How IBM quietly pushed out 20,000 older workers [video] | Hacker News Reader

How IBM quietly pushed out 20,000 older workers [video]

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63 pointsdaviddavis30 comments

IBM has stopped innovating a long time ago, I would guess sometime in the late 1980s

IBM is also the biggest Patent Troll on the planet[1]. I met a Patent and IP Lawyer at a Code Camp in San Luis Obispo. He said he did Legal Patent and Licensing work for IBM for many years and claimed that they generated over 1 Billion $ / year just from their Licensing deals and patent enforcement alone, and that it was their biggest source of income. I tried to see if those # in his claim were true, and it looks like they are, even to this day.

> Between 2008 and 2012 IBM’s patent portfolio generated between $1.1 and $1.2 billion per year.

Source: https://www.forbes.com/sites/chuckjones/2016/01/19/if-patent...

[1] Source: https://thumbor.forbes.com/thumbor/960x0/https%3A%2F%2Fblogs...

And yet I'd bet a lot of money that innovating again was a large part of the reason IBM management justified to itself and shareholders these layoffs.

Turns out, again, that management had zero plans for innovation. Instead, they only had the standard MBA plans : we're going to get a cheaper, MUCH worse, workforce. No more decisions to make for management, so they don't have to take the risk of being wrong anymore.

Innovation ... died. Bill Gates became the richest man in the world taking one of their more obvious opportunities. But managers looked good to other managers, you know, in ways they were taught in their MBA education, and only in those ways. IBM ... withered and died, in the opinion of a lot of people. IBM watson, their poster child for innovation, is not even a bad joke in the AI research community. It's actually unknown. It's an empty shell.

Today, even the financial community is saying stuff like IBM is like McDonalds ... it's a real estate play (you're essentially betting on their ability to sell-and-lease-back their real-estate portfolio and pay out the short term profits from that to their shareholders). There is much justification for that in their financial reports.

It's a bit wider than that: they own some things, and they're rent-seekers, who are to deep in debt and are finding they have to sell ever more income-generating assets. Every product they have, even the ones with deep market lock-in is declining fast.

For anyone who doesn't want to watch a youtube video, here's the article the video is based on:

https://features.propublica.org/ibm/ibm-age-discrimination-a...

& the discussion https://news.ycombinator.com/item?id=16648000 which has 348 comments.

My uncle used to work for IBM, and he told stories for years before also getting let go. They definitely made a push for a younger workforce.

On my first day at my new job out of college, IBM told me the location I requested for in my offer letter could only be temporary as I was on "loan" in a budgetary sense. Now 6 months in, I must transition to a new role (which will not be in my current location). I have other offers in this area, but the agreement I had to sign to repay my bonus (which has been used to pay off student loans) if I voluntarily leave before a year of service is likely not something myself or a startup can make happen at this point. I feel trapped and it's not great.

Anecdotally, I’ve had 2 friends leave companies where they owed a bonus to the company (50k) - one paid it back and one didn’t. The one who didn’t, never heard from them and it’s been over 2 years now.

Not advocating this, but don’t be miserable over a small sum of money. They’ll probably work with you on a repayment plan if necessary.

A forced relocation may be regarded as a constructive dismissal. I would think if you were terminated for not accepting a transfer IBM would have a hard time claiming it was voluntary.

Did IBM use to have "great wages" as the article says? Because it certainly doesn't anymore. A friend had an offer from IBM Research. It was practically a grad student stipend and a drop in the bucket compared to GoogFace wages. It was even worse than Amazon wages, which is already a painfully low bar. (Though AFAIK at least they let you pee in the bathrooms).

Anecdotally, yes. My grandfather worked at IBM, retired comfortably, had many hobbies, and notoriously packed the christmas tree every year. I was shocked to find, only this year, that despite a basement full of oscilloscopes and tape equipment, his role had been... customer support? Maybe this was less "call center" and more "embedded engineer". I'll never know.

How much of this effect was IBM, how much was the economics of America at the time, and how much was specific to this one man is debatable. But he definitely appeared to live well, whatever it was.

Customer support engineers can be a really skilled job - you have to get highly skilled engineers who know the product well and can explain it and answer technical questions, but that also have really good social skills and are good at sales. A pretty rare combo in my experience.

Maybe that's not what he did but I wouldn't write of "customer support" so easily - it could mean a wide range of things.

My grandfather had an AA from a city college. Worked for Rockwell his entire life. My grandmother worked 2 years her entire life. They retired with pensions, investments, a paid for home, and three-quarters of a million in cash.

Would a penalty/fee/tax help prevent companies from laying off then immediately hiring for the same role? I’m sure they’d just find a loophole but there’s got to be a way to at least reduce the benefit to the companies.

Then they might just not be hired back. Which would be even worse.

IBM is one of the few remaining employers who will pay for your outrageous graduate School tuition, provided you work for them another five years following your completion.

Ageism was just a side effect, I don't think IBM committed it intentionally. IBM's business changed and some of their employees failed to change with it. That the employees who failed to change were generally older is just a coincidence.

I know that I might face that same reckoning when I get older - out of date skills pushing me out of the market - so I'm actively taking steps now to set up habits that keep me on top.

I suggest you read the article linked in another comment. It doesn't seem to be true that they were just getting rid of people with outdated skills. They were getting rid of people with relevant skills who also happened to be old.

One quote from the article:

> IBM [...] Targeted people for layoffs and firings with techniques that tilted against older workers, even when the company rated them high performers. In some instances, the money saved from the departures went toward hiring young replacements. [...] Told some older employees being laid off that their skills were out of date, but then brought them back as contract workers, often for the same work at lower pay and fewer benefits.

I did read the article. I think my point still stands. It's possible to be overpaid, I see it in my company all the time. You can fire someone from one job and hire them for a job with a smaller scope, it happens all the time. It's not ageism, it's just a business going through changes.

Somewhat meta-comment:

I'm slightly sad this comment is being downvoted. I can see why someone would, as especially wrt IBM, there's a decent history/precedent for their being aggressively ageist, and it's a topic on which we certainly don't want to pass over without a hard look. (Full disclosure, I tend to side on the "more worker protections" team, but I want to try and take the parent in good faith and think it's a point worth considering)

That being said, I don't think the OP's comment is something we should ignore, that ageism can appear as an emergent symptom of simply culling an aging workforce.

Here's my napkin math for this scenario, and I'm admittedly playing devils advocate here: You hire 10 new people every year. Every year, every employee has a 1% chance of going "stale". You don't fire every year, or at least, don't fire aggressively. If push comes to shove, when you do fire, you try to clean house. Wouldn't you naturally find the highest % of firings in the older brackets?

Anyway, I have no particular reason to think this is true, I just think it's not so unreasonable a point to make that it should be downvoted in terms of argued. I've specifically seen both cases, older higher payed workers culled on-whole in indefensible fashion, removing domain expertise and powerhouses. I've also seen employees start phoning it in, and for there to be a meaningful epsilon of time before anyone catches on.

To be very clear; I'm personally convinced IBM crossed some lines, given the evidence. However, I can see situations where there's enough ambiguity that I don't want to shut down people asking those questions.

Maybe people don't like the idea of living in a world where someone can be asked by an employer to spend years developing specialized skills then be so easily thrown out onto a job market where those skills are useless?

Right, and I'd agree with that sentiment. I didn't get the sense the OP was even necessarily arguing about addressing that, but was simply expressing his own expectations within the system as it exists today. (As someone who would advocate your more progressive argument, I necessarily have to acknowledge the shortcomings in modern employment that would beg such unfortunately pragmatic preparations/thought experiments)

Maybe this is being pedantic, but I'd split this into two discussions. Might there not be reasonable and justafiable firings that may skew older? And secondly, Should we have other systems in play such that the former isn't such a life-shaking event?

Edit: Another note, but I find myself additionally sad after reading your post, because while I'd like it to be true that "most people don't like the idea ...", the last N years of labor/union/corporate/antitrust legislation (or lack thereof, especially post-gig-economy) don't lend confidence towards that. This is yet another reason I think there's merit towards contemplating the nature of the systems in place currently, and what "smells"/emergent patterns those systems have.

That is normally the case, but at IBM, there was specific attempts to push out OLDER workers, regardless of skill or fit.

https://features.propublica.org/ibm/ibm-age-discrimination-a...

So, as others mentioned, you should read the article. For example, here is something that addresses your exact comment:

> Told some older employees being laid off that their skills were out of date, but then brought them back as contract workers, often for the same work at lower pay and fewer benefits.

But not all 20,000 had that happen to them, only some. And big organizations are weird like that. You get fired by one department, only to have another department hire you for something similar. And maybe you were doing a job that was intermittent, so it made sense to move to contract.

That doesn’t prove ageism, it proves that IBM (and apparently the market) thought those specific individuals were overpaid for their skill sets.

Sounds like kind of a crappy move, but it doesn’t prove ageism.

Is there a difference between losing your job because of ageism and losing your job because the company thinks they can get the job done for less money?

Is it still a difference when the functional effect is that workers over 45 are the primary target?

While often true, the propublica article specifically points out the common practice of laying off employees and then rehiring them as contractors at a lower wage, which suggests that IBM still needs their skills, they just don't want to pay for it.

Keeping your skills sharp is a good idea. That was my thought as well. Now in my 50s, I believe it's helped some, but less than I might have guessed, and I've heard similar from older colleagues.

I'd suggest in addition planning financially for a sharp decline in income in your 50s and 60s.

Look at that actual article, reporting, and data it is based upon.

Try working with some older people. My last corporate team -- one of the most senior and advanced in a major corporation, and carrying some of the most critical work -- was more than 50% "older developers".

Best team I worked on. Most competent. Least bullshit. "Get 'er done" -- and don't unduly fuck over the future while you're at it.

Meanwhile, another part of the corporation was busy off-shoring as much as they could to lower cost developers in India. You'd spend months in meetings and one-on-one training, and they still wouldn't get it. And these were -- a bit different than the norm -- direct employees, not contractors. Mostly in their 20's and 30's.

I'm not saying there aren't good, competent people in India -- or from India, or whatever.

I'm saying that these "employment transition" actions aren't about that. "Better" employees.

It's not the competence -- nor the flexibility and learning; my team was doing both all the time.

It's the money.

They explicitly stated in a confidential planning document that the strategy would "correct the seniority mix". That's practically an outright admission that they were going to discriminate by age.

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