back to article Three years ago, IBM ordered staff to work in central hubs. Now its new CEO ponders mid-pandemic: Is there a better way of doing things?

IBM on Monday reported revenue of $17.6bn for its Q1 2020 earnings, a 3.4 per cent year-on-year decline attributed to "an unprecedented business climate," as CFO James Kavanaugh put it. It was the final quarter under former CEO Ginni Rometty, whose tenure was marked mostly by retreating sales. Her replacement, Arvind Krishna, …

  1. CujoDeSoque

    Working from home? Like they have a choice.

    Their idea of making people work in the office, and the subsequent closing down and centralization of offices, was a ploy to cut expensive headcount and offshore jobs. When the older workers quit or were fired when they couldn't move, the job were offshored or opened to newbies making much less. Many of the offices were ill equipped to handle the influx of people and the facilities weren't kept up to date in some cases.

    The reality was that someone with roots moving a long distance for a job that may not last anyway isn't all that appealing. They knew this.

    The big selling point of working at IBM for many at one time was the ability to work from home. But it's not surprising that employees were betrayed, they only had to look at their paychecks for the first clue.

  2. Anonymous Coward
    Anonymous Coward

    They tried the same tricks in Australia

    In 2017 / 2018, Australian employees were "encouraged" to work from a central office. An email mandating an end to working from home was drafted but, interestingly, never sent. Part-time employees were also told they had to go full time. Both tactics were aimed at making employees resign, so that IBM didn't have to offer redundancies.

    The managing director also held a meeting with all managers across the country, asking them to identify those of their reports they felt didn't have the stamina for the tough transformation ahead. Those identified, almost all over the age of 50, were then given poor performance reviews and made to feel unwelcome. Those who stayed were made redundant.

    IBM gave the latter access to an employment outplacement service, where the mix of people in attendance made it glaringly obvious that the older generation had been targeted.

  3. Anonymous Coward
    Anonymous Coward

    we all know

    Like the 2 previous posters said, we all know the centralized office was a not so cunning trick to get rid of the most expensive staff ...

    But with covid19, I'm just wondering if and for how long companies will use this excuse to impose long commutes to push people out ...

    It will be interesting to see ... The cynical in me bets it's only gonna be one year after covid19 before this tactics comes back again.

    I'd be happy to be proven completely wrong :)

  4. Anonymous Coward
    Devil

    Next: "you can smartwork from you home in <put your offsholring country here>"

    Win-Win situation!

    1. Anonymous Coward
      Anonymous Coward

      Re: Next: "you can smartwork from you home in <put your offsholring country here>"

      This was a tactic used for IBM employees who were of "other" ethnicity - basically, anyone who had come to the USA from India, say, was offered their current USA job, based i India, at a "higher than India" market rate - obviously lower than the USA rate. And they seriously expected employees to fall for it!

  5. Anonymous Coward
    Anonymous Coward

    From OPEN space to NO space

    I worked at IBM when the move from rooms for senior staff and managers to open space for everyone (except for researchers of course) started...

    They sold the building located on prime real estate in the city and moved us to a brand new building in the 'burbs rented for a 15 year contract that was all open space plan, just to list an item on the accounting to increase the bottom line that year and make their bonuses.

    Amazing how the top level managers had booked all the little conference rooms adjacent - blocked out for years ahead. The "experiment" was quickly adopted all over the corporation as a major save on expenses since all the sales people hot desked and spent their time in the field at customers (i.e. avoided the office as much as possible). Another reason may have been the downward trend in what was on offer in the cafeteria...

    I recall the number quoted for IBM Southbank (UK) - one of the pilots of the concept - was 4M quid saved the 1st year from lowering operating expenses for power, AC and taxes on having smaller premises. As for short term profits vs getting stiffed on the long term... the decision makers are all long retired.

  6. Randall Shimizu

    IBM's mandated work at the office was a ill conceived concept. IBM has been a leader in telecommuting for many years now. IBM's Lotus division developed a new application with 30 employees in 12 months. The employees worked in distributed locations globally. It would probably make sense to have a hybrid work from home solution for many employees. I believe we are going much more hybrid telecommuting solutions once the crisis is over. It will be interesting to see some studies how this is working out for many companies.

    1. Anonymous Coward
      Anonymous Coward

      The data is already in...

      Google (no surprise) studied the whole question of working from home vs. going into the office and how it correlated with performance. And of course they looked at actual data.

      And what they found was that it made barely any difference, and that difference was swamped by other factors, in particular how highly the person had been rated during the hiring process.

      In other words, a good worker is good regardless of where they work from. And so is a poor one.

      The other very well-known data point: one of the biggest factors in making workers happy and productive is to give them control over their working environment. So let them choose where they want to work, instead of chasing last year's dumb HR fad.

      1. Yet Another Anonymous coward Silver badge

        Re: The data is already in...

        >one of the biggest factors in making workers happy and productive is to give them control over their working environment

        I think you have a fundamental misunderstanding of the purpose of IBM

  7. Randall Shimizu

    It is good to see that IBM is moving away from this EPS at any cost mentality. Ginni Rommety was a good CEO. But she frittered away a of IBM's technological opportunities and advantages. I am also hoping that Redhat willl help drive the rest of IBM. Cutting back IBM's bloated bureaucracy will be one of Arind Krishna's big challenges. Improving employee morale should be a high priority objective as well.

    1. yoganmahew

      Downvote because "Ginni Rommety was a good CEO. But she frittered away a of IBM's technological opportunities and advantages."

      As you later put it, morale is in the sh1tter too.

      And centralised bureaucracy (a result of large sites methinks) is also bloated.

      If this is a good CEO, then goodness me, I don't want to see a bad one.

    2. Gordon 10
      FAIL

      In what way was Ginny a good CEO? Compared to say any historic IBM CEO or even the dross that is the IT Mega Corp industry average?

    3. GruntyMcPugh Silver badge

      @Randall Shimizu: "Rommety was a good CEO"

      Like F*ck she was. In the very same podcast she mentioned how much money IBM were investing in Watson2, she told us that Grade 2s weren't getting a bonus that year. It's almost like she wanted to demoralise people so they'd leave.

  8. Anonymous Coward
    Anonymous Coward

    When did IBM lose its way

    Lot of people credit Lou Gertsner for "saving" IBM despite being a Tobacco tycoon and bleeding research and talented people by the 1000s shown them the door while merging and cutting every division possible. IBM was not dying but Lou Gertsner opened the first wound wider by a thousand cuts. Elephant was dancing to its death rattles.

    Sam Palmisano and Ginni his protege both were attempting to ride the dead/necrotic/zombie elephant by trying to whip it harder and cutting off more of the limbs left over hoping to make the elephant dance. Alas dead elephants don't dance and you can't make it go faster by beating the dead thing. Cutting off dead rotten meat won't sell. And moving the dead body around won't make you popular.

    IBM still has not started spending on research or training or employee bonuses or any kind of increments or marginal benefits not even corporate programs that once existed.

    All the once great and wonderful teams have joined with SoftLayer or now with Redhat or went to HCL or wherever IBM parts ended up at. IBM still has a mobile office WFH workforce with moderately strong secure systems on Linux workstations or loads of Macs....

    How long before the purges and bloodletting or puss-letting going to start remains to be seen.

    1. Randall Shimizu

      Re: When did IBM lose its way

      Ginni biggest problem is that she did move fast enough to move IBM to the cloud. The other problem is that she failed to cut and revamp IBM's bureaucracy. As HCL. IBM should have spun off Lotus and other software years ago. Lotus was good company, but they became smothered in IBM's bureaucracy. IBM has strange tradition of only marketing to their existing customer base.

    2. Yes Me Silver badge
      Headmaster

      Re: When did IBM lose its way

      You're wrong about Gerstner. Actually it was his predecessor (Akers) who started the mass firings and also planned to split up the company the first time it was swirling towards the plug hole. Gerstner came in, actually listened to the top technical people, decided to cancel any idea of splitting the company, and started the pivot towards the Internet. A bit late, since apparently Akers didn't notice the Internet and was fixated with the dying SNA cash cow (by which I do not mean Ellen Hancock personally, but she was quickly ejected by Gerstner). Gerstner's one mistake: picking Palmisano to follow him, who mainly listened to accountants and marketroids. Palmisano's worst mistake: picking Rometty. Rometty's best decision: picking Arvind Krishna. I have a tiny hope that he can save the company again.

  9. IGnatius T Foobar !

    India Business Machines?

    Weren't they some sort of 20th century computer company or something?

  10. JDFST

    It takes a worldwide pandemic with thousands of deaths for a company to stop and think. That alone says the most about a company

  11. Gil Grissum

    It's funny how we were struggling to get one day a week off, working from home, which helped with Snow days, as Atlanta shuts down, when it snows. then they eliminated my Contract division and replaced us with AI. How's that going for them, now? irony.

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