IBM spin-off Kyndryl accused of discriminating on basis of age, race, disability

Five current and former employees file formal charges with US employment watchdog

Exclusive Kyndryl, the IT services firm spun out of IBM, has been accused by multiple employees within its CISO Defense security group of discrimination on the basis of age, race, and disability, in both internal complaints and formal charges filed with the US Equal Employment Opportunity Commission (EEOC).

The Register has reviewed documents supporting allegations that include discrimination and retaliation against staff.

These files describe a years-long saga of staff allegedly being axed, moved, or demoted for taking time off work for health reasons, for being from India or non-White, and for other alleged unfair reasons.

It's a saga of a team experiencing an influx of workers from another company, sparking tensions over pay and performance. All of which will have to be probed and resolved by the employment commission.

'Avoid suspicion'

In an email exchange earlier this month, a Kyndryl security analyst, who having returned from short-term disability in December, felt he was being treated differently, and asked a manager whether he was facing retaliation for taking that time off.

The manager responded he was aware of others who believed they were being unfairly targeted, and then described a call with his own superiors that same month about another employee who had applied for short-term disability (STD).

On that call, it's claimed, the manager was told by his bosses that all those taking STD were going to be forced out albeit after a delay of several months to avoid people connecting their break from work for health reasons with their exit from the business.

"I brought up performance issues that needed to be addressed with that individual" ‒ the other employee who applied for STD ‒ "and was told that all the individuals that were on STD were people they were seeking to remove - but had to wait at least six months to avoid suspicion," the manager wrote in an email to the security analyst.

That claim, that the IT giant was deliberately and carefully quietly pushing out staff, is repeated in an April 30 whistle-blowing memo the manager sent up the chain within Kyndryl.

On May 16, the security analyst separately sent an email to Kyndryl's top-level leadership, including CEO Martin Schroeter. The analyst expressed concern about corporate direction and called for integrity and accountability from management.

"In my role within Kyndryl's cybersecurity team, I have witnessed and experienced firsthand troubling instances of cronyism, bullying, and retaliation that are eroding Kyndryl's culture and integrity," the security analyst alleged.

"Despite my efforts to raise these concerns through appropriate channels, including discussions with managers and HR, little action has been taken to address these issues effectively. The lack of accountability and transparency within our Resolver system, where employee complaints seemingly disappear without resolution, is deeply concerning. It appears to be nothing more than a facade, allowing misconduct to persist unchecked.

"Furthermore, I have documented evidence of targeted mistreatment of individuals within our CSIRT [computer security incident response team] department, including discriminatory actions against minorities and individuals with disabilities. This behavior not only undermines our core values but also compromises the effectiveness of our cybersecurity operations."

Kyndryl declined to comment.

Wendy Musell, counsel to employment law firm Levy Vinick Burrell Hyams LLP, told The Register: "If the evidence is as you've described it, there's enormous concern about liability."

Federal and state laws forbid employment discrimination on the basis of age, disability, national origin, or race, and other protected characteristics, she explained. "If the evidence shows these employees were targeted based on those characteristics, that would violate the law."

An institutional problem?

The group of affected Kyndryl employees has not yet filed a lawsuit, though The Register understands that's a possibility.

People who file charges with the EEOC typically wait up to 180 days for the commission to conclude its investigation and issue a Notice of Right to Sue, at which point the plaintiffs have 90 days to file a complaint. Complainants can also request a Notice of Right to Sue letter from the EEOC if they wish to file a claim before the EEOC concludes its inquiry.

The Register is aware of five EEOC charges that have been filed, plus a pending sixth charge, and at least eight internal "employee concern" complaints have been submitted to Kyndryl's human resources department.

We're told that one employee received a response from HR indicating that the alleged discrimination could not be substantiated and that an investigation has been concluded with no action taken.

A group of Kyndryl employees contacted The Register to call attention to a situation they believe is both unfair and illegal. These individuals, all over the age of 40 and predominantly minorities, include several disabled military veterans and those with serious health challenges. They claim they have been treated in ways that violate corporate policies and federal laws.

The trouble began, we're told, in 2021 when Kyndryl started hiring folks from a security firm called Leidos, starting with one leader in particular. The Register understands that the subsequent recruitment of Leidos employees became significant enough that while IBM was preparing to spin off Kyndryl that year, Leidos served IBM with a cease-and-desist demand to end the ongoing hiring. Neither Leidos nor IBM responded to requests to confirm this.

Of the people brought over from Leidos, some got along well with their new colleagues at Kyndryl, but not all of them. For example, one person, the April 30 memo claimed, "fostered an environment that consistently favors former employees [from Leidos] over all other CISO Defense team members."

According to the security analyst's email to execs, certain individuals "prioritized personal agendas over the well-being of our employees and the success of our organization. Their actions have led to the deterioration of trust and morale within our teams."

Internal tension

Part of the friction between the Leidos imports and existing Kyndryl staff, many of whom came from IBM, reflects differences in pay and work expectations. Those from Leidos were allegedly given significantly higher salaries than their peers. They were also supposedly told by recruiters Talent Acquisition Partners that they could take unlimited time off. However, we understand from our sources that HR disputes promising that accommodation.

Our sources tell us that those allegedly targeted by management were labeled low-performers after processing a low number of security tickets. But those from Leidos supposedly weren't held to the same standard: When they had significantly lower ticket resolution rates, they received support from management for focusing on quality rather than quantity.

Not only that but: Since the spin-off in late 2021, a senior staffer with a non-Western name was dismissed from his position, due to organizational changes and allegations that he was fostering a hostile work environment by promoting a culture that pitted Leidos workers against those from IBM.

The manager told us those claims were unfounded and unsupported in documentation, and that proper personnel procedures weren't followed. The senior staffer, we're told, was removed from his position without any investigation. Seven months later, he was able to secure another position in another area of the company.

In the April 30 memo, titled "Concerns of Retaliation and Cronyism in Cyber Defense," the manager wrote that, in light of the removal of that particular person with the non-Western name, he feared "minorities would become a target in CISO Defense over the next year."

Kill list

In mid-November 2023, the manager reported receiving a message from above asking if there was anyone he wanted to get rid of. The manager said he provided "some names of people that I felt were the lowest achievers on the team."

The people upstairs, the manager said, came back with a different list of names, however. One exec in particular "was making it seem that the redeployment was a positive thing, that we were going to go get these people training and that they're going to get a new job in Security and Resiliency. And it was going to be like a positive impact on these individuals' careers, which I was okay with. Well, that ended up being completely erroneous."

Redeployment being an internal term for being moved to another role or, in this case specifically, terminated or laid off.

The manager explained that thereafter supervisors stopped asking for input. "At the end of November, they gave me a list of names and they said these are individuals that are also being put on the redeployment and what they did was cut the entire India cost center," he said.

They got rid of four people in India, the manager claimed, and on the Americas team, they nixed three employees from India, one from Hong Kong, one from Nigeria, and one from Laos. Only employees who had been born outside the US were removed in this administrative action, it's claimed, and the manager contends that these individuals do not qualify as low performers - based on their work metrics.

The manager subsequently had multiple conversations with several of these individuals who felt that race was part of the decision. "I mean, when you're looking at the names, it's kind of hard not to think that race could be involved," he explained.

"I couldn't tell them that it wasn't involved because [the staff overseeing this ouster] had literally told me that performance was not the measurement that they use to decide who was going to get released and who wasn't. So they didn't use metrics. They didn't use anything other than their gut feeling."

The security analyst who returned from STD leave in December explained that when he came back, there were perhaps two dozen new employees and even more who were gone. Over the course of about a year, we're told that the team has gone from close to 60 to just over 30. Some of the newcomers were from Leidos, cementing the feeling that Leidos staff were being prioritized over others by some in management.

"I mean, that's cool," the security analyst said. "Like, I have no problem with it. If they know what they're doing, by all means, right? But the way I look at things is that you don't s**t on your people in order to get rid of them, just because you don't like them or, you know, just to make room for your friends from your other company. That's just a no no."

Everyone's getting a hard time

Among the few White Americans caught in this internal shakeup was a veteran forensic investigator who suffered a stroke post-spin-off and was hospitalized for three weeks the following month, according to his EEOC filing.

"Subsequently," the IT investigator claimed in his EEOC charge document, a higher-up "unilaterally assigned me to a lower-ranking position without any prior discussion regarding the transfer ... I was relegated to an entry-level position without receiving any training or guidance."

In August last year, the forensic analyst's physician submitted a request for reasonable accommodations to allow the analyst to perform his job – headphones, a microphone, and large monitor, and written policy directives.

HR reportedly agreed that these disability accommodations were reasonable. We're told, however, that HR never followed through by providing the physician-recommended items. Lacking the tools necessary to do his work, the forensic analyst was forced to take STD leave from September 2023 through March 2024. Additionally, he suffered a 50-percent salary reduction due to their untimely fulfillment of his requests.

Per his EEOC complaint, the forensic analyst is asking for reasonable disability accommodations so he can work with his doctors and therapist to return to his original position. Like colleagues in Kyndryl CSIRT who have made discrimination allegations, he claims that his performance was above average and that no verbal or written issues with his work were ever discussed or documented.

Citing the six people who were let go in December, all of whom were minorities, the forensic analyst told The Register, "They let go all those people at the same time. And they even said it's not due to performance.

"Well, if it's not due to performance, name the issue. There's never been a complaint. There's never been an issue. There's never been anything else. Then all of a sudden, when you start looking at the back history of what's going on, they're saying – which we do have evidence of – they're saying specifically, we're trying to get rid of all the other minorities, they're trying to get rid of all the people with disabilities."

The EEOC in March said it received 81,055 new discrimination charges in 2023, an increase of 10.3 percent from FY 2022. ®

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