IBM Layoffs vs U.S. Hires: Positive Rometty Spin Before Trump Meeting?
Oh, the irony. IBM has spent recent years cutting employees and “rebalancing” its workforce for next-generation opportunities like cloud and cognitive computing. And the company never disclosed actual layoff figures. Now, CEO Ginni Rometty says IBM will hire 25,000 professionals in the United States over the next four years.
Rometty’s aggressive hiring statement surfaced in a USA Today op-ed piece on Tuesday. Plenty of people noticed the curious timing: Rometty and other tech leaders are set to meet President-elect Donald Trump on Wednesday at Trump Tower in New York. Trump, of course, has criticized — and verbally threatened — some U.S. companies that cut onshore headcount and move jobs offshore.
Anecdotal evidence suggests IBM has been guilty of that practice. IBM has had at least three rounds of layoffs in 2016. The company never disclosed actual layoff figures, and repeatedly described the moves as a “rebalancing” of talent across the company.
IBM: Problems Before CEO Transition
No doubt, Rometty inherited big challenges when she became IBM’s president and CEO in January 2012. Her predecessor, Sam Palmisano, appeared to have a very successful tenure based on profits and revenue growth. In reality, Palmisano failed to anticipate the full impact of cloud computing, and the implications across IBM’s hardware, software and services businesses.
During the first few years of Rometty’s CEO tenure, she focused on long-term earnings-per-share targets — before finally conceding the targets couldn’t be reached. More recently, Rometty has aggressively pushed IBM toward cloud, cognitive computing, mobile and security opportunities.
Fast forward to present day. At first glance, Rometty’s vow to create 25,000 U.S.-based IBM jobs over the next four years deserves some praise. But take a closer look and there’s plenty of reason to be skeptical — especially since IBM has been so coy about its layoff figures and U.S. employment numbers in recent years.
IBM’s U.S. Headcount: Quite A Mystery
“While the firm does not break out staff numbers by country, a review of government filings suggests IBM’s U.S. workforce declined in each of the five years through 2015.
In annual Department of Labor filings, IBM has reported that the active number of participants in its 401(k) pension plan fell to 84,350 last year from 110,876 in 2010.
When asked why IBM planned to increase its U.S. workforce after those job cuts, company spokesman Ian Colley said in an email that Rometty had laid out the reasons in her USA Today piece.
Her article did not acknowledge that IBM had cut its U.S. workforce, although it called on Congress to quickly update the Perkins Career and Technical Education Act that governs federal support for vocational education.”
The Bottom Line: ChannelE2E is not suggesting that CEOs must bow to Trump’s U.S.-centric hiring demands. But IBM in particular has lost some credibility with the media over its staffing figures in recent years. Instead of restoring that credibility, Rometty’s letter to USA Today feels like an awkwardly timed publicity stunt.
The shadow of Trump Tower apparently looms large — stretching all the way to Armonk, N.Y. these days…