APPLE Computers may review its Irish expansion plans following the announcement of a $69 million (£43 million) 16 for the three months to the end of last December 29th. The group also announced it is to cut 1,300 jobs from its worldwide workforce of 16,000 in an effort to shrink costs.
The company had planned to increase employment at Cork, which makes computers for the European market by 600 over the next three years.
The redundancies announced yesterday are in the areas of sales marketing and administration and are not expected to have major impact on the Cork manufacturing plant, which currently employs 1,400.
However, the company is embarking on an ongoing review and the Cork expansion plans, announced late last year, will be examined as part of this, said a spokesman for the company last night.
The computer maker, which has seen profits squeezed by price wars in the United States and Japan, said its restructuring would cut 8 per cent of its worldwide workforce over the next 12 months.
The company will take a charge of $125 million pre tax to pay for the restructuring in the second quarter and said it might take more actions. Apple said it wants to simplify its product line and pursue broader licensing of its Macintosh operating system.
Apple said it lost $69 million, or 56 cents per share in the first quarter ending December 30th. That compares with a net profit of $188 million, or $1.55 per share, in the same quarter a year ago.
For the quarter, Apple's turnover hit a record $3.1 billion, up 11 per cent from a year ago. Unit shipments for the quarter also grew by 12 per cent to a record 1.3 million. Sales and profit growth in Europe were strong, said the company.
Apple last week had projected the loss, saying that stiff competition had forced it to cut prices in order to build market share. But the price cuts slashed its profit margins and created the loss which has continued in the second quarter.
Chief Executive Mr Michael Spindler said that the company expects to report an operating loss for the second fiscal quarter, independent of further restructuring charges.
As the company refines its restructuring plan, he said Apple would fundamentally change its business model to focus on its key products in education, business and home markets.
