By most accounts, Virginia Rometty’s unannounced visit to IBM’s Rochester campus this week was a positive development after the discouraging series of layoffs that have occurred over the last several years.
Appointed IBM’s chief executive officer in January 2012, Rometty gave a 45-minute talk on the company’s increasing focus on technologies such as data analytics, cloud computing and mobile services.
Rometty’s appearance came across as a pep talk for uneasy employees coming off a disappointing year. In 2014, sales fell 6 percent to $92.8 billion, and IBM’s net income dropped 27 percent to $12.02 billion.
IBM is a much different company from when the last time the chief executive made an official visit to Rochester. Rometty’s predecessor, Samuel Palmisano, came in 2003 when IBM employed 4,600 in Rochester. The site employed an average of 2,677 in 2014, according to documentation required by the federal Occupational Safety and Health Administration.
While the declining number of IBMers in Rochester has been the source of pessimism for many observers of the regional economy, we view Big Blue’s continued presence as a case of the glass being half full.
IBM still has a massive commercial footprint in Rochester with more than 3.6 million square feet, the equivalent of 78 football fields. It is IBM’s largest facility under one contiguous roof in the world.
While Rometty discussed the shift toward analytics, cloud development and mobile services, it’s important to remember that many of these product initiatives were created partly in Rochester. In other public talks about IBM’s changing focus, Rometty has said those markets should make up 40 percent of IBM’s business in the next four years. That’s up from 13 percent five years ago, and 27 percent by the end of 2015.
Skeptics question whether the 103-year-old company with more than 400,000 employees worldwide is nimble enough to transition into emerging technologies. One staunch believer in Big Blue is Warren Buffett, the CEO of Berkshire Hathaway who invested in IBM for the first time in 2011, buying 64 million shares. By the end of 2014, Buffett, known for his buy-and-hold investment strategy, had 76.9 million IBM shares, valued at $12.3 billion, and a 7.8 percent ownership stake.
Even though we wish IBM was more transparent about its changing workforce — it hasn’t released specific employee numbers at its campuses since 2008, causing wild speculation anytime layoffs are imminent — we see Rometty’s visit as evidence Rochester remains important to IBM.
FROM AN EDITORIAL IN THE ROCHESTER POST-BULLETIN