Reports suggest that Apple (NYSE: AAPL) has begun laying off corporate employees. While all its FAANG peers have announced mass layoffs over the last year, Apple had so far refrained from retrenchments.
To be sure, the layoffs are not as sizeable as other tech companies and according to Bloomberg are “likely very small.”
Looking at other tech peers, Amazon has announced 27,000 layoffs in two rounds which in absolute terms is the highest among FAANG peers.
Meta Platforms has also announced two rounds of layoffs which would trim its workforce by 21,000 or about a quarter of its workforce – the highest in percentage terms among FAANGs.
Alphabet has also announced 12,000 layoffs including at Waymo, its self-driving subsidiary.
The Google parent faced shareholder ire amid spiraling costs and London-based TCI Fund Management called upon the company to cut costs and increase buybacks – terming the stock as “undervalued.”
- Read our guide on buying undervalued stocks
Coming back to Apple, the company’s CEO Tim Cook has previously said that layoffs would be the last resort.
Also, unlike other tech companies, its hiring was relatively muted between 2020-2021. Many tech companies like Meta and Amazon went overboard with hiring and amid slowing growth now find themselves grossly overstaffed.
Apple Has Reportedly Laid Off Some Corporate Employees
Meanwhile, reports say that Apple has laid off employees in the segment that looks after the building and maintenance of its retail stores.
The company has also offered the affected employees the option to look for jobs internally – failing which they would be laid off with a severance pay of upto four months.
Previously also there were reports that said that Apple has taken measures like cutting travel budgets to cut costs.
Meta Platforms is possibly at the forefront in cutting costs – and the markets have rewarded it sending the stock up 70% in the first quarter of the year.
Apart from layoffs, it has also cut bonuses for some employees after its CEO Mark Zuckerburg touted 2023 as the “year of efficiency.”
Alphabet is also reportedly looking at multiple ways to cut costs including closing some snack bars.
Tech Companies Grapple with Slowing Growth
Tech companies are grappling with slowing growth and Apple is no exception. The iPhone maker reported revenues of $117.15 billion in the December quarter – a YoY fall of 5.5% and the worst quarterly performance since 2016.
Things have been no different for other tech peers and Meta Platforms reported its first-ever annual fall in revenues last year while Amazon’s sales growth was the lowest ever.
Meanwhile, Warren Buffett does not seem too perturbed by the fall in Apple stock and bought more Apple shares in 2022 to add to Berkshire Hathaway’s already humongous position.
- Read our guide on buying Apple stock
All said Wall Street analysts saw Apple as a “safe bet” and the stock somewhat justified the status by outperforming the Nasdaq in 2022.
It has also been relatively immune to tech layoffs and has at least publicly not announced mass layoffs.
Analysts might question the company on the reported layoffs and its future plans when it reports its earnings later this month.
If Apple too resorts to mass layoffs amid slowing growth, it would mean that the last bastion has also fallen amid the worsening tech slowdown.
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This article was written for Business 2 Community by Mohit Oberoi.
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