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EUROPEAN WORKS COUNCIL
Opinion – XXXVI Meeting

IBM Europe made a significant financial contribution to IBM's 3Q 2017 results, with reported growth in France, Italy, Germany and Spain. The EWC was informed that the strategic imperatives revenue growth in Europe was better than worldwide. The EWC membership is pleased to see Europe making such a positive contribution. Many European countries are typical Small and Medium Business (SMB) markets covered by IBM's General Business (GB) organisation. The EWC observes that the overall macro-economic growth rates in SMB are among the highest in the ICT market. Unfortunately, the EWC concludes that IBM's quarter-to-quarter performance in the European SMB market has been disappointing for a long time. Given the absolute size and volume of the SMB segment versus IBM's market share, it is clear that SMB can offer IBM much upward potential. The EWC membership is convinced that broadening the SMB base can bring IBM Europe back to growth.

In May 2017, IBM has started the implementation of a so called 'Playbook for Workforce Transformation' in five selected markets in Europe, ie. Germany, France, Italy, Spain and BeNeLux. Playbook is presented as a series of alternative approaches to traditional restructuring in order to avoid collective dismissals. Playbook options include:

The EWC membership welcomes Playbook as a voluntary alternative to avoid collective dismissals and traditional restructuring. However, Playbook approaches should be made available to all European countries as soon as possible, without distinction or differentiation between groups of IBMers around Europe, to ensure equal treatment.

IBM management reassured the EWC membership that the goal of Playbook is not to make savings, but to avoid financial accruals that might negatively impact the bottom line result, by spreading the cost over a longer period of time. However, the EWC observes that in designing additional and new Playbook solutions, IBM management's priority appears to be cost reduction. The EWC disagrees with this practice and believes that the focus should be on developing attractive options with long term clarity for all employees in cooperation with local representatives to establish a win-win outcome. Employees should also be actively informed locally about Playbook solutions in their countries.

IBM management stated that there is no active co-location in Europe. However, the EWC membership observes that European co-locations are operational within the CIO mission. Under the 'Accelerate' program, the co-location concept seems to be rolled out in Enterprise Services and Procurement departments as well. The EWC urges IBM management to investigate the situation and to ensure that there are no negative implications on employment, working practices and work-life balance.

The EWC requests that IBM management provides an insight to Fall Plan targets at the earliest opportunity, particularly in relation to GTS and GBS.

IBM European Works Council
Brussels - November 9, 2017