Voluntary redundancies | IBM asks HR staff to come forward for layoffs amid cost cutting

IBM asks HR staff to come forward for layoffs amid cost cutting

IBM has asked its staff to volunteer for redundancy amid another round of global job cuts, with a significant portion of these cuts happening in Human Resources.

The reason for the job cuts, which the company has called ‘resource action’ instead of layoffs, is reportedly out of a desire to restructure the firm, instead of it solely being based on financial strain.

A majority of the expected cuts (80%) are set to take place towards Enterprise Operations & Support (EO&S) and Finance Operations, this includes CIO, Procurement, Marketing and Comms, and HR.

The cuts will reportedly affect IBM’s Europe branch the most, with 50% of the layoffs set to take place in the continent. A third of the layoffs will take place in IBM’s International Centre in Bratislava, Slovakia, whilst another chunk of redundancies will take place at its Centre in Hungary.

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In January, the firm’s CFO James Kavanaugh told spectators the company has a goal of achieving savings of $3 billion (£2.3 billion), a marked shift from their original target for savings.

This might explain the need to restructure the organisation and streamline specific departments where tasks are becoming increasingly automated.

This rebalancing is driven by increases in productivity and our continued push to align our workforce with the skills most in demand among our clients, especially areas such as AI and hybrid cloud,” an IBM spokesperson told The Register.

Voluntary redundancies

Whilst voluntary redundancies can be seen as less contentious compared to forced layoffs, there can still be risks associated with it. This type of layoff can have benefits like cost savings and workforce flexibility but can also have drawbacks like decreased morale, reputational risks, and a disruption in workflow.

Kerstie Skeaping, Head of Employment, Education and Pensions at law firm Hill Dickinson, says: “Consider whether redundancies are really necessary; could enough savings be made by having a recruitment freeze, reducing the use of agency workers, or by not renewing any fixed-term contracts when they expire. Other options, such as voluntary redundancy and early retirement, may also provide savings.

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“It is all too easy for a business focused on its survival to make costly mistakes in redundancy situations. For example, by failing to collectively consult where 20 or more redundancies are proposed within a 90-day period, by not following a fair selection procedure, by failing to appreciate that special rules apply to new mothers on maternity leave, or due to failures in how staff are consulted with individually about their dismissal.

“Much of this legal risk can be mitigated through a well-planned redundancy programme, but this requires the employer to do some preparation in advance.”

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