IBM, The Ruthless Giant Page: 3 of 8
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PREFACE
Many newspapers recently printed the sensational news furnished from
IBM to the effect they vere lowering their retirement reouirements to
25 years service as well as the now existing plan where employees can
retire at 55 years of age or on any other year up to the maximum 65
working age. On the surface this article did sound sensational to
many IBM employees as well as to the majority of the working public.
To analyze the announcement accurately as to the overall and IBM desired
results necessatates an outlook from a long time IBM employed but re-
cently retired person as I.
IBM as with many other companies has along standing policy in which
fired employees are given severance pay in amount 2 weeks pay for every
year worked for the company. Accordingly most or all companies had
certainly rather people would quit rather than wait big be fired. How7
ever some people being lets say loaded with obligations had rather be
tired than hungrey. To these IBM must have decided to offer this new
plan. It was for an employee to sign up for retirement between now
and the end of 1971 and draw 3/4 salary for 6 months and i/2 salary
for 39 months amounting roughly 2 years full pay. This amounts to
considerable more than severance pay but the great public response
that IBM would get along with it evidently would make for the extra
money dlfferance. Actually, it is to accomplish the same in reducing
their supposedly over-manned condition as wholesale firings but the"
public response would be so great as to offset the cost.
For many years, IBM emnloyees in ever increasing numbers have been
quitting. In the last year or so the ones leaving the field force
has reached wholesale proportions. IBM is happy of course as they
want to reduce the field force just about anyway they can. It stems
from the fact that IBM. did not have their expected increase show of
earnings in just one ouarter and for this to happen shook all the
executives and directors thoroughly. This had never happened and
just never supposed to happen to the IBM organization although it
had just happened to almost all the other industrial giants all over
the world. Top management, eager to pass the buck to any flexible
division they thought could survive for the best, were auick to decide
the field service was over-manned. Accordingly, they instructed field
executives everywhere to put into play any p&an necessary to reduce
this excess of field employees as well as others too old or other-
wise not needed. It was almost amusing at times to see the local
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IBM, The Ruthless Giant, paper, Date Unknown; (https://texashistory.unt.edu/ark:/67531/metapth249557/m1/3/: accessed June 9, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting Hoston History Research Center at Houston Public Library.