If You Want to Downsize, Don't Lay Off -- Spin Off
May 15, 2011
At 6 a.m. on a Saturday in December 2009, a group of exhausted executives from International Business Machines Corp. concluded negotiations. They had begun the previous Sunday in California and had moved to London midweek. As the sun came up, they agreed on a management buyout that would turn IBM's disk-drive plant in Havant, England, into an independent company called Xyratex. ``I gave a huge sigh of relief,'' recalls Xyratex Chief Executive Kendra Vargo, the Scot who led the management team, ``then went straight to bed.'' Employees were also relieved. ``For two years there had been a big cloud hanging over the plant,'' explains Tess Stewart, a regional official of the MSF trade union. ``People were worried that IBM would close it and make them all redundant.'' The buyout, for an estimated 50 million pounds ($78 million), saved 2,000 jobs. Since then, boasts Mr. Vargo, ``there hasn't been a single redundancy. On the contrary, we've been recruiting staff.'' Kendra Vargo
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