IBM Buffalo Billion project fails to deliver
Among a string of investments in untested companies, the $55 million grant to bring IBM to town seemed like one of the safest bets of Gov. Andrew Cuomo’s Buffalo Billion program.
IBM’s new Buffalo location was an obvious choice, too, when the state was looking for a company capable of handling a multi-million dollar contract to provide customer support for state agencies’ IT needs.
But, so far, IBM’s Buffalo office has been mired in dysfunction and disappointment.
Far from bringing “cutting-edge software development jobs” to Buffalo, as the governor promised, most of the employees here work call center jobs as contractors, for modest pay and meager benefits.
It’s not just that the project isn’t living up to its billing as a high-tech hub; its performance as a call center has been dismal, too.
State employees calling the help desk – to reset a password, or restore access to an account – might wait on hold for more than half an hour, only to find the person on the other end of the line doesn’t have the right tools or training to help. Last summer, the service was so bad that managers feared the contract would be cancelled altogether.
IBM did not respond to requests for comment. A spokesperson for the state Office of Information Technology Services said in a statement that the IBM contract “has consolidated the State’s IT call centers into one centralized support desk,” but declined to answer specific questions.
In interviews, 27 current and former IBM employees and contractors described a chaotic workplace where IBM and its partners struggled to balance the demands of the new state contract with the need to hire rapidly.
Of the 220 people currently working for IBM in Buffalo, close to half are employed by staffing agency Career Connection, Inc.
“As in any new business, often times getting things in place and processes firmed up are challenging,” a spokesperson for CCI said. IBM’s other contractors declined to comment.
To Erica Williams, the turmoil of the office – a “crazy house,” she said – seemed at odds with the prestige of the IBM name.
She left last summer, after eight months, tired of the endless nickel-and-diming of life as a “permatemp” – working in a permanent position, but a world apart from IBM’s direct employees, without the same pay, benefits or opportunities.
“I kept telling people,” Williams said, “‘Y’all know we got bamboozled, right?’”
In June 2014, the Buffalo Billion was still in its early stages.
Two major projects had already been announced, funding for biotech firm Albany Molecular Research Inc., and solar panel startup, Silevo, soon to be bought by SolarCity. Neither were household names; both were losing money.
Everyone had heard of IBM. State officials laid out an ambitious vision for the company’s Buffalo branch – an “innovation hub,” an “advanced research” center, “a major addition to WNY’s high-tech network.”
The company would set up an office downtown, Cuomo announced, with $55 million in state funding for computer equipment and renovations to office space in Key Center at Fountain Plaza. In exchange, IBM promised to create 500 jobs over five years; these positions, one state memo noted, would pay, on average, $70,000 a year.
Nothing in IBM’s agreement with the state, however, requires the company to create any particular kind of jobs or specifies how much they will pay.
On top of the Buffalo Billion funding, IBM subsequently won a state contract worth $58 million over five years to provide an IT help desk for state agencies.
Experts warn that subsidizing call center positions offers a poor return on public investment and that in this case – for the jobs supported by the state contract – New York is doing so twice over. The cost of the subsidy works out to $110,000 per job.
“Call center jobs are notoriously mobile, and there’s not a lot of spin-off effect,” said Greg LeRoy, executive director of Good Jobs First, a research group that tracks economic development subsidies across the U.S.
“It doesn’t give you the economic development benefits of a classic, high-tech job.”
“The un-help desk”
One morning in October 2016, dozens of newly hired call center agents arrived at Key Center for their first day of work. Many were employed by CCI.
They would be given IBM email addresses and work in a building with the company’s logo emblazoned on the side, but earn less than direct IBM employees, with less generous benefits and less opportunity for promotion. Like many staffing agencies, CCI offers employees no paid holidays, and no paid time off in their first year. Another contractor in Buffalo tells new employees they are not welcome at IBM holiday parties.
To many of the new hires, it seemed that, in the rush to fill seats, the company would take almost anyone who could pass a background check. A CCI spokesperson disagreed with this, pointing out that the company also interviews candidates and requires them to complete an online test.
Their training mostly involved watching PowerPoint presentations. One mislabelled the state Department of Environmental Conservation, calling it the Department of Energy Conservation. Some slides noted that IBM was “still waiting on more information.” Others outlined state programs, only to add “the IBM service desk does not have access to this tool.”
Other training sessions took place over speakerphone, sometimes with more than 70 people huddled together, trying to keep quiet so everyone could hear, some taking notes with pen and paper because they were still waiting for their computers.
There was a daunting amount to learn. The new agents would be fielding calls from over 100,000 state employees spread across dozens of agencies, each with their own assortment of programs, procedures and acronyms. Still, when speaking to callers, one slide urged, “sound confident! Even if you do not know what you are talking about.”
Once the help desk went live in November, employees found themselves in this position almost all the time. Their instruction manual was out of date, incomplete and, in places, flat out wrong.
“If you don’t know what to do,” several agents remember being told, “just Google it.”
It didn’t help that it took weeks – sometimes months – for the state to give the new agents access to all the programs they needed. In the meantime, calls ran long as workers put people on hold, frantically pinging coworkers for assistance.
“We tried to the best of our ability to take calls and help, but we were the un-help desk,” said Lloyd Neuhauser, a former CCI employee.
“I felt like I was piloting a space shuttle without any advanced training.”
The state’s IT agency had hoped to improve service and save money, consolidating basic tech support and outsourcing work previously done by state employees. But the new agents heard a lot of complaints: from candidates for civil service exams, fuming at the wait for a password reset; from state troopers, exasperated that everything seemed to be taking longer; and from employees at the Department of Transportation, venting that the old system had worked better.
“They would say, ‘What’s the point of having you, if you can’t help with anything?’” one former CCI employee recalled. Another remembered “people saying we were a disgrace, putting people with no knowledge on the phones and taking away state jobs.”
Surprise pay cut
For CCI employees, the pay started at $13.75 an hour, with a 50 cent raise after a month – about $3 less than Buffalo’s median hourly wage, according to the federal Bureau of Labor Statistics.
Agents were spread across three companies – Kelly Services, another staffing agency, and IT company nfrastructure, as well as CCI – each paying different rates and offering different benefits.
Officially, agents were discouraged from comparing notes. But, in the break rooms and at lunch, people talked. After the mayhem of the launch, CCI changed its recruiting strategy, increasing the hourly rate offered and asking candidates for more IT experience and some college education. Some employees realized the people sitting next to them were making several dollars an hour more than they were, doing the same job for the same company.
Last spring, many of the original hires, who had applied when the job only called for a high school diploma, were fired. When they opened their final paychecks, some were surprised to find them hundreds of dollars less than usual. The reason was buried in the stack of paperwork that CCI gives new employees to sign, in a form that many didn’t read closely.
If employees “separate” from CCI “for cause or non-cause (i.e. terminated or resigned)” within six months, the form says, their final paycheck will be reduced to minimum wage, to recover part of the company’s investment in their training.
Dozens of people were fired in March, some just a few weeks short of the six-month mark. The policy meant their last two weeks’ pay was cut by almost a third.
Brandon Thomas fell behind on his car payments.
Lloyd Neuhauser filed a complaint with the state Labor Department, wondering if the company had broken the law. There was nothing they could do, a caseworker told him eventually: employers are legally obliged only to pay the minimum wage.
Lashawnda Murphy was evicted after the abrupt pay cut left her short on rent. The last few nights in her cherished North Buffalo apartment, she barely slept, packing up her children’s things and panicking about where they would go. They ended up in a shabby apartment that became infested with gnats when it rained – all she could find at the last minute.
On top of the firings, a lot of people just quit.
A few months after Jessica Lee Taylor began working at CCI, she began to notice people “dropping like flies.” Of the more than 100 people working there when she started last January, less than half were still there by the time she left in October, she estimated. A CCI spokesperson said the turnover in Buffalo is less than the industry standard, but declined to provide specific numbers.
At least 25 CCI employees have gone on to be hired by IBM, the CCI spokesperson said. But, for most, the opportunity to move up was limited and many said this was part of the reason they left.
Contract employees were scolded for taking coffee supplies from the twelfth floor, where IBM’s corporate office was located. Time away from the phones was strictly monitored. Unscheduled breaks, even just to go to the bathroom, either counted against agents’ scheduled break time, or, if they went too often, came out of their wages.
“You basically had to pay go to the bathroom,” said Kendazia Gadley, who worked at CCI for almost a year.
LaTasha Banks was six months pregnant when the help desk went live. Clocking out to go to the bathroom was costing her almost an hour’s pay each day. At first, Banks said, she asked her manager if she could have a seat closer to the bathroom. No. Then, she asked several times if they could make an exception to the rule. No exceptions, she said managers told her.
“They knew I was pregnant,” she said. “My stomach was huge.”
A CCI spokesperson said employees can easily submit work accommodation requests online, along with a doctor’s note; Banks said she wasn’t told this.
Late last year, a flyer went round the office telling agents to be at their desks at least ten minutes before the start of their shifts – another chunk of unpaid time. (CCI said this is not company policy.)
For managers, keeping the help desk staffed 24/7, 365 days a year was a balancing act. The company makes “every effort” to accommodate employees’ needs “as best as we possibly can,” a spokesperson said. Still, “flexibility is crucial in a call center environment,” the employee handbook warned. Schedules could change with just a few days’ notice. (A company spokesperson said these short-notice changes are now “virtually non-existent.”)
One Thursday towards the end of August, LaTasha Banks received her new schedule, which went into effect the following Monday. The end of her shift was only being pushed back by two hours, but it was enough to be a problem. Her son’s daycare wasn’t on a bus route. Losing her ride home, and without a car of her own, she wouldn’t be able to pick him up. Seeing no way to juggle her new schedule and her newborn, she resigned.
Another employee was assigned to work an overnight shift that she couldn’t fit around caring for her one-year-old son.
“They won’t even try to work with you,” Banks said.
The state help desk had started with more than 100 agents. By last summer, that number had dropped by more than half, eight former employees said. When IBM added another help desk contract, for health insurance company Anthem, dozens of employees were moved upstairs to the new account.
“You would see nothing but empty desks walking around the floor,” Kendazia Gadley remembered. “It was like a ghost town.”
Agents were supposed to answer the phone in less than 30 seconds, according to IBM’s contract, but state employees regularly had to wait on hold for as long 30 minutes. Often, former employees remembered, they would look up and see the screens that showed the help desk’s performance glowing amber or red, a warning that they were falling behind.
One particularly busy day, there were more than a hundred calls waiting in the queue for password resets, remembered Ian Larson, another former CCI employee. Almost a quarter of that day’s callers hung up in frustration, before getting through, he said.
Some months, IBM missed the goals outlined in its contract with the state altogether, two former supervisors said. Not having enough people made things worse, and the worse things got, the more people quit.
“We couldn’t get a breath between calls,” said Victoria Pennick, who worked at CCI until last August.
Even once callers got through, there was no guarantee of a quick fix. When a problem was too complex for the Buffalo desk to resolve, agents were supposed to write a ticket, sending it on to a more specialised state help desk in Albany. Often, though, tickets bounced back and forth between the two, ending up backlogged, in limbo.
The backlog of tickets for the state’s public safety desk, which includes the Department of Corrections, one of the largest state agencies, was particularly bad, former employees said. In September, tickets from as far back as June were still sitting, unresolved, while new ones piled up.
Things got so bad that some responsibilities were eventually given back to state employees, reducing the scope of the work done in Buffalo. A spokesperson for the state Office of Information Technology Services said the change was made “to deliver certain higher level support services to our clients.” The agency would not comment on whether IBM is paid less as a result.
Going forward, the project faces other challenges.
The deal with IBM was brokered by former SUNY Polytechnic President Alain Kaloyeros, before his arrest on federal and state corruption charges in late 2016.
Pressed by lawmakers at a hearing late last year, Empire State Development CEO Howard Zemsky, whose agency has since assumed responsibility for many of Kaloyeros’ projects, promised change. ESD has had “productive” conversations with IBM, Zemsky said, about bringing more specialised, high-tech jobs to Buffalo – “the kinds of jobs,” he conceded, “we’d all imagined.”
For now, IBM’s contractors are still hiring for help desk positions, offering hourly rates of anywhere from $15 to $18.
Since Sherry Knight left CCI in December 2016, she’s been working occasionally as a driver for Uber and Lyft. A few months after she quit, she said, she got a call from a recruiter for one of IBM’s other contractors. But, if she had to work with CCI again, “no amount of money would be worth going back there.”