IBM Corp's Chief Executive Virginia Rometty told employees the company had become too sluggish and unresponsive, after it posted weak first-quarter results, the Wall Street Journal reported on Wednesday, citing IBM's internal video message addressed to its employees.
The technology services company posted on Thursday a rare quarterly earnings miss as a sliding yen hurt earnings from Japan and it failed to close a number of major deals, especially in Europe and the United States.
Rometty set a new rule. If a client has a request or question, IBM must respond within 24 hours, the newspaper reported she said in that call. She addressed the call to over 434,000 employees worldwide.
"Where we haven't transformed rapidly enough, we struggled," Rometty said in the video published on IBM's internal website, reviewed by the newspaper. "We have to step up with that and deal with that, and that is on all levels."
IBM was not immediately reachable for comment on the report.
IBM blamed a poor performance by its sales force for some of the shortfall for the poor quarterly results. But analysts said it was not just one quarter - the company's sales have been weakening consistently, dragging down results with or without the changes in the yen.
Rometty said IBM needs to speed its shift to new computing models to get back on track, the Journal reported citing the video. (Wall Street Journal article: http://link.reuters.com/dah67t)
IBM also reassigned one of its most senior executives, the head of its computer hardware business, following a sharp drop in first-quarter sales at the unit, the Journal reported citing a person familiar with the matter.
(Reporting by Thyagaraju Adinarayan in Bangalore; Editing by Lisa Shumaker)