Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, July 28, 1993 TAG: 9307280097
SECTION: BUSINESS PAGE: B6 EDITION: METRO
SOURCE: Associated Press
DATELINE: NEW YORK LENGTH: Medium
Most of the loss comes from the cost of paying 85,000 employees - about 25 percent of its work force - to depart the world's largest computer manufacturer by the end of 1994. International Business Machines Corp. earlier said about 25,000 would leave. The board of directors cut the quarterly dividend from 54 cents to 25 cents. It was cut from $1.21 in the first quarter.
Louis V. Gerstner, in his broadest assessment of IBM's trouble since becoming chairman and chief executive officer 3 1/2 months ago, said he would not name a president and did not want to be bogged down by committees.
"I'm not spending a lot of time on structure and the process of IBM," Gerstner said. "I'm spending a lot of time on customers, employees, technology and the economics of IBM."
He defended his decision to deal with all of IBM's potential restructuring charges in one quarter.
"We've got to try to get behind us this Chinese water torture we've been going through quarter after quarter, year after year," he said.
IBM expects to cut its work force to 225,000 by the end of 1994 from 302,000 at the start of 1993. Gerstner said no further charges or cost-cutting moves are anticipated.
IBM's quarterly loss is its biggest ever and second only to General Motors Corp.'s $21 billion loss in the fourth quarter of 1992.
The operating loss was $40 million, or 8 cents a share, far better than expectations. The overall loss was $8.04 billion, or $14.10 per share. IBM earned $734 million, or $1.29 a share, in the 1992 quarter. Revenue was $15.5 billion, off 15 percent from $16.2 billion a year ago.
Memo: slightly different version ran in the State edition.