In his memoir, Gerstner described the turnaround as difficult and often wrenching for an IBM culture that had become insular and balkanized. After he arrived, over 100,000 employees were laid off from a company that had maintained a lifetime employment practice from its inception.[23] Long allowed by their managers to believe that employment security had little reference to performance, thousands of IBM employees had grown lax, while the top-performing employees complained bitterly in attitude surveys.[14] In the goal to create one common brand message for all IBM products and services around the world,[1] under Gerstner's leadership the company consolidated its many advertising agencies down to just Ogilvy & Mather. Layoffs and other tough management measures continued in the first two years of his tenure, but the company was saved, and business success has continued to grow steadily since then.[1][2]
From 1993 to Gerstner's retirement in 2002, IBM's market capitalization rose from $29 billion to $168 billion.[24] Despite his success[16] Gerstner also presided over the company's decline, relative to newer rivals, as it lost its once-dominant position in the IT industry. Microsoft grew beyond just PC software in the 1990s, hardware companies Apple and Dell expanded their market share, and entirely new entities such as the Google search engine emerged and created new computer-based business empires.[25] Gerstner was also the first highly-paid IBM CEO relative to his home-grown predecessors, earning a personal fortune of hundreds of millions in his role. His philosophy, quoted as "The importance of managers being aligned with shareholders—not through risk-free instruments like stock options, but through the process of putting their own money on the line through direct ownership of the company—became a critical part of the management philosophy I brought to IBM" has been criticized for IBM's management in the late 2000s becoming "fully isolated and immune from the long-term consequences of their decisions".[26][27]
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