IBM tightens the screws

IBM just became a somewhat less attractive place to work. The outsourcing giant is changing how it makes matching contributions to employees’ 401(k) plans. Starting January 1, an employee’s payment will be made in one lump sum, on December 15 of each year. Currently, payments are made semi-monthly.

Which wouldn’t be a huge deal, except for one thing: IBM has been rapidly cutting its US workforce, making thousands of layoffs each year. The company has cut at least 30% of its domestic workforce in the past five years (we don’t know the exact figure because IBM no longer releases layoff figures or the size of its US payroll). And, if one very well-connected tech journalist is right, the company plans to cut even more aggressively in the next three years — reducing its US workforce by 78%.  

And if you get laid off anytime before December 15, you don’t get the matching contributions for that entire year.

The change in policy has angered IBM employees around the country, according to Lee Conrad, national coordinator for Alliance@IBM, an employees union organized under the Communication Workers of America.

“People feel once again that IBM is picking their pockets,” Conrad said Friday. “Everybody knows IBM cuts jobs right up until November. If you’re not employed by December 15, you don’t get that money.”

There’s probably not much the union can do about it;  they don’t represent very many IBM workers, and they mainly serve as a watchdog. In the absence of official IBM releases, Alliance@IBM is the best source for layoff and outsourcing news.

Two other points:  

— Some observers of corporate 401(k) plans believe that other major employers may follow IBM’s example. It’s just one more way to take money away from workers and give it to shareholders and executives.  Er, ahem, I mean “job creators.”

— This change is especially troublesome at a company like IBM with a history of frequent layoffs. But it’s no great shakes for any worker; if your company adopts the same rule and you leave for a better job anytime before mid-December, you lose some of the 401(k) contributions you should have received.  

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