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Buffalo hasn't landed IBM high-paying jobs, but 'it's a work in progress'

Chelsea Juda moved back to Hamburg after graduating from the University of Vermont with a business degree three years ago and ultimately landed a job at the new IBM technology hub in Buffalo.

"I wasn't really sure what I wanted to do, but this sort of fell into place," Juda said. "I'm learning a ton."

Juda is one of roughly 240 people who now work at the IBM hub in Key Center near Fountain Plaza. But she also is an exception. Most of the jobs at the IBM hub – a $55 million part of the state's Buffalo Billion economic development initiative – aren't high-paying positions such as programmers or software developers or data analysts.

Roughly four out of every five positions are in a pair of call centers that provide technical support services. One is a state help desk that moved from Albany. Another provides technical assistance for a health insurer.

IBM executives, however, hope to bring in more higher-end technology jobs in the coming months. They are working to bring in 90 to 95 higher-end technology jobs from IBM. About 60 new jobs would come from the technology company's analytics report development business, while 30 to 35 would involve a further expansion of IBM's Bluewolf cloud-based software development business, which already has a presence in the hub.

"The call center type jobs were a way to ramp employment rapidly, but IBM has been adding research jobs in artificial intelligence recently and has assured us they will continue to ramp high-paying  jobs focused on artificial intelligence and development going forward," said Howard Zemsky, the Buffalo developer who serves as president of Empire State Development.

IBM executives cautioned that the hoped-for jobs aren't guaranteed.

"We're working on these things. It's a work in progress," said Jay Goodwyn, the executive director of the IBM Buffalo Innovation Center, as the technology hub is formally called.

"It's looking good right now," Goodwyn said. "I would expect, within the next couple of months, we'll move forward pretty quickly."

If that happens, it will move the IBM hub closer to the state's goal of turning the center into a venture that can help bring new technology jobs to a region that lags far behind the rest of the country in one of the fastest-growing sources of higher-paying jobs.

For now, though, the heavy reliance on help desk and call center jobs at the hub is not what state officials outlined when they struck the deal with IBM through Alain Kaloyeros and SUNY Polytechnic Institute. Kaloyeros now faces corruption charges in an alleged bid-rigging scheme involving other Buffalo Billion projects.

At the time the hub was proposed, Kaloyeros envisioned a center crammed with high-end technology jobs that would jumpstart the Buffalo Niagara region's vastly undersized technology sector.

Two floors are vacant

While two floors are bustling with about 190 workers, the other four floors of the technology hub are far quieter. Those floors are set aside for more collaborative, higher-skilled technology services, like software development and data analytics that can tap into IBM's Watson supercomputing capabilities. On a recent visit, fewer than two dozen workers were scattered among the center's spacious top two floors.

The hub's middle two floors are vacant, but IBM officials believe those will fill up as the center moves closer to fulfilling its promise of creating 500 technology jobs by November 2021.

Jay Goodwyn, executive director of the IBM Buffalo Innovation Center, stands in a collaborative workspace for employees. (Derek Gee/Buffalo News)

 

The divide between the help desk work and the jobs in data analytics and cloud development is fairly wide. Agents working on the help desk earn $30,000 to $40,000 a year, which puts those jobs in the middle of the Buffalo Niagara region's wage spectrum. Half of all jobs in the region pay less than $36,300 a year, while half pay more, according to state Labor Department data.

Lead agents at the call centers earn above-average wages, averaging $40,000 to $55,000 a year, IBM officials said.

Goodwyn also argues that the help desk jobs are a good breeding ground for "new-collar" jobs that don't require a traditional four-year degree, but do require a good amount of skill. IBM CEO Ginni Rometty came up with the name. Goodwyn said new-collar jobs provide a way for employers like IBM to address the shortage of information technology workers and give those employees a way to gain experience and learn new skills.

The help desk jobs aren't run-of-the-mill call center positions because of the technology know-how they require, Goodwyn said.

"The help desk is all technical hires," he said. "It's a great way to create new-collar jobs."

"In Western New York, I've found that entry level hires are pretty easy," Goodwyn said. "It's easier to get the entry-level people and develop their skills."

"What is harder is the experienced hires, the professional hires," he said. "It's very difficult to get an experienced data scientist."

Andrea Rivers, for instance, didn't have any technology experience when she started working for a subcontractor at one of the center's help desks. Her previous work experience was at jobs in banking and product management. But she has steadily moved up. She now is an IBM employee and a lead agent for the service desk, where she manages the 120 people who work at the help center on any given day.

"I'm very happy about becoming an IBM regular," she said.

In all, about 47 percent of the center's jobs are considered to be new-collar, Goodwyn said. While a little more than half of the hub's current workers have bachelor's or advanced college degrees, nearly one-in-five has only a high school diploma.

"These are good jobs. They aren't bad jobs," Goodwyn said. "If we weren't doing it in Buffalo, we'd be doing it somewhere else. I'd rather do it in Buffalo."

The higher-paying jobs come mostly from the 25 people who work at IBM's Bluewolf cloud development business, which opened at the hub earlier this year, and the 25 workers involved in data analytics work. Cloud development jobs pay between $50,000 and $125,000 a year, while analytics positions pay $50,000 to $160,000, Goodwyn said.

If the jobs that Goodwyn hopes to land for the hub come to pass, it would reduce the reliance on help desk positions to about three of every five jobs at the center, assuming no change in call center employment.

Informal workspace in the IBM Buffalo Innovation Center. (Derek Gee/Buffalo News)

Designed for collaboration

The IBM hub opened in 2015 in temporary space in the north tower of the Key Center. It moved in October 2016 into its permanent home on the top six floors of the Key Center’s south tower, which formerly was the headquarters of Delaware North Cos. The tower's top floors were then gutted to accommodate the open floor plans and wide-open work areas that tech workers tend to favor.

Instead of individual offices or cubicles, the center has open tables. There are small enclosed spaces, big enough for one or two people, where workers can get away if they need quiet or private space. There are multimedia areas with couchlike seating and dual television screens where groups can plug in up to four laptops and work together. Some of the walls have special paint so they can be written on.

"It's specifically designed for collaboration," Goodwyn said. "People can grab a conference room, but we're encouraging people to work collectively."

 

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