Lou Gerstner, the man who saved IBM from collapse and taught the elephant to dance, has died
The former CEO of IBM, credited with one of the most remarkable corporate bailouts in business history, has died at the age of 84.
The former CEO of IBM, credited with one of the most remarkable corporate bailouts in business history, has died at the age of 84.
Gerstner's death was announced by Bloomberg, citing current CEO Arvind Krishna in a letter to employees, without specifying the cause of death. Gerstner took over the technology giant in 1993, when the company was on the verge of bankruptcy, and during his nine years at the helm, he transformed it into the undisputed market leader, increasing the value of its shares almost tenfold.
What made Gerstner memorable?
When Gerstner joined IBM on April 1, 1993, he became the first outside CEO in the company's history. At the time, IBM's management was considering breaking the company into many smaller divisions in order to survive. Gerstner stopped that process, focusing on preserving the company's integrity and changing its course.
He implemented painful but necessary reforms: he laid off 35,000 employees, ending the tradition of lifetime employment, sold non-core assets (including the art collection), and reoriented the business from hardware production to services and software.
His strategy was to abandon unprofitable products (in particular, the OS/2 operating system) and focus on "middleware" - connecting software, as well as on Internet technologies and e-business. This allowed IBM to become the main integrator for corporate clients regardless of whose hardware they used.
The result was IBM's financial transformation: service revenue grew from $7.4 billion to $30 billion, and the company's market capitalization jumped from $29 billion to $168 billion. He later described his experience in the best-selling book "Who Said Elephants Can't Dance?"
After retiring from IBM in 2002, Gerstner headed the Carlyle Group investment group and was active in philanthropy, supporting education, biomedical research, and social initiatives.
It was previously reported that 55-year-old video game developer Vince Zampella, who worked on such popular game series as Call of Duty, Medal of Honor, Titanfall, and Battlefield, had died.
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