Reports Indicate Enterprise Layoffs at Apple, But Context is Cloudy

March 10th, 2009 at 5:23 PM - Columns and Opinions by Bryan Chaffin

Reports began circulating Tuesday that Apple recently laid off some 50 people from its Enterprise sales force (CNet, Valleywag, 9to5Mac). While it appears fairly certain that this group was given walking papers, the context of Apple's actions mean that not all may be as it appears, especially as our own sources indicate that a subgroup in Enterprise has seen a headcount increase.

The layoff stories began March 3rd with the report that 50 people had been laid off from the Enterprise group. While terrible for the people involved, the layoff was small enough that Apple didn't have to report it (the WARN Act requires notifications in the case of 500 or more workers, unless the number smaller than that represents 33% of the company's employees).

The context of the layoffs was originally couched around the theme that times are tough, and the Enterprise sales team at Apple has never gotten much love from Apple CEO Steve Jobs. While the latter may be true (hint: it is), Tom Krazit of CNet reported Monday that Apple has long been working on outsourcing its Enterprise to third party solution providers like Ingram Micro and CompUSA who specialize in Enterprise relationships.

He wrote, "The decision does not seem to have been prompted by falling sales or poor performance within the group, rather a change in philosophy embraced by [Apple executive John] Brandon and [Apple COO Tim] Cook."

This is supported by the reports that the people let go were allowed to apply for jobs in other parts of the company. If they were laid off due to poor performance, that opportunity is not extended at a company like Apple.

Our own research into this issue seems to prop up this idea, too, at least to a certain extent. An off-the-record check we did with our sources found that some areas within the Enterprise group kicking butt, taking names, and recycling the old Windows machines on their way out the door. In that section, new people have been hired to help meet the demand.

What all this leaves on the table, though, is whether or not Apple is being as forthcoming as it should about this event. The company has heretofore denied the layoffs occurred, despite several independent confirmations by the above-listed publications that it happened.

In a column for Silicon Alley Insider, Dan Frommer asked if Apple was lying by denying, a sentiment addressed by Mr. Krazit in his article, too.

From my perspective, Apple often takes its penchant for secrecy way, way too far, but then maybe you have to do that to attain any level of secrecy at all.

If Apple did downsize its Enterprise sales force in order to outsource this to third parties -- AN IDEA I THINK IS DANDY BECAUSE APPLE KIND OF SUCKS WHEN IT COMES TO WORKING WITH ENTERPRISE (I'm just saying) -- then the company shouldn't bother to hide it. In fact, sing it from the rooftops of Cupertino and be done with it.

But then, I'm just a journalist (and a tiny shareholder in AAPL) writing a column from my home office. That I am right far more often than not in my Apple writings doesn't necessarily mean I am right on this.

In any event, it would seem that Apple is doing well in at least some of its IT sales, and that's saying something in this economy. It's terrible that those 50 people have to look for new jobs, but I don't see any reason from an observer's point of view to get worked up about such a small layoff in a company with a headcount of roughly 30,000 people.

Bryan Chaffin began using Apple computers in 1983 in a high school BASIC programming class. He started using Macs in 1990 when the Kinko’s guy taught him how to use Aldus PageMaker, finally buying a Power Computing Power 100 in 1995. Today, Bryan is the Editor of The Mac Observer, and has contributed to the print versions of MacAddict and MacFormat (UK).