IBM freezes contractor hires to keep full-time workers fully occupied

Big Blue isn't renewing contractors or hiring new ones, even on projects with deadlines

Updated More evidence that IBM is cutting costs in multiple ways: the company's Australian tentacle is making it very, very hard to hire contractors.

The Register has viewed emails sent among organisations seeking to place contractors with IBM Australia. The thread explains that IBM has not replied to offers of new contractors because of a freeze that means it can only hire temporary workers under limited circumstances, and even then after signoff by senior bean-counters.

We understand the freeze even applies to gigs at which IBM teams are relying on contractors to help the company meet looming deadlines.

IBM would not confirm or deny the freeze, but The Register has been led to understand that Big Blue is always “optimising” its workforce to ensure they're fully occupied and that no resources are wasted. We understand that optimisation process means the IT giant is ensuring its full-timers are kept busy.

The Register cannot be sure that the contractor freeze is global, not least because Australia's financial year ends on June 30th and cutting contract workers is just the kind of thing that happens at this time of year if companies worry they'll miss targets. It's not hard to see IBM Australia missing its numbers, given it is on the nose after admitting it could have done better when planning for Australia's failed online census. It would be a brave government agency that gives IBM work at this time, and government gigs are Big Blue's meat and potatoes in Australia.

But there's also plenty of evidence for global cost-cutting by IBM. The company's recent centralisation and consolidation of its marketing team took place in the United States and the United Kingdom, suggesting it was an initiative covering multiple territories.

We've also learned that IBM UK says even £75 in travel costs – well under day trip fares between London and major regional cities - won't automatically be signed off and that more expensive journeys will require supporting documentation before they'll be authorised.

The Register therefore suspects the screws are being well and truly tightened across the Big Blue world, as you'd expect at a company where revenue has shrunk for 20 quarters in a row. ®

Updated to add

Multiple sources now tell The Reg that the contractor freeze is global, with many finishing assignments last week and being told their services will not be required for the foreseeable future. We understand that the contractor freeze is a cost-saving measure and that projects that need extra hands will draw on internal resources to hit deadlines. If you're one of those contractors, or an IBM client wondering how your work will get finished, feel free to write to me with more details. Confidentiality assured.

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