Apple expected to reduce staff in bid to cut rising losses

 

APPLE Computer is set to lay off up to a quarter of its workforce - some 3,000 employees - as part of a bid to cut costs, according to a report in the Los Angeles Times. The plan, expected to be unveiled today, comes just a few weeks after Apple announced a net loss of $120 million during the fourth quarter compared to a loss of $69 million a year earlier.

Apple employs 1,500 people in Cork, although it has said recently that an expansion programme there remains on course despite the difficulties faced by its parent.

As part of its planned restructuring - the second in less than a year - Apple will announce the creation of a new post for Mr Steven Jobs, the company's cofounder who came back in December as an informal technology consultant to Apple's chairman and chief executive officer, Mr Gilbert Amelio.

Mr Jobs official return is tied to a deal struck by Apple to buy Next Software, the company founded by Mr Jobs after Apple let him go. The company's product will become part of a new version of the Apple Macintosh operating system.

The plan also calls for the reorganisation of a half dozen units into three divisions reflecting key segments of Apple's market: desktop publishing, Internet products, and education.

At present, each unit operates semi independently and each has its own marketing and engineering operations.

Mr Amelio reportedly wants to create an entity in charge of marketing as well as research and development for the three new divisions, the report

The company, which let go 4,200 workers last year, also is expected to impose a hiring freeze.

Apple reportedly wants to cut costs by 20 per cent so it can be profitable on between $7 billion and $8 billion in annual sales compared to $9.83 billion last year.

Analysts say Apple's sales and its share of the market are shrinking at an alarming rate.

According to Dataquest, a specialised research firm, sales of Apple personal computers fell 30 per cent in the United States last year, while industry wide sales rose 17.8 per cent.

For its part, Apple says that sales of high end products such as the Power Macintosh rose 15 per cent during the fourth quarter compared to the previous quarter. And it stresses that the international market accounts for 56 per cent of the company's business.

Apple is expected to release the restructuring plan short before the company's shareholders meet at Apple headquarters in Cupertino, California.