IBM Rehires Retired Top Executives

IBM has called back two top executives from retirement to advise the company as the computer maker faces one of its worst slumps.

The two executives, Paul Rizzo and Kaspar Cassani, will advise IBM Chairman John F. Akers as the company attempts to stem an erosion of sales and declining profitability. Analysts said their appointment may also be designed to ensure confidence in IBM’s management.

Rizzo and Cassani were formerly vice chairmen of IBM.

Rizzo, 64, was once considered a leading contender to become IBM chairman but was passed over six years ago in favor of Akers. The former chief financial officer retired from IBM in 1987.

Cassani, also 64, headed IBM’s European operations for seven years, when business there grew steadily. Cassani retired from IBM in 1989. Last week, IBM blamed a sharp drop in European sales in recent months for its worsening financial results.

IBM said last week that it will eliminate 25,000 more jobs next year--possibly through its first-ever layoffs--and it may slash its shareholder dividend. The company also said it will barely break even in the current quarter. The news sent IBM’s stock price plunging to an 11-year low.

In a short statement to IBM’s top managers Friday, Akers announced that he was retaining Rizzo and Cassani as of Jan. 1 to help run the company, based in Armonk, N.Y. Rizzo, he said, would help Akers in the United States while Cassani would assist IBM’s top European executive, Renato Riverso.

Akers described the role of the two as “counselors and advisers. Our work will benefit from their insight and seasoned judgment.”

The news did little to help IBM’s stock, which lost $2.50 a share to $48.875 in heavy trading on the New York Stock Exchange.