Mass layoffs have taken place at virtually every tech giant in recent months. Google’s parent company Alphabet had to tell 12,000 people the bad news last week, while Microsoft cut 10,000 jobs earlier last week. Meta already cut 11,000 jobs at the end of last year, and Amazon even laid off around 18,000. Apple, the most valuable company among the tech giants, seems to be escaping the dance.
The iPhone maker often shows courage in financially difficult times, experts told The Wall Street Journal. This is due to a combination of factors, with one simple truth at the fore: the fewer people you’ve hired over the past few years, the fewer you’ll need to fire now. Apple saw its workforce grow by about 20 percent between September 2019 and September 2022 to 164,000 FTE.
In recent years, it has gone much faster with the other four companies. Amazon doubled, Microsoft grew by 52 percent, Alphabet added 57 percent more employees and Meta takes the cake: 94 percent more employees. In total, more than 200,000 people have been laid off in the US tech industry since the beginning of 2022, reports Layoffs.fyi, which keeps track of such numbers.
Recession blows for everyone else
The common denominator for each company was the rosy financial outlook. It went differently, and it hit the other four companies harder than Apple so far. Meta and Alphabet immediately felt the blow from the declining advertising market. Amazon immediately notices when people buy fewer things, and Microsoft notices it, among other things, when fewer PCs are sold. This happened last year, when 16 percent fewer computers were sold.
This decline hit the manufacturers of Windows computers much harder, by tens of thousands of percent. Apple returned ‘only’ 7.5 percent of sales from the previous year. And the most important device for Apple, the iPhone, saw its sales grow by just under 10 percent in the penultimate quarter – good for a record quarter.
iPhone sales may be slightly lower
Analysts look forward to the figures for the past three months. The fourth quarter is traditionally the strongest of the year, supported by both the holiday season and sales of the latest iPhone models. But that phone market has also collapsed, and it is expected that Apple will now release less smoothly than before. Not only has demand for smartphones fallen, the popular iPhone 14 Pro in particular has been plagued by shortages due to closed factories in China. However, Apple may catch up to those sales in the current quarter now that China is reopening faster than expected.
Still, experts don’t expect mass layoffs at Apple, so that could be related to the lower number of new hires. The analyst Tom Forte from the investment bank DA Davidson & Co. believe that Apple will work more quietly, for example, by not re-filling positions of departing staff. For example, the work pressure of the other staff increases, so that they leave more often on their own.
No free lunch
Like its competitors, Apple can also cut back on employee benefits. At tech companies, the amenities are often very comprehensive: from indoor gyms and childcare to included breakfast, lunch and dinner. Apple is already an exception in this regard, and does not offer its employees a free lunch. It sounds like a small savings, but when the much smaller Twitter recently canceled its free lunch, it made a big difference, according to owner Elon Musk 13 million dollars on an annual basis.
Furthermore, one staff is not the other. At Apple, 40 percent of the workforce is employed in Apple Stores, which generally run well. And the company has been making units since its founding, so all the knowledge and skills are already in-house. Competitors such as Alphabet and Meta also want more and more in that direction, but have to invest much more in this – without immediately profiting from it.
Moreover, Apple deliberately wanted to spread itself: according to Bloomberg, the MacBook Pro and HomePod speakers unveiled last week were actually planned for Christmas. However, Apple would have deliberately withheld the products, partly due to concerns about factory shortages, but also to supplement the usually weaker first quarter.