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IT Sector

Behind the scenes of a tech layoff: Merative workers criticise redundancy 'charade'

Workers also fear for the stability of a software system that underpins government social services in countries around the world.

IN AUGUST, 267 employees at the Dublin branch of the medical IT company Merative received an email notifying them that they were at risk of losing their jobs.

It was a planned round of layoffs and what followed was a 30-day engagement process (mandated by law) that ended this week, a process that some employees have described as “a charade”. 

The Journal has spoken to a number of Merative workers about efforts to unionise and what it’s been like to deal with their parent company, American venture capital fund Francisco Partners. They have expressed their disappointment with the redundancy package on offer and their frustration with the engagement process, which they say has not featured any real negotiations. 

“Now that we’re in this situation, you realise how vulnerable you actually are and the Irish legal system isn’t really there to protect your rights, it’s kind of protecting the employers’ rights,” one employee said. 

The Unite trade union says about a quarter of the workforce has joined in the past month. 

Workers say these job cuts are not due to poor performance or a lack of profits and that their jobs will likely be moved to India, where Merative recently announced plans for three “global capability and innovation centres”.  

On top of their immediate financial worries, workers at the Dublin branch also fear for the future stability of one of its Irish-made products, a software system that underpins government social services in countries around the world, Cúram. 

It’s not that they’re not making money, it’s that they’re not making enough money.”

Founded in 2022 and currently owned by Francisco Partners, Merative is based in Ann Arbor, Michigan and has a second branch in Dublin city centre. It was previously owned by IBM. 

In 2016, IBM acquired what was then Truven Health Analytics and merged it with its IBM Watson Health unit. That entity was sold to Francisco Partners for over $1 billion in 2022 and rebranded as Merative. 

The company describes itself as “a data and software partner for health and government social services”.

Merative employs between 2,000 and 3,000 people globally, roughly 400 of whom work in Ireland.

‘Charade’ 

The coming layoffs seem to confirm suspicions employees have harboured ever since the company was first taken over by IBM, suspicions that have only grown since the company was acquired by Francisco Partners.

Francisco Partners is a private equity firm with 164 companies listed as investments on its portfolio.

The Merative employees who spoke to The Journal all expressed deep dissatisfaction with working under Francisco Partners’ ownership and claimed that selling off the parts of the company has always been the plan.

They say next week’s layoffs represent that plan kicking into action, at least in Ireland (there was already a round of redundancies in the US branch at the beginning of the year). 

“We just think their plan from the beginning was probably to cut heads and then sell it off,” said another. 

After receiving “skills assessment” scores this week, about 85 to 90 of the original 267 will be told on Monday that their services are no longer required. They will then have five days to take the redundancy package on offer – two weeks’ pay per year of service on top of the statutory two weeks. 

The make-up of that package has been met with frustration and disappointment by Merative’s workers, who say the company has not changed its position in response to any of their concerns while also refusing to recognise the Unite union.

Workers at the company say the consultation between Merative’s HR department and a group of representatives elected from among those at risk of redundancy has not seen any real negotiation take place. The process as a whole has been an exercise in “box-ticking”, sources said. 

The company said it has acted in good faith throughout the process and that meetings have been held with the employee representatives multiple times a week. 

One source said: “From the very first package that they offered, they did revise that once. But that was after the first time we asked. So it really looks like the package offering now was the one they always intended on offering. They were just low-balling us originally, you know, to give the impression that we had some sway over it.”

“The whole process is very cruel,” said another employee who did not wish to be named.  

“Basically everything that we’ve asked of Merative has been ignored up until now and we don’t really feel like there have been any genuine negotiations or discussions during this process. 

“The whole idea of this 30-day process is meant to be that you can engage in actively discussing with the employer how to avoid a dismissal or how to reduce the number of people that are going to be laid off, and how to maybe then mitigate the consequences of the layoffs, you know, like a package, and none of that’s happened. 

“So, the way I feel about it is just that this whole 30-day employee engagement process is a bit of a charade.

“I think they go in on day one with a list of people that they’re going to cut and they’ve done all their calculations. And then after that, they just keep going through this dance, you know, of acting like we have some control or influence over it. But it’s very disingenuous.

“So basically, it just feels to me like they’re playing a game of Monopoly with your life and livelihood.”

Perhaps chief among the workers’ frustrations is the company’s refusal to offer voluntary redundancy as an option. 

Also among their most pressing concerns are the immediate futures of pregnant workers, who will find it near impossible to get a new job now, those who haven’t been with the company long enough to qualify for statutory redundancy (two years), and immigrant workers dependent on corporate-sponsored visas. 

One source said the redundancy package is about half of what they could have expected when the company was owned by IBM. They also said the timing, with just three months left till the end of the year, will also make it hard to find new work anytime soon in a sector that has had its fair share of redundancies of late. 

“We’re going to be really scrambling for jobs. I don’t see that being a great situation at all. I don’t have a lot of hope there to be honest,” one source said.

The Journal understands that a number of Irish politicians have written to the company expressing their concern for the fate of those facing redundancy. 

In a statement provided to The Journal, Merative defended the consultation process. 

“Employees elected representatives to engage with the company and the employees to ensure a fair and thoughtful consultation process,” the company said.

The representatives have frequently met with at-risk employees, dutifully gathered feedback, and provided daily updates.

“These representatives have also been meeting with Merative leadership multiple times a week to share employee input.

“We have been conducting this consultation process in good faith and have sincerely considered the feedback provided. We expect to complete the process soon. To respect the integrity of this process, that is all the information we can share at this time.”

‘Organise, unionise and strike’

Chris Boyd is a dev-ops engineer at Merative who has been leading the push for union involvement. He says he’s never thought much of the engagement process, which he describes as the company’s attempt at “aping a union”. 

“I just don’t see it as legitimate,” he says of the engagement process.

“The IT sector is notoriously and historically unorganised, non union, although that’s changing with these layoffs that are happening left, right and centre.”

Boyd says there has been an uptick in interest in union membership since the process began, with experience of negotiation lacking among the representatives chosen. 

“They (Merative) trained them in the beginning and then they said, well, we need independent training and independent advice. Can we get that in? The company said no.”

Boyd says that the only forum for voicing concerns provided by Merative was a channel in their work chat application, which people were afraid to speak out in for fear of management scrutiny. 

“Other than the union meetings, there has been no proper democratic, open platform in which to debate the issues that we are facing, so I’d say that process is completely distorted.”

After that, engagement with the Unite union picked up and employees crowdsourced funds to employ a solicitor but that did not produce any positive results. 

“People are definitely not happy. They’re not completely happy with how the process has happened, with how the reps have necessarily handled it, and then also not happy with, you know, four weeks per year.” 

The whole process has left some workers wishing they had involved a union earlier and made them realise how the odds can be stacked against them.

“We probably did it too late, you know, when you haven’t gone through it before you learn a lot,” said one source who did not wish to be named. 

“It’s too little too late but a significant amount of us joined Unite the union. And Unite wrote on our behalf to Merative, to recognise the union in discussions and Merative came back and said, no, they wouldn’t.”

In Unite’s letter to Merative , the union said: 

“Sufficient time and opportunity has not been given for fair representation in relation to the current redundancy proposals in order to discuss ways of avoiding the dismissals, reducing the numbers to be dismissed and mitigating the consequences of any dismissals with a view to reaching agreement on a fair package.

“Repeated requests from employees who are part of this process have been rejected.” 

The letter, also a petition, called for the consultation deadline to be extended.

This worker also points to the lack of union membership among IT workers as an issue in general. 

“I’ve been in the IT sector all my life, but I never really knew anything about unions. And that’s pretty much how the rest of everybody else in the at risk group is as well. And now that we’re in this situation, you realise how vulnerable you actually are and the Irish legal system isn’t really there to protect your rights, it’s kind of protecting the employers’ rights.

“And so I suppose, you feel very disempowered, you know, even though we expected Merative to come back and reject it still, it still just makes me realise how much power the bigger companies do tend to have. And the law isn’t really on your side with these things.

I just think it’s probably opened my eyes to how vulnerable you actually are.”

“I would just say, to stop this rash of layoffs in the sector, to save the sector and our working conditions, organise, unionise and strike,” says Boyd. 

The Unite members at the company held a protest outside Merative’s offices in Dublin on Thursday afternoon. 

Tom Fitzgerald addressing workers long Workers gather outside Merative's Dublin offices on Thursday. Tom Fitzgerald of Unite addresses the crowd. Unite Unite

Following the protest, Unite released a statement saying: 

“Trade union Unite, which represents workers in medical technology company Merative, has called on the company to engage meaningfully with Unite in a bid to minimise the proposed redundancies announced in August. The union is seeking an extension of the statutory consultation period to allow for such engagement.”

Commenting on the situation Unite’s regional coordinating officer Tom Fitzgerald said:

“Since August, Merative workers have been organising to push back against the company’s proposals and defend the future of these highly skilled jobs in Ireland. 

“Unite is calling on the company to extend the consultation deadline and engage meaningfully with the workers’ union, Unite, to minimise redundancies.

“We have also written to Enterprise Minister Simon Coveney outlining our serious concerns at the company’s refusal to engage with Unite as the workers’ chosen representatives”.

Cúram

Many of the employees at risk of losing their jobs work on the software programme Cúram, which is used by governments around the world to facilitate social welfare payments.

Australia, Canada, Germany, New Zealand, Qatar, Scotland, Singapore and the United States all use Cúram for a variety of social services.

Sources inside the company say key personnel with decades of specialised knowledge and “domain experience” are at risk of losing their jobs.

“You can’t hire that back,” one source said.

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