NEW YORK (CNNfn) - Apple Computer Corp. said Wednesday that Chairman and Chief Executive Officer Gilbert Amelio has resigned from the struggling computer maker.
Amelio came to Apple in February 1996 from the top spot at National Semiconductor Inc., replacing ousted CEO Michael Spindler. The company characterized Amelio's resignation as a joint decision between Amelio and Apple's board of directors.
When he joined Apple, Amelio said his two main objectives were to stay consistently profitable and to make sure the company positioned itself to "do great things" in 1998.
His exit leaves the company in disarray, with analysts predicting Apple's losses could reach $70 million in the third quarter. Apple earlier said it would post a loss when it releases its third-quarter results next Wednesday.
Also leaving the company is Ellen Hancock, executive vice president of technology. Hancock, who joined Apple in July 1996, also came from National Semiconductor where she was executive vice president and chief operating officer. She also held various top positions during a 28-year tenure at IBM Corp.
The departures were announced after the close of trading. Apple shares, which were halted after hours, ended the day off 1/16 to 13-11/16 in trading on the Nasdaq.
Cupertino, Calif.-based Apple said it was initiating a search for a new chief executive. Until the position is filled, Fred Anderson, executive vice president and chief financial officer, will assume the day-to-day management responsibilities.
In the interim, Apple co-founder Steve Jobs, who currently serves as a strategic advisor to the company, will assume a more expanded role with Apple's board and executive management team, the company said.
Now that he's out, some analysts only partially blame Amelio for Apple's problems. Kurt King, technology analyst at Montgomery Securities, went as far as to say the company's problems were "fundamentally unfixable." (77K WAV) or (77K AIFF)
Jason Pontin, editor of "The Red Herring," said Apple's problems stem from the fact that its management results can't match its top-notch products. (74K WAV) or (74K AIFF)
Amelio's departure resembles the sudden exits of former top Apple executives Michael Spindler and John Sculley. Jobs also made a hasty exit from the top spot.
Last month, in a filing to the Securities and Exchange Commission, the troubled personal computer pioneer said it would take longer than originally anticipated for it to return to profitability.
The company said it would be at least the fourth-quarter of 1997 before profits return, although it could take longer.
Apple posted a $708 million, or $5.64 a share, second-quarter loss in April. The losses included $179 million in one-time restructuring charges. The restructuring also included 3,500 full-time job cuts.
"In recent months, Apple has made significant progress in addressing the crises which were threatening its viability," said Executive Vice President Edgar S. Woolard in a statement announcing the resignations.
"In pursuit of the best interest of our shareholders and our customers, we now want to move forward and return the company to growth and sustainable profitability. We believe that with a customer-focused CEO and Apple's product and technology portfolio, the company will have the necessary ingredients to return to success."
Late last month, Apple's advertising agency BBDO West said it was resigning its account after Apple said it wanted to review its agencies. BBDO West had held the Apple account for 12 years.
In May, as part of an ongoing effort to stem its losses, Apple said it would spin off its unprofitable Newton hand-held computer business into a separate company to be known as Newton Inc.