Hancock says she's staying

Despite published reports of her severance negotiations and pending departure, senior executive Ellen Hancock is not leaving Apple Computer (AAPL).

"It is not true that I am negotiating a severance package from Apple," Hancock told CNET. "This rumor is a bad one."

Hancock, who arrived at Apple last July as chief technology officer, had her responsibilities reduced two weeks ago as part of a management shuffle. That shuffle also resulted in Marco Landi, former chief operating officer, receiving the diminished role of vice president in charge of worldwide sales. Landi quit abruptly earlier this week.

With Hancock no longer overseeing Apple's development of its operating system and company cofounder Steve Jobs returning to advise CEO Gilbert Amelio, rumors of Hancock's departure have heated up.

PC Week's online publication reported yesterday that Hancock was negotiating a severance package and preparing to resign.

But Apple spokesman David Harrah reiterated Hancock's unequivocal denial. "Ellen is not leaving," he said.

If Hancock quit, she would be giving up a base salary of at least $480,000 and the potential to earn a bonus of $360,000, according to her employment contract. The contract also entitles her to a full year's salary and the bonus should she be terminated without cause.

Meanwhile, the troubled computer company is looking to slash $400 million in operating costs this fiscal year and is expected to announce a major reorganization plan and layoffs next month. Apple also pushed back its profitability forecast six months to its fourth quarter.

The company earlier this month wrapped up its acquisition of Next Software, which was owned by Jobs. Apple plans to blend that company's technology in developing its next-generation operating system.