March 4, 1997 5:00 PM PST
Apple layoffs due March 14
Chief executive Gilbert Amelio sent a letter today to the company's 13,000 employees, letting them know that Apple's restructuring plans and, most critically, the number of pending layoffs will be announced March 14.
With the Apple workforce becoming increasingly anxious over the size of the upcoming cuts, Amelio sent the letter to let them know more precisely when the blow will fall. Until today, employees had been told only that they would find out more at the end of February or the beginning of March, according to David Harrah, an Apple spokesman.
On March 14, Apple will disclose which projects the company will stop funding, the number of the layoffs, and the charge that the company expects to take in the second quarter to cover the reductions, Harrah said.
Apple executives have already nailed down more than 70 percent of the specifics for what Amelio has termed the "hot lists and the hit lists," but coming to an agreement on the remaining 30 percent has been tough, according to one inside source. The lists are based on the suggestions of the head of each division.
A source said Apple will definitely discontinue its support of the Pippin operating system, which it developed and licensed to Bandai America for its Internet information appliance. But as of last week the future of the handheld Newton device was still under fierce debate.
With some of the knottier decisions still to be made, some Apple employees will still be left on pins and needles even after March 14.
"This won't be a final, comprehensive list. There will still be stuff we won't be able to talk about at this point," Harrah said. "It would be nice if we could wrap everything up in a nice big bow."
Harrah said pink slips for individual employees will not actually be issued on March 14 but will be issued sometime thereafter. Issuing termination notices overseas may take even longer.
"There are complications and legalities that don't let you make cuts without other steps. Europe, for example, has many laws regarding the time you have to give for notification," Harrah added.
Amelio said at Macworld Expo in San Francisco last January that the bulk of the changes will be announced in March and that other smaller cuts and reorganizations will continue through 1997.
The cuts are the biggest part of Apple's drive to cut $400 million in operating costs and turn a profit by the end of its fiscal year in September. Last quarter, the company posted a surprise $120 million loss, largely due to a slowdown in Performa sales.
The company will also try to offload more of its manufacturing. Last January, the Acer Group announced that it will serve as a major source of components, such as motherboards, for Apple as well as the third-party Macintosh clone makers.
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