Louis Gerstner, Who Saved IBM, Dies at 83

The Day Big Blue Held Its Breath

On the morning of April 1, 1993, IBM’s stock was trading at a 10-year low, employees called it “I’ve Been Moved,” and the press had written its obituary. That afternoon Louis V. Gerstner Jr. walked into Armonk headquarters, looked at the roomful of executives and said, “The last thing IBM needs right now is a vision.”

He didn’t promise miracles. He promised discipline. And in the next decade he delivered the greatest turnaround in tech history.

From Cookies to Computers

Gerstner, who died Monday at 83, had never sold a microchip when he took the job. He had sold cigarettes at RJR Nabisco, American Express cards, and once convinced McKinsey to hire him straight out of Harvard Business School. Colleagues said he could read a balance sheet the way sailors read the sky.

IBM was hemorrhaging $8 billion a year. Mainframes, its crown jewel, were being replaced by cheap servers. The company had 400,000 workers and 13 different CFOs. In his first 90 days Gerstner flew 200,000 miles, ate in 37 employee cafeterias, and concluded: “We’re going to rebuild this thing around the customer, not around the product.”

The Bet That Paid Off

He slashed 35,000 jobs, merged the fiefdoms, and staked everything on a wild idea: instead of abandoning mainframes, make them smaller, faster, and connect them to the fledgling World Wide Web. The result was the IBM eServer, a machine that kept banks, airlines, and governments humming through Y2K. Revenue climbed from $62 billion in 1993 to $87 billion in 2001, and market cap soared 800 percent.

A Quiet Farewell

Gerstner retired in 2002, traded the corner office for a canoe in Connecticut, and poured his energy into education reform. Friends say he fought pancreatic cancer with the same stoicism he once brought to boardrooms, refusing to let the disease define him. He is survived by his wife of 57 years, Elizabeth, their two children, and the Silicon Valley maxim that elephants can indeed dance.