In a 2014 whitepaper, IBM wrote that remote workers are, “more highly engaged, more likely to consider their workplaces as innovative, happier about their job prospects and less stressed than their more traditional, office-bound colleagues.”
So why just 3 years later did the company reverse course and recall all employees to traditional office work? IBM was once touted as one of the best companies for remote employees, with a sizeable portion of its workforce based outside of an office.
But in early February, the company announced to workers that they were ending the remote working program, and employees had to choose between working at a specified IBM office or leaving altogether. Employees were asked to give up the flexibility that comes with remote working in exchange for possible relocation and a commute into a large city, and were given only 30 days to make the choice.
With this ultimatum, IBM’s leaders have said that the move will make the company more competitive with rivals in Silicon Valley.
So is this evidence that remote working is not working? Or perhaps it is symptomatic of IBM’s larger strategic problem of failing to adjust quickly enough to the rapidly evolving tech market.
Last year, was a tough year for IBM. Net income growth was down 11.1%, and the company had three rounds of layoffs. But this was part of a greater trend for the company, whose revenue has fallen for the past 19 quarters.
As the tech landscape continues to evolve, much of the company’s loss come from former core business areas, such as servers, software licensing, and consulting. Some newer areas of business, like artificial intelligence and automation, are less people-intensive. Which is why many thought it strange that CEO Ginni Rometty made a public pledge in late 2016 to hire 25,000 new workers in the US.
There is speculation that the elimination of remote working in 2017 was meant to encourage employees to quit, in order to make room in the struggling company for some of these pledged new hires, as well as increasing offshore jobs in Eastern Europe and Asia.
IBM lacks the agility that their smaller, more nimble Silicon Valley rivals have in responding to new tech markets. Once a innovator in the computer industry, IBM has continually been behind the curve in shifting to new markets, which has hurt their bottom line. Now, combined with shifts away from people-intensive product lines and offshoring, this has resulted in workforce-shedding which hurts the company’s brand image and employee morale.
Eliminating remote working is a misguided way to deal with these business struggles; remote workers were not contributors to the company’s decline, but rather scapegoats of IBM’s failing market strategy. IBM needs to seriously rethink their strategy to remain innovative in this rapidly disruptive digital era. If putting an end to remote working is their solution, the company will likely continue to go the way of the dinosaurs.