Exclusive: Apple rallies troops after slump
After an earnings warning halved its stock within 24 hours, Apple Computer is reportedly working to limit operating costs while shoring up employee morale.
According to sources, Apple chief executive Steve Jobs hosted a company-wide "communications meeting" from Apple's Californian headquarters on Friday morning that was simultaneously broadcast to remote locations. Jobs reportedly told employees that the company plans no layoffs -- a hiring freeze is in effect, Jobs said, with a few exceptions.
The company will replace departing employees, Jobs said, and will also fill a few outstanding positions in key areas. While sources said the chief executive didn't specify which open positions would be filled, they speculated that Apple will address gaps in hardware engineering.
Meanwhile, Jobs said, the company is considering scaling back a number of nonessential projects, although he reportedly did not identify which products would be affected by the cuts.
Sources said Jobs repeated the company's assertions that the lower-than-expected numbers were primarily the result of disappointing Power Mac G4 Cube sales and a slump in education channels. He said operations and engineering hadn't been getting products to market in time and said Apple needs to streamline its operations to address the problem. Jobs told employees that the emphasis needed to be placed on more quality work, rather than working longer or harder.
Jobs told staff worried about the status of their stock options that while the company can't legally re-price those options, Apple is investigating a stock buyback. He dismissed investors' bearish response to the earnings warning, saying it made no sense that Apple could drop from a $9bn company to a $4bn company overnight, especially since Apple has hardly any debt and plentiful cash reserves. The decline in profit didn't reflect on Apple staff, he said: "I'm still proud to be part of this company," he told them.
Apple on Thursday issued a warning that its fourth-quarter earnings will be 30 cents to 33 cents a share on sales of $1.85bn to $1.9 bn, well below the First Call Corp. consensus estimate of 45 cents a share. The warning sent the stock plunging 47 percent Friday morning and inspired a number of analysts to downgrade the stock.
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