News alert: IBM fails to meet job numbers; Louisiana extends deal for two more years

    IBM failed to create the 800 jobs it promised by 2017 in Baton Rouge under a 2013 economic development deal.

    Louisiana Economic Development also put up a 12-year, $29.5 million performance-based incentive package that included $1.5 million from the East Baton Rouge city-parish government.

    Despite falling short, Gov. John Bel Edwards’ administration decided to extend the deadline by two years for IBM to reach its promised 800-job mark. Under a revised agreement, IBM has agreed to pay an increased “non-performance penalty”—$10,000 for each job below 800—if it falls short again in 2019, according to a statement released by the administration.

    Should IBM meet the 800-job threshold, it will be allowed to repurpose $3.3 million in remaining qualified labor grant funds for training programs.

    The new job numbers, obtained through a public records request, are the latest indication that the region’s nascent tech industry is struggling to grow at the pace officials hoped. Stixis, another tech firm that located to Baton Rouge, fell entirely short of its job creation goals after a highly-touted 2014 announcement.

    The IBM Client Innovation Center has created 572 jobs so far, leaving the company well below its previous agreement with the state. The company created 139 jobs in the past year, according to the company’s annual report to the state and previous reporting by Daily Report.

    An IBM spokesperson could not be immediately reached for comment.

    Last year, IBM also failed to meet its promised 500-job threshold, but was able to roll 67 jobs over from previous years, when it exceeded expectations.

    “Today’s announcement means that IBM is doubling down on their commitment to the Baton Rouge area by agreeing to expand their time in the city by at least another two years and by promising a full 800 jobs and at no additional cost to the state,” Edwards says in a statement. “Their willingness to agree to increased penalties should they fail to hit the agreed-upon job creation targets demonstrates that they are investing further in the community as a good faith partner.”

    IBM will also bring a new customer contact center to Baton Rouge, according to governor’s office, and will create “several hundred new employment opportunities” to the area. Recruitment for the center will begin in 2019, but other specifics were not immediately available.

    —Sam Karlin