Tax agency cutting jobs

Changing times have forced the Internal Revenue Service to begin a long, difficult process of cutting several hundred information technology employees from the payroll by September 2005.

The near-certain job losses are similar to those that other financial services businesses have faced as new IT has made certain jobs obsolete, according to many experts.

Known as a reduction in force, or RIF, agency employees received word of the plan from a June 2 memo from W. Todd Grams, the IRS' chief information officer and head of the Modernization and Information Technology Services organization, where the job cuts will occur.

Although they were surprised by the news, several former IRS officials said the job cuts are necessary. But given the long tenure of many employees and the cohesive culture of the groups that provide IT support, a RIF will be especially difficult for the agency, they said.

In his memo, Grams apologized. "For those employees who are affected by these decisions, I know that this is very painful news to receive," he wrote. "Please know that it is also very painful to deliver."

But his memo also notified IT employees that the agency will not deal with long-term staffing problems as if they are temporary.

In making the proposed staff changes, the memo states, many current IT jobs are no longer useful and the officials need to hire employees in different jobs than those now on the books.

Union leaders will fight to keep the jobs. Colleen Kelley, president of the National Treasury Employees Union, which represents IRS employees, said she is angry that senior executives at the agency did not work with union leaders before announcing the RIF. Kelley said she was simply informed that 500 jobs need to be cut.

"I asked them not to issue a RIF notice and to spend the summer working with us on buyouts, early outs, training, priority placements, career transitions — all those things," Kelley said.

If, after that, senior managers still found the RIF necessary, "at least we would have done everything we could to mitigate this," she said.

About 1,500 people work in the two groups affected: End User Equipment and Services and Enterprise Operations Services. The IRS operates three large computing centers in Detroit, Memphis and Martinsburg, W.Va. Each center's executives hope to reorganize staff jobs and redirect some savings to other parts of the CIO organization.

Other affected employees are in help-desk, desktop and telecommunications support jobs.

In the IRS' computing centers, known as enterprise operations, more than a third of the jobs are held by managers and administrative employees — this at a time when the IRS needs more systems administrators to fill frontline technical jobs, Grams said. Even after shifting some of the employees to technical jobs, money will be left over to reinvest in other parts of the CIO organization, he said. "We think we're going to free up maybe around 150 jobs and about $10 million."

IRS officials also plan to increase the grade-level requirements for help-desk employees. Officials want to hire employees who can begin solving problems immediately rather than writing help-desk orders and passing them on to field-support technicians, which is the current practice, Grams said.

Automation of routine tasks once performed by IT employees is also affecting how the IRS operates. For example, Grams recently released a new policy requiring users to reset their passwords. The agency has been spending about $2 million a year in personnel time simply resetting passwords for users, and he estimates that $1.3 million can be saved by having them do that themselves.

The IT staff changes at the IRS prove that no organization is exempt from the consequences of automation, said Stephen Holden, a former modernization program director for the IRS' Electronic Tax Administration. "It used to be [that] the folks in IT were the ones doing it to the business side of the organization," he said. Now the same thing is happening to those who work in IT, he added.