Leaked Kyndryl files show 55 was average age of laid-off US workers
As one ousted staffer claims the IBM spin-off is in disarray
Special report IBM spin-off Kyndryl was accused in a recent age-discrimination lawsuit of not only relying on IBM resources for its layoffs but also following Big Blue's frequently alleged playbook of ousting older workers.
Yet Kyndryl, carved out of IBM in 2021 as a managed IT infrastructure giant, differs from its erstwhile parent in one aspect of its headcount reduction strategy: it internally shared the ages of workers who have been laid off, as well as the ages of those given other roles within the company.
The Register has seen a copy of that data, which was provided to a US-based Kyndryl worker who was among a pool of "individuals selected for Kyndryl's 2023/FY 2024 Customer Engagement Transformation Program" – where "transformation" can mean either termination or reassignment.
Of 420 US workers tapped by Kyndryl for this particular round of "transformation," 156 people (37 percent) between the ages of 25 and 70 lost their jobs, at an average age of 55. And 264 people (63 percent) between the ages of 24 and 70 were allowed to transition to other roles, at an average age of 52.
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That information was collected and presented to staff in an attempt to satisfy America's Age Discrimination in Employment Act (ADEA) and its 1990 amendment, the Older Workers Benefit Protection Act.
Employees can choose to waive their rights to sue Kyndryl for discrimination under the ADEA and take home a negotiated severance payout in exchange. In order to have a clear picture of their situation to make that decision, the business provides each person an employee information package that features the above stats.
IBM has avoided such disclosure to its workers reportedly based on the notion that staff who sign their severance agreements remain free to pursue ADEA-based discrimination claims, before an arbitrator rather than in court.
"That is a novel legal theory and one not supported in legislation," said Wendy Musell, counsel to employment law firm Levy Vinick Burrell Hyams LLP and a partner of Law Offices of Wendy Musell, in an interview with The Register.
Kyndryl has not followed in the footsteps of IBM, and instead opted for disclosure – though that disclosure has been questioned. There is a concern that a true view of the facts and figures has not been presented.
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Attorney Shannon Liss-Riordan, whose law firm represents a plaintiff suing IBM and Kyndryl for discrimination, told The Register, "IBM and Kyndryl have played a lot of games with not providing data on the proper pool of employees in its disclosures. … We don’t believe they are being forthcoming on identifying the actual pool considered."
Kyndryl in its own marketing material [PDF] said its 8,500-person mainframe group has "an average workforce age of 35." As of about a year ago, the biz said it had about 90,000 employees in more than 60 countries, about 92 percent of whom are outside the US. So its US workforce would be about 7,200.
The US Department of Labor Statistics said the median age for workers in the "data processing, hosting, and related services sector" is 37.0, and it's 40.8 for workers in the "computer systems design and related services" sector.
The Register asked Kyndryl to verify the average age of those laid off – which we calculated based on the data in the employee information package we saw – and to provide the average age of its US workforce. We also asked the New York corporation to confirm the total number of people let go in its global layoff last month – a figure one report puts at 2,000.
Eight percent of Kyndryl workers are in America, and eight percent of 2,000 is 160, which aligns closely with the 156 roles eliminated per the employee information package we have reviewed. That is to say, the figures in the data we've seen look about right, if the 2,000 figure is correct.
Both the attorney and plaintiff involved with this matter are serial lawsuit filers and headline hunters
A company spokesperson sent two statements, neither of which addressed our questions. The second statement was pretty much the same as the first though it omitted a passage that, we're told, went out to us prematurely.
"Both the attorney and plaintiff involved with this matter are serial lawsuit filers and headline hunters who have filed a complaint that is riddled with disingenuous inaccuracies," the spokesperson said in the revised statement, referring to the lawsuit brought by Liss-Riordan on behalf of MaryKathryn Doheny against Kyndryl and IBM.
"As we have previously publicly disclosed, we are eliminating some roles globally – a small percentage – to become more efficient and competitive. Kyndryl will defend itself vigorously."
That's the official statement. The initial version of the document included a claim that the ages of the staff selected for "transformation" were in line with the average age of the organization's workforce. Kyndryl representatives walked back that point after reviewing their internal data, we're told.
Discrimination claims became significantly harder for employees in the US following the June 18, 2009 Supreme Court decision in Gross v. FBL Financial Services, Inc. The court held that the protected characteristic at issue – age, gender, and such – must be the determinative factor (rather than one factor among many) in the alleged discrimination, as determined by a "preponderance of the evidence."
So even if Kyndryl's layoffs look statistically concerning, its actions may be lawful if they're not mainly based on age.
Salt in the wound
Kyndryl's layoffs, however, have been poorly handled, according to a recently laid-off employee based outside the United States who asked not to be identified by name and we'll refer to as M.
"I think it's important that people know they've done that to me, you know. I am someone who's a mom coming back off sick leave, and they've just sort of thrown me out with the garbage," M said in a phone interview.
Kyndryl talks about its progressive workplace policies, said M, but that's all just talk.
"Talk is cheap with them, and they don't put their money where their mouth is when their actions are actually on the line. So I want people to know. I want to save other women from having to go through this."
What I think applies to me is they're picking off the more expensive employees
Asked whether she believed older workers had been targeted, M said she would not be surprised if that were the case.
"What I think applies to me is they're picking off the more expensive employees," she said. "They're looking at who had the highest take-home. For me, I had a very large take home last year. And obviously I was on sick leave, so I wasn't bringing in any pipeline and so it was sort of out of sight, out of mind, and they kicked me to the curb."
M explained she was hired into Big Blue in the years before the IBM-Kyndryl split. "They actually headhunted me from another professional services organization," she said. "They paid me a signing bonus to join them."
She told us she took medical leave due to stress after she and her colleagues uncovered a number of internal financial tangles they found difficult to reconcile "dating back to the split from IBM."
"I was kind of put in charge of trying to unravel it all … It was incredibly stressful to try and deal with it," M said.
"We've been pulled from pillar to post as a sales organization. They lined up all of these fantastic partnerships, [but] there's no products and services behind it. There's nothing that's marketable. They don't understand the different sectors.
"They definitely don't understand the federal government based on some of the decisions they made. And they just haven't found their niche, really. I think they tried to recreate IBM right off the bat with Kyndryl, and it just didn't work."
When she returned to work, she said the company just stonewalled and failed to explain what's going on. "They're reluctant to put anything in writing," she said.
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Kyndryl put her in touch with RiseSmart's career transition service, which offers support to people being laid off. M described the service as "absolute garbage."
"They said the layoffs are just really support personnel but that's not what's actually happened," she explained.
"It was some of the specialist sellers, particularly in cloud data and AI, and they'd also hired a lot of execs that had retired from the federal government.
They'd hired them and then they laid them off ... they threw money at a bunch of extremely talented IT professionals and they didn't know what to do with them
"They'd hired them and then they laid them off. What they did, honestly, they threw money at a bunch of extremely talented IT professionals and they didn't know what to do with them. Their go-to-market strategy is based on smoke and mirrors. There's nothing behind it, which is why you're seeing the lack of results that we saw in the recent financials."
M said she received a layoff notice after returning from sick leave. "They're not extending my medical benefits, so I can't even finish my treatment," she said. "And I wasn't given any more than a month to transition. So they're giving the absolute minimum, and it's a very, very cold, very disrespectful, non-transparent, dishonest process."
She added she believes episodes like this will further strengthen the hand of unions that have been trying to push government officials to minimize the amount of professional services contracted, in part due to the difference in the way public sector and private sector employees get treated during job cuts.
M said Kyndryl is now in a precarious situation because it's angered the talent it hired and then promptly ditched a few months or years later.
"They're gonna find issues further down the line because no one's going to want to partner with them," she said. "How many people will want to rejoin that organization when they've seen how cold and callous they've handled it?" ®