January 8, 2001 3:00 PM PST

Lotus restructuring may lead to tighter IBM control

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IBM, in a move sure to fan ongoing speculation that Lotus Development is being further consolidated into Big Blue, will soon announce a restructuring of the subsidiary.

While details of the restructuring plan have not been made public, executives at Lotus confirmed that a reorganization of the company, managed by chief executive Al Zollar, will be largely completed this quarter. Mary Rose Greenough, director of global public relations at Lotus, confirmed that an announcement on the restructuring is scheduled to take place at Lotusphere, the company's user conference slated to start next week in Florida. Greenough would not comment on whether layoffs or consolidation of Lotus units would be part of the reorganization.

"The company's management team made the decision because of evolving market needs," Greenough said, without providing further details.

Zollar informed some Lotus employees of the reorganization in an email Thursday, Greenough said. She did not provide any further information about the email.

Any reorganization intended to blend Lotus more fully into parent company IBM "wouldn't be out of place," said one Lotus employee, who requested anonymity. Since the IBM acquisition in 1995, "there have been many realignments. So (an additional reorganization) is no surprise," the employee said.

Lotus battles Microsoft in the Web messaging and groupware markets. Groupware is software that manages digital information, like emails, documents and Web content, for office workers.

IBM, which acquired Lotus in 1995, has held a loose rein on the company, allowing it to continue to develop, market and sell its products under its name brand while maintaining its headquarters in Cambridge, Mass.

Zollar, a 23-year veteran of IBM, was picked to succeed Jeff Papows, who resigned a year ago to lead an independent company. Zollar's long history with IBM led some to believe Lotus' days as an independent unit of Big Blue were nearing an end.

The pending restructuring of the company is sure to spark additional questions about Lotus' continued independence. "Lotus will continue to have dedicated sales, marketing and services in support of its name brand," Greenough said.

In an interview with CNET a week after his appointment to lead Lotus, Zollar adamantly denied any moves by IBM to bring more control over Lotus. "Lotus has one of the strongest name-brand recognition in the industry. I want to continue this and foster it," he said.


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