Apple, Microsoft layoffs imminent

Apple Computer is expected to lay off between 1,000 and 4,000 employees on January 17. According to sources, several high-level Apple Computer executives are looking to jump ship before the January 17 release of quarterly results. The results are expected to be less than rosy and may include a loss.

Departing executives will include Peter Friedman, vice president and general manager of Apple's Internet sources; Keith Fox, vice president of the home division; and Don Strickland, vice president of business and government sales.

But laying off employees is a short-term solution at best, said Michael Goulde, an analyst with Patricia Seybold Group, a Boston market research and consulting firm. "Laying off people may help them now, but it doesn't help them in the marketplace," said Goulde.

Apple's major weakness is marketing, said Goulde. "Apple has been living in a fantasy world for a long time. They are not in touch with the marketplace, and they're slow in reacting to change," he added.

The company's Internet strategy is a good example. Said Goulde, "[How Apple has reacted] to the current Internet revolution is just another example of minor tweaking, when in fact, they should be at the forefront of the entire revolution."

Microsoft has also announced plans to lay off some of its 18,000 employees on January 10, but sources say the cuts will be minor. "The layoffs at Microsoft are just a tactical short-term adjustment," said Goulde.

Reports say that sales of Windows 95 were lower than expected and that the layoff will not be significant. "They have been staffing up because they anticipated that they would need a lot of support for Windows 95," said Goulde. "Maybe they didn't find they needed as many people as they staffed up for," he added.