Is Apple growing leaner?

The Mac maker says it laid off 180 employees in its fourth quarter and reveals it's facing increasing pressure in the education market.

Michael Kanellos Staff Writer, CNET News.com
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.
Michael Kanellos
2 min read
Apple Computer laid off 180 employees in its fourth fiscal quarter and said that it's facing increasing pressure in the education market, according to a Securities and Exchange Commission filing.

Many of the job cuts resulted from the Mac maker's acquisition of software developer PowerSchool, according to a regulatory document filed with the SEC and released on Thursday. In October, Apple said it engaged in a "minor staff reduction" but declined to put a number to the layoffs. Nonetheless, the work force is bigger than it was a year ago, according to the company.

Meanwhile, the Cupertino, Calif.-based company has struggled in the education market, it said. Sales to K-12 and university customers fell to 21 percent of its total revenue in fiscal 2002, down from 26 percent of revenue in fiscal 2001, the document said. Apple's fiscal year ends in September.

Macintosh unit sales to the education market dropped 14 percent from fiscal 2001 to fiscal 2002.

"These developments are consistent with industry data showing the company losing market share in the U.S. education market in each of the last two fiscal years," the company stated in the document. "Several competitors of the company have either targeted, or announced their intention to target, the education market for personal computers."

Deteriorating sales of Power Macs have also affected Apple. "If future unit sales of Power Macintosh systems fail to partially or fully recover, it will be difficult for the company to improve its overall profitability," the document stated.

Apple laid off 425 employees during its first quarter, according the SEC document, for a total reduction of more than 605 employees in fiscal 2002. A small number of jobs were cut from the company's Elk Grove, Calif., manufacturing facility in July.

At the end of fiscal 2001, Apple employed 11,434 employees--9,603 permanent staff and 1,831 temporary. The company employed more than 12,000 people at the end of fiscal 2002 in September, according to a company spokeswoman. The number of temps has stayed proportional, she added.

Many of the new hires--807 employees--work in Apple's stores.

The company will likely open more Apple stores in 2003. Since May 2001, Apple has opened 51 stores. Revenue from the stores shot to $283 million in fiscal 2002, up from $19 million in fiscal 2001.

News.com's Ian Fried and Joe Wilcox contributed to this report.