Executives go in IBM shake-up

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IBM, the US computer giant, is reorganising its $11bn (£6bn) software division in an attempt to boost market share amid a shake up which will mean the early retirement of two senior executives.

In an internal memo, Louis Gerstner, IBM Chairman, said he has created an integrated software group to help the company focus its software marketing and distribution activities.

IBM has been cutting tens of thousands of jobs to restore profits and stay competitive. The first phase of IBM's turnaround focused on rebuilding the balance sheet and cutting costs. Now it is trying to build its business.

Mr Gerstner said the unified software group will be headed by John Thompson, now in charge of operating systems development, and will include three divisions - Software Solutions, Personal Software Products and Networking Software. Top executives Ellen Hancock, head of IBM's computer networking division, and Bob Labant have decided to retire, the company announced. No further explanation was given for their departures.

The resignations follow the surprise announcement last week that its treasurer, Fred Zuckerman, 60, a vice-president at IBM, will retire to be replaced by Jeffrey Serkes, 36, his assistant.

With Mr Thompson heading the new IBM software group, the hardware businesses previously under him will become the IBM server group. Servers are computers that link other computers in a network. Ned Lautenbac is to be the new group executive responsible for worldwide sales and distribution.

IBM stock was 12.5 cents higher at $75.25 in late morning trading on Wall Street yesterday.