I.B.M. Plans to Consolidate OS/2 Development in Texas

By Laurence Zuckerman
The New York Times

September 28, 1995

In a move aimed at shoring up its struggling OS/2 operating system software, I.B.M. will relocate 1,100 software developers and other personnel from Boca Raton, Fla., to Austin, Tex., the company told employees yesterday.

The move will consolidate OS/2 development in a single location, something that many analysts said was long overdue. Virtually all the software competitors of the International Business Machines Corporation, notably the Microsoft Corporation, develop their products in one place, while I.B.M.'s OS/2 efforts have been divided between Florida and Texas for years.

Once a joint effort of I.B.M. and Microsoft, OS/2 was taken over by I.B.M. when the two companies fell out in the early 1990's. Since then, Microsoft's rival Windows software has become the industry standard, while OS/2 has retained a much smaller, but loyal, following.

Many industry analysts have predicted that I.B.M. will gracefully back away from OS/2 now that Microsoft's new Windows 95 has matched many of OS/2's more popular features. But John W. Thompson, the I.B.M. executive recently put in charge of OS/2, said I.B.M.'s commitment to the software was unwavering. He said he had decided to consolidate development to increase productivity and to enable new products to get to market faster.

"This is more of a focus on speed of execution than cost savings," he said.

Mr. Thompson said I.B.M. would do its best to convince all 1,100 workers to move to Austin. Those who decline will receive a severance package, while a small number of clerical and support personnel who cannot find jobs at other I.B.M. operations will be laid off, he said.

He added that he would hire more programmers in Austin to make up for any who declined to move from Florida.

The relocation should be completed by April. It comes at a difficult time, because I.B.M. is already late with several OS/2 products. In June, the company released a line of computers built around the PowerPC microprocessor, which was developed jointly with Apple Computer Inc. and Motorola Inc. But a version of OS/2 that runs on the new machines has been delayed for months and will not be available until the end of the year at the earliest, I.B.M. said.

The 600-acre Boca Raton center, which now has about 2,000 employees, dates to 1967. About 15,000 workers were employed there at its peak, and it has earned a place in computer lore as the place where I.B.M. secretly developed its first personal computer in 1980. About 1,000 workers from other I.B.M. divisions will remain.