New IBM Chief Tries to Reassure Workers

Louis V. Gerstner Jr. may be a newcomer, but he understands this much about IBM: Before he can restore profitability, he has to repair worker morale.

In his first memo to employees, IBM’s new chairman and chief executive showed a flair for diplomacy, sympathizing about job reductions and promising to listen to workers.

Gerstner already is getting an earful. Since starting work April 1, the former RJR Nabisco chairman has received scores of messages on IBM’s electronic mail system.

Judging from Gerstner’s reply, sent this week, employees are telling the new chairman that they are hurt and angry about job reductions that labeled workers “surplus,” and they are worried about their futures.

“I am acutely aware that I arrived at a painful time when there is a lot of downsizing. I know it is painful for everyone, but we all know too that it is necessary,” Gerstner wrote in the seven-paragraph memo.

“I can only assure you that I will do everything I can to get this painful period behind us as quickly as possible, so that we can begin looking to our future and building our businesses,” he wrote.

Nearly all of International Business Machines Corp.’s 300,000 workers get electronic mail, so the memo has drawn much attention at an especially wrenching time. IBM last week laid off about 2,600 workers at three plants in Upstate New York, and more layoffs are expected as the computer manufacturer eliminates more than 25,000 jobs this year.

Analysts say Gerstner needs to find a way to soothe employees’ fears so they can concentrate on improving the business.

Gerstner’s diplomatic and sensitive tone won points with workers. He was straightforward and didn’t use IBM jargon. “You’ve told me that restoring morale is important to any business plans we develop,” he wrote. “I couldn’t agree more.”

The candor contrasts with Gerstner’s predecessor, John F. Akers, who employees say delegated most communication to his staff, and with IBM’s generally soulless, bureaucratic reputation.

“He finally acknowledged morale was real low,” said Lee Conrad, an IBM assembly worker in Endicott, N.Y., who writes a newsletter distributed to about 2,000 employees. “That’s a real turnaround compared to past comments from Akers, who always said things were rosy. It’s a dose of realism for a change.”

The memo wasn’t Gerstner’s first communication with workers. On his first day on the job, he taped a message broadcast to IBM workers worldwide, reportedly delivered extemporaneously. Perhaps pointedly, he wore a blue shirt to the news conference at which he was introduced, not the traditional IBM white.