- IBM’s Finance & Operations teams given an ultimatum
- Workers told they must move closer or accept a redundancy package
- Expensive workers will be replaced with new recruits and AI
IBM has enforced a revised return-to-office policy among its Finance & Operations business unit amid what is being referred to as a ‘soft layoff.’
Reports have claimed employees were told they must relocate to be nearer to the company’s North Carolina or New York offices in order to comply with the new office-working mandate.
Workers who prefer not to do so will need to leave the company, but they will be able to do so with a severance package worth up to six months, depending on how long they’ve been with IBM.
IBM using RTO to enact layoffs
“Managers are being instructed to reach out to their reports and ask that they relocate to Raleigh, North Carolina, or Poughkeepsie, New York,” a spokesperson told The Register. “They must be within 50 miles of one of these sites. If not, they will be offered severance.”
The Finance & Operations division is believed to be a costly unit for the company, but by employing artificial intelligence, fresh graduates and outsourcing, IBM hopes to cut costs. The Register’s source confirmed: “AI will be implemented to replace people.”
IBM’s RTO mandate pushed employees to resign voluntarily, therefore avoiding formal layoffs, hence the ‘soft layoff’ description. Previously, the company has faced allegations of discrimination when enacting layoffs.
Two weeks ago, IBM CEO Arvind Krishna said in the company’s fourth-quarter earnings report: “Three years ago, we laid out a vision for a faster-growing, more-profitable IBM. I’m proud of the work the IBM team has done to meet or exceed our commitments.” Quarterly and full-year revenue were up just 1% year-over-year. IBM hopes for 5% revenue growth in 2025.
Looking ahead, The Register’s source said: “The CEO has stated, ‘thousands will be replaced by AI,’ and management is currently heavily focused on cuts and slowing hiring.”
TechRadar Pro has asked IBM to confirm its revised policy and the impacts of artificial intelligence on its workforce, but we did not receive an immediate response.
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