My paper explores the period in IBM’s history beginning in the 1970s that extended into the new century. By the 1980s it was marked by poor business performance, stemming from changes in technologies and market demands for these, both of which required new personnel practices that changed the company’s corporate culture. This is important because historians and employees generally agree that the changes in IBM’s culture helped diminish the firm’s performance. It would be difficult to underestimate the importance of these changes. Revenues and the number of employees declined, entire sections of its businesses closed or were sold off, trends that continued deep into the new century.
These events led to the destruction of the Grand Bargain of lifetime employment with layoffs, reduction in benefits and salaries, and elimination of the firm’s traditional pension. The single most influential change in the company’s culture was the result of laying off employees, followed by the introduction of younger ones who were less expensive and that came in with new skills, but who could also expect not to spend their entire working lives at IBM. Meanwhile, across the past half century the number of women and minorities entering IBM’s workforce increased in the U.S. and permeated all divisions and levels. In 2012 IBM appointed a woman as president and chair of its board of directors. Changes in the mix of personnel were caused by the American civil rights movement, regulations, and widely shared personnel practices in business. Today IBM has more employees in India than in the U.S.; its product mix consists of AI, hybrid Cloud, software and related services, but hardly any hardware sales. The author offers personal comments on working conditions from the 1970s to the 2000s and lessons for other multinational corporations.