Early Retirement Is Offered by I.B.M.

By David E. Sanger
The New York Times

September 13, 1986

The International Business Machines Corporation, moving to cut its expenses in the midst of a prolonged computer slump, yesterday doubled the number of its employees eligible for retirement.

The company said that until Dec. 15, it would add five years to the age and employment history of any I.B.M. employee seeking to retire, effectively lowering the age for early retirement to 50. The company said that it expected to reduce its payroll by at least 8,000 in 1987, once the retirement incentive, limited hiring and normal attrition were taken into account.

Analysts said that the action marked I.B.M.'s latest move to reduce operating costs, at a time when the company's full-year earnings are expected to decline for the second year. Already the company has consolidated some of its divisions and discouraged optional travel by employees. The company employs about 242,000 people in the United States; by the end of 1987, if expects that number to be closer to 230,000.

I.B.M. officials said yesterday that the company would remain committed to its no-layoff policy. ''This is an entirely voluntary retirement incentive,'' said Pamela Hawkins, an I.B.M. spokesman.

Ms. Hawkins added that the incentive would have ''minimal impact'' on I.B.M.'s third-quarter earnings, which will be announced next month, because excesses in I.B.M.'s post-retirement medical plan would largely offset the costs of the retirement offer.

Under I.B.M.'s existing retirement policy, employees are not eligible for retirement benefits until they have worked for the company for 30 years, or until they are 55 years old, with 15 years of service. Employees who retire under age 60 receive a diminished retirement benefit.

While the new policy is in effect, an employee could retire after working for the company for 25 years, or at age 50 with 10 years of service.

Separately, I.B.M. said that it would open a telecommunications development center in Rome to develop Open Systems Interconnection, or OSI, software for use in I.B.M. computers.

Copyright 1986 The New York Times Company