Why was Apple able to avoid mass layoffs despite the crisis?
While Amazon, Meta, Google and other tech giants are laying off large chunks of their workforce, Apple seems to be unfazed by the economic crisis. The iPhone maker managed to avoid severe budget deficits. We explain how.
The economic slowdown is forcing tech giants to scale back their ambitions. Many digital behemoths have indeed had to lay off some of the workforce.
Forced to cut costs, Meta cut 11,000 jobs, or 13% of its workforce. In turn, e-commerce giant Amazon has laid off 18,000 workers. This is a historic record for Jeff Bezos’ multinational company. We should also mention the 12,000 job cuts at Alphabet, Google’s parent company, the 10,000 layoffs at Microsoft, and the 600 job cuts recently cut by Spotify.
No one is immune from the economic crisis, except for Apple. It’s a California group It is the only one from GAFAM has not announced plans for mass layoffs. According to observers, Apple should not be forced to make drastic layoffs despite the recession, the Wall Street Journal writes.
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Careful recruitment
Unlike other Silicon Valley titans, Apple has not drastically increased its ranks during the Covid-19 pandemic. Instead, the firm has been following the same path since 2016. The iPhone maker has not been busy More than 20% individuals From September 2019 to September 2022. That month, the group reached 164,000 employees worldwide.
By comparison, Amazon has doubled its workforce in two years to meet the surge in online sales. Meta increased their workforce by 94% using online advertising. Google said it increased its ranks by 57% in two years. Finally, Microsoft’s growth is 53%. It was justified by the crazy recruitments growth of covid yearsbut it no longer matches the economic recession that started last year.
According to Mark Zuckerberg, Meta grew its workforce too quickly due to overoptimism. Amazon CEO Andy Jassy admits he has ” has been hired faster in recent years. Google CEO Sundar Pichai makes a similar assessment ” periods of spectacular growth”, which contradicts the current economic reality. This is said by Satya Nadella, the leader of Microsoft “Customers Accelerate IT Spending During Pandemic”but these are now about half.
Same observation with several cryptocurrencies. With a vengeance, the industry is turning to support the rise of cryptoassets severe budget constraints. This is the case with Coinbase, Kraken and Crypto.com platforms.
Steady sales and large stocks
Unlike these examples, Apple registered slower growth, but more stable, during the coronavirus crisis. This more gradual increase was not followed by a sudden contraction. So far, Apple has not announced disastrous financial results, unlike Meta and others. During the third quarter of 2022, the Cupertino company generated more than 90 billion dollars in turnover (+ 8%) and 20.7 billion in profit. Apple even had the luxury of beating analysts’ expectations.
The Californian giant is taking advantage of this strong iPhone sales, bolstered by the continued success of the iPhone 13. Between July and September, Apple recorded a 9.7% increase in iPhone sales compared to the previous year. Mac sales were also up 5% year over year, especially thanks to the MacBook Air M2.
Even with the release of the iPhone 14, Apple should know decrease in circulation During the fourth quarter of 2022. Apple’s Chief Financial Officer, Luca Maestri, already mentioned the slowdown phase last summer. This is a first in three years. Note that Apple will present its quarterly results on February 2, 2023.
Behind this contraction, we see inflation, raw material growth and production difficulties Found in China. Last fall, the infrastructure of one of the main iPhone manufacturers, Foxconn, was shut down for several days. Health restrictions imposed by Beijing, followed by a series of violent riots, have significantly affected Apple’s production targets and iPhone 14 sales.
Note that Apple is still aroundan impressive war chest absorb the challenges caused by the economic recession. Over the years, the company has raised more than $200 billion in cash and marketable debt securities. The amount of Apple’s wealth has even increased by 4% between 2021 and 2022.
Careful cuts
Apple, more cautious than its peers, nevertheless announced its intention slow recruitment In the coming months. At the same time, the brand is cutting workforce for certain stores, such as Best Buy. Apple Insider reports that Apple will occasionally rely on seasonal workers to cut costs.
These lenient measures contrast with drastic cuts at Meta, Amazon and Microsoft. It should be noted that Apple’s latest massive layoff plan dates back to the past Over 20 years old. In 1997, the company actually laid off 4,100 employees…before Steve Jobs set the bar.
Source:
The Wall Street Journal
