Extinction of the ‘Dinobabies’: IBM’s push for a younger workforce
In recent years, former IBM employees have accused the company of age discrimination in a variety of legal documents and press reports, claiming that IBM was seeking to replace thousands of older workers with younger to keep pace with their rivals.
It now appears IBM’s top executives have been directly involved in discussions about the need to reduce the proportion of older employees in the company, sometimes disparaging them with terms such as “dinobabies”.
A trove of previously sealed documents released by a US district court on Friday show executives discussing plans to phase out older employees and lamenting the company’s relatively low percentage of millennials.
The documents, which emerged from a lawsuit claiming IBM was engaged in a years-long effort to change the age composition of its workforce, appear to provide the first direct public evidence of the role of leadership in the company in this effort.
“These documents reveal that senior IBM executives were explicitly conspiring with each other to oust older workers from IBM’s workforce in order to make room for millennial employees,” Shannon said. Liss-Riordan, plaintiff’s attorney in the case.
Liss-Riordan is representing hundreds of former IBM employees in similar claims. She is seeking class action status for some of the claims, although the courts have yet to certify the class.
Adam Pratt, a spokesperson for IBM, defended the company’s employment practices. “IBM has never engaged in systemic age discrimination,” he said. “Employees were separated due to changing business conditions and demand for certain skills, not due to their age.”
Pratt said IBM hired more than 10,000 people over the age of 50 in the United States from 2010 to 2020, and the median age of IBM’s U.S. workforce was the same during each. of those years: 48 years. had during this period.
A 2018 article by the nonprofit investigative website ProPublica documented the company’s apparent strategy of replacing older workers with younger ones and argued that it stemmed from Ginni Rometty’s determination, then CEO of IBM, to capture market share in areas as cutting-edge as cloud services. , big data analytics, mobile, security and social media. According to the ProPublica article, based in part on internal planning documents, IBM believed it needed a greater proportion of younger workers to gain traction in these areas.
In 2020, the Equal Employment Opportunity Commission published a summary of an investigation into these practices at IBM, which found that there were “descendant messages from the highest levels of IBM inciting managers to embark on an aggressive approach to drastically reduce the number of older employees. workers.” The agency has not released evidence to support its claims.
The newly unsealed documents — which cite internal company emails and which were filed in a “statement of material facts” in Liss-Riordan’s lawsuit — appear to back up those findings and show that top executives at IBM specifically stress the need to thin the ranks of older workers and hire more young people.
“We discussed the fact that our millennial population lags behind our competitors,” an email from a senior executive said at the time. “The data below is very sensitive – not to be shared – but I wanted to make sure you have it. You’ll see that while Accenture is at 72% millennials, we’re at 42% with a wide range and many units well below this average Talks about the need to hire early professionals.
“Early Professionals” was the company term for a role that required little prior experience.
Another email from a senior manager, appearing to refer to older workers, mentions a plan to “accelerate change by inviting ‘dinobabies’ (new species) to go” and make them an “extinct species”.
A third email refers to IBM’s “mother-dated workforce,” an apparent allusion to older women, and says, “That’s what needs to change. They really don’t understand social or engagement. Not digital natives. A real threat to us.
Pratt said some of the language used in the emails “is not consistent with IBM’s respect for its employees” and “does not reflect company practices or policies.” The statement of material facts clears the names of the authors of the emails but indicates that they left the company in 2020.
Previous legal documents and newly unsealed documents claim that IBM sought to hire about 25,000 workers who generally had little experience during the 2010s. At the same time, “a comparable number of older workers, not millennials, were to be fired,” concludes a passage from one of the newly unsealed documents, a decision in a private arbitration initiated by a former IBM employee.
Similarly, the EEOC’s letter summarizing its investigation of IBM found that older workers made up more than 85% of the group the company considered candidates for layoff, although the agency did not specify what. she considered ‘older’.
The recently unsealed documents suggest IBM has sought to implement its strategy in a variety of ways, including a policy that no “advanced hiring of professionals” can be included in a mass layoff in the first 12 months. of the employee in the company. “We are not making the progress we need demographically and are wasting our investment in talent acquisition and training,” an internal email read.
The lawsuit also argues that IBM sought to weed out older workers by forcing them to move to another part of the country to keep their jobs, assuming most would refuse to move. An internal email said the “typical acceptance rate for relocations is 8-10%”, while another said the company should find work for those who accept, suggesting there is no had no business justification for asking employees to relocate.
And while IBM employees slated for layoffs were officially allowed to apply for open jobs with the company, other evidence included in the new disclosure suggests the company discouraged managers from hiring them. For example, according to the statement of material facts, managers had to seek approval from head office if they wanted to proceed with a hire.
Several of the plaintiffs in a separate lawsuit filed by Liss-Riordan appeared to have been victims of these practices. One of them, Edvin Rusis, joined IBM in 2003 and had worked as a “solutions manager”. He was informed by the company in March 2018 that he would be laid off in a few months. According to his legal complaint, Rusis applied for five internal positions after learning of his upcoming layoff, but received no response to any of his applications.
Pratt said the company’s efforts to shield recent hires from layoffs, as well as its approach to relocating workers, were age-blind and many workers slated for layoffs got new jobs at IBM. .
ProPublica’s 2018 story identified employees in similar situations and others who were asked to move out of state and decided to leave the company instead.
The company has faced other age discrimination claims, including a lawsuit filed in federal court in which the plaintiffs accused the company of laying off large numbers of baby boomers because that they were “less innovative and generally disconnected from IBM’s brand, customers, and goals”. The case was settled in 2017, according to ProPublica.
In 2004, the company agreed to pay more than $300 million to settle with employees who argued that its decision in the 1990s to replace its traditional retirement plan with one that included some features of a 401(k). (k) constituted discrimination based on age.
The federal Age Discrimination in Employment Act prohibits discrimination against persons 40 years of age or older in hiring and employment on the basis of their age, with limited exceptions.
The law also requires companies to disclose the ages and positions of all individuals within a terminated group or department, as well as those who are retained, before a worker waives their right to sue. for discrimination based on age. Companies typically require such waivers before granting severance packages to workers.
But IBM stopped asking workers who received severance packages to waive their right to sue beginning in 2014, allowing it to stop providing information about the age and positions of workers affected by a severance. collective licensing.
Instead, IBM asked workers receiving severance pay to individually take any discrimination claims to arbitration — a private justice system often preferred by corporations and other powerful defendants. Pratt said the change was made to better protect workers’ privacy.
While some former employees preserved their ability to sue IBM in court by denying severance pay, many former employees accepted the severance package, forcing them to sue in arbitration. Liss-Riordan, who is running for Massachusetts attorney general, represents employees in both situations.
The particular legal issue that prompted the disclosure of the documents in Federal Court was a motion by one of the plaintiffs whose late husband had signed an agreement requiring arbitration and whose IBM arbitration proceedings subsequently sought to block.
IBM argued that the plaintiff sought to pursue the arbitration claim after the window to do so had passed and that some of the evidence the plaintiff sought to introduce was confidential under the arbitration agreement. Plaintiff argued that these provisions of the arbitration agreement were unenforceable.
The judge handling the case, Lewis J. Liman, has yet to rule on the merits of this argument. But in January, Liman ruled that the case documents, including the statement of material facts, should be made available to the public.