Apple Axes Jobs After Q2 Losses

UK arm forced to cut staff after parent company announces $708 million loss for second quarter

Apple UK will be forced to slash its workforce by up to 25 percent as its parent company reported worse than expected results for its second quarter.

According to sources close to the company, Apple UK will reduce its staff by between 15 and 25 per cent over the next few weeks. The company currently employs 134 staff. It is understood that some staff have already left.

The manufacturer reported a loss of $708 million in the quarter ended 29 March, compared with a loss for the comparable quarter last year of $740 million. Turnover was $1.6 billion, down 27 per cent from $2.19 billion for the same period last year.

Apple CEO Gil Amelio said: ?We?ve made significant progress toward executing our strategic plans during the quarter. We?ve streamlined our organisation and narrowed our focus; we?re divesting non-core assets and we?re executing a plan to reduce annual operating expenses by $500 million.? But he conceded the results were ?disappointing?.

Apple incurred a charge of $375 million from the acquisition of Next Software, and a further $155 million to cover the costs of its March restructure.

But gross margin on product was 19 per cent, no change from gross margin in Q1, and up 10 per cent on the same quarter last year. Apple CFO Fred Anderson said this was one per cent off the company?s gross margin target of 20 per cent. Apple?s wholly owned software subsidiary Claris reported record sales of $70 million during Q2.

Meanwhile, Oracle CEO Larry Ellison has not formally mounted his takeover bid for the manufacturer, but he is rumoured to have hired San Francisco headhunter, The Geneva Group, to find a new management for Apple if the takeover bid goes ahead.