IBM’s CEO has a perfect response to her critics

IBM CEO Ginni Rometty

IBM has had 16 quarters of shrinking revenue. CEO Ginni Rometty took over at the start of 2012, so that’s her entire reign.

The year before she took over as CEO, in 2011, IBM had $106.92 billion in revenue and $15.86 billion in net income. It finished 2015 with $81.74 billion in revenue and $13.36 billion in net income.

Rometty points out that she is shrinking the company “by design.” She’s been selling off low-margin or money-losing operations like its commodity Intel server business and its chip manufacturing business.

And she’s been refreshing her enormous, aging workforce in major ways, too. IBM employs 380,000 people. IBM has been laying off thousands of workers a year in those shrinking areas while hiring thousands in growth areas of big data, cloud computing, security. She’s also been investing in new markets like design and digital marketing.

Some of IBM’s actions seem harsh. Like the recent decision to offer only one month severance to some laid off employees, no matter how many years they served with the company.

But other of Rometty’s decisions seem visionary, like ramping up her super smart computer service Watson, into a major cloud service. While all the other major cloud vendors are now chasing the machine learning, artificial intelligence thing, Rometty saw the need for that years ago.

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