Nearshore Americas

IBM to Retrain Outsourcing Employees in Bid to Boost Competitiveness

Technology giant IBM has reportedly asked some of its employees in its technology outsourcing business in the United States to undergo training and accept a 10% salary cut for the next six months.

According to reports, IBM chose to offer them training instead of laying them off for being less competitive. But these employees, according to the New York Times, say the step is a cost-cutting tactic disguised as a training program.

It is not clear as to precisely how many employees have been told to undergo training. According to the NYT article, “a few hundred employees in the United States have been affected.”

The move, the paper says, could become a trend in retraining programs as both corporations and workers struggle to stay competitive in a fast-changing economy.

The technology service market has undergone drastic change over the past few years, with an increasing number of corporate companies adopting cutting-edge technologies such as mobility and cloud.

Some employees are obliviously struggling to keep pace with the change by acquiring the new skills that clients are looking for.

Employees receiving the offer are given little choice other than to look elsewhere in the company “for opportunities for which your skills may be a better match,” the paper said.

With hundreds of data centers and offices, IBM is one of the largest technology services provider in the world, helping companies manage their IT operations and resources. Its global business services division, which accounts for more than 50% of the company’s consolidated revenue, employs over 190,000 people across more than 160 countries.

Sign up for our Nearshore Americas newsletter:

Revenues from the Global Technology Services segment in 2012 totaled US$40.2 billion, a decrease of 2% compared with 2011.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

Add comment