IBM staffers climb over each other in race for redundancy payout

IBMers working in the Systems Middleware (SM) division are falling over themselves to volunteer for redundancy, with the programme heavily oversubscribed.

Some 110 people want to leave the company with a big fat cheque, which is way more than the ten per cent of the division’s 736-strong workforce that IBM had in mind.

The voluntary redundancy process is “coming to an end”, one insider told us. “Staff have applied for the package, some will get an offer, others won’t.”

IBM does not recognise trade unions and so set up an Employee Consultation Committee for Platform, Integration and Smarter Process staffers in SM last month to respond to questions.

One point raised by the ECC was how IBM will determine who gets voluntary redundancy if too many people held their hand up.

Rather unhelpfully, Big Blue told the group “offers will be made on the voluntary selection criteria determined by the business”. That’s about as clear as CEO Ginny Rometty’s plan to replace tumbling revenues from the classic business with technology that is sold as a service.

The ECC also asked why job cuts are required when the Message Queue and Integration Bus products in the wider division are profitable, and the risk this poses to future deliveries.

“Transactional revenues is predicted to decline and a result an appropriate revenue plan has been booked. The business model must be optimised to realign to this new plan,” IBM told ECC.

“The objective is to realign the business’s costs to business objectives," said Big Blue, adding that it has already taken measures to help it meet targets, outside of redundancies.

“All business areas have tightly controlled expense management systems in place” to help it meet top and bottom line forecasts, it said.

“Spending and travel restrictions have been implemented to manage costs. These are property portfolio projects which are ongoing and are aimed at reducing overall occupancy costs across IBM UK,” the response to the ECC states.

SM staffers asking for redundancy will leave on 5 April, and compulsory lay-offs are not expected - at least, by employees.

Big Blue has restructured internal divisions, placed all its bets on the cloud and is cutting costs by reducing its worldwide headcount. This follows eleven straight quarters of revenue decline.

IBM previously said it would take a $600m restructuring charge to expunge several thousand people this year, although the number of leavers depends on their seniority and pay scale.

Voluntary redundancy programmes were already run in marketing and Global Business Services prior to Christmas, and both were heavily oversubscribed. IBM told the ECC recently that it could seek out redundancies in the same departments again this year.

We asked IBM for comment but it rolled out the same paragraph it has since the restructure began. We give you:

“IBM continues to rebalance its workforce to meet the changing requirements of its clients, and to pioneer new, high value segments of the IT industry.” ®