ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Saturday, March 15, 1997 TAG: 9703170044
SECTION: BUSINESS PAGE: A-5 EDITION: METRO
DATELINE: SAN JOSE, CALIF.
SOURCE: ASSOCIATED PRESS
The retrenching is the computer maker's latest try to reverse chronic losses and shrinking market share for its flagship Macintosh.
In a dramatic bid to stem its losses, Apple Computer Inc. said Friday it would cut 30 percent of its work force, or about 4,100 employees, and pare its line of Macintosh computers and software.
Apple said the restructuring would cut into its bottom line this quarter by $155 million but was intended to reduce annual operating expenses by $500 million.
The retrenching is Apple's latest try to reverse chronic losses and shrinking market share for its flagship Macintosh personal computers.
Apple said in an announcement it would lay off 2,700 employees, but later said it also was letting go 1,400 contract and part-time employees in its 13,400 work force. Apple's announcement made no mention of its Newton hand-held computer, which some have expected would be dropped.
The company said it would simplify its offerings of Macintosh computers and Power Book laptops. It also would try to cut costs by using technologies developed by other companies instead of developing them in-house.
Apple said it would deliver its next-generation operating system, code-named Rhapsody, next year as planned. But it would cut spending on future upgrades of the Mac OS. It would reduce the number of new releases of its Mac OS beginning next year to one from two per year.
Apple, the nation's No.4 personal computer company, pioneered the machines in the 1970s, and in the 1980s gained the intense loyalty of consumers with its easy-to-use Macintosh.
But in recent years, the company has stumbled badly. Aside from other problems, Apple has been saddled with higher costs than its competitors because - unique among PC makers - it makes both hardware and software.
It also lost ground to rival PCs that run on Intel Corp. chips using Microsoft's Windows operating software. Windows is seen by many to be almost as easy to use as Apple's Macintosh. Apple's claim of the overall PC market fell from 7.9 percent to 5.2 percent last year.
These cuts are just the latest. Apple cut 1,500 jobs last year as part of a restructuring implemented by Gil Amelio, who was hired as chairman 13 months ago to turn the company around. He also vowed to make Apple more efficient and focused.
But Apple's long and costly effort to revamp its operating software, which controls a computer's basic functions, finally collapsed last summer.
In December, Apple stunned the high-tech world by buying Next Software Inc. to make its technology the basis of a new operating system. The $430 million deal also brought back Apple co-founder Steve Jobs, who started Next after his ouster from Apple in a boardroom power struggle in 1985.
But slow sales during the fall quarter - usually a strong one for PC companies - resulted in a $120 million loss. Amelio then ordered the latest restructuring intended to make money on $8 billion in revenues, down from $9.6 billion in fiscal 1996.
LENGTH: Medium: 62 linesby CNB