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IBM`s Desperate Bid to Create Younger Organization - Big Blue’s Woes with Age Discrimination

Global Economic Impact of Coronavirus – Assessment and Mitigation (B)
Case Code: HROB222
Case Length: 13 Pages
Period: 2010-2018
Pub Date: 2020
Teaching Note: Available
Price: Rs.400
Organization: International Business Machines Corporation
Industry: Computer Hardware and Software
Countries: United States
Themes: Workplace Diversity, Diversity and Inclusion, Managing Diversity, Discrimination
Global Economic Impact of Coronavirus – Assessment and Mitigation (B)
Abstract Case Intro 1 Case Intro 2 Excerpts

Excerpts

Ring in the New

A few years before the start of the the millennium, rapid changes were witnessed in the global business environment. Companies from the developed countries realized the benefits of operating from countries like China and India. Several companies shifted some of their processes to these countries, where their tasks could be completed at a fraction of the cost that was being incurred in their home countries. After the 1980s, technology shifted rapidly. The first challenge emerged from Macintosh of Apple. Steve Jobs co-founder, Apple, directly attacked IBM in 1984. This was followed by a slew of technology companies like Microsoft, Google, Facebook, and Amazon, which competed directly with IBM. While other companies were nimble and moved swiftly, IBM lagged behind...

Ring out the Old

Several such presentations were made specifying the “need for re-profiling current talent” and “making room for new talent”. In these presentations it was maintained that to offset the hiring of early professionals, a steady rate of attrition had to be maintained. This reportedly meant the old employees and those who had been with the company for several years were to be replaced...

Make Way for the Millennials

In order to ensure targeted layoffs, IBM brought changes in the performance review process. The managers were reportedly asked to give older employees lower ratings compared to the younger employees. According to one of the lawyers who represented the plaintiff in one of the lawsuits, “IBM is relying on unlawful and unjustified stereotypes to remove older workers who have decades of tech experience, and this suit is also challenging that.”..

What Did the Employees Do?

Many of the employees who were fired chose to remain silent or got busy searching for other employment opportunities. Some of the employees approached the independent federal agency that administered workplace anti-discrimination laws in the US, the Equal Employment Opportunity Commission (EEOC). These employees complained to the agency that IBM had fired them in order to make room for younger employees...

IBM’s Reply

On allegations of older workers being fired, Edward Barbini, Vice President, Corporate Communications of IBM, said, “We have reinvented IBM in the past five years to target higher value opportunities for our clients. As part of this reinvention, we have made major investments in our skills and in new businesses, such as Watson Health, and in people with expertise in critical new areas such as cloud, analytics and quantum and blockchain technologies. We have also transitioned to a less labor-intensive business model and have divested some of our operations.” ..

What Lies Ahead?

In August 2019, Wild said that IBM had fired 50,000 to 100,000 existing employees, while hiring new younger talent. He also said that a team of very senior people had been formed and their main task was to see to it that older staff were blocked from moving to other positions in the company, irrespective of their qualifications and skills. As a result of these changes, 50% of the staff in IBM, as of 2019, had been in the company for less than 5 years which showed that the company had gone in for aggressive hiring. Experts also noted that 50% of the staff were millennials...

Exhibits

Exhibit I: IBM Study: The Real Story behind Millennials in the Workplace
Exhibit II: Age Discrimination in Employment Act
Exhibit III: Forced Arbitration

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