More bad news on Buffalo Billion project

Remember that ill-fated IBM high-tech hub turned call center? Now up to 175 employees at one of the call centers have been told their jobs are being eliminated.

Updated at 2:15 p.m.

At least 84, and perhaps as many as 175 employees assigned to downtown office space paid for with $55 million in Buffalo Billion funds have been told they’re losing their jobs.

The funding was used to recruit IBM to establish a high-tech hub at Key Center that would employ 500 software engineers and other highly paid workers. IBM has not followed through on that pledge, employing a small but undetermined number of workers  at the site. 

Instead, a portion of the space has been sublet to two call center operations. As previously reported by Investigative Post, those operations have been plagued by problems, including staffing shake-ups and missed payrolls.

Investigative Post reported in February 2018:

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.

Fast-forward to today. Employees at one of the two call centers operated by Computer Task Group Inc. — an IBM subcontractor that provides tech services to third-party clients — notified up to 175 employees on June 22 their jobs are being cut because a service contract between IBM and Anthem Blue Cross Blue Shield was “ending prematurely.” 

A copy of a layoff notice obtained by Investigative Post advises CTG employees to expect the layoffs to be finalized “on or around Aug. 31.” It also indicates that there is no provision in the company’s policies for “transfer, bumping or reassignment” and that employees should consider the layoffs as “permanent.” 

Another layoff notice, filed with the state Department of Labor and known as a Worker Adjustment and Retaining Notification, said 84 jobs were being eliminated.

Representatives from CTG and IBM refused to answer questions about the layoffs or the number of jobs involved. 

Our Weekly Newsletter

Sources tell Investigative Post that 175 CTG employees received layoff notices, but the total number of jobs lost, including those involving IBM employees, could be as high as 350. A spokesperson for IBM said the total job loss was about one-third that number.

In 2014, an economic development agency controlled by the Cuomo administration committed $55 million in state taxpayer money to purchase equipment and renovate office space on the seven upper floors of the Key Center to develop an innovation hub anchored by IBM. 

The project has floundered, and Investigative Post reported in 2020 that the state agency was attempting to lease out four of the seven floors it controlled. That contradicted the state’s original deal with IBM, as Investigative Post reported:

The payoff, we were told, would be 500 good-paying software engineering jobs and the start of a technology hub with all sorts of spin-off development.

Now, four of those floors at Fountain Plaza are available for lease, raising all sorts of questions about IBM’s commitment to Buffalo. Has it pulled out? Working on a Plan B? None of the above?

IBM isn’t saying. Neither is the Cuomo administration.

The company and governor are still refusing to answer questions.

Sources tell Investigative Post at least two of the floors would be vacated by the elimination of CTG jobs tied to IBM’s contract with Anthem Blue Cross Blue Shield. Two other floors are occupied by a call center operation providing services to the state. It’s unclear if that operation will be impacted by any layoffs. 

Support our nonprofit reporting with a donation today

Representatives from CTG and IBM refused interview requests, as did Pamm Lent, a spokesperson for Empire State Development. ESD has steadfastly refused to answer questions from Investigative Post about the IBM project.

Amanda LeBlanc, a spokesperson for CTG, issued a statement saying the company remains focused on delivering services through the end of its engagement with IBM. Despite the reference to the company’s lack of a policy for reassignment, the statement indicates that CTG is working to reassign employees as “new opportunities become available.” 

In its statement, IBM indicated the “start or end of any particular project” does not impact the company’s “planned transformation of its operations to support new kinds of technology work with the potential to create new high-tech career opportunities.”