Apple Layoffs In Education

by , 1:00 PM EST, February 26th, 2004

[Update: These layoffs were first reported by Think Secret on January 20th. - Editor]

Dow Jones Business Wire is reporting that Apple has laid off workers in the company's education division. The report says declining sales in the K-12 market are to blame, this despite an actual increase in education market share as recently as the June quarter of 2003.

The report cites Apple's SEC filings, which blamed weakness in the K-12 market on budget issues that face schools all across the US. The number of layoffs was not announced, but the report quotes an Apple spokesperson who called the layoffs "minor." This is in keeping with comments from Fred Anderson, who said that the June quarter's market share increase occurred because Apple's education sales declined less than the competition's. From the article:

An Apple spokesperson confirmed there were "minor work-force reductions" but declined to say how many jobs were cut, or which area they came from. The spokesperson did say that headcount at the company continues to grow overall. Apple has around 10,000 employees overall.

A former employee said cuts have occurred in recent weeks, coming largely from the education unit.

Recent regulatory filings show the company had been planning to address weakness in that division. Analysts said the reported headcount reductions comes on the heels of tougher competition and tighter school budgets.

"The education market has been challenging as state budgets have been so strapped," said Shannon Cross, an analyst at Cross Research. Ms. Cross doesn't own shares and her firm doesn't do investment banking.

The report also notes that Apple has, alone among the major PC companies, heretofore avoided major layoffs. There's much more information in the full story, and we recommend it as a good report.

The Mac Observer Spin:

Our condolences to those Apple employees who lost their jobs. TMO wishes you well in finding new employment.

Apple has been shifting its work force since the dot.com bust, and it is important to note that minor layoffs at Apple do not equate to major troubles. Apple is in the midst of what is expected to be its best March quarter in years, and just finished its best December quarter in an equally long time.

Though overall market share is an area we think needs to be addressed, the fact is that Apple is a financially healthy company. Still, the education market is, and will continue to be, a challenging one for Apple, especially with the current fiscal mess the federal, state, and local governments face.