I.B.M. chief making drastic new cuts; 60,000 jobs to go; costs put at $8.9 billion; some factories will close - new leader aims for swift end to long 'torture.' (Louis V. Gerstner, Jr.)
Article Abstract:
New IBM Chmn Louis V. Gerstner Jr announces an $8.9 billion charge against 2nd qtr 1993 earnings to fund a massive cost-cutting program, under which IBM will lay off 35,000 employees, send 25,000 more into early retirement and eliminate excess factories, office buildings and equipment. Gerstner tells reporters over lunch that he intends the bold move to end IBM's recent practice of cutting its payroll incrementally quarter after quarter, a practice Gerstner calls 'the Chinese water torture.' The fall of Gerstner's axe should save the company $4 billion a year by the end of 1994. IBM reports a 2nd qtr 1993 loss of $40 million on revenues of $15.5 billion before including the downsizing charge, as compared to a profit of $734 million on revenues of $16.2 billion in the 2nd qtr 1992. Wall street responds by bidding IBM stock up $3.25 to $45.625 a share, despite its quarterly dividend dropping from $0.54 to $0.25 a share.
Publication Name: The New York Times
Subject: News, opinion and commentary
ISSN: 0362-4331
Year: 1993
User Contributions:
Comment about this article or add new information about this topic:
I.B.M. to eliminate 25,000 jobs in 1993 and shut plants; stock off sharply; cuts in research are set as company concedes it failed to adapt
Article Abstract:
IBM will respond to ongoing problems and slowed economic conditions by cutting 25,000 additional jobs and reducing manufacturing capacity. Job cuts and plant closings will cost about $6 billion. IBM expects a $4.75 billion loss in 1992, which is a record for American corporations. IBM Chmn John F. Akers admits his company has failed to adapt to technological changes. IBM's mainframe products are obsolete. Desktop computers are approaching mainframes in terms of power and capabilities, and networks of small workstations are more powerful and flexible than mainframes. IBM's stock dropped $6.75 on Dec 15, 1993, closing at $56.125 a share, a 10-year low.
Publication Name: The New York Times
Subject: News, opinion and commentary
ISSN: 0362-4331
Year: 1992
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Making computers a million times faster: new efforts to work with superconductors. part 2 Intel to spend up to a billion this year
- Abstracts: 2 Baby Bells' profits drop; third is flat. 9,900 jobs to be cut by Nynex; $550 million charge will cause big loss
- Abstracts: 10,000 jobs to be cut by Unisys; computer company reports huge loss for second quarter. Toward the voice-literate computer; leading Japan into a keyboardless future where PCs multiply (Technology) (column)
- Abstracts: I.B.M. makes changes in workstation line. Many orders for Storage Technology
- Abstracts: Pacific Telesis plans to split in two. U.S. network is planned for cellular: GTE Group intends to challenge McCaw