IBM execs forced out older staff to make way for younger staff

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Computing giant IBM has been sued for age discrimination by the widow of a former worker who killed himself after being fired from his job aged 57 as it faces further legal claims of axing hundreds of older staffers to make way for millennials.

Documents unsealed last Friday reveal Jorgen Lohnn, from Bridgeport in Connecticut, took his own life after being fired from the firm in 2016, after 15 years working there as a client executive. 

The suit, filed by Lohnn’s widow Denise and seen by The Register says: ‘He committed suicide after his layoff from IBM.

‘Plaintiff [Denise Lohnn] contends that her husband, Mr Lohnn, fell victim to a years-long companywide discriminatory scheme implemented by IBM’s top management to build a younger workforce, by reducing its population of older workers in order to make room for the hiring of younger workers.’

The lawsuit also alleges that execs insultingly referred to older workers as ‘dinobabies’ and joked about making them ‘extinct.’ They’re also said to have discussed bringing in younger ‘digital natives,’ in what has also been branded a cost-cutting measure aimed at getting rid of older, more expensive staff and lowering the company’s average age. 

IBM faces a separate class-action discrimination lawsuit for forcing out hundreds of older employees, also referring to them as ‘dinobabies’ who should be an ‘extinct species’ in favor of younger ‘digital natives,’ according to court documents.  Staff are said to have been offered relocation or severance, in the hope they’d shun the former and opt for the payout. 

Shannon Liss-Riordan, who represents those employees told The New York Times: ‘These filings reveal that top IBM executives were explicitly plotting with one another to oust older workers from IBM’s work force in order to make room for millennial employees.’ 

Lohnn’s suit gives shocking detail of the alleged discrimination her late husband allegedly experienced. It says: ‘(The) use of the disparaging term ‘Dinobabies’ to describe older IBM employees, as well as his plan for how to oust them from IBM’s workforce, stating his intent to ‘accelerate change by inviting the dinobabies (new species) to leave’ and make them an Extinct Species’.

A court filing by attorney Shannon Liss-Riordan, who is representing hundreds of former IBM employees for ‘age animus from IBM’s highest ranks,’ claims that unnamed executives were aware of a ‘companywide plan to oust older employees in order to make room for younger employees.’  

‘IBM has engaged in egregious age discrimination,’ Liss-Riordan said in an interview Friday. ‘IBM has tried to use arbitration clauses to shield that evidence from the public and other employees who are trying to build their cases of discrimination.’ 

Edvin Rusis, who joined IBM in 2003 as a solution manager and is a plaintiff in a separate lawsuit brought by Liss-Riordan, was informed that he would be laid off by the company within a few months in 2018, according to the New York Times. 

He then applied for five internal positions, according to his legal complaint, but never heard back in response to any of the applications.   

Although this case was filed in the US District Court for the Southern District of New York last July, the company has faced a range of similar lawsuits in recent years.

In an undated email chain quoted in the filing, a top IBM executive – whose name was redacted – allegedly detailed a plan to ‘accelerate change by inviting the “dinobabies” (new species) to leave’ to make room for younger employees. 

In another, another unnamed executive said IBM’s ‘dated maternal workforce’ was something that ‘must change’ at the company, writing ‘they really don’t understand social or engagement. Not digital natives. A real threat for us,’ according to the filing. 

Another unnamed executive, according to court documents, expressed ‘frustration that IBM’s proportion of millennial employees is much lower than at a competitor firm.’   

‘We discussed the fact that our millennial population trails competitors,’ says another email from a top executive at the time. 

‘The data below is very sensitive — not to be shared — but wanted to make sure you have it. You will see that while Accenture is 72% millennial we are at 42% with a wide range and many units falling well below that average. Speaks to the need to hire early professionals.’

The term ‘early professionals’ was used by the company to describe roles that required less previous experience.  

The lawsuit also asserts that the company would force out older workers by requiring them to move to different parts of the country to keep their jobs, hoping that they would decline to move. 

One internal email detailed in the suit stated that the ‘typical relo acceptance rate is 8-10%,’ and another said that the company would need to find work for that small percentage that agreed to relocate, suggesting that there wasn’t a business rationale for the relocations.    

Employees designated for layoffs were allowed to apply for open jobs within the company, but the lawsuit suggests that the company discouraged managers from rehiring them. 

Managers had to request approval from corporate headquarters if they wanted to move ahead with a hire.   

IBM chief human resources officer Nickle LaMoreaux said in the email that the company did not systemically discriminate against older employees, and said that it terminated the employees filing the class-action lawsuit because of changing business conditions.       

The blue-chip technology company employed 346,000 as of 2020, according to Statistica.

In 2020, the statement noted, the median age of IBM’s US workforce was 48, unchanged since 2010. LaMoreaux also noted that 37 percent of the company’s new hires since 2010 were over the age of 40. 

The language cited in court filings, the spokesperson wrote, is ‘not who were are’ and ‘is not consistent with the respect IBM has for its employees and as the facts clearly show, it does not reflect company practices or policies.’

IBM fired as many as 100,000 older employees in an effort to show millennials that the company was a ‘cool, trendy organization’ rather than ‘an old fuddy-duddy organization,’ according to a court deposition in 2019 from Alan Wild, former vice president of human resources, as reported by Bloomberg.

An internal investigation into IBM carried out by the Equal Employment Opportunity Commission found that older workers made up over 85 percent of those who the company considered for layoffs, although the agency did not define ‘older.’     

Between 2013 and 2018, according to ProPublica, older employees accounted for 60 percent of job cuts. 

An earlier lawsuit, filed by former employees in federal court and settled in 2017, according to ProPublica, accused the company of laying off baby boomers en-masse because they were ‘less innovative and generally out of touch with IBM’s brand, customers and objectives.’  

In 2004, IBM agreed to pay a settlement of more than $300 million to employees who argued that it’s 1990’s decision to replace its traditional pension plan with a plan that included features of a 401(k) was discriminatory to older workers. 

 Per the federal Age Discrimination in Employment Act, employers cannot discriminate against those over 40 in hiring based on their age. Companies must disclose the age and positions of all people within a department being laid off, as well as those being kept on, before a worker can waive the right to sue for age discrimination. Typically, companies require these waivers before they grant workers severance packages. 

But in 2014, IBM stopped asking workers receiving severance packages to waive the right to sue, which allowed it to stop providing information about the age and positions of those affected by mass layoffs. Instead, they required workers receiving severance packages to bring their discrimination claims individually in arbitration. 

IBM spokesperson Adam Pratt told the Times that they change was made to better protect employees’ privacy.