IBM Hopes to Trim Staff With Retirement Incentive

Associated Press

International Business Machines Corp., suffering through a sluggish economy and weak demand for its computers, announced today new retirement incentives for its U.S. work force.

IBM said the incentives make more employees eligible for retirement and improve the retirement benefit for those electing to participate. The incentives should help cause the company’s U.S. employment to fall by at least 8,000 next year, the company indicated.

“The 1986 retirement incentive is part of IBM’s continuing efforts to improve the company’s competitive strength by reducing costs and balancing resources. It also will help preserve IBM’s full employment tradition,” the company said in a news release.


IBM had 242,241 U.S. employees at the end of 1985 and its work force was projected to decline by about 4,000 this year as a result of normal attrition and limited hiring. With the new retirement incentive, which is to take effect Oct. 1, the company’s U.S. work force should decline by at least twice as much in 1987 as this year, the company said.

Anti-Layoff Policy

IBM has a long tradition of not laying off employees when business is slow. Some analysts have said the company has too many employees because of hiring that was done in anticipation that business would be much better than it is.

Eligibility for the incentives is determined by adding five years to both the actual age and service record of employees as of Dec. 15, IBM said. Employees must notify IBM by Dec. 15 of their decision to participate and should retire no later than June 30, 1987, the company said.

IBM said the decision to retire under the incentive is voluntary.