David M. Thomas
Senior Vice President & Group Executive
IBM Personal Systems Group
From: PSG COMM/Somers/IBM
@ ibmus on 10/06/99 05:29 PM
Subject: PSG Announces
Restructuring in the U.S.
Dear PSG Colleague:
Today we are announcing
a restructuring of PSG in the U.S. to ensure our long-term competitiveness.
The reason for this action is simple: although we have made significant
strides in our business during the last year, we are not yet where we
need to be. Unrelenting pressures in the PC marketplace continue to
drive lower costs, prices, and gross profit margins. As a result, we
are making sweeping changes that are designed to restore PSG to leadership.
We will continue to sell aggressively to individuals, but with a more
direct, cost efficient go-to-market approach with emphasis on product
sales through the Internet. We are cutting expenses, including eliminating
some jobs, and are taking steps to improve sales productivity and profitability
in all geographies.
Finally, this restructuring
will reduce overall costs and expenses in every part of PSG. Overall,
the size of our U.S. workforce will be reduced by about five to ten
percent, although some functions may be more impacted. During the next
three weeks we will determine exactly which jobs and how many people
will be affected. To help employees during this transition, PSG will
create a Project Office to oversee all aspects of this process, including
assisting managers in performing job assessments based on skills and
helping place affected employees in other IBM jobs.
As specific details
for each organization become available, they will be
announced on the PSG intranet site: http://w3.pc.ibm.com and MyNews.
These restructuring
changes will be made as we step up our aggressiveness in the marketplace.
Sales teams must focus on closing opportunities and executing our profit
multiplier strategy. We also will accelerate PSG initiatives to increase
our share of the VSB and SMB markets. Manufacturing and fulfillment
teams must continue to drive down costs and do a better job of managing
our supply chain, such as components needed for our high-end mobile
products and other products that are in short supply. Headquarters,
sales and M&D teams together must improve PSG's competitiveness
by accelerating our direct capability over the Web and by reducing costs
and expenses across the business.
Make no mistake
about it, the actions we have announced today are necessary to make
us more profitable and competitive in our industry. Our customer expectations
are growing. The competition is not letting up, so we must take rapid,
substantial steps to return PSG to leadership -- a goal that I am confident
we will achieve.
David M. Thomas
Senior Vice President and Group Executive IBM Personal Systems Group
