IBM Is Using An Unusual New Tactic To Retrain Its Employees Instead Of Laying Them Off


Ginni Rometty


IBM CEO Ginni Rometty.

IBM is an unbelievably huge company, with more than 400,000 employees worldwide.

Like its competitors, IBM has been struggling to hire people with the skills it needs in hot growth areas.

And similar to its competitors, IBM has been laying off some employees who work in lagging areas.


Now it's trying a new tactic to help with both problems: IBM is sending some of its workers to mandatory training to learn new skills in hot areas like cloud, analytics, mobile and social.

But there's a catch. The training is mandatory and the person's salary is cut 10% while the training is going on. Computerworld broke this news, but in a phone call to Business Insider, an IBM spokesperson confirmed the program.

An email to affected employees was sent to a small percentage of IBMers in its Global Technology Services group, IBM told us.


From mid-October through March, these employees will be required to spend a day a week learning those new skills. The memo told them: "While you spend part of your workweek on learning and development activities, you will receive 90% of your current base salary."

After training, their pay will return to 100%.

No one likes to be told that their skills aren't up to snuff and that they're going to get a 10% pay cut, even for a short amount of time. Some employees feel that IBM is using the tactic to try and get them to quit, instead of laying them off and paying severance, Computerworld reports.


But IBM says its trying to do just the opposite. The idea is to get employees to share the investment of their training, and that this is better than a pink slip.