Sources confirm Apple laid off salespeople last week
Despite public statements to the contrary, Apple did lay off around 50 enterprise salespeople last week, CNET News has learned.
Sources who wished to remain anonymous for fear of reprisal confirmed reports by Valleywag and 9to5Mac.com that roughly 50 salespeople were let go by the company for "business and economic reasons," according to one source. An entire sales group based in Austin, Texas, was let go as well as workers in Cupertino, Calif., where Apple is headquartered. Those affected were given severance packages and the opportunity to apply for other jobs inside Apple.
Apple spokesman Steve Dowling, when asked Tuesday about Valleywag's report regarding the layoffs in the sales group, declined to comment. An unnamed Apple spokesman then told Silicon Alley Insider on Wednesday that the Valleywag report was not true, the same language Dowling used on Friday in a brief interview with CNET News to describe another report that Apple had laid 50 people off in its Mac Hardware and Pro Applications groups as well as the original report involving the sales group.
Reached on Monday, Dowling declined to comment on the situation beyond the statements provided last week.
However, the layoffs in the sales group did happen, according to several sources who were brought into conference rooms in Austin and Cupertino last Tuesday and given white manila envelopes informing them that they had been laid off, amid plainclothes security officers. It's still not clear whether the Mac Hardware layoffs occurred on Friday.
The seeds for the layoffs began last year, when Apple began de-emphasizing its direct enterprise sales force in favor of a sales strategy that embraced resellers and channel partners as ways of getting its products into the hands of businesses. That shift, believed to come directly from Apple COO Tim Cook, started when former the Apple senior vice president of enterprise sales, Al Shipp, left the company. Shipp, now the CEO of software start-up 3VR, did not return a call seeking comment.
John Brandon, formerly the head of Apple's sales for the Americas resellers like Best Buy and Wal-Mart, assumed control of the group when Shipp left and began making changes. Under Brandon, Apple began to shift away from a sales strategy where representatives built personal relationships with business customers in favor of a channel business that will depend on resellers like Ingram Micro and possibly CompUSA to sell Apple products to business customers.
The decision does not seem to have been prompted by falling sales or poor performance within the group, rather a change in philosophy embraced by Brandon and Cook. But the enterprise group has never been the hot group inside Apple, famous for its consumer retail empire and led by Steve Jobs, a man who disdains much of the entrenched corporate IT mindset.
Apple's shift in its enterprise sales strategy isn't all that remarkable, but Apple's willingness to publicly deny that layoffs took place is another blow to its credibility, already having taken a hit this year over its handling of disclosures involving the health of its CEO, currently on a medical leave of absence until June.
Confirming that a few dozen enterprise salespeople had been laid off as part of a strategic shift--and not a downturn in business--probably would not have made that much of a ripple in the tech media, currently more interested in Apple-related topics such as Netbook rumors and Apple co-founder Steve Wozniak's debut on ABC's "Dancing With the Stars" later on Monday.
Although Apple has been considered one of the more resilient companies in tech after posting strong earnings in January, the continued economic decline is believed to be affecting Mac sales and has prompted some analysts to reduce their expectations for Apple's current quarter. Perhaps the company felt that anything that might be perceived as bad news could hurt its stock price, and since it didn't have to report the layoffs to the Securities and Exchange Commission because they made up a small fraction of Apple's workforce, it didn't have to acknowledge them, period.
Tom Krazit writes about the ever-expanding world of Internet search, including Google, Yahoo, online advertising, and portals, as well as the evolution of mobile computing. He has written about traditional PC companies, chip manufacturers, and mobile computers, spending the last three years covering Apple. E-mail Tom. 
But that's a bit ominous for Apple's pro apps area. At least we've got a new Mac Pro for now. Certainly as a coherent business, it's a different focus than consumers. Evidence of Quicktime becoming only a playback system is a potential problem. Hopefully Apple will continue to want the halo effect from Mac's use in digital media industries.
What company do you work for?
"@Vega, Like I'm gonna tell you that information in a forum. Ha ha. "
Well then without any shred of evidence to back your story up, nobody can possibly believe you work for Apple. As such, you get branded a troll.
You have an easy way of fixing that however- come clean. :)
Also, if you want to look at it as a "true" layoff like Microsoft, Dell, Cisco, and others have done, what is the actual percentage of the laid off employees in terms of the total number of employees? My guess is that the percentage is less than 1/2 of 1%...
As the article states, "Those affected were given severance packages and the opportunity to apply for other jobs inside Apple."
Therefore, we don't know if they are truly unemployed. Their positions were cut, but they can apply for other positions within the company. I bet that there will be very few who will opt for the severance package instead of taking another job within Apple.
So, there is no spin here, the number will be far lower than 50 jobs lost. Attrition will always be there so there should be positions available. A good HR department should be able to find positions for each of those effected within a corporation the size of Apple's. I am not saying it's not bad that people had their positions cut, just merely pointing out the fact that it really isn't a layoff, just a restructuring of current business units.
Next time, actually read the article.
"Next time, actually read the article."
I did... the question becomes, did you? You are trying to put a spin on a story by trying to use facts that are simply not there. You can imply that people took the job offers in other departments- but you cannot possibly believe that every single person was offered a position in another location.
If we applied your logic to the recent Microsoft layoffs, then we could say there were no layoffs at all. 5000 job positions were targeted for elimination by the end of the year. 1400 people were elminated. Most of those were contract positions that were not part of the actual MSFT payroll. Those same positions were converted into FTE jobs. So, but your very own logic, one could say that Microsoft *increased* their headcount by more than a thousand positions.
Would that be responsible? No, of course not. That would be spinning the facts... without facts. This is what your comments are perceived as.
It's a good try, but I would have you ask those people who are now without jobs if they volunteered to quit on their own since Apple won't acknowledge them being laid off.
When Steve Jobs is gone Apple will be like Dell when Kevin Rollins took over. Cook and Rollins are okay when they are under control but disasters as number one.
Take charge of the situation or you'll let your lack of forthcoming allow the media to run right over you. Easiest way to defeat them is with open honesty.
How DO they operate without your insights?
Any company not trimming right now would be stupid.
It would appear that Apple *could* use someone with that insight or else this article woudln't have been noteworthy with the point made that Apple has denied twice that these layoffs happeend and have yet to come clean about it.
Make of it what you will- the media sure is.
Not surprising that the Big Bad Wolf crAPPLE PR Machine can't admit when their SPIN MACHINE can't stand to admit that the Apple BS ain't working with a public that has tight pockets and won't pay the MAC PREMIUM for essentially the same Chinese Sweatshop crap that is Dells, eMachines, Lenovo and Gateways LOW END computers.
A MacBook is nothing more than a $500 Lenovo and a MacBook Pro is nothing more than a $1000 Dell Inspirion. Well except BUGGIER!
Enjoying your Spinning Beach Ball of Wait MacTards?? All those flaky OS X updates that kills hardware and software???
OK, Krazit and the CNut Apple Hacks, make sure you censor out this post of the truth too.
What else is going on there that stcokholders should be worried about?
Most of the market has lost more than that - hold one now - there's a global recession!
Come on, have HOPE for CHANGE WE CAN BELIEVE IN!
DImwit.
And this is why the stocks and company is losing value.
Who cares?
You cared enough to read the article and post as well, so someone cares.
- by Zaunto March 10, 2009 1:50 PM PDT
- Spin it any way you want, 50 people lost their jobs and Apple denied the layoffs. They is a clear and obvious deception. The rationalization that lying about any level of layoffs would protect the stock price just doesn't cut it. It's deception and apparently they have been found out. Even if the laid off employees "apply" for available jobs within Apple, they were still "laid off" from their current jobs and have received severance from those lost jobs. Anyone who loses a job in this current economic climate is going to be stressed over the ability to find a new job. In the end, it's about right and wrong and right now, the public appreciates honesty over deception. Apparently Apple didn't learn that lesson yet. Let's see how the stock does now that they have been caught with their pants down on the subject of these layoffs. Remember HP's "stealth layoffs"? They laid off 50 people here... 20 people there... in order for it to fly under the radar of the media. That didn't work, as those HP layoffs still got reported. Let's hope these clowns don't screw up too much while Jobs is away. It's nice for Microsoft to have a viable competitor or more to the point, for the public to be able to choose the lesser of two evils...
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