IBM Rolls Out New Job-Cutting Plan In The Netherlands - InformationWeek

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IBM Rolls Out New Job-Cutting Plan In The Netherlands

According to a leaked company memo, IBM is imposing involuntary job cuts in the Netherlands for the first time. Does the move serve as a template for Big Blue to impose forced layoffs in regions where local labor laws have made it difficult to impose mandatory cuts?

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IBM issued a company memo this week stating it would institute involuntary job cuts for the first time in the Netherlands, adopting a new and permanent workforce reduction strategy in the region. The effects could be far reaching.

Lee Conrad, a former IBM employee who oversees Watching IBM, a Facebook page that tracks Big Blue's workforce cuts, told InformationWeek the move may serve as a template for Big Blue to impose forced layoffs in regions where local labor laws have made it difficult to impose mandatory cuts. IBM Netherlands, for example, previously was only subject to voluntary job cuts, according to Conrad.

"In many of the European countries, the cuts historically have been voluntary. This is because of the existence of works councils and unions inside IBM. Labor laws are also more favorable to workers," said Conrad, who previously oversaw the now defunct union organizing effort called [email protected]

He added IBM's effort to spread this practice across Europe and other regions will likely increase.

"IBM wants to rid itself of more employees than will volunteer to leave," Conrad said in our interview. "IBM also wants to terminate workers in selective areas and not rely on volunteers. IBM is also shedding business units in countries like Germany and Italy and either selling them to other companies or moving them to low-cost countries like India or countries in Eastern Europe."

An IBM spokesman, while not specifically addressing the job cuts in the Netherlands, told InformationWeek, "As reported earlier this year, IBM is transforming its business to lead in a new era of cognitive and cloud computing. To this end, IBM currently has more than 25,000 open positions, many in these key skills areas. If IBM meets its hiring goals, we expect to end the year with around the same number of employees [as] at (year-end) 2015."

IBM had 377,757 employees at the end of 2015, according to its annual filing with the Securities and Exchange Commission. That is down from the 379,592 employees it had in 2014, according to its SEC filing.

(Image: Valerie Loiseleux/iStockphoto)

(Image: Valerie Loiseleux/iStockphoto)

A copy of the IBM Netherlands' layoff memo was posted on the Watching IBM Facebook page and shared with the IBTimes UK. The IBM memo stated:

In today's world, those who do not keep reinventing themselves, fall behind. The demand of the market for new skills and capabilities, is changing fast due to new technologies and changing business models. Our customers have a need for new insights, knowledge and capabilities, making the existing expertise redundant. That is why the optimization of our workforce is a permanent and ongoing part of our business model.

In essence it means rebalancing the number of employees currently working for IBM in The Netherlands and this through an involuntary program. And that is unique in the history of IBM Nederland.

In the past IBM implemented successfully voluntary leave programs. This time the number of places we need to rebalance is too large. The impact of another voluntary leave program will weigh heavily on the organization. We would need to address too many of our co-workers to realize the reduction we envision. An involuntary program allows us to implement a very targeted program, impacting only those employees whose job will be made redundant or made redundant by IBM's transformation. We do not see any other option than to rebalance our workforce through an involuntary leave program. And that is a hard call to make.

Although IBM does not publicly release details of its layoffs, a Wall Street analyst estimated Big Blue would cut as many as 14,000 workers worldwide in the first quarter of this year. Another analyst estimated upwards of 25% of the company's entire global workforce, or 95,000 workers, would be cut by the end of 2016.

Conrad said IBM employees and former employees who share information with Watching IBM have indicated they expect 350 people to be affected by the IBM Netherlands layoffs.

According to Conrad, current and former Big Blue employees have reported 900 jobs cut at IBM Germany this year, affecting areas such as its Global Business Solutions, Management & Business Support, and Business & Technology Services operations. In addition, Conrad said, reports have come in of 360 IBM layoffs in France, and 233 IBM job cuts in Belgium.

[Read IBM Denies Layoff Size as Salesforce CEO Woos Talent.]

The European Works Council (EWC) issued a statement regarding IBM's job cuts in the region. According to the EWC, six weeks after its Jan. 27 job cuts, IBM announced on March 16 a second headcount reduction almost 50% higher than the first round of cuts. The EWC did not specify the number of jobs actually cut, but rather provided a percentage of the anticipated workforce affected.

"New in IBM's restructuring approach is the strong focus on involuntary reductions," the council said. "The EWC has never agreed with restructurings, but could not be against a voluntary, fair and respectful approach. Now IBM clearly seems to break with that tradition and choses [sic] to apply involuntary, US based methods in Europe as well."

What is the takeaway for US IBM employees as Big Blue employs a new job cut strategy in Europe?

According to Conrad: "That the future for employment is bleak and that no one is safe."

Dawn Kawamoto is an Associate Editor for Dark Reading, where she covers cybersecurity news and trends. She is an award-winning journalist who has written and edited technology, management, leadership, career, finance, and innovation stories for such publications as CNET's ... View Full Bio

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tjgkg
50%
50%
tjgkg,
User Rank: Ninja
8/3/2016 | 1:01:38 PM
Re: IBM has been getting More Lean
Selling hardware like PC's is much different today than in the old days when IBM sold mainframes and early PC's which were built like junior mainframes! Like TV's and phone's, hardware is disposable and obsolete quickly. Unless you are in the US Government... IBM was smart to recognize the profitability of the IT service industry even though i miss OS/2.
vnewman2
50%
50%
vnewman2,
User Rank: Ninja
7/12/2016 | 1:41:03 PM
Re: IBM has been getting More Lean
True, when they lost the PC game, at least they had the sense to get out while the getting was good.
tjgkg
50%
50%
tjgkg,
User Rank: Ninja
7/11/2016 | 4:04:56 PM
Re: IBM has been getting More Lean
They've also gone from making computers, operating systems and software to more of a services/consulting type of company. It is much different from the days of the microchannel PC and OS/2!
tjgkg
50%
50%
tjgkg,
User Rank: Ninja
7/11/2016 | 4:02:59 PM
Re: Sad
Unfortunately nobody is safe anymore. From what i have seen over the years you are less safe in large companies like IBM because they tend to cast a wide net when doing reduction in forces. If anything you are probably safer in a small company where you know the bosses.
tjgkg
50%
50%
tjgkg,
User Rank: Ninja
7/11/2016 | 3:58:13 PM
Re: Strange description of layoffs...
I worked for a very large company in the late 1980's and they had a voluntary layoff. It was almost like a buyout program aimed at getting rid of the workers who had been there since the 1940's. It was extremely generous with pension topoffs, salary continuation based on service and free health insurance for life. While I did not qualify for that (was way too young), I wish i saved the literature because it is almost unbelievable that a program that generous was offered once upon a time. Today you would be lucky to get 4 weeks severence for 20 years of service. And COBRA.
vnewman2
50%
50%
vnewman2,
User Rank: Ninja
7/11/2016 | 11:57:14 AM
Re: Strange description of layoffs...
You bring up a great point - if you live in the US, then you probably haven't heard much about voluntary layoffs because they aren't as common as the "involuntary" ones.  It is quite the underutilized strategy - you would think a company who needs to downsize or reorganize would want to get rid of the people who don't actually want to be there and would be willing to part ways.  But not so. 
Nyuk
100%
0%
Nyuk,
User Rank: Apprentice
7/7/2016 | 11:07:57 PM
Strange description of layoffs...
I learned something new today.  I had never heard of layoffs that weren't "forced".  

Voluntary layoffs do sound more friendly but in the case of a company attempting to "pivot", they would likely be ineffective.  Then again, if the unemployment payment system of the Nederlands is anything like Finland maybe not entirely unwelcome.
jastroff
50%
50%
jastroff,
User Rank: Ninja
7/7/2016 | 10:03:22 AM
IBM has been getting More Lean
IBM has been getting more lean for years - losing about 100,000 since 2001. And even more before that. IW has commented that IBM can't shrink it's way to revenue, which is true. But they have gone from a company of white shirts and blue ties and offices to many people working offsite and dressing as they like pushing different lines of business and services into the marketplace. And so it continues until they find the right balance, or get bought by Amazon (just kidding).
Whoopty
100%
0%
Whoopty,
User Rank: Ninja
7/7/2016 | 7:42:22 AM
Sad
I always feel bad for people caught up in these layoffs. You would imagine working for such a big company would give you a lot of job security, great benefits etc. But when they do these monstrous layoffs of thousands of people, it's got to be hard not to be caught up in them.
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