Amelio: Promises made, not always kept

Recently departed Apple CEO Gil Amelio kept some of his pledges but failed on the one that really mattered: turning around the company's finances.

2 min read
Recently departed Apple (AAPL) CEO Gil Amelio made good on some of the promises he made while at the helm in Cupertino, but he failed to come through on the one that really mattered: turning around the company's finances.

Hailed as the company's savior when he was appointed in February 1996, Amelio's early history at Apple made promises of its own. Amelio came to Apple straight from a successful turnaround of National Semiconductor. Soon after his arrival, he recruited a promising team of executives, and his first 100 days of Amelio's tenure led to a swift stabilization of the company's finances and renewed investor and employee confidence, according to former executives.

But in the end, while Dr. Gil was able to cut products that weren't contributing to the bottom line, he was too slow to make sweeping changes, analysts and executives have said. In his 17-month tenure, he twice promised profitable quarters and twice the company posted record losses.

Follows a sampling of the promises made, kept, and broken in the Amelio years:

"helvetica"="" color="#CC0000">Finances:
"helvetica"="" size="-1">September 1996
Amelio says the company will return to profitability in the second quarter (March) of 1997.

"helvetica"="" size="-1">April 1997
Apple reports a second-quarter loss of $708 million, a shortfall larger than analysts' expectations and nearly matching its record loss of 1996.

"helvetica"="" size="-1">December 1996
Amelio says that Apple is "within a round-off error" of meeting its sales objective, and that while there will be continued "steady pressure" on expenses, there should be no more layoffs than the 1,500 in 1996.

"helvetica"="" size="-1">March 1997
Apple lays off 2,700 permanent employees and 1,400 part-time and temporary workers, layoffs that will cost the company $155 million in its second quarter.

"helvetica"="" size="-1"> March 1997
Amelio promises profitability by September quarter.

"helvetica"="" size="-1">July 1997
After Amelio's resignation, Fred Anderson, acting CEO and president, says the company will make no guesses about when the company will get back in the black.

"helvetica"="" color="#CC0000">Products:
Making good on his pledge to ax any product that doesn't contribute to the bottom line, Amelio cuts the following:

"helvetica"="" size="-1">March 1997
Amelio axes Pippin.

"helvetica"="" size="-1">March 1997
Apple cuts off funding to CI Labs; they shut down OpenDoc.

"helvetica"="" size="-1">May 1997
Apple spins off Newton Division.

"helvetica"="" size="-1">December 1996
Amelio promises to "unveil a road map for how Apple will introduce a new operating system" at the opening of the Macworld trade show in January 1997. He also pledges to release Mac OS 7.6, code-named Harmony, in January and Mac OS 8, code-named Tempo, in July.

"helvetica"="" size="-1">January 1997
As promised, Amelio announces that the next-generation operating system, dubbed Rhapsody, will be based on the NextStep operating system. Mac OS 7.6 is released on time.

"helvetica"="" size="-1">July 1997
Apple meets Mac OS 8 deadline. New version scheduled to roll out on July 22. 

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