A senior consultant for IBM made comments suggesting that the IT giant was planning to let 75% of their IT staff go, only to be rehired as IT contractors. However, the company is distancing itself from this speculation.
Tim Ringo had stated that this would be a seven year programme designed to cut the running costs at IBM. Inevitably, at the end of the seven year period the company would employ a full-time workforce of 100,000 in comparison to its 399,000 current employees.
Ringo made his comments during an interview with Personnel Today. He spoke of this process of making employees redundant and then rehiring them on an ad-hoc basis as and when required. He referred tot his as a ‘crowd-sourcing’ strategy.
Ringo commented: “There would be no buildings costs, no pensions and no healthcare costs, making huge savings.”
Many of the forward thinkers in HR innovation are currently promoting this model due to the savings that companies achieve when they adopt this strategy. However, there are associated difficulties, especially with regards to employment, management and HR issues.
A spokesman for the IT giant has said that the concept of cutting permanent staff is contrary to their current programme of growing and strengthening their workforce, stating that this “runs counter to IBM’s history of growing its global workforce over each of the last eight years.”
When asked about the comments made by Ringo, the spokesman said: “This was pure speculation about future job movements without any basis in fact. Needless to say that this isn’t current corporate strategy and we have no plans to implement this thinking.”