Tech Industry

Amelio's right-hand man quits

Apple chief operating officer George Scalise resigns to become the president of the Semiconductor Industry Association.

The hand-picked lieutenant that CEO Gil Amelio brought with him to Apple Computer is quitting after slightly more than a year.

Apple's (AAPL) chief operating officer George Scalise said today that he is resigning to become the president of the Semiconductor Industry Association as of June 2.

Scalise is the latest and the highest-ranking executive to leave the ailing company. His departure is especially notable given his close relationship to Amelio. When Amelio moved to Apple from National Semiconductor in February 1996, it didn't take long for Scalise to follow.

"Scalise is Gil's inside guy. He's his alter ego," said one former Apple executive. "It's been a long and cozy relationship."

Other former executives speculated that the recent return of Apple cofounder Steven Jobs as a consultant to the company reduced Scalise's influence and prompted his decision to leave. Jobs returned to Apple after it acquired his company, Next Software in December 1996.

Scalise did not return phone calls.

His departure comes at a crucial time for Apple. The company, which posted a staggering $708 million loss in the second quarter and has been losing market share, is striving to turn itself around and post a profit in the fourth quarter.

In an example of its cost-cutting efforts, Apple announced in March it would cut nearly 25 percent of its 11,000-member permanent workforce and pare down operations as part of restructuring plans.

Larry Tesler, vice president and chief scientist at Apple, said he will miss Scalise.

"George helped to raise the level of business professionalism in the company by mentoring and by example," Tesler said. "He helped me a lot and I saw him help others. He accomplished what he came here to do, and now has received and accepted a great honor presiding over one the most important industry associations in the world."

The courtship between Scalise and SIA has been a "whirlwind" process.

SIA president Thomas Armstrong abruptly resigned in mid-March and the trade group quickly formed an executive search team to find a replacement.

"George Scalise is a proven leader whose roots run deep in the semiconductor industry," said Alfred Stein, SIA chairman, in a statement. "Because of his stature in the industry, the board immediately recognized that he is the best person to take the reins of the SIA."

Scalise, 63, had previously served on SIA's public policy committee as chairman.

Jeff Weir, a SIA spokesman, said he did not know how long negotiations between the two parties have been underway; he declined to disclose Scalise's salary at the SIA.

"He has been a well-paid executive for a number of years and all indications are he still is," Weir said.

Analysts, meanwhile, said they aren't surprised that Scalise is leaving. And they don't think the COO's depature will necessarily throw off Apple's comeback plans.

"I don't view this as a critical blow to the company," said Daniel Kunstler, an analyst with JP Morgan Securities. "He had a strategic role and I would venture to say that his role had become redundant once the company had settled on [a new operating system] and the negotiations to license Java from Sun Microsystems were completed."

He added that Scalise's departure is not expected to move the computer maker's stock either way tomorrow.

"I don't advocate anyone change their [estimate] on the company based on this news," he said.