Return to the Little Kingdom_ Steve Jobs and the Creation of Apple - Michael Moritz [137]
During the company’s first few years, Apple’s founders had been proud that they were able to avoid savage firings though they had certainly asked a number of employees to leave. The dismissals were usually cloaked beneath milky phrases like “leave of absence” or “vacation” but the artful guise didn’t conceal reality. Some considered that Apple was far too willing to forgive incompetence and a few, like Rod Holt, would complain, “If you get an engineer who engineers everything wrong and doesn’t work and is screwed up one way or another, then you make a manager out of him. They won’t fire people around here.”
When Michael Scott, with the approval of Jobs and Markkula, decided to fire forty-one people three months after Apple went public, the ripples were immense. The firings were an expression of immense frustration and also a cost-cutting move. Above all, they were a public admission that there was a distinction between the competent and the incompetent, and that Apple had managed to hire laggards. It also brought a pronounced change in tone and some months of nervous fright. “All of a sudden,” said Fred Hoar, vice-president of communications, “Apple values were tanked and in its place we had ruthlessness.”
In the weeks leading up to the dank, rainy day that around the company quickly became known as Black Wednesday, Scott asked each department to provide him with a list of the people that were no longer wanted. He passed the list of eighty names around to see whether some should be retained. A few people were switched between divisions and the rest were summoned to Scott’s office, given one month’s pay, and fired. One group singled out for dismissal was the department that reviewed new products. Scott felt they caused too many delays. But there was a lot of confusion about many of the others. Some of the people summoned to Scott’s office had slipped between the cracks because they had no immediate supervisor, and they were rehired. Others, just a few weeks earlier, had been given good performance reviews and bonuses.
The afternoon of the dismissals Scott held a company meeting in the basement of one of the buildings. Amid the beer and pretzels he made an awkward little speech, fielded some questions, tried to give a pep talk, but his tone only made matters worse. The effects of the firings went far beyond the deed. Chris Espinosa buttonholed Jobs and told him that it was no way to run a company. A glum Jobs asked, “How do you run a company?” Rick Auricchio, who thought he had been fired and later discovered he was still employed, felt that “it was like Walt Disney taking a walk around Disneyland and chopping off Mickey Mouse’s head.” Phil Roybal recalled, “A lot of people always assumed that sort of thing couldn’t happen at Apple. This was the first sign of grim reality. People didn’t know what the world was coming to. Their values had been turned upside down. Suddenly we were a company just like any other.” Bruce Tognazzini thought Black Wednesday was like a divorce. “It was the end of a lot of things. It was the end of innocence. It was the end of loyalty. It ushered in an era of incredible fear.”
In the weeks following Black Wednesday an anonymous memo, which many considered too savage, popped up on various notice boards: “We are forming the Computer Professionals Union (CPU) so that we can keep Apple’s management in line. The thing they fear most is concerted employee action; the tactics they use are divide and conquer, and threats of economic reprisal. They can’t get away with it if we unite! Apple was once a good place to work; management preaches to us about the ‘Apple Spirit’; let’s show them what a little bit of real spirit is like and ram it down their throats!”
For Scott, Black Wednesday brought disaster. He had gained a reputation for a ruthlessness