Apple Recast To Cut Costs By $400m A Year
Apple Computer Inc chairman Gilbert Amelio yesterday said the beleaguered company will reduce costs by $400 million per year through its latest restructuring efforts.
Amelio, who took the helm of the troubled American computer giant a year ago, told reporters that the details of the cost-cutting measures would be announced next month.
The changes are about revitalisation and not about retrenchment (of Apple Computer), said Amelio, who is in Japan to open a four-day Macworld Expo in Chiba, near Tokyo.
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He said the aim was to streamline the company into a functional organisation, refocus product priorities and stabilise business, but did not give details.
Apple Japan Inc president Tetsuya Shiga told the same news conference that the unit in Japan, one of Apples strongest-performing markets, did not plan to cut staff. I think we are short-staffed, Shiga said.
Apple stunned Wall Street with a $120 million loss in the three months to December, the first quarter of its 1997 business year, due to falling sales of its flagship Macintosh line.
Since then, the company has outlined a restructuring plan the second in 12 months that will involve layoffs to return it to profit.
Amelio declined to give any estimate of the number of job cuts, and only said the company cares about its employees.
He also declined to estimate the size of the loss for the January-March quarter.
He pointed out, however, that second-quarter results had historically been the lowest of the year, and said there was no reason why this trend would not continue.
On February 10, Apple announced that it expects to report a substantial loss in the January-March quarter due to its previously announced purchase of NeXT Software Inc and restructuring charges.
Apple, based in Cupertino, California, said at the time that the purchase of NeXT would cost about $430 million, up from a previous estimate of $400 million. It also said it did not expect to return to profitability until at least the fourth quarter of 1997, if not later. Apple, once the darling of the computer industry, has suffered in recent years from missed opportunities, management turmoil and failed strategies which resulted in the departures of top executives John Sculley in 1993 and Michael Spindler three years later.
Experts have said Apples decision not to license the Macintosh operating system to other manufacturers allowed rival Microsoft Corp with its Windows operating system to catch up.