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CPSR - CPU, Issue 7

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Issue: 007 CPU: Working in the Computer Industry 01/08/94

CPU is a moderated forum dedicated to sharing information among workers in the computer industry.



  2. /*COMMENTS*/

  3. FEATURE: "Voluntary" Severance At HP Labs

  4. BOOK REVIEW: _Engineers and Economic Conversion_

  5. BILLBOARD: Technology & Employment Conf 1/21-22, Cambridge

  6. LABOR BYTES: Miscellanea

  7. EOF


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In case you haven't seen it yet, check out the latest issue of _Wired_. The cover story, by Douglas Coupland (_Generation X_), is a quasi-fictional account of a week in the life of a "microserf", a QA tester at Microsoft a few weeks before a new release. Coupland does a remarkable job in the details, and manages to get across the depressing vacuity of life in high pressure worksites like Microsoft, where life begins, ends, and rotates around projects with impossible deadlines (see the note about Apple's Newton in LABOR BYTES below for another side to this phenomenon). We'd be interested in hearing your response to the article, especially if you work at Microsoft.

We'd like to see more articles like the one that Jeff Johnson did for this issue on severance policies at different companies. CPU is meant to share experiences and perspectives about our work. Send in your letters, stories, whatever.

Also, especially if you live in the Boston area -- check out the Technology and Employment Conference at MIT on January 21 and 22. It's free ($5 for the conference documents), and includes several sections about working in High Tech. For more info see below...

Happy new year,



In 1992, the management of Hewlett-Packard Laboratories in Palo Alto, California undertook a reduction in staff. The stated purpose of this reduction in force was to refocus the company's research skills and expertise in business areas that HP plans to target. The overall percentage of Labs' employees affected was small, but the cuts were not uniform, and hit some organizations -- those management considered not in line with strategic goals -- harder than others.

This article describes how the reduction was carried out, including the terms of the severance packages that HP offered employees who were let go. People who work in the computer and electronics industry tend not to discuss details of salary, benefits, layoffs, and severance packages with others because they feel that it is somehow "unprofessional." However, knowing how different companies treat employees is valuable information for: 1) choosing among companies to work for, and 2) working within one's company for improvements in how employees are treated. Hopefully, by sharing information about how HP's recent workforce-reduction was carried out, others in the industry will be inspired to share similar information about their employers or former employers. Such sharing of information should help to improve working (and severance) conditions in the industry.

HP has long had a reputation of treating its employees well. This reputation is based partly upon mythology and partly on market positions and business climates of the past that no longer obtain, but HP values it nonetheless. Part of that reputation is that HP doesn't lay people off. Thus, an interesting problem arises for HP management: how to cut HP's workforce without damaging the company's "no layoffs" reputation. One frequently-used method is simply to stop hiring and allow normal attrition -- people quitting -- to reduce the number of employees. However, is can be a slow process, and who goes and who stays is unpredictable. Another method, used infrequently, is to declare a no-longer-wanted organization to be "excess". Employees in that organization are given a few months to find a new job within HP. Managers elsewhere in HP are encouraged to take employees who have been "excessed." If an excessed employee fails to find an acceptable job within the allotted time-period, he or she will be assigned one. The new job may be nearby or it may require the employee to relocate. It may be related to the employee's old job or it may not be. If the employee refuses the new assignment, he or she is let go, with a small severance package.

Another method of "downsizing" that HP uses is called "Voluntary Severance Incentive" (VSI). VSI nominally works as follows: employees in the target organization are told: "We need to reduce our staff by N people. You are all offered the opportunity to sign up for the VSI program, but only N people may sign up." Signing up for VSI means signing up to quit by a specified date a couple of months away, with a fairly generous severance package to sweeten the deal. The exact terms of the package vary from offering to offering, but in the recent VSI offering at HP Labs, it included six month's salary as a base, plus two weeks salary for every year the employee had worked at HP, up to a maximum of one year's salary. In short, employees were offered from six months to a year's pay to go away. The package also included automatic full vesting of whatever unvested stock and retirement benefits the employee had. Employees in eligible job-categories had two months to decide whether to sign up, and then another month or so to find a new job. Employees who opted for VSI were given job-counseling. In short, the basic idea of VSI is: "don't go away mad, but please go away."

For comparison, here is how several other high-tech companies "downsized" in recent years:

- In mid-1989, Olivetti, an Italian computer and office equipment company, decided to close its research laboratory in Menlo Park, California. The lab had been established only a couple of years before. One morning, a bus arrived containing Olivetti officials (with bodyguards). They entered the facility, and told everyone -- researchers, managers, support staff -- that they had 24 hours to clear out their offices and leave.

- In October 1991, XSoft, a software development subsidiary of Xerox, with facilities in Palo Alto and other California cities, carried out a "redeployment." Sixty-five engineers were told that they had 30 days to find new jobs within Xerox or leave the company. Calling it a "redeployment" was a little misleading, however, because there were very few jobs available internally to find. Of the 65 employees hit by the layoff, only a few found new jobs within Xerox. This is in contrast to a genuine "redeployment" carried out the previous year, in which a large number of engineers in Southern California were relocated to the S.F. Bay Area, with fairly generous company assistance in finding new positions, selling houses, moving, etc. In 1991, almost all of those "redeployed" in fact had to leave. Some employees had heard rumors that a layoff was coming; others were caught totally by surprise. To cushion the blow, Xerox offered the following severance package: two months salary as a base, extra pay depending on one's years of service and age (e.g., less than eight years, add two months pay; more than eight years, add four months pay; older than 40, add three months pay), and a job-placement workshop. Employees who were close to retirement were given "early retirement" benefits. A year later, in August 1992, XSoft had a second layoff, with similar terms.

- Recently, Digital Equipment Corporation carried out a series of staff reductions in several R&D organizations in Palo Alto. In one of the more drastic reductions, the 200 employees of DEC's Western Systems Engineering facility were informed in early December, 1991 that the organization was being eliminated so they needed to find new jobs either within DEC or elsewhere. Management had not intended to inform employees until after the holidays, but employee pressure based on rumors of layoffs prompted an early announcement. Employees were offered jobs on the east coast and relocation assistance, or a severance package. Almost everyone took the severance package, which included approximately three months salary as a base, three weeks salary for each year the employee had worked at DEC, and an extension of health benefits. Departing employees had three and a half months to find a new job, and were offered job-hunting services. Subsequent staff reductions in DEC's Palo Alto R&D facilities were reportedly not so generous, either in time between notification and termination or in severance pay.

- Most recently, in August, 1993, Apple Computer announced a layoff of computer engineers at its main Cupertino facility. Rumors of imminent layoffs had been rampant, but management lent no credence to them. One day, all engineers in the targeted organizations were given appointments to meet with their manager the next day. In those meetings, some employees were told that they were being laid off. The layoff was supposedly based upon both performance and job-function. Laid off employees were asked to turn in their employee badges immediately, and were given an hour or two to clean out their cubicles. They were then given special badges that admitted them to a building where job-hunting services were available. The severance package included several month's salary as a base, plus a week's salary for each year they had worked at Apple.

Relative to how these other companies carried out their own "downsizing" programs, HP's VSI offering seems fairly generous. But it is not without problems. Exactly what is problematic about it, however, depends upon one's point of view.

>From management's point of view, one problem with VSI is that it requires a significant cash outlay. When a company makes a VSI offering, it must to be prepared to show a large financial hit that quarter. Management hopes, of course, that these costs will quickly be made up in savings over time as the company moves into the future with a "leaner, meaner" workforce. In addition, the initial fiscal impact of VSI is tempered by certain tax advantages: in return for using VSI instead of harsher layoff methods, local, state, and federal governments allow companies to treat the associated costs favorably. The flip side of this is that there are government rules about how VSI must be carried out. One rule is that VSI must be offered to employees based on job-category, not on employee performance.

This rule leads to a second problem with VSI from management's viewpoint: the employees who sign up to quit and receive the severance package are often not those that the company wants to see leave. Clearly, if a severance package is offered to a broad set of employees, those who can most easily get jobs elsewhere have a strong incentive to sign-up: they get a new job (with a new salary) *and* a large sum of money to put in the bank. Those who would have more difficulty finding a new job tend to stay. Though this may seem so obvious as to make one wonder why any company would offer VSI, consider the following counter-arguments, made by those at HP who favor the VSI method: VSI allows people who are thinking about leaving the company anyway, and who are therefore less valuable employees, to leave. Also, it encourages long-timers and more senior people to leave, opening up room for advancement for less senior employees, which is important for maintaining company vitality and freshness.

HP has used VSI several times in recent years as a way of cutting its workforce. Each time it has done so, the VSI offering has been more and more narrowly targeted as a way of countering the tendency to lose valued employees. The first few times VSI was offered, it was offered to entire divisions. Later offerings targeted sub-organizations within divisions, with different staff-size targets for each sub-organization.

The rules that govern VSI allow job categories to be defined in terms of function as well as job-level, so that no-longer-needed functional groups can be eliminated. For last November's offering in HP Labs, management took full advantage of this flexibility to target VSI *very* narrowly. Project groups (some containing only one person) were told: "you are all offered VSI, and the target percentage decrease for your group is 100." In other words, everyone in the group should accept VSI, and those who don't risk being asked to leave anyway, without VSI. The job-category rule allowed management to offer VSI to, e.g., the engineers on a project but not to the project's manager, or vice-versa. In one department, the manager anunced at a department meeting that VSI would be offered in his department, but he would not say what the targeted job-categories were. Instead, he would tell each employee individually whether he or she was offered VSI. Furthermore, he asked that employees not discuss with each other whether they had been offered VSI, because that "would be unprofessional." There were also cases where people were offered VSI because they were in a targeted group, but then were told privately that their jobs were safe if they stayed. Thus, there are also problems with VSI from the employees' point of view: Is it offered fairly, consistently across groups, and according to the rules? Do some managers use it to carry out performance-based layoffs in disguise? How does it impact people's careers and moral, including those who remain?

The result of HP Labs' VSI program was very good for some employees (those who were happy to be paid serious pocket money to switch jobs) and bad for others (both those who wanted to stay but were "VSI'ed" and those who wanted to leave and were not). In my opinion, the results were less than optimal for Labs as a whole. HP lost many good employees, including some who would have preferred to stay but were caught in 100%-targeted groups. HP also lost some valued employees who *weren't* offered VSI but were bothered by the way it was carried out or by the loss of colleagues.

So what is to be concluded from this? That conventional, performance-based layoffs are better than VSI? That generous severance packages suffice to cushion the blow of losing one's job? I believe the lesson to be learned from HP's VSI experience is that getting rid of employees is never easy or pleasant, no matter how enticing the severance package. Just because a staff-reduction plan looks good on paper doesn't mean that its implementation by numerous middle managers will be as consistent, fair, or effective as it was intended to be. A reduction that is supposed to leave an organization "lean and mean" may in fact leave it weakened and demoralized, and with a damaged reputation that makes it harder to attract good people in the future. As engineers well know, it is naive to base decisions on "best-case" assumptions. If management did more realistic assessments of the true costs of staff reductions and other reorganizations, they might not do them so often. And that would be good for employees and companies alike.

Jeff Johnson

4. BOOK REVIEW: _Engineers and Economic Conversion -- From the Military to the Marketplace_

Editors: Patricia L. MacCorquodale, Martha W. Gilliland, Jeffrey P. Kash & Andrew Jameton. 1993 Springer-Verlag.

"..[Nations] shall beat their swords into plowshares" (Isaiah 2:4).

A confluence of economic and political circumstances are forcing cutbacks in U.S. defense spending. After years of addiction, such cuts are sure to bring on immediate cold turkey at all extremities of the economic body. Arguing that a short, sharp, shock could leave permanent damage while requiring a longer than necessary period of recovery, the book _Engineers and Economic Conversion_ proposes a gradual weaning; a planned conversion from military to marketplace.

_Engineers and Economic Conversion_ focuses in on the implications of defense downsizing for engineers with an agenda that is: "(1) to provide knowledge about the impact of economic conversion on engineers, the likely impact of engineers on economic conversion, and the mechanisms that could empower engineers to be prime movers in the economic conversion process; and (2) to identify public policy issues relating to the development and use of engineering talent." (p. viii).

The book is built about a workshop held in July of 1991 attended by engineers, engineering academics and representatives of engineering associations (American Engineers for Social Responsibility, Institute of Electrical and Electronics Engineers, Institute of Industrial Engineers and others). It includes ten papers presented to workshop attendees with chapters eleven and twelve a synthesis of ideas, recommendations and opinions generated at the event (Appendix A describes the workshop's "highly participatory" process). Ten of the participants were from academia, another ten were representatives from professional (engineering) societies, three attended from Hughes Aircraft (billed as "The Defense Industry"), one from the Department of Defense, one from "local government" and finally, one representative was sent by ol' Dan Quayle's charge, the Council on Competitiveness (Not surprisingly, the CoC, and Hughes aircraft get favorable mention). The book's editors are counted among the participants as also are the authors of the papers discussed. The sense might be of a small group for a big topic, but the most prominent issues of conversion are well-covered to an accompanying theme summarizing research to date on engineers in the workplace (though often noted is how little there is and the dire need of more).

Some of the papers presented were:

* "Economic Conversion: Why, What and When" is written by the editors. It introduces the book explaining how the present project on conversion came about (and the NSF grant that funded it), why conversion is happening now and some of the manifest signs (Colin Powell is quoted in _Army Times_ saying "I'm running out of demons, I am down to Castro and Kim Il Sung"). The editors believe military conversion does not simply mean a cut back in defense spending but that it means a shift of resources to other productive uses. They are not confident in the market's ability at automatically providing alteratives to defense production. "If left to ordinary market forces, the size of the technical community will sharply decline. An extended recovery period of great struggle will ensue, running fifteen to twenty years." And so argue for a "...carefully decentralized planning would allow a far smoother and more successful transition" (p. 23).

* "Economic Conversion in Perspective: The Values and Ethics of Engineers" is the most interesting piece in the book noting common wisdoms that values are generally a reflection of the circumstances of life and are often employed to justify choices and circumstances -- 'a posteriori' -- after the fact. Engineers' traditional conservatism and high valuation of such issues as national security will probably not hold through conversion just as "gold loses its value on a sinking ship" (Pg 70). Other observations include: "Engineers ... place great value on competence, especially technical competence, and are probably more likely to attribute problems in social stratification to personal incompetence." ( p. 83).

* "Engineer's Perspectives on Defense Work and Economic Conversion" documents the entrenched system of "welfare" for defense contractors (Chapter 12 describes the "iron triangle" which keeps the military spending in place: "Interest groups support members of congress who, in turn, authorize desired programs. A bureaucracy implements the programs for the benefit of the interest group, which, in turn, supports the bureaucracy before Congress." p. 251).

* "Economic Conversion and Global Justice: The Moral Issues" compares different models of conversion -- the free market model, a "compensation" model and a "global planning" model. Arguing for the latter, the author calls for equity of distribution and access in a world of diminishing resources, an environment with limits: "Reducing the incidence of poverty is essential to both justice and human welfare in general. In the Third World, poverty supports population expansion, destruction of natural resources, and immense human suffering.... " while at the other extreme ".. the rich have become dangerous to the rest of the world" through their profligate consumption in the face of deprivation and limited resources (p. 221).

Points of note and items repeated throughout the essays featured in the book were:

* R&D plays an important role in product development and economic growth but military-orientated R&D has an overall negative impact on economic productivity. Focussing engineering skills on military technology is a scientific "brain drain" from the civilian sector. Military R&D focuses on the performance-maximization of products with a general disregard for costs involved while civilian sectors require cost minimization -- this cost-insensitivity also contributes to the "brain drain" as defense work generally pays better since cost is not a major factor (Although positive "spin- offs" into the civilian sector do occur from military R&D, they are marginal compared to the negative effects of the "brain drain" or put another way, if military R&D had a steady trickle-down effect into civilian markets, we would expect to see "nations such as Great Britain and the Soviet Union at the forefront of civilian technology, while nations such as Japan and Germany would lag behind." p. 27).

* Roughly 30 percent of technologists work in the military sector. About two-thirds of the federal R&D budget and about one-third of all R&D spending in the nation is tied to national defense.

* Those let-go during defense downsizing, particularly specialized engineers, will have a hard time finding work. According to an NSF study there is an "overall slowdown of the labor force, total employment and GNP growth expected in the 1990's." Seymour Melman argues that in the heavily defense-dependent aerospace industry, for example, "there are 78 administrative, technical and clerical employees for every 100 blue-collar production and service workers." "Civilian enterprises need engineers and technicians, but none of them require these people in the proportions found at [a typical aerospace firm] where more than a third of the employees are engineers and supporting technical workers." Only a third of converted engineers are needed in the equivalent civilian enterprise (p. 172). This creates a structural problem of lack of available jobs in the commercial sector.

The workshop discussions conclude on the necessity of a planned conversion to smooth the economic and social transition "from Military to Marketplace". An onus is put on the federal government as the most important institution for promoting conversion because: (1) it controls vast financial resources which can be used to support conversion policy (2) it can disseminate information supporting conversion policy to all levels of society through government agencies; (3) it can pass legislation that provides incentives for businesses and individuals to support conversion policy; and (4) it controls defense expenditures and can help initiate conversion by diverting defense funds (The book remarks that many bills have been brought before Congress that deal specifically with conversion but none have become law. p. 251). Workshop attendees saw economic conversion as having at least four types of impact on engineers: impacts on the job market, income levels, transferability of talents and job satisfaction (non-managerial engineers have generally low levels of job satisfaction). Better data on engineering employment and defense spending are required so that the impacts of conversion may be determined and the called-for planning more accurately made. Finally the project recommends the formation of an Economic Conversion Institute at a major university to conduct the technology assessment of economic conversion, initiate long-term research, and act as a clearinghouse for information and data concerning economic conversion (p. 263).


P.S. Whatever happened to the "Peace Dividend"?




Sponsored by the Technology and Culture Seminar of the MIT
Community Fellows Program

Friday, January 21 and Saturday, January 22
9:00 am - 5:00 pm
Building 6, MIT, Cambridge, MA

New England is a world center of the current technological transformation, in which computers, electronics and genetics are opening new modes of production and communication. In the midst of this technological revolution, tens of thousands of people have been laid off from high tech industries. These newly unemployed include both highly-trained workers and new entrants into the workforce. This conference will examine the factors underlying this disturbing trend, and identify directions needed to insure that increases in productivity raise the standard of living of all members of society.



Friday, 9:00 am

Ken Reeves, Mayor, City of Cambridge
Prof. Jon King, MIT
Prof. Tom Kochan, MIT Sloan School
Prof. Helen Shapiro, Harvard Business School
David Arian, President, International Longshoremen and Warehouseman's Union

Friday, 4:00 pm

Juliet Schor, Director, Women's Studies Program, Harvard Richard Barnet, Institute of Policy Studies General Baker, National Organizing Committee of the Unemployed, Detroit

Saturday, 9:00 am

Prof. Sarah Kuhn, Policy and Planning, UMASS-Lowell
Prof. Abdul Alkalimat, African-American Studies, Northeastern University
Prof. Noam Chomsky, MIT
David Feickert, European Trade Union Conference

Saturday, 1:30 pm

Prof. Mel King, Director, Community Fellows Program, MIT
Prof. Elaine Bernard, Director, Trade Union Program, Harvard
John LaRose, Oilfield Workers' Union, Trinidad




Changing Production technologies
     The Engineer's Role
     The Impact of Information on Industrial Production
     Cleaner and Safer Production Technologies
     Shop Floor Initiatives

The Internationalization of Production: NAFTA
     Moving Plants Abroad
     Corporate Strategies
     NAFTA and the Trade Unions
     The European Situation

The Telecommunications Revolution
     The National Information Infrastructure
     Insuring Public Access
     Employment Impacts

The Biotechnology Industry
     Projected Growth
     Impact on Pharmaceuticals
     Unfulfilled Promises


Entering the High Tech Job Market
     The High-Tech Job Market
     A Students View
     High Tech Skills for the Disenfranchised

The Electronic Office
     The Automated Office
     Undervalued Technical Work
     Electronic Surveillance

The Changing Reality of Computer Industry Jobs
     Part-time Work
     Closing Doors to Minority Youth
     Coping with Layoffs
     High Tech Peace Corps?

Converting from Military to Civilian Research and Development
     Civilian R&D in the Post Cold War Period
     Prospects at Lincoln Lab
     Physics After the Cold War
     Campus-Based Efforts

Sociobiological Justifications of Social Inequality
     Brain and Behavior
     Exploding the Gene Myth
     The Myth of the Underclass
     Medicalization of Social Problems


The Impact of Unemployment on Education
     The Struggle for Public Education
     The New Technology and New Illiteracy: Black Community's    
            Survival Crisis
     Education for Unemployment

Alternatives to Plant Closings
     The National Pattern of Layoffs
     The Employee Buy-out of Market Forge
     State Intervention
     Restructuring Labor/Management Relations?

Converting from Military to Civilian Production
     Historical Precedents
     The Machinists Role
     Federal Financing
     Conversion Efforts in Massachusetts

Struggles in the Shadow of the High Tech Industry
     Building a Youth Center in the High Tech Shadow
     Child Care in the High Tech Shadow
     The Carpenter's Union Experience

The Politics of Agriculture and Food Production
     The Hybrid Corn Experience
     Mechanization of Agriculture
     Regulation of Genetically Engineered Foods
     Agribusiness and Ecology

To reserve program documents and register, send $5 to Patricia Weinmann, 312 Memorial Drive, Cambridge, MA 02139. Make checks payable to "The Technology and Culture Seminar."

For more information, contact Patricia Weinmann, (617) 253-0108, or email



LAYOFFS, ETC.: XEROX announced in December it would cut 10,000 jobs worldwide "to cut costs and improve productivity", also closing and consolidating an unspecified number of manufacturing plants. According to the _New York Times_, "Xerox takes its place among financially sound companies seeking higher profits through mass layoffs." (12/9/93). NCR, ATT's computer division, announced in November it was cutting 7,500 jobs, to remain "competitive." In October, NCR offered early retirement to 5,500 workers aged 50 or older. Italian computer giant OLIVETTI threatened to "temporarily" lay off 2,000 workers after negotiations with the union representing the workers there broke down. DIGITAL EQUIPMENT will continue its job cuts in 1994 (_Wall Street Journal_, 11/5/93). PC software pioneer SOFTWARE PUBLISHING laid off 140 workers, or 21% of its workforce last September (_SFE_ 9/17/93) INTEL will add about 1,000 jobs to its planned research facility near Sacramento, CA, and NEC is adding 250 jobs to its Roseville, CA memory-chip plant.

Cuts hit the telecom sector hard: PACIFIC BELL recently announced 10,000 more job cuts by 1997; this on top of an 11,000-job cut that started in 1992. New technologies, according to the company, will enable to expand information highway-related services while using fewer workers. The company is also freezing salaries of 14,000 management workers. Some layoffs will be required to achieve the cuts. After the cuts, Pac Bell will have half the employees it had at the time of the Ma Bell breakup. (_SFE_, 1/7/94, 12/22/93; _San Jose Mercury News_, 1/8/94). ATT is expected to cut about 4,500 people from its consumer communications division. (_NYT_, 12/2/93), SOUTHERN NEW ENGLAND TELECOMMUNICATIONS announced layoffs of 1,500 employees (14% of its workforce) beginning this month. (_NYT_, 11/13/93) BELLSOUTH announced cuts of 2,200 more jobs, on top 8,000 jobs killed last year. US WEST announced last September that it was cutting 9,000 jobs, BELL ATLANTIC announced cuts of 6,000 in 1992, and NYNEX said it was cutting 9,000 jobs in 1991. (_NYT_, 11/11/93) GTE CALIFORNIA is laying off 514 in March (_SJMN_, 1/8/94). Will there be unemployed shanty-towns along the information highway?

And these items from our European correspondent:

IBM: IBM Germany plans to eliminate 6,000 more jobs through the end of 1995, 25% of the employees. [That's on top of another 3,500 cut in 1993 -ed] In 1994, IBM's Louis Gerstner intends to reduce IBM's workforce from 260,000 to 225,000; by 1995, the number will be down to 215,000 (from a peak of 406,000 in 1986).

BULL: The restructuring of Bull-Europe cost 2500 jobs. 1000 people have already left "more or less" spontaneously. The remaining 1500 jobs will be cut in 1994.

SOFTWARE AG GERMANY: Against the will of the bosses, a works council is becoming a reality at Software AG. A committee for the installation of a works-council received 500 positive replies to have an employee meeting. This is one major success of the "Netzwerk Arbeitswelt Informatik" a group consisting of 70 members and interested persons working in over 30 companies. (contact: NAI, c/o BTQ e.V., Akazienweg 22, D-34117 Kassel, Germany, Fax: area code Germany + 0561/776057)

Mailbox for works-council members: The newspaper "Computer Informationen" - oriented towards works-councils - publishes several of its articles in electronic form. The number of the mailbox is: area code Germany + 05721-4835, its name is "Aracoid Cavern" in the FIDO net.

(These items from Engagierte Computer ExpertInnen Austria, Postfach 168, A-1015 Vienna)

WHAT DID THEY EXPECT?: "There are residual costs [to layoffs] in worker trauma and, some say, lost productivity and efficiency, at least over the short haul," according to a Reuters story (_SFE_ (12/9/93). Dubbed "layoff survivor sickness" by management consultant David Noer, "survivors of layoffs hunker down in trenches and do not take risks... And once stress reaches a certain level, they shut down and are not as productive. The consequence is that American companies are fielding wounded players on the global economic playing field." According to an American Management Association survey, half of all American companies had gone through downsizing in the past year, and expected the pace of reductions to continue in 1994. 80 percent of companies that downsized saw company morale decline, and only 44% saw profits rise after the cuts.

SEE YOU IN COURT: A former marketing coordinator for Oracle has sued Oracle president Lawrence J. Ellison, claiming she was fired after breaking off her relationship with Ellison. According to the suit, Ellison tried to force Adelyn Lee to have sexual intercourse with him "or else"; she was fired five days later. Oracle denies the charges (_SFE_ 10/21/93). An ex-IBM employee has sued the company, alleging that her bosses forced her to have sex with Pentagon officials so that IBM could win millions of dollars in government funding (_WSJ_ 11/15/93). John Poole, a senior v-p for NCR has retired early, citing a sexual-harassment lawsuit against him and three other NCR executives by a former employee. The plaintiff's husband has also sued NCR, for age discrimination, after he was fired from his sales job in 1992 (_WSJ_, 11/26/93). Former Apple Executive Vice President Al Eisenstat's lawsuit against Apple for wrongful termination was tossed out of court after mediation "determined that the allegations were not supported by the facts." Eisenstat has accepted Apple's unspecified severance package (_SFE_, 11/23/93). Meanwhile OLIVETTI head Carlo De Benedetti was briefly jailed and then placed under house arrest for his role in Italy's widespread government bribery scandal. De Benedetti is accused of authorizing $7 million in bribes to win a government post office contract.

HOW BIG IS YOURS?: John Sculley's severance package from Apple included: $1 million, plus his $1.5 million in salary and bonuses for 1993; a one-year consulting job paying $750,000; purchasing Sculley's upscale Woodside home at "fair market value", purchasing Sculley's Lear 55 jet, and paying moving costs back to Greenwich, Conn. Apple also agreed to let Sculley exercise his stock options valued at $2.42 million. (_SFE_)

APPLE STANDS FIRM: To its credit, Apple stood firm on its policy of extending benefits to domestic partners, including gay couples. It had applied for a $750,000 tax break on a new technical support facility in Williamson County, Texas, south of Austin, but the county supervisors there initially turned down the request -- not because Apple didn't need a tax break -- but because of Apple's domestic partner benefits. Apple refused to change its policies. A week later, the vote was reversed, the lure of high tech jobs winning out over reactionary morals. [For more information on non- discriminatory hiring and benefits policies, contact High Tech Gays, P.O. Box 6777, San Jose, CA 95150]

While Apple deserves applause for sticking by its policies, one must question the too-common corporate practice of demanding tax breaks in exchange for jobs. Communities are pitted against each other to see who can provide the best deal to lure jobs. INTEL recently decided to locate a new billion dollar chip factory in Albuquerque, New Mexico, after it was given: $57 million in property tax abatements, $36 million in waived new equipment sales taxes, $20 million in manufacturing tax credits, and $1 million in job training funds which will pay 50% of workers salaries for up to six months. They also received $2 billion in Industrial Revenue Bond from the county. Intel will also not pay any gross receipts taxes until 2010 (if the factory is still operational then it will be something of a technological miracle.) From TidBITS #206/13- Dec-93 by Shekhar Govind -- "...Last week, the commissioners reversed their earlier decision and by a 3-2 vote granted Apple a tax break similar to the one DELL just hammered out with the county... This soap-opera played out in real life proves once again that whatever the race, creed, or sexual orientation involved, the color of money still reign supreme."

(Info from various newspaper accounts, plus _Silicon Valley Toxics Campaign Newsletter_, Fall 1993)

LEARNING ABOUT AMERICAN CULTURE: HEWLETT-PACKARD has ended a "foreign trainee program" after "trainees" complained. Under a U.S. Information Agency "cultural exchange program", H-P brought in some 100 programmers, mostly from India and China, and a few from Russia. Some of the Russian programmers complained that they were not getting paid enough for the $35,000 to $60,000 a year jobs that they were doing. Their pay: air fare, lodging, a bus pass, and $25 a day. "The company was particularly disappointed that the Russian program ran into problems... [HP] had hoped the Russians would go home as 'enthusiastic advocates of HP purchases there'" (_SFE_, 11/14/93). Meanwhile HP has been sued for allegedly hiring contract programmers from India, and paying them below market wages. Indian computer services giant TATA SONS LTD, with which HP has its contract, is also named in the suit. HP denies the charge.

WHERE DO PROGRAMMERS GO WHEN THEY GET LAID OFF?: _The Irish Emigrant_ (12/13/93) reports on the circumstances of workers laid off at the DIGITAL plant in Galway, Ireland. Of the total 350 workers made redundant up to the end of November, just under 70 were actively seeking work. Twenty-six had moved to Digital sites outside of Galway. 31 had managed to find employment in the Galway area but more than 140 were in new jobs in different parts of the country. A total of 42 had emigrated and 43 had started their own businesses. About 50 had decided to take a career break, including a few who had returned to college. 400 more will be let go over the next ten weeks and it is expected that the statistics will take on a different complexion with a substantial majority of these unable to find employment in the short term. (Requests to be added to the "Irish Emigrant" distribution list, etc., should be sent to:

BLOOD ON THE CHIPS: On the crush to get the Apple's Newton to market, by John Markoff in the _NYT_ (12/12/93): "The pressure to finish, exhilarating at first, eventually overwhelmed some of the young engineers. After 18-hour days, some engineers went home and cried. Some quit. One had a breakdown and ended up in jail. One took a pistol and killed himself." According to the article, Ko Isono, a 30-year-old programmer from Japan, feeling trapped by the long hours of work, and social and cultural isolation, shot himself on December 12, 1992. The following week, another engineer flipped, and attacked his roommate. He was jailed for assault. When a special command is entered on the Newton, the screen displays "In Memory of Ko Isono."

7. EOF:

"... [W]ay back 15 years ago, a hacker could sit down and write an entire piece of software by himself. Now, that's no longer possible. Software comes out of factories, and hackers are, to a greater or lesser extent, assembly-line workers. Worse yet, they may be managers who never get to write any code themselves."

Neal Stephenson, _Snow Crash_

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