Apple is going to slowdown on the hiring part
Apple Inc. is a state-of-the-art tech company coordinating recruitment and spending plans, adding evidence that even Silicon Valley proponents are worried about the recession in the coming months. Bloomberg reported on Monday that Apple hasn’t announced a company-wide policy, but iPhone makers are trying to limit spending and employment growth in some businesses.
The more cautious stance mimics the approaches of peers such as Amazon.com Inc., Alphabet Inc.’s Google, and Microsoft Corp., all of which are taking steps to curb spending.
News plunged stock prices, adding concerns about a full-fledged tech earnings season this week. It can be difficult for a company to calm a nervous investor. International Business Machines Corp. Recorded higher-than-expected sales growth on Monday, but stock prices fell due to transaction delays. Today, most big tech companies aren’t talking about employment reductions, they’re just talking about employment reductions.
And overall US employment growth hasn’t stagnated. Employment in June increased by 372,000, surpassing an estimated 265,000, with manufacturing jobs supporting that number. The United States created 25,000 information centres in June, an increase of 105,000 from just before the pandemic. However, some tech companies have gone as far as reducing work. This includes Microsoft, which announced last week that it would cut some positions as part of its restructuring.
The cuts will affect less than 1% of the workforce of 180,000, and Microsoft still expects to end the year with more people. However, in May, “because Microsoft is preparing for a new fiscal year,” there is a move to delay adoption in the Windows, Office, and Teams business areas.
Last month, Tesla fired hundreds of workers and closed a California facility specializing in autopilot’s autonomous driving technology, people familiar with the matter said. Chief Executive Officer Elon Musk previously said that layoffs are needed in an increasingly volatile economic environment.
In a subsequent interview with Bloomberg, he stated that about 10% of employees would lose their jobs in the next three months, but the total number of employees per year could be higher. Earlier pandemic high flyers like Netflix Inc. and Peloton Interactive Inc. have also fired employees in recent months.
Netflix cut hundreds of jobs in June, and Peloton just announced plans to stop its production. Facebook’s parent company, Meta Platforms Inc., has cut spending on some senior positions and delayed hiring. In April, the company announced plans to reduce this year’s spending by $ 3 billion. The idea is to align Meta’s product team with core priorities such as Metaverse and its TikTok clone Reels.
Meta has also discontinued early smartwatch prototype development and repositioned its home video device, Portal, to focus more on business users than the average consumer.
Last week, Google CEO Sundar Pichai told employees that he plans to delay hiring for the rest of 2022. This is a rare move for Internet giants, usually adding tens of thousands of employees each year. From now until the end of the year, Google will focus its recruitment efforts on technical and “other important roles.”.
“We need to be more entrepreneurial, more urgent, more sharply focused, and more hungry than we showed on a sunny day,” he said. Other companies are trying to complete their ambitious growth plans without major layoffs. Amazon has increased its staff during the pandemic to deal with the surge in e-commerce spending.
As a result, the warehouse is overstaffed, but the company says it is working on this issue. In some cases, Amazon subleased storage space and stopped developing facilities for office workers because it took time for employees to determine how much space they needed for hybrid work. Amazon CEO Andy Jassy said early in the pandemic that he decided not too few workers, but too many workers and too much warehouse space.
“We knew this could mean that we could increase capacity in a short period,” he said. An important issue last season was whether consumer demand subsided. Apple warned in April that the final quarter would be bumpy, largely due to supply chain challenges.
These issues are expected to reduce Apple’s sales by up to $ 8 billion this quarter. Investors need a clearer picture of the damage and Apple’s outlook for the coming months when it announces its results on July 28. This change will not affect all teams, and Apple continues to plan aggressive 2023 product launch schedules, including the first major new category since 2015, mixed reality headsets.
Note that during the Covid-19 pandemic, it generally outperformed Wall Street’s expectations, overcame past economic turmoil, and outperformed many other products. Apple stocks fell 2.1% to $ 147.07 after Bloomberg reported a slowdown, recording the largest one-day fall in nearly three weeks. This year’s inventories have fallen by about 17% so far, in line with the wider market. Stocks of other tech companies also fell on Monday.
Alphabet Inc., Amazon.com Inc., Meta Platforms Inc., Snap Inc., and other tech companies have taken steps in recent weeks to limit budgets and delay employment. Microsoft Corp., Tesla Inc., and Meta have gone as far as reducing work. This is something Apple has never done in the past.
Based in Cupertino, California, Apple allocates a fixed amount each year to each major sector for R & D, resources, and employment costs. In 2023, a team with a lower budget than expected was selected. In some groups, the company will not increase its workforce in 2023, but it is usually possible to add 5% to 10% more employees in a particular year.
Some groups also have plans to not play the role of retiring employees. A tech giant spokesman declined to comment.
In recent years, Apple has invested heavily in research and development, being actively adopted by competitors and launching several new products. However, it also faces supply chain challenges, such as production outages in China in recent months. Apple warned in April that the trouble would cost as much as $ 8 billion in the last quarter.
Analysts say Apple will report third-quarter revenue of about $ 83 billion, up slightly from the same period last year when it reported its impact on gross profit and operating expenses on July 28. I’m expecting it. The company also mentioned the ongoing negative impact and rising fares of Covid-19. Refused to provide specific sales forecasts.
Spending slows are rare, but Apple has already taken similar steps. In early 2019, before the pandemic, iPhone sales in China and other parts of the world were disappointing, and the company reduced its adoption. Also, in April, leaving some positions in Apple retail stores was delayed. Even though Apple is preparing to curb spending in several areas, Apple plans to increase its company-wide compensation budget this year to deal with the tougher employment market.
The company is also struggling to consolidate stores in the United States. Apple recently raised the wages of many hourly retail and tech support workers. Employees say the increase ranges from 5% to 15%.
At the same time, Apple is preparing a large number of new products. Later this year, the company plans to launch four iPhone models, three Apple Watch variants, new Mac desktops and laptops, and an updated Apple TV set-top box. We also plan for a new HomePod speaker, a larger iPad, and some new Macs next year.
Apple spent about $ 22 billion in R & D in 2021, up 17% year-over-year. As of the end of the year, the company has approximately 154,000 employees. In 2021, Apple’s capital investment exceeded $ 11 billion, up 52% from 2020. Meanwhile, total operating costs, including marketing, labour and equipment costs, increased 13% last year to approximately $ 44 billion.
The company spends billions of dollars annually on electric vehicle issues, new content for Apple TV + streaming services, and mixed reality headsets. In addition to products such as foldable devices and augmented reality glasses, the company is also working on developing unique components such as cellular modem chips.
edited and proofread by nikita sharma