UPDATED 21:44 EST / JULY 31 2019

POLICY

IBM accused of trying to look ‘cool’ by unfairly firing older workers

IBM Corp. has been accused of targeting older employees in several rounds of layoffs in an effort to change its image and come across as being “cool” and “trendy” like rival companies Amazon Web Services Inc. and Google LLC.

The accusation was made in a deposition by a former vice president in an ongoing age discrimination lawsuit against the company. IBM is said to have axed as many as 100,000 employees in the last few years as part of the effort to reinvent itself, Bloomberg reported today.

The lawsuit is said to be one of several filed against it in recent months that accuse the company of discrimination against older workers.

Bloomberg said that Alan Wild, a former IBM human resources vice president, accused the company of laying off “50,000 to 100,000 employees in just the last several years,” citing documents filed with a court in Texas Tuesday.

The deposition states that IBM has targeted older workers for layoffs in order to demonstrate to millennials that the company is no longer an “old fuddy duddy organization” and that it hoped to come across “as [a] cool, trendy organization” instead, in order to make it more attractive as an employer.

“To do that, IBM set out to slough off large portions of its older workforce using rolling layoffs over the course of several years,” Wild said, according to the report.

IBM is one of the world’s biggest enterprise technology companies, but in recent times it has struggled to compete with rivals such as Amazon and Google, which are often seen as being more innovative and are ahead of the game in important areas such as cloud computing.

The company’s revenue has been declining slowly but surely for almost seven years now, and in response it has attempted to cut costs by shedding thousands of workers. Just last month, it reportedly laid off another 2,000 employees, according to a report in the Wall Street Journal.

“We are continuing to re-position our team to align with our focus on the high value segments of the IT market – while aggressively hiring in critical new areas that deliver value for our clients and IBM,” the company said in a statement to the Journal at the time.

Bloomberg said IBM’s total global workforce stood at 350,600 at the end of 2018, which is a 19% reduction since 2013.

The layoffs can’t be denied, but Constellation Research Inc. analyst Holger Mueller said the accusation that IBM is letting go of older workers to make itself look more appealing to millennials has little credibility. Rather, there’s a far more logical explanation to its motives, he said.

“IBM faces an unprecedented change to its business, and this requires a different skill set than in the past,” Mueller said. “This is what’s driving IBM to create more headcount room through its continuous layoffs. Letting go of older workers is just a side effect of the company switching to the right talent set, which tends to be younger people fresh out of college.”

Photo: Patrick/Flickr

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