To cut costs and boost collaboration, IBM forces some remote workers back into the office

IBM recently gave some remote workers an ultimatum to return to work in an office or lose their jobs.

Image: iStockphoto/master1305

IBM, once thought to be a leader in allowing to work remotely, recently told part of its remote workforce to return to working in an office or face losing their job. Originally reported by the Wall Street Journal, workers in IBM's Watson division, as well as software development, digital marketing, and design, will initially be affected.

The move is a surprise from IBM, which has publicly painted itself as a proponent of remote work, going as far as to moderate panels on the subject. As a part of the deal, the affected workers were given 30 days to deicde whether or not they wanted to relocate to an office, often in a completely different city. Or, as the Wall Street Journal reported, if they didn't choose to move, they would be given 90 days to find another job at IBM.

The public rationale behind the move was to encourage collaboration and have employees work "shoulder to shoulder," the Wall Street Journal reported. However, Forrester analyst David Johnson told TechRepublic that cost savings also likely "played a significant role in the decision," especially given that IBM's gross margins and earnings per share (EPS) declined in 2016.

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Johnson said that employee attrition data also would have played into the decision, especially regarding risk and cost savings on payroll and benefits. Additionally, technology support costs, and other costs depending on the state can also be difficult to manage, he said.

"Companies also often reimburse remote employees for home office expenses, such as internet access, landline telephone, home office furniture, etc," Johnson said. "While this would normally be offset by the cost of office space in a corporate office, if IBM had extra office space they're already paying for that they can't easily shed the cost of, then moving remote employees into it, could be a net cost savings."

The bigger issue here is that IBM didn't address the emotional aspect of the decision, Johnson said. Even if the goal is to improve collaboration, the decision left many employees asking what would happen to them and what was coming next.

"Ergo, employees understandably concluded that it has nothing to do with better collaboration and everything to do with saving money," Johnson said. "The truth, I believe, is somewhere in the middle."

Even if the move was driven by a desire to be more innovative, Johnson said, there are impacts that may have not been accounted for.

When it comes to remote work versus working in an office, employees with task-driven work tend to do slightly better in an office, while creative workers tend to be more productive at home, Johnson said. Still, it comes down to what works best for the employee.

"To be most productive, knowledge workers need the flexibility to choose what works best for the kind of work they need to get done," Johnson said. "Being together physically with colleagues has benefits, and being able to work remotely to get deep work done also has benefits. Accordingly, I believe IBM would have been better off offering employees more options to come to one of their corporate centers as needed - perhaps quarterly."

IBM could not be reached for comment.

The 3 big takeaways for TechRepublic readers

  1. IBM has forced some remote workers to move back to working in an office, or to take another job within the company.
  2. Employees in many departments were asked decide whether to relocate to an office in 30 days, or to take 90 days to find a new position in the company.
  3. Forrester analyst David Johnson said that cost savings also likely played a big role in the move.

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