FREE tea and coffee are necessities in an office, but if new cost-cutting measures get the nod at IBM Australia, staff will be paying for their own. IBM worldwide has begun cost cuts that will scrap office amenities such as tea and coffee, and even company-funded home internet access, as the IT services giant battles the effects of the global financial crisis.From May 1, IBM will cease to reimburse internet access for staff working from home. Direct-pay corporate managed and contracted home internet services will also be scrapped.
"IBM will cease the reimbursement of home internet access for employees," the company said in an email to staff. "Secondly, over the next several months the provision of some office amenities, including tea and coffee supplies, will be phased out. Where it makes sense, our intent is to replace this with user-paid vending machines at selected sites."
IBM said the expiring home internet policy was developed in the 1990s, when home internet was not the norm.
"Today internet access has become pervasive around the world and in-home internet contracts have become commonplace along with cable and other telephony services," IBM said in the email.
The cost-cutting measures would allow IBM to continue workforce programs including a salary bonus pool, a single-cycle salary review later in the year, funding education to support revenue generation and continuing to invest billions in research and development, it said.
IBM Australia declined to reveal how much money it expected to save from the cost-cutting initiatives.
"IBM is taking prudent steps to address discretionary spending. We are investing in salary reviews, bonus programs and education," an IBM Australia spokesperson said.
IBM Australia staff are angry about the cost-cutting measures.
"Some employees are not too worried, while others feel as though they have been slapped in the face, particularly those who work unpaid overtime," an IBM Australia employee said. "You would have thought that basic amenities like tea and coffee was not a lot to ask for after working long hours and neglecting private life; obviously we were wrong.
"They'd put a coin slot in the toilet door if they could."
Although home-based staff have been invited back to the office to work where internet access is available free, staff say office real estate is short.
"The problem with that is there is a severe shortage of desk and real estate space and prior to this directive it was almost impossible to find a desk to sit at," another IBM Australia employee said.
Matt Tukaki, government and public sector general manager at human resources specialist Drake International, described IBM's decision to make employees pay for tea and coffee as "ludicrous".
"What you really want to do is make sure that you're keeping your staff happy. There's already enough nervousness out there at the moment with people in fear of losing their jobs. What good is it taking away people's tea and coffee? I see no point," Mr Tukaki said.
Another workplace relations consultant who asked not to be named said the decision was likely to have a dehumanising effect on employees.
"It would make me feel like I was a commodity," she said.
Des Heaney, principal at workplace relations specialist HBA Consulting, said the tactics IBM has chosen to pursue were rare in large organisations as the cost savings they generated did not justify the levels of animosity between staff and employers that they created.
"We have found that where you start cutting marginal staff benefits like tea and coffee and internet access it comes across as really quite mean-spirited and it's not really effective," Mr Heaney said.
Ensuring employees took annual leave and reducing working hours to trim wages were more effective forms of cost control, he said.
IBM reported a 12 per cent gain to $US4.4 billion ($6 billion) in net income for the fourth quarter of 2008 but slipped 6 per cent in revenue to $US27 billion when the recession hit technology spending. In January, IBM sent layoff notices to more than 2800 people in its sales and software groups in the US. The latest round of job cuts at IBM was announced last month, when industry sources said another 5000 IBM workers in the US would lose their jobs. Cisco Australia-New Zealand said it was following the global lead of allowing home broadband and subsidised mobility where appropriate. The company said it has saved more than $1 million locally by eliminating travel for purely internal meetings and replaced it with videoconferencing systems. Hewlett-Packard Australia has also cut costs. During the first quarter of this year, it took several actions to reduce expenses, including extending the December holiday shutdown and significantly reducing travel.
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