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For half a century, IBM has maintained a no-lay-off, full-employment tradition. Offering its workers staunch job security has garnered IBM a dedicated workforce unknown at its competitors, IBM executives claim, thus securing for Big Blue a critical competitive edge.
"Full employment equals loyalty," asserts Dick Hallock, IBM's director of employee relations and planning. Yet he qualifies, "Full employment is not a guarantee, but rather a function of our prosperity." Still, through good times and bad, the computer behemoth has developed a variety of methods designed to retain that tradition while allowing it to reorganize as needed and, occasionally, to slim down its workforce.
When IBM has found itself with an overabundance of workers possessing specific skills, it has frequently offered voluntary resignation and early-retirement programs to reduce headcount while avoiding outright layoffs. Some of these programs have been so lucrative that IBM's "early-out" schemes have become synonymous with golden parachutes in the industry.
Voluntary departure programs work for IBM. Through 38 separate plans, IBM has cut its worldwide workforce by 33,000 over the past five years, including 7,800 managers, down to a level of about 373,000 total staffers by early 1991. Now, IBM has announced plans to eliminate another 14,000 positions by the end of this year--mostly through new incentive-to-leave programs.
YESTERDAY'S NEWS
Downsizings have ceased to become news in today's market. But times have been particularly rocky for Big Blue recently. Its market share has been steadily dropping amid a general downturn in the computer industry. The corporation that has ruled the mainframe market since it introduced the System 360 in the 1960s, and which revolutionized the way we work when it introduced the PC micro a decade ago, has yet to offer workstations for laptops that set industry standards. While IBM remains a Blue Chip favorite on Wall Street, it no longer retains its earlier, inviolate market position. And as it fights for market share amid a crowd of wanna-be competitors, many observers have openly wondered if the company may be on the edge of pushing its full-employment tradition overboard.
Indeed, despite the loyalty, goodwill and 30-year career tracks that IBM has carefully nurtured over the years (30-year IBM veterans receive full benefits when they retire, no matter what their age at...