A flood of red ink forced IBM, the world's largest maker of computers, to change its chairman and CEO early in 1993. Louis Gerstner, the chairman of RJR Nabisco, was named to fill the post. Not a computer industry insider, Gerstner was seen by the investment community as a strong manager.
On July 27, he announced a massive restructing at the computer giant that would cut 35,000 jobs as part of a program that would eventually eliminate 60,000 jobs.
IBM lost $8.04 billion in the second quarter and cut its stock dividend for the second time.
In an effort to halt the losses, Gerstner sold some assets, reorganized divisions into more independent operations, and sought new sources of revenue to replace the revenues once earned by IBM's mainframe computer division.
By year's end, the reorganization seemed to be working. IBM stock rebounded from the low 40s into the mid 60s as investors found renewed interest in Big Blue.
A surge in price-cutting for IBM and compatible personal computers also forced changes at Apple Computer, where Michael Spindler took over from John Sculley as CEO. Apple has cut prices and announced it is eliminating 2,500 jobs in an effort to improve earnings.
