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> "Not one company in the home-computer business has yet given the American public any compelling reason why it should buy a home computer."
The immediate problem Morgan faces is Atari's financial survival. To achieve that, he has been slashing on all sides. Atari's U.S. payroll has already been reduced from 9,800 people to 3,500; 3,000 manufacturing jobs will be added in Hong Kong and Taiwan this spring. By late next year it will centralize most of its operations in a four-building complex in San Jose, Calif.
The company's laid-back Californian managerial style is also going. Morgan began regular staff meetings with his senior executives. Last week he announced a total reorganization of the company with the aim of reducing corporate bureaucracy. "A lot of what Morgan has done is just fairly standard business basics," says Arthur Gemmell, vice president for administration. "We just somehow became a $2 billion company without any of them."
Morgan is cutting back on the products Atari manufactures. He simplified its computer line from five proposed models to two and delayed introduction of a series of new Atari telephones. But he is still adding new video games.
Can these changes save Atari? Morgan promises that the firm will be profitable in 1984, and next month Atari is expected to announce substantial progress in paring losses. But others are skeptical. Said one former Atari executive: "Morgan is determined to walk through the hurricane, but it is a shrinking company dependent on an industry that is itself declining. We know Morgan can cut, but can he create?" Morgan insists he can. "I don't have fun cutting budgets," he says. "I have fun running a company and dreaming." It is now up to him to see how soon his dreams can follow his radical surgery.