As IBM Corp steps up involuntary lay-offs, it is also lowering the ceiling on payments and benefits for employees in the US that are laid off or voluntarily leave the company. The change was announced internally on April 2 and will extend to all units in the US. From July, IBM will give departing employees a maximum of 26 weeks’ pay and as much as six months paid medical coverage. The current maximum is one years’ pay and 18 months of medical coverage. The effect is likely to be to accelerate the requests for redundancy before the boom falls on June 30. The decision to cut the payments was one of the first made by Louis Gerstner since he became IBM’s chief executive on Thursday. But though Gerstner reviewed the move, he didn’t initiate it, IBM said. IBM will keep its retirement bridge, which allows employees that are within five years of retirement to take unpaid leave until they’re eligible to retire with full benefits, but it will no longer provide benefits during the leave, or include employees’ unpaid time in any of its length of service benefits.
