Gerstner's IBM revival: impressive, incomplete

Article Abstract:

In CEO Louis V. Gerstner Jr's four years at IBM, its stock value has tripled from its 1993 low point of $40, and revenue is up 40% from 1987-1995, while the workforce is down 40% in that period. IBM is now focused on selling PCs and services, two growing markets. However, profit is up only 3.2% in the decade from 1987-1996, and IBM's 1996 revenue growth of 5.6% is slow compared to Intel's 29% growth rate and HP's 19% rate. Remaining bureaucracy, infighting, and inefficiencies have slowed IBM's product development and impaired its decision-making abilities. Speed is imperative in the current information technology market, and IBM could be losing ground. While the worldwide information technology industry grew 13% in 1996, IBM's share dropped to 12%. Some corporate customers see IBM charging for consulting and other services that used to be free; the additional fees, combined with IBM's no-longer dominant image, are leading some longtime customers to look at rivals' systems.

Electronic computers, Computers, Electronic Computer Manufacturing, Company Business Management, Company Employee

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IBM's helmsman indicates that bulk of layoffs is over; an upbeat Gerstner employs wind-direction similes and hints at uses for cash

Article Abstract:

IBM CEO Lou Gerstner announced that the majority of the layoffs at the computer company were over and that employees should start to feel more comfortable with the company. Gerstner also gave some indication of what he is planning to do with the company's $11 million surplus. He indicated that possible uses for the money include a reduction of the company's debt, possible acquisitions or an increase in the company's dividend to shareholders, which was reduced by half when Gerstner took over the company. The announcements were made as part of a year-end briefing to employees worldwide that was beamed by satellite and are expected to dispel recent rumors that IBM was planning new rounds of workforce reductions. The company is still planning its new product divisions for 1995 and is considering reductions in divisions that are not meeting profit goals, including the RS 6000 workstation division.

Financial analysis, Layoffs, Layoff, Outlook, Reorganization

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Industry soothsayers wonder: how long will Lou woo Jim? Lotus CEO Manzi will stay at IBM without a pact; clashing egos predicted

Article Abstract:

Industry experts are beginning to speculate on how long Lotus Chmn Jim Manzi will remain at IBM before his personality clashes with IBM Chmn Louis V. Gerstner Jr. Manzi, head of the newly purchased Lotus, says he is planning to stay at IBM as long as he can contribute to the company or until it is no longer interesting. Manzi has not specified an amount of time, but indicated his concern for making Lotus Notes successful and keeping his employees happy. Gerstner has publicly admitted he is pleased Manzi has decided to join IBM. Industry watchers question whether Manzi will last even 18 months. Manzi is currently working without a contract from IBM. Both Gerstner and Manzi have a reputation for possessing sizeable egos. Having Gerstner as the man in charge may prove too much for Manzi, especially after running Lotus as CEO for so long.

Human resource management, Mergers, acquisitions and divestments, Beliefs, opinions and attitudes, Lotus Development Corp., Company personnel management, LOTS, Manzi, Jim P., Company Operations, Company Employee Status Change

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