Translated by
2019/08/01 15:46:48

Work and personnel management in IBM



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Dismissal up to 100 thousand people for several years

At the end of July, 2019 it became known that for the last several years IBM dismissed from 50 thousand to 100 thousand employees. The company updated personnel to be attractive to young specialists. The former human resources vice president in IBM Alan Wild said it on court session, to the devoted class action for age discrimination in the American technology giant.

According to Wilde, IBM had problems with involvement of professionals therefore the company decided to show to the younger generation that it "not old and not backward company the organization", and "abrupt trend" the company as Amazon and Google. For this purpose IBM began to dismiss age employees.

IBM dismissed 100 thousand employees in recent years, but the company also recruits new employees
IBM dismissed 100 thousand employees in recent years, but the company also recruits new employees

IBM confirmed large-scale departure of employees within several years, but emphasized that the company actively recruits other specialists.

For the last five years we again invented IBM to offer our clients more valuable opportunities. The company employs 50 thousand workers every year — Bloomberg quotes the statement of IBM.

As notes news agency, nearly seven years of IBM tried to stop falling of revenue therefore the company dismissed thousands of people in the USA, Canada and other countries with high salaries to cut down expenses and to requalify personnel on cloud and mobile computing which the corporation mastered with lateness.

By the end of 2018 the number of staff of IBM reached the lowest value in six years: then the company had  350,600 employees that is 19% less in comparison with 2013.[1]

Against the background of high routine of the personnel to IBM numerous claims from the former employees accusing the company of discrimination on age began to arrive. So, the class action from elderly employees in Manhattan and also a number of personal civil actions in Pennsylvania and Texas was submitted.

Dismissal of 1700 people

On June 6, 2019 it became known of mass layoffs in IBM. About 1700 employees got laid off.

According to CNBC with reference to the informants, IBM liquidates about 0.5% of the state. Number of staff of corporation by the end of March, 2019 contained 340 thousand human.

IBM reported that reduction concerned "small percent" of jobs. The exact number in the company did not begin to be given.

IBM dismisses 1700 people for business optimization
IBM dismisses 1700 people for business optimization

According to CNBC, staff reduction is caused by business optimization against the background of acquisition of Red Hat for $34 billion and focus of IBM on new sources of growth.

We continue to transfer people in our command that it was possible to be guided by the most important segments of IT market. At the same time we further actively hire new employees in crucial areas which bring benefit to our clients and IBM — the representative of the company told TV channel.

Really, IBM not only dismisses, but also gathers personnel. For example, by June 6, 2019 on the website of IBM more than 7700 open vacancies are specified.

The staff of IBM will significantly be increased after closing of the transaction on acquisition of Red Hat company in which by the beginning of June, 2019  13,360 employees worked.

In April, 2019 IBM announced closing of the enterprise in Singapore in this connection about 600 people were dismissed. 

The plant under the name Singapore Technology Park which IBM opened in 2010 was considered then as one of the production facilities which are most technology advanced in the world. There were issued meynfreymyibm Z, and after closing their production is transferred to factory in New York.

The Singapore workers who got laid off now were notified on it at the beginning of March, 2019. Will pay them compensation in the amount of one monthly salary.[2]


IBM ceased to require the higher education at employment

In August, 2018 the large recruiting agency Glassdoor provided results of a research in which called the large companies which ceased to require the higher education at employment. Among such corporations Apple, IBM and Google appear. Read more here.

Discrimination of age employees

In March, 2018 it became known of age discrimination in IBM, despite the law existing more than 50 years in the USA protecting such employees.

According to the The Verge edition,   the ProPublica and Mother Jones editions published results of investigation which showed that for the last five years of IBM dismissed about 20 thousand American workers aged from 40 years. About 60% of the personnel of IBM reduced in five years were the share of those who were 40 years old and more. And real digit of reductions "almost for certain above", journalists note.

According to them, among personnel which got under age discrimination there were many veterans of IBM who worked in corporation several decades. On places of elderly specialists "less experienced and low-paid" successors were accepted. Or duties of the dismissed people were transferred to the staff of foreign divisions.

IBM gets rid of employees 40 is more senior
IBM gets rid of employees 40 is more senior

The report made according to the results of investigation contains the questionnaires completed with more than 1100 former employees of IBM which shared the work experience in the company gave an interview, shared white papers, etc.

Reduction of number of staff is more senior than 40 years matched transformation of business of IBM when the company focused on cloud services and technologies of data analysis. Within the IT giant conversions wanted to achieve more "the suitable list of age workers" and "increase percent of young professionals", according to the presentation which were opened to reporters by heads of IBM among whom — the vice president of personnel department.

It is reported that IBM pushed employees to dismissal at own will not to worsen public statistics of reductions. Also the fraudulent courses were undertaken: employees, withdrawal from whom of the company was defined, received offers to write applications for transfer to other divisions, and to heads of the last received recommendations not to take them to themselves.

Even if someone managed to pass into new departments, it became much heavier to work there, paid them less and reduced various privileges. Employees forced to sign the document in which they agree that the severance pay can be received only through the arbitration court, having recognized that IBM mistakenly broke laws on discrimination on age.

IBM did not give more senior employees information put under the law which would help them to understand that they became the victims of age discrimination. Besides, recommended to sign with it disclaimer on judicial proceedings in the future, said in the report.

Ex-employees of IBM told that suddenly heads began to carry out much more tough audit of efficiency evaluation of work. Some employees did not have choice except how to sign the agreement on early retirement with compensation payment — otherwise them could dismiss in one afternoon. Much left IBM then it was difficult to find new work location.

It is heavy when you worked all the life on one place. As soon as you reach certain age, your requests for vacancies remain meek — the former senior manager of IBM Brian Paulson who was unexpectedly dismissed after 18 years of work in the company reported.

Since 1967 in the USA the law protecting workers works 40 years from age discrimination in "hiring, promotion, dismissal, compensation or rules and conditions of employment" are more senior. Nevertheless, it does not prevent corporations to implement "vicious" practicians, especially in the last 20 years, note in ProPublica  and  Mother Jones.[3]

Staff reduction in division of IT services

In January, 2018 it became known of significant reduction of staff in division of global IT services of IBM. At the same time employees will not be dismissed, and will move to other structures of the company. Read more here.


Increase in payments for adoption by same-sex partners

On October 25, 2017 IBM announced building of corporate expenses on the employees going on a maternity leave on child care. Increase four times in the amount of compensations for same-sex parents became one of points of the new program.

According to the blog posting of IBM, duration of a paid leave on child care for mothers working in the company is increased from 14 to 20 weeks. Calculation was made, that after the patrimonial act the woman loses normal working capacity approximately for eight weeks.

From 6 to 12 weeks of IBM increased the paid decree on child care for fathers, same-sex civil partners and adoptive parents.

IBM prolonged a paid leave on child care up to 20 weeks
IBM prolonged a paid leave on child care up to 20 weeks

Besides, the corporation promises to compensate costs for surrogacy or adoption at the rate to $20 thousand, including for homosexual partners. Before this amount was $5 thousand.

Review of family policy in IBM was explained with several reasons. First, by  estimates  of Pew Research Center, the number of the American households where both parents are employed, grew from 31% in 1970 to 46% in the 2015th, and, secondly, according to data  of Center for American Progress, in 2015 65% of mothers in the USA were the only, main or second supporter in family. Besides, fathers play the increasing role in education of children  and even more often children are brought by same-sex couples.

Employees of IBM who became parents after November, 2016 will be able to use innovations.

Those staff of IBM, whose children needs special support and leaving, will be able to expect money payments from the employer at the rate to $50 thousand. Compensation covers any services necessary for children with intellectual and physical backwardness in development.

Besides, IBM saved the program of delivery of milk to children at whom the feeding mothers were forced to go to a business trip.

As the situation with the working parents changes, obvious is the fact that there is no uniform approach in problem solving which parents who combine every day family and work outdoors face — the vice president of IBM concerning privileges Barbara Brickmeier reported.

As notes the edition TechCrunch, IBM - it is the nonunique IT company giving a financial support by child care leaves. So, Facebook offers four months of a paid leave for all new parents (irrespective of the fact how they them became), Netflix — 12 months.

IBM reviewed the policy on support of families of employees
IBM reviewed the policy on support of families of employees

The American laws do not assume maternity leaves with preserving of contents. Workers can leave only for 12 weeks at own expense, and that if is women with full employment in the medium-sized and large companies. However some firms, especially in the hi-tech sector, even more often use the paid decrees as a method to attract and hold personnel. Thanks to their efforts 12% of Americans have access to the paid maternity leave, data of the Bureau of Labor Statistics of the USA demonstrate (as of 2017).

In PL+US non-profit organization which supports introduction of privileges within child care every fourth woman to the USA returns to work already 10 days later after the child's birth, and access to the paid decrees have access of only 6% of the population with small income. 

The large American companies often pay a maternity leave only to the employees holding more highly paid positions: probability to receive a paid leave on child care twice higher for the people earning $75,000 a year is reported in PL+US.[4]

The staff of the company in India became more, than in the USA

At the end of September, 2017 it is known that the staff of IBM corporation approximately on a third consists of residents of India. According to the CNBC edition, in the homeland of chess and yoga the American IT giant has about 130 thousand employees — more, than in any other country.[5]

For IBM which for 21 quarters in a row suffers because of decrease in revenue, employee involvement from India — a key component of strategy of the company on cost reduction. However, Blue Giant not the only American company using foreign countries as "source of manpower". In staff of other technology corporations from the USA, including Oracle and Dell, also prevail the employees living outside their country. Unusually the preference of one certain state looks: in India at IBM more people, than even work for it in the homeland, in the United States.

The staff of IBM approximately on a third consists of Indians
The staff of IBM approximately on a third consists of Indians

According to the edition, since 2007 the staff of the Indian division of IBM almost doubled. At the same time the number of employees in the USA during the same period decreased as a result of reductions and an asset sale. IBM does not disclose information on exact number of workers, but on estimates of detached onlookers, significantly less than 100 thousand people are engaged in the American business of corporation today though in 2007 about 130 thousand residents of the USA worked there. Data of the American recruiting Glassdoor portal demonstrate to what depending on a post, salaries to the Indian employees are from a half to the fifth part of the salaries paid to Americans.

Professor of economy of the University of Massachusetts in Lowell (University of Massachusetts in Lowell) William Lazonick studying business globalization notes that IBM and other technology giants significantly won thanks to cheap, but at the same time to technically qualified and knowing English labor power from India.

Not in IBM it was thought up, but IBM would be absolutely other company if not India — the specialist said.

According to the head of IBM India Vanitha Narayanan who before moving to the country in 2009 for 12 years worked for IBM in the USA and China, its division is in literal sense IBM corporation in a miniature.

In an interview to the Narayanan agency also noted that the choice fell on India absolutely not accidentally. The decision on where to concentrate the labor resources, was accepted proceeding from in what country sufficient qualified personnel and also taking into account budgets of clients, the top manager explained.

IBM which opened the first Indian offices in Mumbai and Delhi in 1951 extended through the whole country today and has offices in Bangalore, to Poon, Calcutta, Hyderabad and Chennaye.

The most part of personnel of IBM in India is engaged in the core business of corporation connected with providing computer and IT services to the large companies, such as AT&T, Airbus and Shell. The Indian staff of IBM renders consulting services, develops the software and monitors work of cloud services of many banks, telephone companies and state organizations worldwide. Also they are engaged in the advanced researches in the field of technologies of visual search, artificial intelligence and machine vision. One of the Indian groups even developed for creators of the children's telecast Sesame Street cognitive mobile application for development of the speech of children.

Reduction of number of business trips

In June, 2017 it became known that the management of IBM demands from employees of approval of all business trips. The company saves, however it does not prevent top managers to use helicopters in working visits.

The The Register edition was provided with the copy of the letter distributed among the staff of representative office of IBM in England and Ireland. It is said in the statement that all Global Technology Services working in division of IT services people should approve any business trips (irrespective of the volume of required expenses and a reason for a business trip) with the head of office Kolandzheli's (Tosca Colangeli) Melancholy.

Earlier IBM reduced number of meetings of employees with clients by their territories, having limited expenses on each such trip to 75 pounds sterling (nearly 100 dollars).

It is entrusted to finance divisions to give failure by that who already got approval on assignment for business trips regardless of business project value. To receive affirmative answer, the project manager should write the application by e-mail personally to Melancholy, said in the letter to the staff of IBM.

Insider sources of The Register confirmed failure on already approved requests.

Apparently, we should return from trips which cost money. Now it became almost impossible to get approval if only you do not fight for it — the interlocutor working in IBM reported.

In the separate message for personnel IBM stated that the employees who went to departure to customers will be insured in IBM Life Assurance.

IBM cuts down expenses against the background of drop in sales within 20 quarters in succession. However, most likely, economy does not concern the top management of the company. In May, 2017 the president and the CEO of IBM Ginni Rometty arrived in the British research laboratory in Hyorsli by helicopter (see video above).[6]

Failure from remote work for benefit of office

In March, 2017 it became known of shift of IBM in the field of job management. If earlier the company willingly offered employees remote work, then then preferences changed for benefit of offices.

According to the Quartz edition, about 2600 employees of marketing department of IBM to the USA and also a part of the employees working in IT, purchases and projects based on Watson are informed on need of work for offices for one of six American cities: Atlanta, Austin, Boston, San Francisco, New York or Roly.

Earlier the company willingly offered employees remote work, but then preferences changed for benefit of offices
Earlier the company willingly offered employees remote work, but then preferences changed for benefit of offices

The removed personnel received adequate notices at the beginning February, 2017. If these employees refuse to move to the appointed city, they will have to leave IBM.

The representative of IBM reported to the Business Insider edition that the company decided to send many teams of marketing specialists at once to offices as requirements of the modern market are like that. At the same time other departments transfer to office operation mode gradually.

Marketing is not any more cascade workflow when work is transferred from one person to another. It is cyclic process in which effects of changes in campaigns can be understood at real-life communication, and response to them will happen in real time — reported in IBM.

According to the marketing director of IBM Michelle Peluso, for some staff of IBM transition from not tied to work location on office will be heavy. One of employees of IBM was recognized as Quartz that the moral spirit in the company appeared in decline after the declaration of need to visit office.

IBM increases the staff of office workers after long-term development of remote work. During the period from 1995 to 2009 the company reduced the area of office spaces on 7.2 million square meters that allowed IT giant to save more than $100 million. By 2017 approximately every fourth working American in a varying degree uses opportunities of remote work.[7]

Reductions of thousands of jobs

On January 23, 2017 it became known of mass layoffs in IBM. At the same time earlier the management of corporation spoke about plans to increase the state in the USA and to spend $1 billion for its training.

As the being and acting staff of IBM told the Bloomberg agency, at the end of November the company completed at least the third round of reductions of jobs for 2016 therefore works lost thousands of people. The most part of dismissals concerned divisions of the company in Asia and Eastern Europe.

Ginny Rometti
Ginny Rometti

In January, 2017 IBM began to notify some workers in the USA on need to leave the company through some time. In particular, such notifications received the corporations serving service business, one of the staff of IBM reported the edition.

In December, 2016 the head of IBM Ginni Rometty said that in four years the number of staff of the company in the USA will increase by 25 thousand human. The representative of IBM Doug Shelton confirmed to Bloomberg this plan, but did not begin to comment on dismissals in 2016. They only noted that the routine of the personnel in the company was always less mean value in IT market.

Ginny Rometti dismisses thousands of IT employees and behaves as some hero who tries to employ 25 thousand human. On me, this hypocrisy — the lawyer of the organization for protection of the rights of the American working Protect U.S said. Workers Sara Blackwel representing the interests of 100 ex-employees of IBM who accused the former employer of discrimination and other violations.

After Rometti announced plans of IBM to increase the state in the USA, at forums and on social networks a huge number of messages from the dissatisfied staff of the company appeared. Some complained that the new wave of acceptance of workers does not compensate long-term outflow of jobs abroad, and others predicted mass layoffs in IBM at active hiring of new people.[8]

2016: A promise to the president Trump to increase the staff on 25 thousand people in three years

On December 13, 2016 IBM announced a staff increase on 25 thousand jobs. The statement was made before a meeting of the CEO of the company Ginni Rometty and heads of other American IT companies with the elected president USA Donald Trump.

In a conversation with the USA Today edition Rometti reported that by the end of 2017 of IBM she will employ 6 thousand new workers, and in three years the number of staff of the company will increase by 25 thousand people concerning the end of the 2016th. It is supposed that the most part of the employed employees will work in the USA.

Ginny Rometti announced a personnel increase on 25 thousand human
Ginny Rometti announced a personnel increase on 25 thousand human

Besides, IBM is going to invest $1 billion in learning process and improvement of the employees. This money will be spent during the period which will last till 2020.

By the end of 2015 in IBM  377,757 people worked. In 2014 the number of employees of the company was laid off by 12%, and the previous year the staff of IBM decreased for the first time in the history of corporation.

According to Ginny Rometti, the main problems in the personnel market are connected with the working positions created as a result of development of new technologies. It is, for example, about specialists in cloud computing and providing IT services. Such positions are taken hardly as require certain highly specialized knowledge and skills. By estimates of the head of IBM, by the end of 2016 more than 500 thousand vacancies connected with IT and allied industries remain open in the USA.

For correction the situation of IBM practices non-standard approaches in training. The company developed for the six-year higher school the new educational model combining traditional objects with knowledge and skills which can be received in colleges, at work and at occupations with tutors. Such school was open in New York in 2011.[9]


Fine of $250 million for economy on pensions of employees

At the end of July, 2015 IBM warned the American finance regulators that the company, perhaps, should pay a quarter of one billion dollars if in Great Britain the appeal on court's decision concerning economy of corporation on pensions of the employees will not be allowed.

In 2009 British "subsidiary" of IBM recorded pensions to employees depending on salary and an experience. Accumulation of preferential payments was stopped, and increases in payments or an additional experience ceased to influence the size of retirement benefits. In exchange the percent of contributions from salary to the pension fund was increased.

The company warned that it, perhaps, should pay a quarter of one billion dollars if the appeal on court\'s decision on pension reform will not be allowed
The company warned that it, perhaps, should pay a quarter of one billion dollars if the appeal on court's decision on pension reform will not be allowed

At the expense of these measures of IBM was going to reduce budget deficit of the pension fund by 890 million pounds sterling (about $1.4 billion). However employees of the company dissatisfied with reform submitted a set of claims (about 290 from 2010 to 2015) against the employer.

In April, 2014 the London judge Nicholas Warren rendered a verdict according to which IBM reduced pension benefits about 5000 employees, having misled them the statements and not having fulfilled pension provision obligations. The IT giant submitted the appeal, claiming that pension reform was explained to employees most clear and is transparent. At the same time IBM prepared for a penalty.

According to Bloomberg with reference to documents which IBM sent to the U.S. Securities and Exchange U.S. Securities and Exchange Commission at the end of July, 2015 in case of a rejection of the appeal of IBM should return the former scheme of pension assignments. At the same time the company will have to write off $250 million and also to make the additional fixed payments connected with pension accrual. Decision by the British Court of Appeal is expected not earlier than 2016.[10]

Media: IBM can dismiss 112 thousand more employees

In January, 2015 media were written that almost every fourth employee of IBM can be dismissed. If information is confirmed, the company will be overflowed by the biggest wave of staff reduction in its stories.

The Forbes edition with reference to own sources announced intention of IBM to reduce nearly 112 thousand jobs that approximately corresponds to 26% of all staff of the American corporation.

IBM can dismiss 112 thousand employees

The most part of the program of reorganization which received the secret name Project Chrome will concern personnel of IBM in the USA, however dismissals will happen in all regional representative offices. At the time of writing of the publication the Russian office IBM refrained from comments about dismissals of which the press knew.

According to Forbes, the management of IBM will announce liquidation of working positions at the beginning of February, 2015, and until the end of the same month the laid-off employees will have to leave the places.

Before the biggest dismissal of employees of IBM was dated 1993 when the company was left by about 60 thousand human. In 2013 from 6 to 12 thousand employees of IBM worldwide, including 3.5 thousand serving in the USA were dismissed.

The wave of mass reductions in IBM can become logical result of long financial recession of corporation. In October-December, 2014 revenue of the company dropped by 12% year on year, having made $24.1 billion, and this quarter decrease was the 11th in succession. In 2014 sales of "the blue giant" fell by 6% to $92.8 billion.

According to the chief executive officer of IBM Ginni Rometty, the company is in process of transformation of business and already achieved considerable results in it. IBM stakes on long-term investments and reference points, Rometty said.

The main problem of IBM because of which the corporation, perhaps, decided to resort to large-scale reductions of jobs is in the outlined trend within which the companies transfer the infrastructures of data storage to a cloud worldwide, refusing own physical data centers. The related services and the equipment bring to IBM two thirds of income therefore recession of this business affects the general financial results of the producer. In these conditions the company pays more and more attention to the cloud direction from revenue in which reached 2014 $7 billion (+60% by 2013).

2014: The staff of IBM in a year was cut down for 12%

In March, 2015 it became known that the total number of personnel of IBM was reduced by 12% in 2014. It is connected with reorganization within which the company displaces business accents, getting rid of the non-profitable directions.

By the end 2014 the staff of IBM totaled 379,592 persons worldwide that is 51,600 staff less, than the previous year. As of the end of 2013 in the company 431,212 people worked.

The most part of employees (about 35 thousand) who left IBM in 2014 represented the divisions sold by the company, including those that were responsible for release of servers on architecture of x86 and microelectronics — these structures got according to Lenovo and GlobalFoundries for $2.1 billion and $1.5 billion.

In 2014 the staff of IBM was cut down for 12%

According to the analyst of Pund-IT Charles King, the IBM corporation is focused only on profitable segments of corporate IT market, getting rid at the same time of low-profitable.

In particular, IBM stakes on the cloud market where sales at the company increased by 60% in 2014 in comparison with the 2013th, having made $7 billion Besides, "the blue giant" pays special attention to mobile and analytical technologies and also solutions in the field of information security: there income jumped by 200%, 7% and 19% respectively in 2014.

It should be noted that the staff decrease which happened in 2014 was the second in a row. Till 2013 the company dismissed people, without compensating it by new employees, only in 1993-1994 when the vendor was on the verge of bankruptcy.

In 2014 IBM not only reduced jobs, but also employed new people. The representative of the company Clint Roswell reported that in 2014 45 thousand people were employed, and by March, 2015 opened worldwide there are 15 thousand more vacancies for specialists in the field of cloud computing, analytics, cyber security, social networks and mobile solutions.[11]

These markets by which IBM is guided have high potential which is not realized completely yet, Charles King noted.