CFO's poor show causes IBM demotion

The CFO of IBM has been demoted following the company's shock third quarter results two weeks ago. Douglas Maine has taken the blame for the poor results, which caused the largest single-day drop in Big Blue's share price since Lou Gerstner was brought in as CEO to reverse the giant's fortunes. Maine will lose his senior VP status and become head of a new Internet based direct-sales team. He is to be replaced by John Joyce, currently head of sales in Asia. The third-quarter results, complete with a profit and earnings warning for the next two quarters, fell below expectations and were blamed on a sales slowdown due to the year 2000. The setback, which came at a time when confidence in IBM was on a new high, is unlikely to have impressed Gerstner, especially since the year 2000 problems had earlier been dismissed by Maine. Maine said there was no connection between the poor results and his new job, stating that he had always wanted to work on the operations side. It seems likely Gerstner was only too pleased to grant Maine's wish - a move which will see him learn about PC sales on a first-hand basis. John Joyce is widely viewed as a possible future head of IBM and his move to the high-profile CFO job could prove a defining moment. ®