Institutional Knowledge an Issue in IBM, Federal Retirements

Susan Hall

We know that IBM is reducing headcount in North America, but doesn't discuss that publicly, so the reported numbers vary. Alliance@IBM, which touts itself as an IBM employees union, in calling for pickets at IBM sites April 24 put the most recent number of jobs cut at 2,500, while the count on its site is closer to 1,900.


And former InfoWorld columnist Robert X. Cringely has written that Big Blue plans to eliminate 78 percent of its U.S. headcount by 2015 and move that work offshore as part of a plan to increase earnings per share by $20 in that time frame.


Now the company is offering IBM employees near retirement some job security - at least through the end of next year, Computerworld reports. The program, called "Transition to Retirement," offers eligible workers 70 percent of their pay - plus full benefits - for working 60 percent of their schedule. All must retire, though, on Dec. 31, 2013.


As IBM put it in a letter to managers:

... a number of our employees with skills and knowledge critical to our success are at or nearing retirement eligibility.

IBM spokesman Doug Shelton told Computerworld:

It's an innovative program to respond to interest from U.S. IBMers who have asked for ways to ease into transition. But it also helps IBM, as we now can better plan for their eventual retirement by preparing to build the skills that they take with them and/or hire behind them, where needed. And the program is totally voluntary.

The company did not say how many workers would be offered this option. With the threat of layoffs always hanging over them, though, you know those folks will be thinking long and hard about whether to take it.


The federal government faces the same potential loss of institutional knowledge. A long piece at Federal News Radio ponders whether the expected tsunami of retirements from government service has begun. There was a wave of retirements at the end of last year and more than 2,000 more retirement claims than expected in the first three months of this year. It quotes Michael Kane, chief human capital officer for the Department of Energy, saying:

... one of the things that we're faced with is we hire a lot of technical talent and we have to take those technical managers and develop acquisition skills, develop program management skills and develop long-term leadership skills. That is going to be one of the areas where we're struggling.

The article talks about identifying the best performers and zeroing in on what makes them so good at their jobs, then thinking about how to transfer their knowledge to a new generation. It suggests using those older folks as mentors, something that the newest generation of workers really prize.


My colleague Don Tennant recently wrote about a survey by the Society for Human Resource Management and AARP in which 70 percent of respondents said they view the loss of older workers as a problem or potential problem for their organizations, so plenty of companies are scrambling as the baby boomers retire.

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