IBM quietly slashing Australian jobs, moving work offshore

Updated

Technology giant IBM has quietly slashed its Australian workforce, with anxious staff preparing for up to 1,000 more redundancies, the ABC understands.

Several hundred Australian workers have been laid off this year, the ABC has learnt.

Up to 1,000 more local jobs are likely to go in early 2014, although IBM would not confirm that figure.

Employing more than 400,000 people worldwide, IBM is not required to publicly release the number of Australian jobs it cuts because it is not an ASX-listed company.

IBM Australia managing director Andrew Stevens refused to comment about the lay-offs when questioned by the ABC at a business event in Sydney last week.

But a company spokeswoman alluded to the workforce restructure in a statement.

"Change is constant in the technology industry," the statement said.

"Given the competitive nature of our industry, we do not publicly discuss the details of staffing plans," it added.

Some workers claim IBM is sacking staff in smaller tranches to prevent a public backlash.

Focus changed from 'people to profit', former staffer says

Intelligent Business Research Services (IBRS) analyst Alan Hansell said the company's "professional standards" had slipped in recent years.

He says IBM is no longer winning the big services contracts it once did and is shedding staff in response.

"The focus has changed from people to profit," said Mr Hansell, whose career at IBM spanned three decades.

Talk of mass redundancies at IBM has been circulating for months, but it appears the number of lay-offs is greater than previously thought.

Former staff have criticised the appraisal system where managers rank workers in each section of the company.

Staff said those with the lowest scores were "first off the rank" during the next round of redundancies.

"I went home in tears every day," a former employee who left IBM last year without a severance package told the ABC.

Another said burnout and depression were common among staff.

US-based online support group Alliance@IBM encourages workers to share their experiences.

A Sydney-based IBM staffer wrote in September: "Workplace morale is at rock bottom due to mass [redundancies]."

Another IBM worker posted: "They continue to simply throw out employees, cut benefits, while all along the execs are making a killing."

Alliance coordinator Lee Conrad has expressed concern about the company's refusal to put a figure on the number of workers being sacked.

"We have strongly insisted that IBM come clean on the job cuts in every country," Mr Conrad said.

"It is unconscionable to keep this a secret."

IBM's 'Project Mercury' moving jobs offshore

IBM even has a name for its job-cutting program: Project Mercury.

It has seen Australian services sent offshore to Singapore, Malaysia and Ireland.

One senior manager, who expects to be made redundant this year, says IBM Australia had shed most of its procurement, finance and accounting roles.

Some point to the use of foreign workers on 457 visas to further drive down costs in the industry more broadly.

They see a correlation between a spike in the number of IT workers across Australia employed on 457 visas and falling wage growth.

The number of 457 visas issued to IT workers rose by 68 per cent between 2008 and 2012, yet the average IT wage fell by $4400 a year over the same period.

A source has told the ABC that IBM's use of third-party providers makes it difficult to know the number of its workers employed on 457 visas.

A representative from IBM employment agent Right Management said a confidentiality agreement prevented them from responding to the allegations.

IBM says it fully complies with Australian work visa laws.

Do you know more? Email investigations@abc.net.au

Topics: business-economics-and-finance, telecommunications, electronics, science-and-technology, computers-and-technology, australia

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