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Waiting for the ax at Apple

Just as Apple desperately needs energy and creativity, fears and rumors paralyze many of the company's employees.

As D-day approaches at Apple Computer employees are characteristically busy, but not with the kind of enthusiasm that made their company a household word. They are working the phones, revising their resumes, and preparing for job interviews.

"In the old days, the spirit was really something that set us apart, but it's been gone for a long time now," said one employee as she awaits an anticipated severance package to carry out the door. "No one has that burning passion anymore."

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CEO Gil Amelio on employee creativity in Sept. 1996 interview
Passion is a word that has long been associated with Apple (AAPL). When Steve Jobs founded the company with Steve Wozniak in what eventually would become California's Silicon Valley, he pledged that Apple would "change the world"--a revolution that would be driven by his devoted congregation of programmers and engineers.

And it is this very kind of inspiration that CEO Gil Amelio is trying to rekindle--in no small part with the return of prodigal son Jobs--to help lead the crusade. The support of the rank and file is perhaps more crucial than ever to Apple's future as it faces dwindling market share, plunging revenues, mounting losses, and stock that is trading at its lowest price in a decade.

But unlike years past, when the Apple faithful have endured rumors ranging from buyouts to bankruptcy out of undying loyalty, today's employees are showing a collective weariness and skepticism that has been unusually absent in the company's history.

The change is understandable: Yesterday, Apple finally set a date--March 14--to announce the expected layoffs, which could to run upwards of 3,000 employees.

"There is no one here that feels safe. It's sad," said one worker has been laid off twice and rehired during her tenure at Apple. Each time she has returned, it has been with a little less enthusiasm as projects previously started were canceled.

Through Apple's once-electrified hallways, productivity has come to a "screeching halt" in recent weeks, said a marketing manager who asked not to be identified. Many employees are quietly preparing their resumes and using sick time to go out on interviews, she added.

Driving this megamorphing is Apple's desire to cut $400 million in operating expenses and turn the company toward profitability by September. "Let me assure you that my very highest priority as I stand here is to get this company in the black as quickly as possible," Amelio said at the annual shareholders meeting last month.

Employees are well aware of the reasons behind the restructuring, but that does little to ease the tension that envelops the workplace. Some are concerned that their employment at Apple may actually hurt them if it becomes a stigma throughout the industry.

Aware of the obvious distractions, the company is trying hard to keep its workers focused. "It is a goal of Apple to nurture and sustain company morale," spokeswoman Jeni Johnstone said.

Although she could not discuss the current layoff situation, Johnstone added Apple has done its best in the past to help departing employees, offering career counseling, severance packages, and help in finding new jobs. "Apple handles all layoffs with respect and dignity...People are being laid off through no fault of their own."

But one employee said the only counseling that Apple provided was a briefing on workplace violence. Others are simply biding their time, waiting to get a pink slip and a severance package that they believe the company owes them.

"It starts to feel like it's your birthright," said the marketing manager, who hopes to collect a package equal to about five months' pay. In the past, Apple has offered packages of six weeks' pay, plus an extra week for every year the employee has been with the company and more for higher levels of responsibility.

Workplace experts say the sense of resignation that pervades the company's labor force will make it doubly hard for Apple to achieve the comeback it has so many times promised. The uncertainty of pending layoffs can tear a business apart, according to Jot Friedland of Friedland & Marcus, a business and career counseling center.

"When employees are kept in the dark about upcoming layoffs, the first thing to go is a sense of trust, and that attitude remains with those that stay," he said.

That is exactly how Steve Beitzel described his experience at Apple.

Beitzel, who spent three years as a programmer on the eWorld project, survived two rounds of layoffs before quitting a year ago to join Salamander Interactive.

Morale plunged as pink slips were handed out to his colleagues and friends, said Beitzel, who left Apple only weeks before it pulled the plug on the online service.

"A lot of people were walking on eggshells, and nobody knew anything," he said. "There had been such an air of secrecy and isolation from management that we didn't really feel like we could trust them."

Beitzel, at least, was able to land on his feet. Others may not be so lucky if Apple's problems follow them on their interviews.

"Marketing personnel are probably a little bit less advantageous because of the lingering negative press for Apple," said Tod Gregory, a vice president at Korn/Ferry International, a leading executive search firm. "If you came out of Apple a year ago, the outlook for the company was more positive then."

But he noted that most Apple employees will find that working for the computer maker is a plus on their resume, especially in light of the industry's demand for anyone with relevant skills and experience. Larry Standzack, a manager with executive search firm Source Services, said the information technology job market has been booming since 1993, thanks largely to the Internet.

Still, even those employees who are confident they will get jobs elsewhere say it will be difficult to duplicate the kind of experience they had at the Apple of old, and that makes them sad.

"We used to be able to leap tall buildings in a single bound," one said. "But no one even feels like jumping anymore."

Photo by Donald R. Winslow