CUPERTINO, California: Apple Computer reportedly will lay off up to 3,000 people, or some 20 percent of its workforce, and sell its floundering Newton division as the company struggles to recover from a whopping $120 million loss in the fourth quarter of 1996. Apple was forced to make the cuts after Macintosh sales flagged during the Christmas season even as the company was already anticipating a 20 percent drop in 1997 revenues to $8 billion, according to the Wall Street Journal. If Apple carries out the cuts, they would comprise the second massive restructuring in two years for the company, which eliminated 1,500 workers last year. "Apple is caught in a dangerous spiral of having to lay off people because they're not selling enough computers," notes TIME San Francisco Bureau Chief David Jackson, "but news about the problems at the company then scares people off from buying their computers." Wall Street reacted cautiously to the news, with Apple stock finishing down 5/16 to close at 16 5/16 for the day. While Apple has refused so far to confirm the rumored cutbacks, industry analysts say the move should be announced sometime before a shareholders meeting Wednesday. Despite the continued bad news out of Cupertino, Jackson notes that the Mac still has a future. While the company's customers currently make up less than five percent of the personal computer market, their numbers are still high enough to attract the attention of software and hardware companies, says Jackson. Apple is "either going to settle into being a much smaller company, or it possibly could be bought out by somebody down the road," he says. Either way, don't look for a world without Macs anytime soon.