How IBM quietly pushed out 20,000 older workers

How IBM quietly pushed out 20,000 older workers

Imagine it’s 1980. Mullets are cool. The Empire Strikes Back is playing in theaters. And International Business
Machines or IBM is the world’s dominant technology firm. It embodies the American
Dream with a progressive agenda of equal opportunity and prides itself on a
stable workforce. It’s so thrilling to see the new IBM personal system – in the
hands of an old master. According to this handbook in over 40 years, full-time
employees haven’t been touched by layoffs. People are a treasured resource
and are treated like one. Fast forward to the present. ProPublica estimates IBM has eliminated 20,000 American employees age 40 and
over in just the past five years. That’s about 60 percent of its estimated US job
cuts during that time. How did IBM go from valuing its older workforce to
systematically getting rid of them? Through the ’80s, technology started shifting rapidly. Among other things, Apple
introduced the first Macintosh and took a direct shot at IBM. It appears IBM
wants it all. By the early 2000’s IBM fell further as new rivals like Google,
Facebook, and Amazon took the lead. In our world the speed and tempo of modern
living are increasing at an ever-accelerating rate. And as it slipped,
IBM had to deal with something most of these competitors didn’t have: a large
number of experienced and aging employees. They reacted to new setbacks
with layoffs and many of them were older workers. ProPublica heard from over 1,400 former IBM employees. Here’s what we know. In making staff cuts, IBM has side-stepped US laws and regulations intended to
protect workers from age discrimination. In the past, they would get two lists
from IBM. One that had ages of people staying and another with ages of those
being let go. In 2014 IBM stopped giving that information. On top of that, the company required people to sign away their rights to sue for age
discrimination in court, in exchange for their severance packages. By signing the
documents, laid-off employees waived the right to go to court. They could only
pursue their age cases through confidential arbitration. They also have
to do it solo, so they couldn’t combine forces with other workers who may be
claiming similar age discrimination. Studies show arbitration overwhelmingly
favors employers. Workers win only 19% of the time, when their
cases are arbitrated versus 36% of the time when they go to
federal court and 57% in state courts. IBM has also laid off and fired
some older workers with review techniques that effectively made their
age a disadvantage. Take the case of one business unit that was using a point
system to evaluate workers. The more points a person got, the more protected
they were from negative changes to employment. But the system itself
appeared biased. Employees were given points for being relatively new at a job
level, so those who worked there fewer years earned more points than long time
IBMers. The bias against older workers is
evident when you compare the number of points to years of service. Those with no
points worked there an average of more than thirty years. Those with higher
points average fifteen years. But the numbers don’t
reflect worker skills. 80% of older, more long-term employees, the ones with lower
points, were rated by the company itself as “good enough to stay at current job
levels or be promoted”, while only a small percentage of younger employees with
high numbers had similar ratings. They’ve also converted many layoffs into
retirements, forcing ex-employees to accept a retirement package or leave
with no benefits. They’ve told remote workers, including older ones who had
worked from home for years, to relocate to offices potentially thousands of
miles away from their homes. Their options were relocate or resign. In response to all of these findings IBM has said “we are proud of our company and
our employees ability to reinvent themselves era after era while always
complying with the law.” The problem is protection for workers under the law is
eroding. In the past few decades, rulings in age discrimination cases have said
former employees must prove that there were no factors other than age involved
in their job changes, but companies like IBM have made it near impossible to
prove that. With nearly 400,000 employees worldwide, IBM is still a tech giant. And how it handles its older workforce could encourage other companies to follow suit,
even though a lot of these companies have a younger workforce now. Here’s the thing about aging: it happens to everyone


34 thoughts on “How IBM quietly pushed out 20,000 older workers”

  • Anyone in the tech industry with contacts at IBM would know this is true… it's been happening since the late 90s.

  • 0:50 60 per cent of those affected by IBM's job cuts were 40 years or older. 

    Think about that. 

    IBMs employees mostly went to college first, so they start working with something like 23 years. Then they work till they are at least 60. 

    This means, that roughly 20/37=54 % of IBM's employees are older than 40. Sorry, but I cant conclude a discrimination by the 6% difference. (I think the difference is actually even smaller since the baby boomer generation probably also represents more employees)

  • Gijs van der Giessen says:

    It does not make any sense to me. Why would a company be firing older workers in non-physical very high-skilled labor? You’d think that experience is what brings in the dough. I mean the difference between a smart and a skilled person is experience… I’m not seeing the benefits.

  • This makes me livid with anger. I thought 50 was the cut off, the disposal age, and now it appears to be 40. Older workers are deemed useless, but older executives are considered valuable and worth millions in compensation. What hypocrisy. Are they not subject to the same degradations of age – rotting neurons and slowed reflexes, collapsing health? The only solution is for workers of all ages to disavow loyalty and to always seek greener pastures, and to ensure their own retirement and security.

  • Sixth of July says:

    So are those younger people just supposed to waste their degrees on another job when they’ve worked hard to get the education to fill it? I mean it’s only natural to move the old workers out and bring in new workers as the older ones have for many decades now, been working longer, meaning positions that would have normally invited in new fresh thinking to the company instead forcing a gap in the generations work force now creating a roadblock, with older workers now being kept sometimes an entire decade longer. The workers that seem to be out of luck more than likely haven’t saved their large salaries instead opting to buy nice stuff. What companies should do it help organize their workforce to save money for retirement and make it clear in the beginning that current methods are allowing workers to stay far to long she it’s like keeping 10 boxes on a conveyer belt after it passes it’s destination when it’s time to put 100 new ones on it, and the belt only holds 100..

  • In IT if you dont update yourself, you will be taken out.
    In other industries, technologies dont change so rapidly and you will still be valued for your management skills.

  • So why isn't Trump the Dump and his so-called "best government" in the world doing anything about it?'s because they are the American government is the "best government in legalizing corruption" :). That's why…don't act holier than art thou with other people around the world when your backyard is itself a filthy garbage dump. Talk about government stifling their people's welfare…hahaha. Change the Trump's 2020 slogan to "MAKE AMERICA A JOKE AGAIN"

  • Today's generation is a lot more creative and is a lot more used to a world where tech is key and may even have a basic engineering course somewhere in their school.

    Older people are experienced with ancient tech. Tech that today's generation has never even heard up. It's important to have employees who are more creative but older employees just need to be in like a different department and maintain older tech. No kid would ever be interested in learning about a world where tech was a lot more limited. Older generations have perhaphs mastered the ancient tech world.

  • Rex II ForSure says:

    IBM targeting older workers, not good, disgraceful! None of my kids and grandkids will ever work for that loser company!

  • Wow, I had no idea about this. I hope IBM gets trashed in the court of public opinion and loses a lot more money than if they never discriminated in the first place.

  • GE does this too. They did this to my mother, said she missed to many days but hadn't used anymore than what they said she was allowed. Too many doctors appointments and they let her go. Turns out she had cancer, we learned this after she was let go. After some talks, GE settled, and paid my mother a monthly retirement.

  • For anyone who is an IT graduate and you want to get a job you will be able to keep forever: Get a job with the government. Sure, work for IBM for those 10 years from age 28 to age 38, but when you get fired for some made-up reason, go and apply for a government position managing computer resources, (or even working as a janitor somewhere), and your job will be 10-times more secure than for working for a private company.

  • Does this have anything to do with the fact that in Us the employers are somehow responsible for providing their employees with health care? And older people are viewed as more costly?

  • If all their employees are old, they will all retire in 15 years and leave them with nothing. Most tech companies have healthy high turnover to make this a non-issue.

  • Why did they sign such ridiculous severance packages?
    Seems to me, everything could have been contested without the restrictions enforced by those packages, so don't sign them, play the long game…

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