, phone companies and governments.

IBM even has a Bangalore “garage” full of app designers who build corporate iPhone and iPad apps to simplify tasks like helping airline agents rebook passengers, bankers make loans and doctors update patient files.

Why? Cost cutting. The Times:

Depending on the job, the salaries paid to Indian workers are one-half to one-fifth those paid to Americans, according to data posted by the research firm Glassdoor.

IBM isn’t the only US tech company to shift employment to India. Much of US tech has moved that way. Oracle employs 40,000 people in India, or about 29% of its global workforce. Dell employs 25,000 in India or 18% of its workforce. Cisco employs 10,600 in India or 15% of its workforce. Microsoft employs 8,000 in India, or 6% of its workforce.

IBM is also in sixth position this fiscal year with H-1B visa petitions. The top five are companies – three of them Indian, such as Infosys – that provide H-1B contract workers to US companies. IBM is listed with 3,569 H-1B petitions so far this fiscal year through June 30, 2017.

But IBM is unusual among big American tech companies because it employs more people in a single foreign country than it does in the US. The Times as some perspective:

Ronil Hira, an associate professor of public policy at Howard University who studies globalization and immigration, said the range of work done by IBM in India shows that offshoring threatens even the best-paying American tech jobs.

“The elites in both parties have had this Apple iPhone narrative, which is, look, it’s O.K. if we offshore the lower-level stuff because we’re just going to move up,” he said. “This is a wake-up call. It’s not just low-level jobs but high-level jobs that are leaving.”

Has IBM’s corporate focus been confused for years? Clearly, the policy of blowing $116 billion on share repurchases in ten years while cutting costs and employees in the US, and offshoring employment to cheaper countries has not produced any results other than cutting costs: Revenues have dropped five years in a row.

Dropping revenues year after year doesn’t “unlock” or create “shareholder value” and isn’t “shareholder friendly,” as the Wall-Street jargon goes. It’s shareholder punishment by a thousand cuts. The hype surrounding the announcements of share buybacks serves only as briefly soothing ointment.

Sure, the fact that IBM itself has been the biggest buyer of its own shares has propped up their price. Yet, shares have dropped 32% since February 2013. Now imagine what IBM could have accomplished if it had invested that $116 billion in R&D and productive activities – which doesn’t include M&A – in the US! But that’s not what Wall Street wanted. Wall Street wants M&A deals, fees, share buybacks, and cost cuts that gut the US workforce. And that’s what it got.

What the phenomenon of cheap credit has accomplished. Read…  Corporate Mirage: Debt out the Wazoo, Sales Languish, Stocks Soar

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  153 comments for “Big Shrink Bulks Up in India, Guts US Jobs, to Please Wall Street

  1. BradK says:

    Indian Business Machines

    “Indians perform consulting services, write software and monitor cloud-based computer systems for many of the world’s banks, phone companies and governments.

    …Depending on the job, the salaries paid to Indian workers are one-half to one-fifth those paid to Americans, according to data posted by the research firm Glassdoor.”

    You get what you pay for.

    • AC says:

      “You get what you pay for.”

      That is a wildly optimistic assessment of what the Indian IT labor pool is capable of providing.

      • DC says:

        India’s workforce is capable. See it to believe it

        • Nicko2 says:

          I live in a fast growing developing economy (actually fastest growing in Africa at the moment), GDP growth of almost 5%. Local and regional stock markets are on fire. Anyway, these fast growing economies (along with India) have YOUNG and well educated populations – altogether we’re talking of nearly a billion people; they will work harder and for less. May globalization pick the winners, for they won’t be in an isolationist, regressive Trump America.

        • RR. says:

          The Capability doesn’t seem to be coming out in the Bottom Line.

          And not to be forgotten, the attentiveness of the Indian IT
          Worker. He never forgets to watch where he steps when
          walking to his workplace.


    • mick says:

      Pay an entitled, lazy US worker 80K or a hungry, happy-just-to-have-a-job Indian worker 20K?

      And minimal, if any benefits for the Indian as well….

      No brainer for a corporation, and dont start with the quality argument. Quality can be taught, just like it was to Americans. Indians will learn and improve, just like Americans did.

      Say good bye to the overpaid, arrogant tech worker in the US…

      • Matt says:

        You clearly have no experience of what you talk about. I’ve been hiring engineers for a decade, in the west, and hire less than 2% of all applicants. Indians who make the grade are less than 2% of that.

        • Tang says:

          I fully support your views. I managed a tech support team of more than 40 engineers from 1998 to 2009. Platform products Sun Microsystems, HP, Networking. Oracle DB, aHP Software products, Web and middle tier.
          There were NZ , Indonesian, Mainland Chinese, local engineers as well as engineers direct from aIndian. Do not really see those from India sparkling. But they are very good with forging resumes. Interviewing them you need to put them on practical assignments then assess their work. So you yourself need to be technically qualified and know your stuff.
          IBM is living on her past success. Like HP. Both management slowly grinding away.

      • Davis says:

        No, quality comes from the culture. A perfectionist culture such as Germany as an example, will always get ahead. If Indians knew anything about quality and perfectionism, their country wouldn’t be such a wasteland.

        The only reason India can compete is that they have 1.3 billion hungry people who make $1700 a year. Now, promise someone who is making $1700, even $5000 and he will murder his own mother to get it. Now, you promise Indian workers $50K, and he’ll murder his whole family. Also, if you have only 1 in 100 Indian who has any talent, now you have 13 million talented people. So, now you have 13 million Indians who are both talented and are hungry.

        India is not about quality, but quantity. If US companies stop hiring Indians tomorrow, the whole tech economy in India will collapse along with India’s economy.

        • gary says:

          ” If US companies stop hiring Indians tomorrow, the whole tech economy in India will collapse along with India’s economy.”

          And what would happen to the US economy??

        • Hendrik1730 says:

          Very true words. Siemens once ( 90-ies of last century ) started outsourcing big-style to India, has long since given up. Poor quality.

        • Davis says:

          gary: US economy will see a blip in comparison to what it is, but it will soon recover. India is all about providing cheap software engineers; Indian engineers are not any good in any other engineering fields. The only field that India has anything to say is software, and that is because in the last 30 years, the big companies have given Indians all the necessary opportunities.

          On the other hand, US economy is a multi-faceted economy; US economy doesn’t depend only on Google and Facebook.

        • Mike G says:

          The quality of their work is abysmal. Short-sighted MBAs outsource because all they give a damn about is cost-cutting, then the work comes back onshore after a few years of miscommunication and shoddy work that costs far more to fix than it ever saved up front.

          Realistically, IBM can probably hire the cream of the Indian crop, but the general standard of work is low, even if you avoid the many fake-diploma-mill grads.

        • Mary says:

          You don’t need quality for all kinds of jobs. Many jobs can be done by even morons, until they are automated. And if a job is to be done by a moron, better be a cheap and hungry Asian moron than an entitled Californians moron.

        • d says:

          “A perfectionist culture such as Germany as an example,”

          Japan is a “Perfectionist Culture” they seek perfection in ALL, they do. If the Japanese can turn an activity into an “art from” they will.

          Germany is an Engineers culture. (Very close to perfectionist, due to the demands of longevity in Mechanical item’s)

          True engineers, despised garbage, or poor quality control, but do frequently make things to complicated.

          Eg Bosch v Japanese (apart from Honda) electronic fuel injection.

          There is no German Equivalent to the “Tea Ceremony”, or the perfect Sword (Now Golf) Stroke.

      • mikey says:

        The Indian IBM employees hate the company as well and usually leave after getting something to put on their resume. The remaining ones are fiercely divided by tribe and religion and most interested in looting whatever they can. This is according to their comments on IBM watch and Why would it be otherwise? Even in India, a computer wizard has almost no chance of getting rich quick at IBM and much better chances elsewhere.

        The top one tenth of the top one percent of the programmers do eighty percent of the work that requires truly innovative thinking. Who is the Indian John Carmack,etc.

      • rex says:

        Three words- Standard of living?

      • Heidi's Master says:

        I’ve worked with some good Indian programmers who were in the U.S. on H1-B visas. I’ve also worked with off shore Indian programmers. They were absolutely terrible. If I were a professor and grading their work, they would get a low F.

      • Johnny A says:

        I bought the services on fivver, mostly Pakistani, Indian and Malasian. They complained about my request for web services as “too much work” for the fee. It was all bid work. Then, I found a US web pro in my own town who did everything and more than I could have seen, for $20/hr. So, my own small biz experience is that the US still has a top workforce, even if you have to look around. The cheap fixes pushed by new media are exactly that: cheap fixes. Plus, now I’m getting spam about fivver that tells me Paypal is billing me.

      • fajensen says:

        Yes Maybe. Stick it to those uppity chattel while one can!?

        Ryanair seems to be going down the shitter over underpaid pilots on those Zero Fucks Given contracts that made me and many really smart people leave IT. Seems it can cut both ways with the attitude.

        Or maybe it’s something related to cash flow and the leases on the planes, now that Yellen is getting serious.

        Need to look at the books more.

      • 2GeekRnot2Geek says:

        Hi Mick! “Overpaid, arrogant Tech worker” here.

        Upsides of offshore/H1B:

        1. Less Capital outlay.
        2. Anywhere from 3 to 15 workers for the price of one.
        3. An immobile work force that you can abuse as you like. (not just H1B in US…)
        4. Hours are determined by corporate need. (offshore work forces generally work a minimum of a 10 hour day, average is 12, bad times are 14-16 hours a day 6 days a week for weeks on end.)
        Reduce the headcount of the “overpaid, arrogant US tech work force”
        5. Depress wages for the “overpaid, arrogant US tech work force” for more than a decade.

        The downsides that are not immediately apparent unless you are an overpaid, arrogant Tech worker or a tech savvy CIO ; )

        1. Creative/Innovative thinking is damn near non-existent.
        2. Problem solving skills are in very short supply. When things go sideways you will have a very small pool of people working all out to fix it. And BTW, > 90% of them are will be in the US.
        3. Lack of rudimentary skills. (you will need to lay out every step or your finished product will be very bad if it functions at all.)
        4. “Copy and Paste” mentality. If it worked in project A, it will work in project B. This leads to poorly performing, buggy, overblown systems. (See lack of rudimentary skills)
        5. English speaking does not mean necessarily mean English reading. So endless hours will be wasted in meetings where items are discussed at length over and over again. (With the phone meetings in Hindi afterwards from the Onshore H1B/GC folks who have to keep the whole leaky ship from sinking.)
        6. Seniority means more than any good idea. (This is a really bad concept in tech)
        7. Corporate Intellectual Property is in the wind. Collaborating and sharing means wholesale distribution of source code to help you coworkers or friends in other companies.

        Please take this as a view from the trenches, as I have spent most of the last 10-12 years redesigning or revising systems and code that were proudly built by poorly educated and trained people to whom you believe quality can be taught.

        I am a senior highly skilled tech worker, and I have not seen a real raise in pay in over a decade. I still do this for a living because I love designing and building systems. IMHO, the bean counter mentality has lead to a disturbing lack of creative and innovative tech workers, and this lack is reaching a tipping point in IT departments across America.

        Contrary to what non-tech execs and senior management thinks, innovative tech is not like carpentry or plumbing or mechanics. Tech is a meeting of science, experimentation, art, creativity, and risk taking.

        I put IBM’s survival for more that 5 more years at less than 15% because of all of these factors. The company is in a death spiral due to chasing shareholder value and ever rising executive compensation vs innovation. It is far from the only company in this position.

    • Drango says:

      Didn’t Trump say he was going to stop this kind of thing? Of course, Trump said a lot of things, didn’t he?

    • ChadVX says:

      Great comment, this article should be expanded from IBM to most top fortune 100 companies including financials and oil and gas. To meet domestic and international shareholder demands these companies are utilizing lowest cost labor available from IT to Engineering jobs, It will be soon that our annual reviews will be conducted by outsourced managers

    • roddy6667 says:

      In the US you might have to pay a programmer $85,000 to do a job, but you can get the same work done for $11,000 in India. This is good pay. These young IT professionals are college educated, have a good work ethic, and speak good English. $11,000 US puts them into the upper middle class in their country. They live lives similar to the Yuppies in the Eighties with nightlife, nice homes, good restaurants, etc.
      The horse is out of the barn-no need to close the door.

      • Matt says:

        Except the vast majority of them can’t even write code that compiles.

        You’re another one who doesn’t have any experience of what you speak.

  2. truth always says:

    IBM wouldn’t survive without consulting – not that anyone would miss it.

    The larger issue though is the systematic abuse of H1B across the board.

    Until it gets curbed and I doubt it would, America gradually would decline.

    The Chinese at some point would be competitive to Apple and other hardware powerhouses.

    The Indians would do the same in software.

    I would point out that Indians are the biggest abusers of H1B and there is rampant nepotism of unqualified Indians esp. from Andhra Pradesh, a southern state whereby wives, cousins and others are put in IT jobs to replace at least as good if not better Americans.

    I am an Indian born and raised US Citizen in silicon valley so I know both sides.

    The truth must prevail or everything collapses HUGELY

    • alex in san jose AKA digital Detroit says:

      And you get hijinks like this:

    • Rates says:

      Your “optimism” is cute. America has already declined. The Chinese companies are already competitive when it comes to hardware. Apple is getting their butts kicked in China i.e. witness the Apple 8 launch in China. Super embarassing.

      In India, Apple is just a joke. Chinese companies now own 51% of the smartphone market:

      And let’s get real in software. At this point Chinese software is probably better than Indian ones. All those outsourcing firms are doing crappy work that no one wants to do. What do you think Alibaba, Baidu, etc from China are if not world class companies?

      • mikey says:

        India is more likely to collapse than become a serious competitor to China. So much for the benefits of Democracy over state directed economies. Most of India does not want to use toilets stll. Chinese are buying Chinese made cars for cash. Bangalore may survive as a low cost grunt work center since the rupee collapse to come will make it even cheaper.

        • Rates says:

          I don’t think it’s an issue of Democracy vs State directed.

          The idea of a united India itself is a SHAM. From the division between North and South, religion division and of course, the world class caste system.

          India should reapply to have itself colonized again.

      • RangerOne says:

        China still needs to one day hold up tech IP laws if they ever want to have their companies do major innovation. The current no holds bar stealing and replication of tech developed by Western companies is unsustainable if they ever plan to take the lead.

        They have the ability, they need to give a shit about intellectual property…

        • d says:

          When and only when it is in china’s interest to have stringent enforcement of IP laws, will you see such from china.

    • Anonymous.1 says:

      “there is rampant nepotism of unqualified”

      Frankly, the biggest reveal is that for decades obtaining a great job depended upon a resume with solid references. It appears that they aren’t really necessary for obtaining a professional position.

  3. John M says:


    As smart as you are, it will matter little the whole of Wall Street is on the point of imploding. Anyone who’s missed the telegraphed messages, has been asleep on their desk for years..

    • mick says:

      Yep, John is right. None of this matters when the planned, well executed bubble blows sky high.

      Too many on this site paint an undeservedly rosy picture of the future, as if this mania can be sustained, or won’t blow to kingdom come.

      It will, and when it does, the fallout will be 1000 times worse than anyone dares to imagine.

  4. Ron says:

    I agree with John, Wall Street is imploding, along with the NFL and all the other create wealth schemes. Just wait until everyone figures out you can’t spend the wealth effect.

    • walter map says:

      That may not be true. The market can stay irrational longer than you can stay solvent, and karma can stay unbalanced longer than you can stay serene.

      The models suggest the Financial Industrial Complex may be able to sustain its high-wire act for as long as it can cannibalize the real economy: note that stocks have tripled even as the real economy continues to stagnate, at best. Stocks did not recover because the real economy recovered: they recovered despite the fact the real economy has not recovered. And probably never will.

      All the while the real economy remains stagnant (or in decline, if you believe the more pessimistic statistics) which is apparently not a policy concern so long as the financial markets can escalate and the government can make its interest payments. The markets only care that a collapse is not imminent, and do not care at all that a collapse is inevitable, since it may still be a few years away.

      It does not matter if the high wire is two hundred feet or two thousand feet above the ground. All that matters is that the high-wire artist stay on the wire.

      • Mary says:

        Sharp. Reminds me of the monologue I have with myself about living in earthquake country. The Big One is coming…any moment? Fifty years in the future? Statistically speaking, it should have happened decades ago.

        So, how best to prepare? We have water, peanut butter and a fatalistic attitude. On the financial front, I’ve tried to learn from Wolfstreet. Diversify: stocks, bonds, cash and extreme fatalism. But still with faith in humanity, so no guns. Given Mother Nature’s arsenal, why bother.

  5. chip javert says:


    You wrote “over 10 years…IBM has repurchased $116 billion of its own shares” – I apologize for questioning you, but that is a monumentally stunning number – please confirm it’s accurate.

    • Truth Always says:

      Why the fu*k is this not illegal? Buy back shares to meet CEO MBOs while laying off workers so CEOs get their bonus?

      Only if CNN, Fox, MSNBC etc. fixed on this rather than on ‘minorities, immigrants, Russia’; there maybe traction on this.

      • Wolf Richter says:

        Share buybacks were illegal until 1982. It was considered stock manipulation, which it is.

        • d says:

          Let me guess just like the republican repeal of glass signed by bill as they had veto proof numbers.

          This was also a republican initiative.

          The American political system has almost completely destroyed America.

          Just as the same system destroyed the western Roman empire.

          Americans were warned of this in the late 18Th century, but like in so many other issues, didn’t listen.

        • Dan Romig says:

          My take on the repeal of Glass-Steagall is slightly different d. Clinton did indeed veto the Senate’s May of 1999 vote which was 54 to 44. But, before it finally passed the House and Senate that November, Clinton had it rewritten, primarily by Neal Wolin. Sandy Weill, then CEO of Citigroup and Larry Summers, then Secretary of the Treasury also had a great influence of the final bill.

          Final Congressional votes on 4 November:
          Senate 90 to 8
          House 362 to 57

          Wolf’s quote, “Wall Street wants M&A deals, fees, share buybacks, and cost cuts that gut the US workforce.” is an epitaph for what is killing the middle class of this nation. This death is being deliberately conducted not just by Wall Street, but also by the Fed, the SEC and the political power structure.

          I do not own stock in IBM (thankfully), and I try to avoid owning shares of companies I do not believe are ‘respectable’.

        • d says:

          “Clinton had it rewritten”

          Parts of it rewritten.

          Clinton was smart enough to realise, it was possible to water it down some, but not defeat it.

          Clinton, unlike the three that have followed him.

          Had the brains to deal, around fights he could see he couldn’t win, even with the house and congress out for his blood, he still achieved.

          Unlike the next Democrat to hold the office. Clinton is still among the top 5 Democratic Presidents post the Civil war.

        • R Davis says:

          They borrow to buyback – isn’t it just a little to expensive a stock manipulation – for their own good that is ?
          A bit like shooting yourself in the foot.

        • R Davis says:

          Wouldn’t the borrowed millions be better invested in steering the company in a more positive direction, or product diversity of some sort.
          Don’t they call this throwing good money after bad ?
          Buyback only serves to give the impression of company desperation & panic.

      • Gershon says:

        Why the fu*k is this not illegal? Buy back shares to meet CEO MBOs while laying off workers so CEOs get their bonus?

        It’s not illegal because Wall Street has captured both parties as well as “our” regulators, enforcers, and the judiciary.

        If you don’t like it, stop bending over for Wall Street and the globalists by electing its bought-and-paid-for Republicrat duopoly water carriers.

        • Kent says:


        • michael w Earussi says:

          Nothing will change until the sheeple quit voting blindly for the bought and paid for Democratic and Republican parties.

        • d says:

          “It’s not illegal because Wall Street has captured both parties as well as “our” regulators, enforcers, and the judiciary. ”

          You need to get real with your targeting and stop shooting where the MSM and other idiots want you to shoot.

          Wall street is a bit player. It is owned by the Globalised Vampire Corporates, currently allied with china.

          Entities like black rock, that alone own over 1% of all global equities by Value. Some of those entities have names you have never even heard of, They are not, secret just very private, very discrete, and very under your radar.

          They own the people who own wall street and congress.

          The Illuminati Etc Have always been “Conspiracy theory” “fairy stories”.

          The collusion of these Globalised Vampire Corporates, and what that protend’s going forward, are not Fairy stories.

          The undoing of china and a global depression, will be the result of the shift in Alliance of these Corporates. Unless china undoes itself first.

          These Combined Globalised Vampire Corporates are the most dangerous thing humanity has ever faced.

          They regard Humanity and the Planet as resources, to be consumed by them as and when they see fit.

          Their only interest, and the only thing they have true allegiance to, is their profit.

          Entities with culture like, that are not compatible with Humanity. When they combine with advanced AI (it is a when) the results could be catastrophic.

          Human Governments are far to interested in lining the pockets of their members, to come together, and do anything, about this looming nightmare.

    • walter map says:

      You can expect the world to seem increasingly surreal as the distortions of reality escalate.

      If that displeases you, you might want to find yourself an alternate reality in a parallel universe that doesn’t have these problems. For that you’ll need a map, and I’m not actually available.

    • JR says:

      If you extrapolate this graphic – looks to be a “reasonable” number. Peak was above $18B in 2007.

    • Wolf Richter says:


      Here are four sample years, averaging $14.8 billion a year — obviously not all years were like this, because at that this average, the buybacks for the 10-year period would have amounted to $148 billion, not $116 billion, but it gives you an idea:

      2011: $15.0 billion
      2012: $12.0 billion
      you can find those numbers on page 16 here…

      2013: $13.9 billion
      2014: $13.7 billion
      you can find those numbers on page 20 here…

      2014 and 2015 were $4.6 billion and $3.5 billion… IBM has been cutting back on share buybacks, under pressure from its own debt :-]

      • chip javert says:


        Thanks. Like I said in the original post – those are just stunning numbers (I was not suggesting you were wrong – the numbers were just so huge I thought maybe a zero got misplaced).

        As an old retired CFO, I would not support eliminating shareholder-approved stock buybacks (too many companies use stock to pay employees, causing huge dilution), but I would support restricting buybacks in a given period if they exceed GAAP earnings in a closely-related period. Yea, there are legitimate exceptions, but significant or prolonged use of this tactic simply loots shareholder equity.

        IBM, like the old HP, is a tech company that fell off the fast-track a while ago, and has unsuccessfully played catch-up ever since. Painful to watch, but necessary to free up capital for fresher ideas.

    • mikey says:

      Yes, it is accurate. If they had bought their competitors stock instead…..

  6. michael Engel says:

    The cost of an engineer, in the US, including the pyramid
    above : finance, sales, HR, RE and management all the way to the CEO, at the top of the pyramid ==>
    $250,000 to $300,000 annually.
    A similar engineer in India / China with more limited pyramid above ==>
    $25,000 to $50,000 annually.
    IBM is not a Romentic co.

    • walter map says:

      A company that will go to the ends of the Earth for its people will find it can hire them for about 10% of the cost of Americans.

      • David Calder says:

        You might be off just a bit Walter.. My old paper mill in Everett, WA, now a 90 acre grassy strip, closed in 2012 and moved what could be salvaged to China. It was common knowledge in 2011 that the pay of one American paper mill worker would equal the entire payroll of a modern Chinese mill. People who have power, position, and money would demand that we compete with that..

        • walter map says:

          “You might be off just a bit Walter.”

          I just haven’t been the same since the Alzheimer’s set in and they locked me up in the attic with no AC and a bucket of fish heads. At least they gave me this contraption to type on so I can amuse myself.

          All my friends seem to be spiders and the occasional raccoon.

        • Makes sense but only one problem. If the same people who were working in US are supposed to buy the products, suddenly you have a problem. Why? Because their income went down drastically as they lost the jobs. That’s the reason why the FED started reducing the interest rate with more of outsourcing so that people can take up credit to buy things.

          Outsourcing works well for the Managers and executives in short term; but it destroys the Purchasing Power of middle class.

          The folly is the thinking that you can compete with the low wages of China etc. Not possible as the living standard and cost of living is high in USA.

        • RR. says:

          The ends of the earth is still under a dollar an hour, True.
          Chinese Wages and benefits have escalated dramatically,
          especially for Diploma Technicians with real experience.
          We do auto parts for the top German brands and Jeep and
          American GM. We have a factory near Bejing, and I drove
          our Techs back to München Airport. They are not being paid
          a dollar an hour. (much more). You don’t even buy a Chinese
          car on a dollar an hour. and housing prices through the roof.


    • Uncle Bob says:

      What’s actually happening in practice is that companies are hiring teams of 15+ developers in India and Mexico to do the job that 2-3 highly skilled Americans can do on-site. The end result is that they are paying more money for poor quality, outdated software. I work in the industry and have endless stories about outsourced projects like this. There is a reason IBM is IBM and Google is Google.

      • walter map says:

        They do pay a premium to have a subservient workforce, but apparently its worth it to them. Money they’ve got, in vast piles, so they’ve moved on to utter domination over hordes of disempowered minions.

        Call it a business model.

        • thelocalpragmatist says:


          Please disabuse me of this thought;

          The ills of the US economy can be laid directly at the feet of Wall Street’s demand for quarter over quarter increases profit, and hence stock value. A CEO, to maintain a princely lifestyle, will do whatever it takes to keep the gravy train rolling…however destructive in the long term.

          This method of control is deceptively simple…only one individual in a corporation has to be “bought”… the “decider”.

          On another note…the spiders are not your friend…they have no politics.

      • HudsonJr says:

        Yep offshore to 15 developers, and then have to pay a premium for a domestic dev to fix. Although in larger companies you usually have scummy people that will borrow domestic resources from other department because of an “emergency”. This means the person who made the decision doesn’t actually take on a financial burden of the problem.

        By the time the mistakes become clear, the person responsible will have jumped ship for a promotion…and do the same thing at another company.

    • Suzie Alcatrez says:

      IBM has the same top of the pyramid regardless of where their employees are.

      At some point however, it will make financial sense for IBM ( like Halliburton) to move the HDQ out of the US.

      • fajensen says:

        It would be too funny if the move is planned by a team of disgruntled resources and they relocate to a place where they chop off body parts for stealing.

  7. Halsey Taylor says:

    Yeah, well, Canada’s project Phoenix showed how well IBM’s India strategy has worked: great for IBM. Lousy for the Canadians who paid for it. The end gets closer every quarter. At some point, IBM’s going to run out of things to sell off to buy back shares.

    • walter map says:

      Corporations have also gone in for that Race to the Bottom.

      Capitalism as practiced is unsustainable, destructive, and self-destructive on many levels. It doesn’t need to be this way, but the FIC apparently demands it as its method of maximizing short-term profits – as if there is no future, which makes it a self-fulfilling prophecy.

      I’ve tried talking to them about these issues, but do you think they listened to me? They looked at me like I had two heads and threatened to make me live in the attic with no AC and feed me a bucket of fish heads every couple of weeks.

      • alex in san jose AKA digital Detroit says:

        Walter Map – as the saying goes, under Communism you’ll still get to keep your Kenny Loggins records.

        Fortunately due to the political atmosphere lately, there are tons and tons of people reading their Pikkety, their Marx and Engels, getting educated, joining the DSA, the IWW, and other groups who are eager to educate.

        A fundamental idea to learn is “the reserve army of the unemployed” even the excellent book “The Jungle” by Upton Sinclair describes this fact of capitalism well.

      • R2D2 says:

        Serves you right for thinking walter. How dare you have a thought in this day and age? Your thought should only be focused on which Kardashian recently got pregnant in a bang bang, or what is the color of the latest underwear Britney Spears is wearing.

    • IdahoPotato says:

      Every quarter, you can see Buffett dump some of his IBM shares.

      • Drango says:

        It sounds like IBM might not be able to survive the next crisis as an American company. All those bean counting executives better start learning Hindi.

  8. John M says:


    I have trained a horse to eat less and less food each and every day. It was working great right up until the time that horse keeled over and died.

    Henry Ford knew intuitively nearly 100 years ago that his employees needed to make a decent wage. If you don’t leave enough profit in the job you are only robbing yourself in the longer run.

    • Gershon says:

      Henry Ford knew intuitively nearly 100 years ago that his employees needed to make a decent wage.

      Henry Ford also knew the score on who our real rulers are.

      “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” — Henry Ford

      • d says:

        ” “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” — Henry Ford ”

        Henry Demonized what he did not understand.

        He went Bankrupt 3 times DUE to his unworkable financial practices, not the actions of “Jewish Banker’s”.

        When McNamara went to work at Ford post WW II. Ford was still estimating its invoice due value “by weighing them”.

        Anybody who could write something like the international Jew. Then pay to have it published, has problems, Big Ones.

        Henry was responsible for some important, good things though.

  9. IdahoPotato says:

    Isn’t this capitalism? Free movement of goods and labour? Or is it a one-way street where the U.S. can dump subsidized corn, soy wheat on India and Mexico and prevent American companies from hiring Indian and Mexican workers?

    I remember the 1990s when Enron wanted to set up a power plant in India with subsidies from the state government of Maharashtra and the bending of all kinds of rules to help them because of diplomatic pressure from the U.S. government. Happens everywhere everyday. The notion of “free markets” is a sick joke.

    Modern capitalism sees boundaries merely as pesky irritants that impede the movement of goods and labour. But if you suggest socialism as an alternative, most people’s heads explode. They start howling about Europeans and freedom fries.

    People cant have it both ways – worship at the altar of unabashed capitalism, and complain about globalization.

    Capitalism taken to its logical conclusion – when you can buy legislators and judges – is very destructive. That’s why I am an unabashed socialist.

    • walter map says:

      “That’s why I am an unabashed socialist.”

      If only it were that simple.

      Capitalism is a tool, and tools are no respecters of ideology. It depends on how they’re used. I believe in capitalism, but I believe its product should be used for positive social purposes, and not to enrich the wealthy merely. It should and can be sustainable, and not destructive, and not self-destructive, but that is what this tool becomes when it is controlled by the avaricious and ambitious, and not by society.

      Naturally, to capitalists I’m a socialist, and to socialists I’m a capitalist, but they’re both wrong. I’m actually an art critic.

      Remember that Diego Rivera was an out-and-out communist – but the wealthy, sometimes very wealthy, were his clientele, like Nelson Rockefeller and Henry Ford. One of his wives, Frieda Kahlo, never capitulated to the rich for her art, so she mostly lived on Diego’s money. Go figure. Capitalism, as a tool, supports socialism, as its proper purpose, as Marx prescribed.

      Bad things happen when you let people have too much money. They find weird ways to go strangely ape-shit and acquire aspirations of godlike power and greater-than-oriental splendour. Unfortunately they run the world and are inevitably running it into the ground, and they’re not going to stop and aren’t going to let you stop them, and that really is the way it’s going to be. Tragic, huh?

      You do have the satisfaction of knowing that corportists are no more likely to survive the catastrophe they’re creating than you are. My advice is that since you can’t change it that you try not to worry about it too much, and instead do the best you can to enjoy your life despite despite the horrific abyss heading your way.

      I’m just going to sit back and watch it happen and later on I’ll submit my critique.

      The mind is its own place, and in itself can make a heaven of hell, a hell of heaven.

      Paradise Lost

      • IdahoPotato says:

        “In capitalist hell, the damned must lie on a bed of nails while a steam roller drives over them. In socialist hell, it is exactly the same, except sometimes there are no nails, sometimes the steam roller is broken and sometimes the driver is too drunk to work.”

        – Someone on the Internet.

        It’s hell either way.

        • Mike G says:

          In capitalism, man exploits man.
          In socialism it is the reverse.

        • d says:

          In capitalism, man exploits man.
          In socialism it is the reverse.


          In capitalism, man exploits man.
          In socialism many men, exploit the rich man.

          Which is why Socialism always fails, as there is not enough rich man to go round for long..

      • Dharmabum1323 says:

        Thanks, Walter. I too am trying to find a way to relax while I watch it all crumble. To quote my favorite punk band (whose name escapes me at the moment), “Yeah, we’re fucked, let’s dance.”

      • kitten lopez says:

        damn i love this site. just a money site is so hilarious. most cutting edge philosophy art and poetry.

        thanks, Walter Map.

        i’ve been so blue and in pain about Puerto Rico and how long and evil colonialism and waste is and for…what???

        i danced to Boricua music on the radio out in the sun so hard and long today in tear tears so many tears, i got lost in dancing so hard in my pain, i forgot to eat or drink water and after a couple of hours in the sun i passed out in a cold sweat on the sidewalk.

        before i passed out i couldn’t talk, but asked a guy walking past me from the gym for some water and he said i could get some inside. i told him i couldn’t move and then i put my head down as i couldn’t talk anymore.

        i’ll have to talk to him about that later whenever i run into him. he’ll tell me to fuck off because he’ll be embarrassed, and that’s how people in san francisco are now to each other. but i don’t really believe people intend to walk over the dying. so just in case he comes across another person face down in the street in a cold sweat asking for water, maybe he’ll think twice.

        maybe not. he’s probably in tech. those folks have an eerie way of looking right through you as if you weren’t there, because you have nothing they need or want. you are irrelevant and it’s like that’s displayed over their eyes in text only they can see, as they look at you.

        but later a homeless person passed and yelled at me sharply to see if i’d move. my head jerked up and i was drenched in sweat but alive.

        i smile because i love this new level of acceptance in your posts, regarding the horror waste and tragedy of the course of humanity and what it’s done to everything its touched.

        your posts reflect the existential despair horror and FIGHT that i, as an artist, are here to struggle to transform our splashing around in all this death, into some kind of …renaissance. no matter how small.

        thanks for making it back, Walter Map. you and your new way of accepting and still feeling, is good for me to see.

        this is hard. watching all this death decay and waste. so fast. it sped up all the sudden. but i guess depending on when you said that is a dead giveaway at you’re navite.

        this place has always been rough to evil on the poorest most fragile among us. now it is us, as the pogo and that poem about no one being left to fight for you because they’re all gone or working 5 jobs.


    • d says:

      The problem with globalisation is simple there is not 1 rule book for it. Which should have been agreed before it was allowed to permeate.

      So the rule books, get played against each other. By exploiter nations like china.

      Blaming capitalism for these issued caused by flawed globalisation is pathetic and stupid.

      TPP was, and still is, a rule book for every nation in it, it will work with or without the US.

      china does not like the TPP rule book (it prevents chian exploiting an dstrip mining other nation’s), so promotes RCEP which is simply a license for china to exploit. The US would like RCEP I can see it joining.

      • IdahoPotato says:

        Capitalism without globalization is regulated free trade, which is closer to Socialism (vs Communism, which precludes capitalism). Exactly my point.

        • d says:

          Regulated free trade, was used by some countries to provide a social safety net.

          A social safety net (which also covers Education and healthcare), is not socialism, it is a wise capitalist investment in the society. That can be termed “Socialist”.

          As soon as you get into the realms of personal income/asset redistribution, via taxation and other legislation, or unequal state asset/income redistribution, you have trouble. Like Venezuela.

          As you are entering the unworkable socialism, that must fail, when other peoples money runs out. And it always does.

          Before arguing Socialism it is important to define, the definition, of the Socialism, to be argued.

          As Socialism has become a “Catch all” for any Social policy, anybody dosent like.

          Is UBI, Free health care, free education to graduate level, State subsidized housing, Socialism? or an intelligent capitalist way of dealing with multiple very expensive problem’s, in a modern society.

          You can have those things, In a workable capitalist state.

          You can not have them, combined with uncontrolled unskilled immigration, and exploitative globalist trade agreements, with “trade Partners”. That intent to gut your employment base.

  10. Felix_47 says:

    Does anyone know why Warren Buffet seems to like IBM so much? Is there another angle we are missing?

    • Wolf Richter says:

      He sold about 1/3 of this stake in Q1 and Q2 2017 and may have sold more in Q3. He has soured on IBM.

      • IdahoPotato says:

        Apple is the new apple of his eye.

      • akiddy111 says:

        I remember Buffet telling Joe Kernan on CNBC back in 2011 – after he disclosed his $10B bet – that he would prefer if IBM’s stock would not rise for 5 years so that they can buy the stock back. Well, he got what he wanted.

        I guess he could have bought the S&P 500 instead. But he’s too much of a genius to do something as straightforward as that.

      • d says:

        IBM can not shrink away fast enough, for me.

        Warren soured on IBM when it started hollowing itself instead of making real money, which it used to.

        IBM has always had a corporate culture, which used to work for it. Now it has Morphed into something that is destroying it.

        Just desert’s.

      • Mel says:

        Doesn’t sound sour to me. Two to tango. IBM is buying, Buffet is selling. Happy happy.
        Good thing that, as you pointed out, it’s not called stock manipulation any more.

  11. Maximus Minimus says:

    The 399,000 employee number is surprisingly high. Probably still includes personal PC, and small server branch sold to Lenovo. Probably most are administering legacy IBM systems in places that can hardly afford an upgrade, so the decline will only continue. Otherwise, it’s hard to find an IBM product anywhere. I hope, the execs will retire in comfort.

  12. mean chicken says:

    This is the EXACT same way US government operates, not by taking an interest in innovating and manufacturing real products people use every day! No, $118B of stock buybacks is backfiring b/c it isn’t innovation and has nothing to do with manufacturing new products to replace out dated ones. It’s all about insiders lining their pockets.

    What other country on Earth subsidies offshoring beside the US?

  13. Hiho says:

    Well, I would say that the strategy of IBM, which seems to be to allow its CEOs to take home big bonuses, has worked so far. I bet they do not give a sh.. About long term growth and future revenues.

    And do not blame the fed only. This trend, aka financialization, was taking place far before QE was even concieved.

    About offshoring IT jobs to India. Well it was the logical way to follow. If you can offshore factories that produce tangible thing which afterwards have to be shippes back to the us, it makes all the sense to offshore “virtual” products.

    And in the long run, as energy costs go up, I bet manufacturing might come back, while service jobs will not.

    Call it karma, the professional class despised blue collar workers and celebrated their misery, not realizing that (some of) them would be the next.

    • Maximus Minimus says:

      “the professional class despised blue collar workers and celebrated their misery.”
      Because they were told by big name eCONomists that that was the right thing to do. Peeps in the third world would be only happy to make things for fatso US consumers.

    • Anonymous.1 says:

      “Call it karma, the professional class despised blue collar workers and celebrated their misery,”

      Absolutely on point. They told the blue collar workers to move to a job rich area, get educated in a different field, you were lazy, and I could go on. I actually read something like this on someone’s comment.

  14. JR says:

    Their net earnings (6 months ending Jun 2017) of $4B covers their dividend of $2.7B. Could be that they are swapping equity (shares) for debt to continue to cover their dividend out of earnings. Looking back to the start of 2000 – they have repurchased one half of their shares!! 1.8B in Jan 2000, now 943B (source- SEC filings – just hit back a bunch of times). Wow!

  15. hidflect says:

    Indian engineers can be quite capable. The inferiority stems from the mahouts business practice of pocketing 40-60% of the fee and outsourcing the work to a lower tier vendor. Who then does the same and so on until you end up with a guy in his kitchen with a cell phone hotspot trying to handle 4 clients on his 2001 laptop.

    • Uncle Bob says:

      The problem is also that remote work-for-hire teams are simply not going to give you as good of a product as an in-house team.

      Imagine Google wants to update Gmail, so they hire a remote team. This team has no knowledge of the inner workings of the application, no domain knowledge of web mail, no real knowledge about the user base. They are just expected to take a specification and produce a good product. This is how MBAs wish software development worked.

      In the real world, high quality software is made by small highly-skilled teams with expertise in the product they are building. This is a tried and true approach that almost all successful tech companies in the US use.

    • Davis says:

      Capability comes to a great part from experience. When you are kicking out US workers and hiring Indians, after a few years the Indian worker can do the job while the US worker has forgotten everything he knew. And Indian engineers are hardly any good; on top of that they bring the same corruption and nepotism that has made India a wasteland for thousands of years to the US companies. At the end, you will get companies who hardly produce anything innovative, and we are seeing that right now.

      • mikey says:

        Yep. Once the manager is Indian, you usually see only Indians hired in that group. And not just any Indian. They have to be from the same religion , tribe and state. This is assuming no family members are available. Technical knowledge is not essential as interviews can be done by phone with a different person than the one hired.

        Some companies seem to be able to prevent these practices. Not any that I have worked at.

        • junior_kai says:

          I saw this earlier in my career – nepotism amongst Indians that eventually destroys a company. I think a few have talent, but many do not and just ride their connections.

          Frankly I’m surprised IBM employs that many people still – color me dubious. I currently (unfortunately) use a number of their products, all of which were developed by companies they purchased and seem to be killing off these products with lame upgrades and virtually nonexistent support. Whenever I find a cheaper or free alternative, I jump to it – and there are more and more everyday that are catching up.

          The other thing I havent seen discussed is that a lot of these foreigners, while maybe understanding code dont understand what the problem space/ultimate intent & function a lot of these applications are for so they cant possibly advance the product against US domestic competition; they can only change little things around the edges and migrate to new OS flavors.

          Hopefully IBM goes belly up soon (unlikely, but a guy can dream that fraud will one day get punished), sells off the pieces that were never really theirs in the first place to companies that can get them back on track.

  16. akiddy111 says:

    We know that IBM has 130,000 employees in India and 121,000 employees in the USA. What we don’t know is how many USA based IBM employees are from India.

    That being said, I have nothing but admiration for the kindness and benevolence of Americans for stepping aside and letting east Indian immigrants take over it’s most important Jewel, the Tech Industry.

    Furthermore, it always fascinates me that there are two countries next to each other, namely India and China – both with 1.3 billion people – separated by only a sliver of a border , yet they could not be bothered mingling with each other. Instead they prefer to head to the west coast of America.

    • Truth always says:

      Your geography is poor.

      India China are separated by the mighty Himalayas stretching 1000s of miles. And they are the tallest range.

      So historically hard for mass travel amongst them. India did export Buddhism to China.

      Until the 15th century they were the 2nd and 1st largest economies overall. The great Mughals of Mongolian origin controlled 1/4 of the world’ their peak.

      They both fell due to hubris, nepotism, hedonism and other viles.

      History repeats itself and America is headed the same path. I say this with no pride or joy. I was born in India but am an American and have kids who I hope spend their lives in the America which I dreamt of as a child.

      As a side, maybe I should push one of the kids to write a new “Dreams of my father’.

      Someone commented on why globalism defeats capitalism – how can workers compete with their kind overseas who make a tenth of what they do.

      Agree with Idaho Potato, another native Indian that I too think that socialism is less bad than nakes capitalism.

      Inundate the masses with alcohol, drugs, sex, entertainment and RAPE democracy. The 2 party system is the biggest scam and with the attention of the masses towards Kim.Kardashain and their elk, the masses will suffer.

      And that is maybe Darwin’s curse ‘Survival of the Fittest”. If most Americans are stupid not to know what is best for them and how to participate in a notional democracy – maybe they perish or get enslaved to the bankers and politicians who are smarter than them.

      The human condition is one of misery and do not believe the last few hundred years in America were a norm. It was just a blip – maybe America was a back swan whereby the masses had a great lifeform the first time in human history.

      And the reversion to the mean begins.


    • d says:

      You forget a basic, which is rooted in things this site dosent deal in.

      Indians think they are superior to chinese and everybody else.

      Their culture, and caste system, teaches them this, from birth.

      You Must always consider this carefully, when dealing with them. Or viewing their actions.

      So no they dont mingle. AT ALL.

      • IdahoPotato says:

        “Indians think they are superior to chinese and everybody else.”

        True, but Americans beat them at this hands down by constantly chest thumping about “freedom” whatever the heck that means. I say this as an American born in India.

        • d says:

          “True, but Americans beat them at this hands down by constantly chest thumping about “freedom” whatever the heck that means.”

          Jack Nicholson in easy rider explained, that most of them arent and dont even know what it is.

          Even worse they hate anybody who exhibits a little bit of “true freedom” let alone the loathing they have for anybody who might actually be vaguely “free”.

          America gets more repressive and surveillance oriented by the day, however it still has a long way to go, to catch up to russian and china.

        • Anonymous.1 says:

          “constantly chest thumping about “freedom””

          Your welcome. Thank a Vet.

      • walter map says:

        “Indians think they are superior to chinese and everybody else.”

        India operates on the caste system. The US does not, so Americans are outcastes, including managers. Indian IT managers are notorious for hiring underage relatives and faking their credentials. It’s common to find IT groups staffed almost exclusively from the same clan.

        You’ve probably noticed that the US corporate model favors quantity over quality, calls failures successes, and pass on ethical issues, so Indians fit right in. US workers ask too many questions.

        A common tactic is to deploy a cobbled-together application and avoid delivering the source code, so make sure you get it and and can deploy it yourself before you pay them. Also expect they’ve arranged to make a career out of doing bug fixes.

    • Wolf Richter says:

      Typo: IMB has “well under 100,000” employees in the US, not “121,000” (that was in 2007).

  17. Stevedcfc72 says:

    Hi Wolf,

    Another great article, similar to HP. I presume most of the Traditional Tech Companies are seeing these revenue reductions?

    Question for you sir.

    You’re in the boardroom at the IBM strategy meeting, the CEO turns to you and says the income is down 25% in the last 5 years, we’ve countered some of that by reducing our costs, reducing headcount so far. Our debts are now 42 billion 52% of income.

    To address this issue what does IBM need to do?

    1) Reduce the 380k staff numbers substantially.
    2) Sell off certain parts of the business to reduce the debts
    3) Potentially look at a merger with a rival for the cost ‘synergies’.

    What do you think Wolf?


    • Wolf Richter says:

      None of the above.

      But this:
      1. Stop wasting money on share buybacks.
      2. Tone down the focus on cost cuts and US layoffs.
      3. Hire the best most creative people and drive new technologies forward.
      4. Tell Wall Street to go to heck.

      • Stevedcfc72 says:

        Thanks Wolf,

        1) Agreed lazy finance share buybacks.
        2) There’s always room within big companies for cost cuts.
        3) Totally agree in IBM’s message to shareholders they should be saying how they have the best talent.
        4) I would love a big Company to do just this.


      • Maximus Minimus says:

        5. Kiss good bye to your bonuses.

        After Lenovo bought IBM PC division, it seemed almost easy to turn it around (same as Tata Jaguar). But then, they don’t have to report quarterly profit increases to Wall Street.

      • walter map says:

        4. Tell Wall Street to go to heck.

        Wall St. has ways of retaliating. Most targets comply because they’ll last longer.

  18. Cynic says:

    Short-sighted strategies and behaviours versus far-sighted is more apt a way to view matters than Capitalism v Socialism, too heavily-laden with emotion.

    ‘Socialism’ can be quite as destructive as ‘Capitalism’, within the context of global industrialism. Both can behave as if there was no tomorrow (and make it so, as Walter M. observes).

    I like to contrast this with the wise terms of old farm leases in Britain: landowners knew that a clever and greedy farmer might be tempted to kill the soil and wreck the woodland in pursuit of sort-term yields and quick personal profit,and so the proper manuring of the land was specified explicitly, the routines for maintenance, what wood could and could not be taken, which trees could not be felled, etc.

    Private property, individual effort combined with a proper respect for the land based on the assumption that it would be farmed thus for centuries, and be in the possession of the owners for that time

    Then came Industrial Agriculture, unleashing its chemical horrors on the soil and wrecking the hedges and woodland.

    Our problem is not human nature as such.

    • Jon says:

      Most of the tech workers from top to bottom in USA working in companies like Apple Facebook Microsoft Amazon Google etc are indians
      This is a fact..

      • alex in san jose AKA digital Detroit says:

        Jon – And I can certainly back you up – tonnnnnnnnns of Indians here, and they’re not homeless like so many of the rest of us. They’re all working at tech companies and then well, they’ll only hire more Indians.

        I’m not saying there aren’t jobs here, but you’ve got to be smart about it. If you have the eyesight, there are always driving jobs. If you have a strong back, there are tons of jobs in warehouses and tire shops and working on cars, and you might even make more than $20 an hour until your back wears out.

        Gov’t jobs are the best to go for, get one of those and hang on for dear life.

        I suspect a good amount of the actual good jobs here are illegal. Name it: drugs, human trafficking, money laundering, theft, smuggling, etc. Risky, but probably not any more risky than studying tech and making great money until you turn 40 and then you’re out on the street.

      • R2D2 says:

        Most is an optimistic term; 90%-95% would give a more accurate picture. Basically, American companies decided to move the knowledge and know how from US to India. I bet all these US companies feel so proud and patriotic for doing such a great job of destroying the Good ol’ USA.

        • Kent says:

          No tech company in the US gives a damm about the US or American workers. They care about maximizing their stock prices and CEO compensation. That is basic Libertarian ideology: that maximizing shareholder value will maximize wealth. It doesn’t mention where that wealth ends up though.

          Until the vast majority of Americans reject that ideology, there can be no change.

      • Truth Always says:

        As with everything in life, the devil is in the details.

        Just because tech companies have Indians, doesn’t mean the latter get paid lower than American everytime.

        There are the outsourcing types (IBM, Tata, Accenture, Infosys, Wipro) that do put lower pressure on wages.

        However if you are in a top notch company (Apple, Google or other leader in its industry) – companies do not care what color you are. It is what you can do for them.

        My boss is from Europe, has mostly white and I (per him) make more than any of his employees even Directors. I am in engineering with no reports and am Indian.

        So the narrative of all Indians making low is false.

        To wit- upon leaving the company a native White American confessed to me his salary and what he was getting in his new job. I was shocked that even with a 30% raise in his new job – he was still making 20% Less than i was making at that time.

        Apropos – the only way of curing H1B is to banish it for Level 1 engineers and keep a minimum floor of 150K in silicon valley for H1B / L1 imports and adjusted elsewhere for cost of living.

        Importing Data base Admins or Testers at 60K forces unemployment in Americans -> and these are not exceptional talent or work that anyone with a decent education cannot be trained.

        Again – devil in details which everyone misses out.

        • HiLo Tech says:

          I was at MSFT 10 yrs ago. My colleague from India on H1 visa through Indian H1 peddler was making 66 percent less than my salary, doing the same thing I was doing.

        • R2D2 says:

          1- This whole thing started decades ago for bringing in lower waged Indians to replace everyone else. Average income in India back them must have been around $300/year. Big companies started to forcefully bringing Indians and kicking everyone else out. I bet back then, they paid Indians at most 7-8K per year. Companies considered that low wage, but Indians considered it a treasure; going from $300/year to $8K a year.

          2- Majority of Indians are still paid much lower than others; on top of that you abuse anyone else and they leave. On the other hand, you abuse an Indian, and at least face to face, he’ll say “Thank you sir for not sending me back to India.” And of course a bunch of MBA morons will love that.

          3- After years of giving jobs exclusively to Indians, of course they are gonna have the know how. Any mediocre engineer will learn all the details after a decade or two of working. And of course a few talented ones, specially the ones that finally got their green cards are going to demand more. But in general, it was, and still is the lower cost that drives these useless companies to hire Indians. Why would Google hire Indian DBAs when almost any engineer can learn to do that job? Lower wage, that’s the only reason.

          H1B visas should be eliminated altogether; we already have imported millions of Indians into this country, we don’t need to import anymore

    • How Now says:

      I disagree: human nature IS the problem. When gorgeous women seek out rumpled and tweedy socialists rather than slick, wealthy capitalists (regardless how depraved and narcissistic they are), we’ll have the dawning of a new age.

      • How Now says:

        Apology for sounding sexist. That “law of nature” seems to me to apply to rumpled socialists and slick, wealthy capitalists of any gender… Reinhold Niebuhr says it best in “Children of Light and Children of Darkness” – the ego can be reduced infinitely but can’t be totally eliminated.

        • Paulo says:

          Actually, it was pretty funny and adept. However, like RE it is all about Location Location, and timing. Where I live a dweeb with money is still a dweeb. And when times are tough the benefits will go to people who can do things; provide and protect. The others will get their lunch money stolen.

          I remember several years ago the company I worked for flew some well known movie stars around while they filmed a movie in our location. It went on for months. No one cared who they were and we treated them the same as if they were our loggers going to camp. I saw them at the movies one night, and no one paid them any attention. Around here it isn’t what you have or who you are that is important, it is what you can do and do you live here? Away from the cities it gets pretty tribal. It was a real break for the movie people.

          Of course down the street from me we have a guy who moved his cousin in and his wife out. And, a mile away we have a guy with two wives. He is ‘supposedly’ on a disability stipend. It’s pretty curious out here in the Canadian boonies. Odd.


  19. R2D2 says:

    “Massive share repurchases and soaring debt.”

    Sounds like another Sears in the making.

  20. R2D2 says:

    These companies are going to pay dearly for their stupidity of gutting US workforce. India is a hugely corrupted country where you can easily bribe your way out of murder, and you don’t even have to be generous in your bribes.

    Also Indians might be good at getting fake certificates through bribes in India, and then memorizing a bunch of tech stuff to be able to do a mediocre job, but as a whole they are not a nation who can think innovative. They have turned the tech market into a meat market; a meat market as smelly, and dirty as any other meat market. You might every now and then get some decent meat out of a dirty meat market, but as a whole, you are gonna get rotten meat that makes you sick to the stomach. So, expect the likes of IBM, Cisco, Verizon to ultimately go belly up.

    • curious cat says:

      The companies may pay dearly, but chances are the executives won’t.

    • Drango says:

      Boeing is another company well on its way to being American in name only. Last year alone it outsourced a half billion dollars to India. I hope the folks in Seattle have been saving their money, because the day of reckoning is at hand.

  21. Gershon says:

    “Shareholder value” is the mantra accompanying the destruction of formerly great American companies, and America itself.

    American voters are going to get everything they deserve for letting the Wall Street-captured Republicrat duopoly turn our former republic into a crony capitalist looting plantation.

    • curious cat says:

      “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” – Alexis de Tocqueville (in Democracy in America)

      • Kent says:

        “The American middle-class will endure until the day Congress discovers that it can take bribes from American capitalists to let them liquidate the nation’s wealth.”

        Kent (posting on Wolf Street)

        • Mike G says:


        • d says:

          “The American middle-class will endure until the day Congress discovers that it can take bribes from American capitalists to let them liquidate the nation’s wealth.”

          Kent (posting on Wolf Street)

          should read

          “The American middle-class will endure until the day Congress discovers that it can take bribes from Globalised Vampire Corporates to let them liquidate the nation’s wealth.”

          American capitalist, Asset stripped England, And Europe. Post WW II.

          Now the Globalised Vampire Corporates, are doing it to America. That is Justice.

          The Majority of those Corporates, are no longer, any more American, than I am.

      • penfold dangermouse says:

        pet peeve (not pointing at you).

        wish people would be more detailed when quoting historical people unless it’s something obvious like the Gettysburg Address.

        That deTocqueville quote doesn’t quite sound right. And I can’t (in 60 seconds of looking) find the original citation.

        And I don’t care enough to keep looking to be proven wrong or right.

        • JR says:

          Attributed to (short version):

          “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” — Alexis de Tocqueville, Democracy in America

          Long version (wikiquote) – to me this sounds like truth:

          This is a variant expression of a sentiment which is often attributed to Tocqueville or Alexander Fraser Tytler, but the earliest known occurrence is as an unsourced attribution to Tytler in “This is the Hard Core of Freedom” by Elmer T. Peterson in The Daily Oklahoman (9 December 1951): “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

          No link – easy to find with google.

        • d says:

          “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.””

          Democracy, like Constitution’s is supposed to be live.

          S so it should be possible to tune the ability for the majority to vote itself largess or political groups to promise the Majority largess out of it.

          This however would not apply to America as Americans consider most of their constitution, particularly the 2 senators per state to be set in stone.

          The inability to change the number of senators per state enshrines and locks America into the failed duopoly. Now owned by the Globalised Vampire Corporates.

    • MD says:

      Yeah well I’m sorry to have to say but you brought it on yourselves.

      Not only failing to stand together to protect those jobs, but also willingly training your Indian replacement for no cost whatsoever due to a totally misplaced sense of duty and loyalty.

      Allowing the corporate bully to tread all over you, and meekly shuffling off into the sunset afterwards.

      Bed-make-lie I’m afraid.

      Rediscovering the reason people unionized – but all too late.

      • Mike G says:

        Training your replacement is usually made a condition of severance pay. Sure you could say screw it and walk out if you have money to burn, and you’ll be an unnoticed symbolic mosquito bite on an elephant hide of the corporate machine, while missing out on severance $ you’ll probably need before you land another job.

        I don’t think there are many people left who don’t know corporations will screw you in a heartbeat whenever it benefits them to do so.

        • Derek says:


          I have heard too many stories of engineers forced to train their replacements because they’re over a barrel moneywise for it to at least seem true. Though it begs the question of why not perform some subtle sabotage because the Indians don’t know s*** from shinola and the MBAs certainly don’t.

  22. R2D2 says:

    Forgive me for being off topic, but I just had to share this here:

    “Elon Musk unveiled his plans to build a city on Mars on Friday, but he also announced that the rockets used to get there could be repurposed for travel a lot closer to home. The BFR, as it’s called, would travel at speeds approaching 17,000 mph. In theory, the rocket could reach any destination on Earth within an hour. Most trips would take less than 30 minutes, the head of Tesla and SpaceX said during his presentation at the International Astronautical Congress in Australia. ”

    Many dispute if we actually been even to the moon, and this guy is building cities on Mars. This guy is selling the sheeple science fiction and the sheeple all lap it up. Tesla’s shares have been under pressure lately, so, the con-man uses his charm to charm the sheeple :).

  23. Shawn says:

    Well for what it is worth, India economy is a mess. Current GDP growth rate is just 7%, very pathetic for a developing country. The official rate of inflation is below 5% but the real rate of inflation is much, much higher. India Inc. was loosing it’s competitive edge when the Rs. was at 42. Well no problem, they devalued to 65 just to stay competitive. Kind of the same problem China is facing at the moment. There is a lot of fraud in India with regard to academic credentials, you don’t even have to show up for any classes, just open your wallet and they’ll mail you an engineering degree. Also experience engineers are not cheap, but cheaper than here I imagine.

  24. Frederick says:

    Meanwhile Warsaw Poland my second home just scored a big win with JPMorgan choosing to move 4 thousand jobs there from London Great choice n their part Smart well educated English speaking populace and a very underrated city with great mass transit and very low cost of living Google also just opened a startup incubator across the Vistula in the Old Prada neighborhood Things are definitely looking up I was there on business in July and you could feel it in the air

  25. Tang says:

    American corporations organisations are getting what they deserved. You get what you paid for. Your passwords gets stolen. Your profile your email addresses in the hands of other people. Your database gets hacked. Your websites mutilated. Your internal network gets compromised. Your cybersecurity are being looked after by foreigners whom you know next to nothing what they can and will do after they completed your assignments. And yet you cry the Russian wolf. You fail to realise the onguard requirements for your most important and confidential assets and just leave your front doors access to some Tom, Dick and Harry to guard just because it costs half a dollar less. Equifax is but one case. Perhaps it us timely to pay the heavy price.

    • Derek says:

      I’m constantly amazed that nobody in the C-suite puts this together. All these people that you got so cheap…. Don’t you think that some of them are moles for your competitors, or for the highest bidder?

  26. Tang says:

    And from CNBC. US govt. notifies 21 states of election hacking.
    Not convincing enough?

  27. tony says:

    Now i know why at&t service is so bad takes 5 tries to get in to my bill,sometimes not at all.

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