Although it’s happening in many industries, mass layoffs in the tech industry score national headlines. In 2023, layoffs have affected some 80,000+ workers already. Google, Microsoft, and Amazon alone account for some 40,000 layoffs. Meta (Facebook), Twitter, Salesforce, Shopify, Stripe, IBM, PayPal, and others have announced layoffs in the thousands.
Recruiters aren’t being spared either. Many of these layoffs included sourcers and recruiters. In some cases, entire teams were let go.
Apple is seeing much of the same challenges other tech companies are facing. Its stock price dropped 27% in 2022 and the company’s latest earnings report showed the first decline in quarterly sales in more than three years.
Yet, Apple is avoiding layoffs. Why and how?
Apple Operates and Hires Differently
Apple runs a little differently than other companies. For example, compared to its tech rivals, Apple tends to operate very lean. They don’t tend to offer the laundry list of perks that other tech companies do, and they tend to hire at a slower pace.
More Methodical Hiring
Compare the hiring patterns at some of the major tech companies over the past three years:
- Meta employment expanded by 94%.
- Google employment grew by 57%.
- Microsoft employment increased by 53%.
Yet, Apple only grew its staff by 20% during the same period. Although the company did scale back 100 contract recruiting jobs last August, so far mass layoffs have been avoided.
Industry analysts say Apple’s restraint in hiring during the pandemic is key to its ability to withstand economic challenges. While other companies added huge amounts of employees, Apple held off.
CEO Pay Cuts
There’s another significant step Apple took amid economic uncertainty. Tim Cook, Apple’s CEO, took more than a 40% cut in pay. While still set to earn an astounding $49 million in 2023, his comp package was reduced from $84 million in 2023. You can save a lot of jobs that extra $35 million.
FYI, CEOs at Alphabet (Google), Meta, and others didn’t take pay cuts.
So, No Layoffs at Apple?
“We manage for the long term,” Apple CEO Tim Cook said during a February call with analysts. “We invest in innovation and people.”
That long-term thinking has paid off so far.
Tom Forte, senior research analyst at DA Davison predicts there will be reductions in headcount at Apple. Forte told Bloomberg Radio that the cutbacks are more likely to occur through attrition. Apple’s been vocal about employees returning to the workplace full time and that may shrink the ranks of employees who want to continue to work remotely. Forte expects any layoffs to occur at the retail level based on consumer demand.
Still, Forte says he sees an underlying structural shift in the tech industry. Despite record gains over the past five years, he says you can no longer count on these companies to automatically outperform other industries. “I think it’s a change in dynamics,” he said. “I think it’s something that’s going to continue to play out over the next 12 months.
Cook says they will work hard to avoid layoffs. “I view layoffs as a last resort kind of thing,” Cook told the Wall Street Journal. “We want to manage costs in other ways to the degree that we can.”
Still, he said, “You can never say never.”
Right-sizing an organization and balancing employee headcount versus bottom-line expectations is always a challenge. Many companies overhired in the wake of the pandemic as consumer behavior changed. Now with slowing in eCommerce sales and digital advertising, companies are seeing growth patterns that align more closely with pre-pandemic levels.
What will happen next in hiring and recruiting? Expect more cutbacks across industries as companies right-size their organizations for the future. While mass hiring and layoffs in the tech industry get a lot of attention, hiring shifts are happening across nearly every industry.
Apple was more cautious than other tech competitors when it came to hiring and it looks like that decision is paying off so far — for both the company and its employees. As Cook notes, Apple is still hiring for strategic positions.
Paul Dughi has held executive management positions in the media industry for the past 30 years. He earned his master of business administration degree while working full-time as President of a multistation television group and is the author of two books on marketing and management.
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