Tue. Mar 21st, 2023


In lower than three months, 4 of the large 5 US tech firms have lower tens of 1000’s of staff mixed, shattering myths concerning the {industry}’s seemingly unstoppable development within the course of.

However there was one notable exception: Apple.

So far, Apple

(AAPL) has not introduced any substantial cuts, thanks partly to slower headcount development than a few of its friends in the course of the pandemic and continued demand for its core merchandise. Some analysts assume extra modest price cuts could possibly be coming, nonetheless.

The iPhone maker is ready to report earnings outcomes for the ultimate three months of 2022 on Thursday after the bell. It’s anticipated to put up a uncommon year-over-year decline in income.

Whereas these expectations present the pressure Apple’s enterprise is beneath, Wedbush Securities’ Dan Ives mentioned in a observe this week that pent-up demand for upgrading iPhones stays robust. “Apple will seemingly lower some prices across the edges, however we don’t anticipate mass layoffs from Cupertino this week,” Ives wrote.

Tom Forte, a senior analysis analyst at DA Davison, agreed there will probably be workers reductions, however seemingly not as drastic as these at different giant tech firms. “Apple will lower headcount,” he mentioned in a current interview on Bloomberg TV, however steered the cuts would come by means of attrition or reductions on the retail stage.

“Whereas they haven’t carried out so but, like everybody else, they’ll modify their headcount for the present stage of demand,” he mentioned.

Fueled by a surge in demand for digital merchandise earlier within the pandemic, Large Tech went on a large hiring spree.


(AMZN) and Meta every doubled their headcount between the third quarter in 2019 and the third quarter 2022, in line with knowledge shared within the firms’ securities filings. Alphabet, in the meantime, grew its headcount 64% throughout that point, and Microsoft grew its workers by greater than 50% over roughly the identical interval.

Apple, by comparability, grew its headcount by a extra modest 20%. As of September 2022, Apple mentioned it had roughly 164,000 full-time staff.

Many tech CEOs, with various levels of regret, have blamed over-hiring within the early days of the pandemic for the mass layoffs now. As pandemic restrictions eased final yr, the demand for digital providers shifted again towards pre-pandemic ranges. Inflation pinched shopper and enterprise spending, and rising rates of interest evaporated the straightforward cash tech firms had tapped into. And one-by-one, amid the whiplash, family names in Silicon Valley started saying widespread layoffs to regulate to the brand new surroundings.

Whereas Apple has not introduced layoffs, its enterprise has been strained in different methods. Like different Large Tech firms, it has confronted threats of antitrust motion in the US and EU. Earlier this month, Apple additionally mentioned CEO Tim Prepare dinner had agreed to an enormous pay lower this yr, following a shareholder vote on his compensation package deal after its inventory fell about 27% in 2022.

As shopper spending tightened, international smartphone shipments plunged 18% within the fourth quarter of 2022, in line with market analysis agency Canalys. Apple’s enterprise additionally confronted provide chain hurdles linked to China’s Covid lockdowns and unrest that hit a key manufacturing website in Zhengzhou, China late final yr.

Nonetheless, Apple’s enterprise is weathering the downturn higher than a few of its fellow tech giants. In its most-recent earnings report, the corporate reported gross sales grew 8% year-over-year and that the corporate hit a September quarter income report for iPhone.

Thursday’s earnings outcomes will present whether or not Apple can hold defying gravity.

“Apple continues to innovate with high-quality, industry-leading merchandise supported by a strong digital platform,” analysts at Monness, Crespi and Hardt wrote in an investor observe Tuesday. “Nonetheless, regulatory headwinds persist and we imagine the darkest days of this downturn are forward of us.”

By Admin

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