He wasn't. The CDC 6600 cost IBM some prestige, but it didn't put a dent in IBM's sales, which were about to skyrocket due to the 360 series.
However, during that time the market for lower-cost and acceptable performance computers was expanding very quickly, so IBM had growing revenues and profits, without being affected by the loss of a smaller market.
They were more strongly affected by the ascension of DEC, as the main vendor of minicomputers, which took the lower end of the market from IBM, but the medium-performance market, especially for business data processing, where the greatest profits were achievable, remained dominated by IBM, so they had little to worry about.
As a response to CDC 6600, IBM had the internal development project ACS (Advanced Computer Systems), which was eventually cancelled, as diverting resources from the money maker that was the IBM System/360 line.
Had ACS not been cancelled, it would have had good chances to become the fastest computer of the world, because its design team invented many techniques that were introduced in computers only almost a quarter of century later, e.g. unrestricted out-of-order and superscalar execution with fine-grained multi-threading.
The business consequence wasn't merely losing a talented employee. IBM threw away the future contributions of someone who had already demonstrated an extraordinary ability to solve fundamental architectural problems. She subsequently helped launch the Mead-Conway VLSI design revolution at Xerox PARC, making chip design accessible to a much broader community. IBM's bigotry drove that talent, and the opportunity to cultivate her next breakthroughs, out of the company.
We can't put a dollar figure on that loss, or assume retaining her would have saved ACS. But growing System/360 profits don't establish that IBM had "little to worry about." They show how easily a lucrative existing business can conceal the opportunity cost of throwing away exceptional talent. Maybe IBM thought they had the luxury of affording prejudice and bigotry, but it wasn't a sound business judgment.
Perhaps IBM's treatment of Conway supplies another answer to Watson's question. A vast organization can have exceptional talent and still squander it. Conway's firing came after the CDC 6600, but dismissing a pioneering computer architect for transitioning hardly suggests that IBM's problem was a shortage of resources. Sometimes the obstacle between your engineers and the future is your own management's bigotry.
I wonder how much talent Elon Musk has driven away -- trans employees, people with trans family and friends, and anyone repelled by his public humiliation, deadnaming, and misgendering of his own daughter. How many breakthroughs will happen elsewhere because their inventors wanted nothing to do with him? Those losses won't appear as a line item on a balance sheet either.
An interesting connection: Seymour Cray's grandson Andrew Cray was a trans man and LGBTQ healthcare advocate. He married Sarah McBride in 2014, four days before he died of cancer. McBride later became the first openly trans person elected to the US Congress.
As for Elon, I will call the website Twitter, because if he can deadname his daughter, I can deadname his companies as well.
After the acquisition of Twitter, a large number of talented people walked away, a lot because of his attitude towards work-life balance, and, I assume, later, as his darkest side became more and more public (culminating in Trump's inauguration Dr. Strangelove event), a lot of the remaining talent left for healthier pastures. That period was full of outages and data loss.
On @DonHopkins, I love his "FORTH ?KNOW IF HONK ELSE FORTH LEARN THEN"
In many ways, the 6600 would be unthinkable to IBM - it was a very limited machine, with 60-bit words and no character addressability, just ludicrously fast (and cool looking). The central processor was augmented by 12 peripheral processors that offloaded IO and other tasks from the CPU (not sure IBM did that, but this - channel processors and channel programs - is a pattern that was common on IBM mainframes at least after the 360).
It's very normal to slow down new model releases so they don't cannibalize too much of the sales of previous established lines. CDC was a very lean company, while IBM had a lot of different lines to protect from their own disruption.
It's always an important thing to remember it's better to develop the product that will kill your cash cow, because someone will, and you don't want it to be your competition.
A much greater omission was IBM's refusal to consider time-sharing, until it was too late, and then they made a total mess of it with TSS/360. (The 360/67 was a good machine, I have fond memories of it, but it needed a different OS, Michigan Terminal System in our case.) It took IBM a long time to understand the need for interactive computing.
I don’t remember much about time sharing being a thing at that time - batch processing made sense in both kinds of applications.
As for time-sharing,IBM explicitly ruled it out as a design objective for OS/360. Then MIT went shopping for a partner for Multics. IBM had nothing of interest for them, but GE agreed to design a virtual memory version of their 635, the 645. Suddenly, IBM realized that they were going to lose a market, so they rapidly added memory mapping to the 360/65, producing the Model 67. They also announced Time Sharing System/360, but the early versions were unusable (20 minutes to log in, for example), so a few folks at the University of Michigan whipped up an interim solution, the Michigan Terminal System, which worked fine, and was in service at various places from 1968 to the 1990s.
Although IBM produced various time-sharing systems, including Call/360, APL\360, the Time Sharing Option, and VM/CMS, they never really understood it, which is why a few underfunded folks at a university could produce something better than what they could produce with a professionally-managed team.
By contrast, DEC did get it in that era, which is why the PDP-10 did so well in university computer science departments.