IBM Has a New Path to Early Retirement

IBM LogoIBM has hatched a plan to ease thousands of workers out the door within two years without having to lay them off. U.S workers approaching retirement age can sign up for the Transition to Retirement program and reduce their hours by almost half while retaining 70 percent of their pay. In exchange, the employees must pledge to retire by the end of 2013.

Have you heard about similar early retirement plans? Share your experiences below. 

Pre-retirement workers will continue to receive benefits and 401(k) contributions and will be “exempt from any resource actions that may occur during the Transition to Retirement Period,” as IBM puts it. In other words, they won’t be laid off.

Eligible workers include those with 30 or more years at the company, regardless of age, and those who will be at least age 55 by Jan. 1, 2014, with 15 or more years at IBM. Older workers with fewer years of service are also eligible.

“The goal is for retirement eligible employees to have a conversation about retirement,” an IBM spokesman told Information Week. “For IBM, the success measure is being able to prepare for and predict when retirement eligible workers might choose to exit. It gives our U.S. business managers the opportunity to start building skills behind what we know are going to be some very strong skills leaving the business.”

IBM appears to be trying to reduce its U.S. headcount as part of a campaign to globalize its operations. It laid off more than 1,800 U.S. workers earlier this year. In fact, one estimate says IBM has cut U.S. headcount by 29 pecent, to about 95,000 workers, since 2005. The company employs 433,000 people worldwide.

Comments

  1. BY Fred Bosick says:

    “IBM appears to be trying to reduce its U.S. headcount as part of a campaign to globalize its operations.”

    That is an incredibly poor euphemism. They should just drop the pretense and say, “We think our US staff is too expensive and we think we can get acceptable performance using offshored resources who are much cheaper.”

    They aren’t and they won’t.

  2. BY davidlowe says:

    Bob Cringely wrote a series of blog entries on IBM. How will all these personnel movements at IBM play out? Time will tell. I thought Mr. Cringely’s take on IBM was certainly thought-provoking.

  3. BY davidlowe says:

    Bob Cringely recently wrote several IBM-related posts on his blog – thought-provoking in my opinion. While I can certainly understand and appreciate the reality of globalization, it also saddens me to see an US company trying hard to ditch its workforce in the home country.

  4. BY Bob Taylor says:

    It’s been mentioned before; IBM means International Business Machines. They’re using ‘international’ resources to operate cheaply and to course, make the stock price rise higher.

  5. BY Mrs. S says:

    This is old news, they’ve been trying to pry people out of their jobs and force them into retirement for years. Why not do it the old fashioned way – pension and a Rolex?

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