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IBM Facing Age Discrimination Lawsuit From Laid-Off Workers
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International Business Machines Corporation (IBM - Free Report) has recently come under fire for reportedly violating age-discrimination regulations. The company is said to have been retrenching older employees in a bid to replace them with a younger workforce. In fact, several reports have been surfacing about the issue for quite some time now.
A class-action lawsuit has been filed against IBM in a federal court in Manhattan by attorney Shannon Liss-Riordan defending company’s three former employees. The complainants, in their 50s and 60s, claim that the company discriminated based on age criteria. Liss-Riordan is a partner at Boston, MA-based Lichten & Liss-Riordan.
Further, the plaintiffs state that since 2012, IBM has laid off 20,000 employees who were over the age of 40. Per the complainants, the company is not recruiting older job applicants, violating Age Discrimination laws in Employment Act and other similar laws across North Carolina and California.
Notably, Liss-Riordan has previously championed the cause of employees wronged by powerful companies, including Amazon (AMZN - Free Report) , Alphabet’s (GOOGL - Free Report) Google, Uber and to name a few. Liss-Riordan expects more employees who were forced to a similar fate by the company to join the lawsuit.
Pro-Publica Report on IBM’s Layoff Practices: Major Concern
In an exhaustive study, Pro-Publica revealed about IBM abandoning “old heads” or “grey hairs” or baby boomers to keep pace with competitors in this cloud-computing era. Per the report, IBM aspires to transform the work force to include more millennials with the “new” skills. As a result, the company devised ways to retrench veterans availing higher wages.
The report claims that IBM is striving to optimize the “age mix” in its labor force. The company is recruiting younger, lesser experienced workers who are paid lesser. The company is even transferring several positions overseas, reportedly.
Per ProPublica estimates, IBM has laid off more than 20,000 American workers who were around 40 years or more, making up almost 60% of its anticipated total U.S. job cuts in the past five years.
Further, the study reveals this cut in labor force has been done by violating U.S. labor laws and regulations protecting employees from age bias.
What is IBM’s Response?
Since 2010, IBM has stopped reporting details about the workforce, consequently making the average age of the employees difficult to decipher.
Reportedly, in an emailed statement, Ed Barbini, a spokesman for IBM said, “Changes in our workforce are about skills, not age. In fact, since 2010 there is no difference in the age of our U.S. workforce, but the skills profile of our employees has changed dramatically.”
Per Barbini, IBM is focused on investing heavily to retrain employees to make them at par with emerging technology trends.
International Business Machines Corporation Price and Consensus
In case the class action lawsuit proceeds and tides turn against IBM, the company might have to incur heavy costs to satiate the laid off employees. We believe it might cause a severe blow to company’s goodwill and reputation in the market.
However, we may note that the company is focusing increasingly on various inclusive initiatives. For instance, the company is working on an unbiased artificial intelligence (“AI”) future per its 5-in-5 goals.
AspenTech has a long-term earnings growth rate of 16.5%.
5 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2018 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs. A bonus Zacks Special Report names this breakthrough and the 5 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains.
Image: Bigstock
IBM Facing Age Discrimination Lawsuit From Laid-Off Workers
International Business Machines Corporation (IBM - Free Report) has recently come under fire for reportedly violating age-discrimination regulations. The company is said to have been retrenching older employees in a bid to replace them with a younger workforce. In fact, several reports have been surfacing about the issue for quite some time now.
A class-action lawsuit has been filed against IBM in a federal court in Manhattan by attorney Shannon Liss-Riordan defending company’s three former employees. The complainants, in their 50s and 60s, claim that the company discriminated based on age criteria. Liss-Riordan is a partner at Boston, MA-based Lichten & Liss-Riordan.
Further, the plaintiffs state that since 2012, IBM has laid off 20,000 employees who were over the age of 40. Per the complainants, the company is not recruiting older job applicants, violating Age Discrimination laws in Employment Act and other similar laws across North Carolina and California.
Notably, Liss-Riordan has previously championed the cause of employees wronged by powerful companies, including Amazon (AMZN - Free Report) , Alphabet’s (GOOGL - Free Report) Google, Uber and to name a few. Liss-Riordan expects more employees who were forced to a similar fate by the company to join the lawsuit.
Pro-Publica Report on IBM’s Layoff Practices: Major Concern
In an exhaustive study, Pro-Publica revealed about IBM abandoning “old heads” or “grey hairs” or baby boomers to keep pace with competitors in this cloud-computing era. Per the report, IBM aspires to transform the work force to include more millennials with the “new” skills. As a result, the company devised ways to retrench veterans availing higher wages.
The report claims that IBM is striving to optimize the “age mix” in its labor force. The company is recruiting younger, lesser experienced workers who are paid lesser. The company is even transferring several positions overseas, reportedly.
Per ProPublica estimates, IBM has laid off more than 20,000 American workers who were around 40 years or more, making up almost 60% of its anticipated total U.S. job cuts in the past five years.
Further, the study reveals this cut in labor force has been done by violating U.S. labor laws and regulations protecting employees from age bias.
What is IBM’s Response?
Since 2010, IBM has stopped reporting details about the workforce, consequently making the average age of the employees difficult to decipher.
Reportedly, in an emailed statement, Ed Barbini, a spokesman for IBM said, “Changes in our workforce are about skills, not age. In fact, since 2010 there is no difference in the age of our U.S. workforce, but the skills profile of our employees has changed dramatically.”
Per Barbini, IBM is focused on investing heavily to retrain employees to make them at par with emerging technology trends.
International Business Machines Corporation Price and Consensus
International Business Machines Corporation Price and Consensus | International Business Machines Corporation Quote
Our Take
In case the class action lawsuit proceeds and tides turn against IBM, the company might have to incur heavy costs to satiate the laid off employees. We believe it might cause a severe blow to company’s goodwill and reputation in the market.
However, we may note that the company is focusing increasingly on various inclusive initiatives. For instance, the company is working on an unbiased artificial intelligence (“AI”) future per its 5-in-5 goals.
Zacks Rank & Another Stock to Consider
IBM carries a Zacks Rank #2 (Buy).
Aspen Technology (AZPN - Free Report) sporting a Zacks Rank #1 (Strong Buy) is another stock worth considering in the same sector. You can see the complete list of today’s Zacks #1 Rank stocks here.
AspenTech has a long-term earnings growth rate of 16.5%.
5 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2018 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs. A bonus Zacks Special Report names this breakthrough and the 5 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains.
Click to see them right now >>