Many future employees of Kyndryl are concern that revenue will not be what Exec expect and know the will be axe will be swinging. The question is - will Kyndryl continue IBM's separation package used last year ?
The other question is how many institutions will sell Kyndryl stock since it will no longer on the DOW. This will force the Kyndryl price down.
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Industry average for USA staffed outsourcers is 60 days pay plus one week for every year served. 3 months of medical. Right now the outsourcers have a 20% attrition rate, so benefits may fluctuate.
I don’t see Kyndryl burdening themselves with a “generous” severance package unless IBM sweetens the p-t as their parting gift. Why would IBM do that? Because they don’t want to get saddled with implementing yet another RA. Better to overstuff the number of employees going to Kyndryl (especially if they are older) and outsource it to Kyndryl. It makes new IBM younger, forces the retirement of older IBM’ers, and makes Kyndryl responsible. Folks may say “IBM would never do that”, but remember who is running the Kyndryl show. Martin Schroeter has a reputation of anything for a buck.
Although Kyndryl is a spin-off and not a divestiture ... I have direct personal knowledge of a divestiture where hundreds of former IBM employees were laid off two weeks after the deal closed ... and there was NO severance package AT ALL ... just NYS unemployment benefits.
I would expect Kyndryl to be on the S&P 500. That will force the index funds to buy it. This isn't price support, but it does mean there will be buyers.
The price of a stock is based on future earnings. It might be a good stock for a trade, but the jury is out if Kyndryl will be an investment.
Kyndryl's being "overstuffed" ... so giving some thought to its severance package is a good idea, because a lot of folks will be receiving it within the next 12-18 months ... or sooner.
Maybe a Starbucks coupon.....maybe.
Why would Kyndryl honor IBM separation package? Unless IBM negotiates for Kyndryl to do their dirty work, I expect Kyndryl to be quite stingy as THATS the way GTS was operated. On the good side of the equation, if you move to Kyndryl, and have legacy IBM benefits (a pension) you most likely will be able to double dip