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CALIFORNIA

Apple Will Detail Cuts, Changes Next Week

Computers: Chairman Gilbert Amelio tells workers he will reveal how many will lose their jobs and charge to be taken.

March 05, 1997|From Times Wires Services

CUPERTINO — Apple Computer Inc. Chairman Gilbert Amelio told employees that on March 14 he will outline the exact number of jobs to be cut and give more details about a planned restructuring.

Apple spokeswoman Katie Cotton said Amelio will give the amount of any charge to cover severance payments and will name any units to be sold or shut down.

"He will try to get all the bad news out of the way," said Tim Bajarin, an independent analyst with Creative Research Strategies. "He's got to try to move forward."

The maker of personal computers is trying to reduce its expenses by about $400 million, or 25%, as its sales plummet, market share dwindles and quarterly losses mount. It's Amelio's second restructuring in his 13 months at the helm.

In an e-mail Tuesday to the company's approximately 13,500 workers, Amelio said executives were still formulating plans for the reorganization, first announced last month.

"On March 14, we are planning to give more detail on what we'll do, what we won't do," he said in the letter.

Industry experts and company executives have estimated that Apple will cut between 2,000 and 5,000 jobs from its worldwide work force.

The company is also expected to take a charge of between $300 million and $350 million to pay for the cuts.

Apple has lost nearly $1 billion in the last five quarters, and sales are expected to decline to as low as $7.5 billion this fiscal year from $9.83 billion in the fiscal year ended Sept. 30. Its market share fell to 5.2% in 1996 from 7.9% in 1995, according to market researcher Dataquest Inc.

Amelio has said the company will return to profitability by the fiscal fourth quarter, six months later than once expected.

The job cuts will go into effect later this month, Cotton said.

Apple has already cut more than 1,500 workers since May, and many more have left voluntarily. The company has also sold some if its manufacturing facilities and reduced product offerings.

In the latest shake-up, Amelio reorganized sales, marketing and research into single companywide divisions, instead of having separate units for each product group.

That shuffle prompted the resignation of four senior executives, including former Chief Operating Officer Marco Landi and Satjiv Chahil, who had been senior vice president and head of worldwide marketing.

Apple shares rose 37.5 cents to close at $16.50 in Nasdaq trading.

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