Move near an office or leave: IBM tells managers

By Brody Ford

International Business Machines Corp. delivered a companywide ultimatum to managers who are still working remotely: move near an office or leave the company.

All US managers must immediately report to an office or client location at least three days a week “regardless of current work location status,” according to a memo sent on Jan. 16 viewed by Bloomberg. Badge-in data will be used to “assess individual presence” and shared with managers and human resources, Senior Vice President John Granger wrote in the note.

Those working remotely, other than employees with exceptions such as medical issues or military service, who don’t live close enough to commute to a facility must relocate near an IBM office by the start of August, according to the memo. That generally means within 50 miles (80 kilometers), according to a person familiar with the rule who asked not to be identified speaking about corporate policy.

Managers who don’t agree to relocate and are unable to secure a role that’s approved to be remote must “separate from IBM,” Granger wrote.

“IBM is focused on providing a work environment that balances flexibility with the face-to-face interactions that make us more productive, innovative and better able to serve our clients,” a company spokesperson said. “Consistent with that approach, we’re requiring executives and people managers in the United States to be in the office at least three days per week.”

Chief Executive Office Arvind Krishna has long touted the importance of in-person work. In a May 2023 interview with Bloomberg, Krishna said that promotions will be rarer for those who aren’t on-site. Some teams within IBM had already instituted office attendance requirements. A November memo told employees in the infrastructure business unit to show up at company locations at least three days a week with “managers and executives expected to be in more.”

IBM has slimmed its operations to focus on software and services in recent years, introduced new products to capitalize on interest in artificial intelligence and divested its managed infrastructure, weather and health businesses. Executives gave a positive outlook for 2024 with fourth-quarter earnings last week, sending shares to their best day in almost four years.

Big Blue expects to reduce jobs this year, spending a similar amount on restructuring as it did last year when it planned to cut 3,900 workers, Chief Financial Officer James Kavanaugh said last week. Return-to-office mandates are often seen as fueling attrition. IBM had about 288,000 workers globally at the end of 2022.

The company has closed a number of offices since the onset of the pandemic, potentially complicating return-to-office plans for workers, including facilities in Philadelphia, central New York State, Southbury, Connecticut, and Iowa. Reducing its real estate footprint is part of IBM’s ongoing margin-expansion efforts, Kavanaugh said during an earnings call last week. It couldn’t be determined how many managers would be required to move under the new rules.

Many companies have increased return-to-office requirements over the last year, replacing employee-friendly incentives like happy hours and commuter subsidies with more punitive measures including disciplinary action or limited career advancement if attendance targets aren’t met. The tech industry in particular has seen tightening rules as the market soured and the risk of job cuts has tipped the scale in favor of employers. Amazon.com Inc. and AT&T Inc. have each ordered some remote workers to relocate near offices.

Despite new rules, office attendance remained fairly stagnant throughout 2023, according to data from Kastle Systems. Across the 10 largest business districts in the US, the number of workers in the office hovered around 50 per cent of what it was before the pandemic, with tech-heavy regions like the San Francisco Bay Area reporting even lower percentages.