Jobs Resigns as Apple's Chairman

By Andrew Pollack
Special to the New York Times

San Francisco -- September 17, 1985 -- Steven P. Jobs resigned today as chairman of Apple Computer Inc., severing his last ties with the company he co-founded in a garage in 1976.

The resignation followed a bitter dispute that arose last week when Mr. Jobs told Apple of his plans to start a new company and then abruptly informed Apple that he was hiring five of its employees to join him.

Apple officials, feeling betrayed by Mr. Jobs, have said they were considering forcing Mr. Jobs to resign his post as chairman and suing him for breach of fiduciary duty or theft of trade secrets. Mr. Jobs's resignation is seen by those close to him as an attempt to head off a forced resignation and as a peacemaking offer to avoid a lawsuit.

''I submitted my resignation in no uncertain terms,'' Mr. Jobs, said in an interview tonight. He said he resigned because the Apple board had made his plans to start a company ''into a very hostile situation.''

'Obviously, I have great emotions about it,'' he said.

Mr. Jobs said he hoped to be able to work out some arrangement with Apple. ''I'm 30,'' he said. ''I don't think that it's Apple's right to keep me in the back room and sterilize me for the rest of my life. There must be a way for six people in blue jeans to co-exist with Apple.''

Mr. Jobs transmitted his resignation in a letter to A.C. Markkula Jr., vice chairman of the board. As of this evening, Apple spokesmen said neither the company nor Mr. Markkula had received the letter.

But Mr. Markkula, in a statement issued by the company, said the board was continuing to evaluate what action it would take with regard to Mr. Jobs.

''As chairman of the board, Steve Jobs is responsible for protecting Apple and acting in the best interests of the company,'' the statement said. ''In light of recent events, the board of directors continues to evaluate what possible actions should be taken to assure protection of Apple's technology and assets.''

Analysts say Apple officials are not worried much about competition from a new venture by Mr. Jobs as they are that Mr. Jobs will take more Apple employees, further depleting the ranks of a company that has already lost much key talent through resignations and layoffs.

While having no more role at Apple, Mr. Jobs remains the largest shareholder, with about 5.5 million shares, or 9 percent of the stock outstanding. This summer, Mr. Jobs sold a fifth of his holdings, raising almost $20 million and fueling the speculation that he was planning to start his own company.

The dispute between Apple and Mr. Jobs began last Thursday when Mr. Jobs told the board of plans to start a company to make products for higher education. He told the board the company would not compete with Apple and ''implied'' he would not hire key Apple personnel, according to the statement issued tonight by Mr. Markkula.

He also said he would show plans for the company to the board and, if the board felt the new company would compete with Apple, Mr. Jobs promised to resign. Given those assurances, the board did not ask for his resignation then, Mr. Markkula's statement said.

But last Friday Mr. Jobs told Apple that he was hiring five Apple employees, including its director of education marketing and some key engineers. This suggested that Mr. Jobs had been recruiting the employees all along. The Apple officials felt betrayed and became wary of trusting Mr. Jobs in the future, according to sources close to the company.

Mr. Jobs's account differed from that offered by Apple. Mr. Jobs said he told the board of his plans Thursday and indicated he would bring some Apple people with him. He said he offered to resign at that time. The board excused him from the meeting and when he returned, told him they wanted him to remain chairman and even wanted to invest 10 percent in his company. He and John Sculley, Apple's president and chief executive, arranged to speak later this week about it.

The five employees who were to join him met that night and decided to tell Mr. Sculley about their resignation the next morning. Mr. Jobs said he hoped to assure Mr. Sculley that the new company would not raid Apple. But the company over-reacted, he said. ''They went non-linear about it,'' Mr. Jobs said.

The resignation is the culmination of a series of events in which Mr. Jobs, 30 years old, has increasingly lost his power in a dispute with Mr. Sculley, whom Mr. Jobs hired from Pepsico in 1983 to add some experienced management to Apple. The dispute between the two men was played out as Apple's fortunes underwent a steady decline to the point that the company suffered its first loss ever in the last quarter.

Mr. Jobs has been described as alternately brilliant yet egoistical. While Mr. Jobs had spearheaded the Macintosh development, his influence in Apple led to a situation in which the employees involved in the Macintosh division were favored over those in the Apple II division. company associates said.

The other founder, Stephen Wozniak, left Apple in February.

Copyright 1985 The New York Times Company