Apple shakes up Claris, lays off 300

Apple absorbs almost all of its wholly owned subsidiary's software products, including responsibility for the Mac OS.

3 min read
Apple Computer shook up Claris, its wholly owned subsidiary, today announcing a restructuring that includes layoffs of 300 and Apple's absorbing responsibility for development and sales of nearly all of Claris's software products.

Claris, which will be renamed FileMaker, will give up all but its popular FileMaker Pro database software and its Home Page Web publishing software, which is adept at posting databases on the Net. In addition to the ClarisWorks productivity suite and Apple-branded software products, Apple will take over responsibility for distribution of the hot-selling Macintosh operating system, beginning February 1.

The move may be seen as a means of preparing Claris for a sale or a public offering, by stripping unprofitable or unwanted software away from the core product, according to IDC analyst Eric Lewis. "Here's a product [FileMaker] that's successful and growing. It's now very simple to evaluate," he said.

Apple reportedly tried to interest Oracle in buying the program, without success. Anderson would not comment on the topic during today's conference call. Nor would he discuss the possibility of Apple's spinning off the new FileMaker company, though he did not rule it out.

Across-the-board layoffs, from development to sales and support, will take place over the next two quarters. U.S.-based Claris employees were notified today of the job cuts.

Apple doesn't expect to take a charge as a result of the restructuring, but will draw from reserves of $140 million the company set aside when it began reorganizing itself last year. Besides changing its name, Claris's relationship to Apple will remain the same.

"We believe we can put more muscle behind the [Claris] software--it makes more sense to have the Apple sales force sell those products. It isn't really a financial decision," Fred Anderson, Apple's chief financial officer, said in a conference call this afternoon.

FileMaker revenues totaled $24 million in the last quarter of 1997, according to Apple, with sales of the Windows version nearly reaching 50 percent of that total. FileMaker's success in the PC environment would be important to potential buyers, Lewis said.

In the meantime, it makes sense for Apple to take on responsibility for distribution the Mac OS in terms of marketing Mac hardware and software in a unified package, Lewis said, while products like ClarisWorks and Claris Email will be evaluated for their strategic value and profitability. Some of these products are likely to be discontinued, he suggested.

Claris currently makes database, office productivity, and other software programs for both the Mac and Windows platforms. The ClarisWorks suite is the leading productivity software in the K-12 education market that Apple heavily targets, according to Apple. Nonetheless, it competes with Microsoft's Office for the Macintosh software suite, which Apple now bundles in some instances.

Claris has been successful in its operations, posting 20 straight profitable quarters, according to the company. Claris posted record revenues of $91.1 million for its most recent quarter, in part due to record sales of the Mac OS 8 software.

Over 3 million copies of Mac OS 8 have been sold to date, Apple claims, making it Claris's most successful Mac software product ever.