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Time - Man of the Year
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Time_Man_of_the_Year_Compact_Publishing_3YX-Disc-1_Compact_Publishing_1993.iso
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1993-04-08
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THE WEEK, Page 16BUSINESSA Torrent of Pink From Big Blue
IBM announces more layoffs and cutbacks. Will these be the last?
When the mighty fall, it's never a pretty sight. But few could
imagine how grim until International Business Machines
announced its most traumatic cutbacks to date. In its fifth
major restructuring in the past seven years, the world's largest
computer company plans to shed more unprofitable and ill-fitting
businesses in 1993 and slash its work force 8%, or 25,000
employees. The latest round of reductions will include the first
involuntary layoffs in the company's 78-year history and will
result in a $6 billion pretax charge for the fourth quarter.
In recent years, IBM has lost share in market after
market, including personal computers. But the massive cuts are
mainly a signal that IBM is finally acknowledging a fundamental
change in its core mainframe-computer business. For years, Big
Blue has tried to ignore the market's shift away from the
closet-size number crunchers to less expensive but powerful
desktop computers and workstations. Now declining sales of
mainframes have forced IBM to face up to the transition.
Traumatic as the cutbacks are to the giant firm's
employees, they underwhelmed Wall Street analysts. Many think
IBM has yet to bite the final bullet, and must pare its costs
and payrolls further.