an 36). IBM was famous among workers for being a highly desirable company that offered its employees luxurious benefits and a job for life. However, IBM is now being sued by employees who were laid off for age discrimination, while others are organizing union efforts to protest the offshoring of once prestigious positions with the company like computer programmer. Thousands of IBM employees are dissatisfied with the firm’s recent actions, arguing that the company’s brisk profits posted for last quarter and its surge in stock prices is due to downsizing and not increased productivity or sales, “Dozens of interviews with IBM workers suggest that job dissatisfaction may be the new norm at America’s blue-chip firms; disgruntled workers think IBM has achieved its rose numbers largely at the expense of employees” (Newman 36).
Yet IBM, like many American firms, is in a bind because of consumer demands for inexpensive technology. DVD plays at Wal-Mart are retailing for $49 and corporate executives are demanding similar deep discounts from tech firms like IBM. In an economy with suppressed prices, consumers have the upper hand. As John McCarthy of Forrester Research maintains, “IBM is under intense cost pressure. And the most expensive cost item is people” (Newman 36). Adding to IBM’s dilemma is the fact that almost half of its revenues accrue from IBM Global Services, a consulting branch of the company that is much more labor intensive than building mainframes for computers or designing software. Employees have become more anxiety ridden as IBM pledged to slash costs up to $7 billion a year to keep profits rising in order to satisfy Wall Street investors (Newman 36). Many other companies are in a similar bind in light of the economy, consumer demands, and increased competition on a global scale.
Kodak is another major American firm suffering from the need to innovate and cut costs to remain competitive and p...