Shaken to the Very Core

He was the brash, brilliant and sometimes bumptious brat of Silicon Valley, a symbol of its high-tech genius and fabulous sudden wealth. Alternately infuriating and inspiring, Steve Jobs co-founded Apple Computer in a California garage nine years ago and helped build it into a billion-dollar business that gave rise to the personal-computer industry. Along the way, Jobs was widely hailed as the prototype of a new American hero--the irreverent and charismatic young entrepreneur.

Last week an embittered and virtually powerless Jobs resigned as Apple's chairman and from the board of directors, following an anguished break with President John Sculley. But Jobs, who remains the largest single Apple stockholder with more than $85 million worth of shares, will not go gentle into the night. He is launching a new computer company that could compete directly with Apple (1984 sales: $1.5 billion). Already Jobs has outraged Apple's board by persuading five of the company's managers, including top engineers and marketers, to join him in his venture.

Jobs' departure caps months of turmoil that has shaken Apple to its core. The maker of home and office computers lost $17 million in its most recent quarter, the first red ink in the company's history. The firm is still recovering from a sweeping corporate housecleaning this summer in which 1,200 of Apple's 5,850 employees were let go. The company's woes, moreover, have occurred against a backdrop of sluggish sales throughout Silicon Valley and the entire computer industry. The beleaguered firm thus cannot take lightly even the symbolic threat posed by Jobs' new company, which will produce computers for the education market, long an Apple specialty.

^ While relations between Jobs and Sculley have been strained at least since last spring, the final rift erupted in a matter of days. On Sept. 12, Jobs informed Apple's board that he was planning to start a new firm; he implied that he would not take any key Apple employees with him. But the brief era of good feeling that ensued lasted less than a day. Just before the start of a 7:30 meeting the following morning, Jobs handed Sculley a letter stating that several Apple employees were leaving to work for his new company. Apple executives could not contain their ire, shouting "liar" and "deceitful" during the meeting. The outcry convinced Jobs that he could no longer stay at the company.

In a characteristically petulant move, the chairman leaked his letter of resignation to the press hours before delivering it to Apple on Sept. 17. "The company's recent reorganization," Jobs wrote, "has left me with no work to do and no access even to regular management reports. I am but 30, and want still to contribute and achieve." Apparently intended to arouse sympathy, the tone of the letter and its public release struck some Apple executives as a clear attempt to embarrass them. Said Steve Wozniak, Apple's co-founder who left the company last February to establish his own electronics firm: "Steve can be an insulting and hurtful guy." One wag dubbed Jobs the John McEnroe of business.