How Apple has so far avoided layoffs: Simple hiring, no free lunches

No company is certain to avoid deep cuts in a volatile economic environment like the current one, and Apple isn’t immune to the business challenges that have plagued other tech giants. Next month, it is expected to report its first quarterly decline in sales in more than three years. Apple has also slowed hiring in some regions.

But the iPhone maker has been in better shape than many rivals so far in part because it added employees at a much slower rate than those companies during the pandemic. It also tends to be a lean business, with limited employee perks and businesses focused on hardware products and sales that have so far largely averted an economic downturn, investors say.

An Apple spokesperson declined to comment.

From the end of the fiscal year in September 2019 to September 2022, Apple’s workforce grew about 20% to approximately 164,000 full-time employees. Meanwhile, over about the same period, Amazon’s headcount has doubled, and Microsoft, Google’s parent company, is up 53%.

the alphabet company

It rose 57% and Facebook Meta Owner swelled by 94%.

Apple has about 65,000 retail employees working in more than 500 stores that make up nearly 40% of the company’s total workforce.

On Friday, Alphabet became the latest tech company to announce large-scale layoffs, with a plan to cut nearly 12,000 jobs, The company’s largest ever round of job cuts.

Cut the alphabet follows a wave of Amazon lays off a large number of workersAnd Microsoft And meta. The tech industry has seen more than 200,000 layoffs since the start of 2022, according to layoffs.fyi, a website that tracks cutbacks in the sector as they appear in media reports and company releases.

The last big round of layoffs at Apple occurred in 1997, when co-founder Steve Jobs returned to the company, which then cut costs by firing 4,100 employees.

So far, Apple’s core business She showed herself to be flexible against the broader downturn in the market. The other four tech giants struggled amid slowdowns in digital advertising, e-commerce, and computers. In the September quarter, Apple reported that sales in its most important business — the iPhone — rose 9.7% from a year earlier to $42.6 billion, beating analyst estimates.

Apple may face tougher quarter in December, due to report on February 2, company also faced Manufacturing challenges in Chinaas there are strict no Covid policies Reduce economic activity. Many analysts expect that demand has not ebbed for its iPhones and as the company continues to ramp manufacturing back up, demand is expected to carry over into the March quarter.

The company’s business model wasn’t entirely immune from the broader downturn. Revenue from the services business continued to slow, growing 5% annually to $19.2 billion in the September quarter, despite gains in recent quarters.

Tom Forte, senior research analyst at investment bank DA Davidson & Co. He expects Apple to cut staff, but it may do so quietly by attrition — by not replacing workers who leave. The company could move toward making cuts or other adjustments to franchises popular in Silicon Valley. Apple does not provide free lunches to employees on its campuses, unlike other big tech companies like Google and Meta.

Some tech giants are cutting jobs I spent heavily on projects It’s not likely to turn into a solid business anytime soon, said Daniel Morgan, senior portfolio manager at Synovus Trust Co. , of which Apple is among its largest holdings. “Both Meta and Google are terribly guilty of this,” he said.

Meta is pouring billions of dollars into new Reality Labs ambitions in the so-called metaverse. Meta CEO

Mark Zuckerberg

He defended the company’s spending on Reality Labs, stating that virtual reality will become an important technology platform.

After the layoffs were announced, Alphabet CEO Sundar Pichai said the company had experienced periods of dramatic growth over the past two years. “To keep pace with and support this growth, we have set an economic reality different from the one we face today,” he wrote in a letter to employees on Friday.

Apple is also working on risky future bets, like an augmented reality headset due later this year and a project car whose release date is uncertain, but at a more measured pace.

Write to Aaron Tiley at [email protected]