The Finance and Operations business unit of the American tech giant IBM has now implemented a revised return-to-office policy amid what is being called a “soft layoff.”
Employees were reportedly informed that they would need to move closer to the company’s offices in North Carolina or New York to meet the new office-working requirement. Depending on their length of service with IBM, employees who choose not to relocate will be offered a severance package worth up to six months.
“Managers are being instructed to reach out to their direct reports and ask that they relocate to Raleigh, North Carolina, or Poughkeepsie, New York. They must be within 50 miles of one of these sites. If not, they will be offered severance,” a spokesperson told The Register.
The Finance & Operations division is believed to be a costly unit for the company, but by employing artificial intelligence (AI), hiring fresh graduates, and outsourcing, IBM hopes to cut costs. A source confirmed to The Register: “AI will be implemented to replace people.”
The term “soft layoff” refers to the fact that IBM’s RTO requirement has encouraged voluntary resignations from staff members, thereby avoiding official layoffs. The company has previously been accused of discrimination when implementing layoffs.
IBM CEO Arvind Krishna said, “Three years ago, we laid out a vision for a faster-growing, more profitable IBM. Two weeks ago, in the company’s annual report, I was pleased with the efforts made by the IBM team to fulfil or surpass our promises. Revenue increased by just 1% year-over-year for both the quarter and the entire year. By 2025, IBM aims to increase its revenue by 5%.”
“The CEO has stated that thousands will be replaced by AI, and management is currently heavily focused on cuts and slowing hiring,” the source said.