“The Separation allowance payment available under the individual separation allowance plan, regardless of the circumstances under which ISAP is offered, is one month of pay.” – IBM severance policy change

RESEARCH TRIANGLE PARK, N.C. – IBM, which has reported a loss in revenue for 15 consecutive quarters, is reportedly gearing up for layoffs this week. The move comes less that a week after Big Blue cut severance pay allowances from as much as six months pay to one month.

“I have received information that a resource action will happen this Friday in GTS,” wrote Lee Conrad, the retired IBMer who also is stepping away from efforts to organize Big Blue workers for the Alliance@IBM. Conrad sent out the alert Monday. He had sent out similar notes earlier this month.

“Divisions include 07, 2F and possibly others,” Conrad said.

“Cuts up to 20%”

GTS is a division of IBM (NYSE: IBM) focused on providing various services to clients.

Alliance@IBM is shutting down its activities after failing to generate enough interest among employees to sign up. But Conrad continues to pass on information sent to him by insiders.

Last week, Conrad told media contacts:

“As stated in my email to the Alliance media list the Alliance is shutting down but I will continue to furnish you with information when I can.

“IBM employees have confirmed the cut in separation pay from 23 weeks to 1 month.

“The document is IBM internal access only.

“Also I expect job cuts in the next few weeks.

In response to a query, Conrad said the 23 weeks had been the maximum amount previously available based on years of service at the company.

IBM employs several thousand people across North Carolina, but over the past several years layoffs and asset sales such as its personal computer and x86 server sales to Lenovo have drastically reduced that number from well over 10,000.

“Separation allowance”

Here’s what IBM said about the change as published at news website WallStreet.org:

“The separation allowance payment as per the individual separation allowance Plan irrespective of the circumstances under which ISAP is provided is a payment for a month.

“For personnel coming under the company’s growth driven profit sharing program or any program offered in place of the former, one month salary is paid at the ISAP. It’s paid as lump-sum considering the retiring individual’s base salary amount.

“A severance allowance payment made under any of the company’s severance plan is in place of any other form of separation payment to which the employee might, is or may have become entitled to. However, a retiring individual is not automatically entitled to severance allowance, and it will not be released for reasons other than those that are listed above. In case, the employee has debts outstanding to IBM, no separation allowance occurring under any of IBM’s plan will accrue.

“However, if the outstanding debts are repaid by an employee, a severance allowance would be paid in full. Indebtedness to the company could be a debit balance, not returning the IBM-owned property, an outstanding travel expense account, unpaid tax loan, credit card debt and an outstanding balance on an installment-based purchase of an IBM product or an IBM US mobility plan equity loan.

“In case of re-recruitment by the company or any of its subsidiaries as a regular employee within 30 days of the termination of the employment, IBM has the right to demand repayment of the entire ISAP payment.”

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