Fri, Jan 19, 2018 - Page 10 News List

Apple to build second campus, hire 20,000 in US

AP, SAN FRANCISCO

Apple Inc CEO Tim Cook, center, laughs with Reno Mayor Hillary Schieve, left, and Nevada Governor Brian Sandoval during a groundbreaking ceremony celebrating a new Apple warehouse on Wednesday in Reno, Nevada.

Photo: The Reno Gazette-Journal via AP

Apple Inc is planning to build a new corporate campus and hire 20,000 US workers in an expansion driven in part by a tax cut that would enable the iPhone maker to bring an estimated US$245 billion back to its home country.

The pledge announced on Wednesday comes less than a month after the US Congress approved a sweeping overhaul of the US tax code championed by US President Donald Trump that would increase corporate profits.

Besides dramatically lowering the standard corporate tax rate, the reforms offer a one-time break on cash held overseas.

Apple plans to take advantage of that provision to bring back most of its approximately US$252 billion in offshore cash, generating a tax bill of about US$38 billion.

That anticipated tax bill implies Apple intends to bring back about US$245 billion of its overseas cash, based on the temporary tax rate of 15.5 percent on foreign profits.

Apple has earmarked about US$75 billion of the money currently overseas to finance US$350 billion in spending during the next five years. The spree will include the new campus, new data centers and other investments.

However, most of the US$350 billion reflects money that Apple planned to spend with its suppliers and manufacturers in the US anyway, even if corporate taxes had remained at the old 35 percent rate.

BUYBACKS, DIVIDENDS

Analysts have also predicted that most of those overseas profits would flow into stock buybacks and dividend payments.

That was what happened the last time a one-time break on offshore profits was offered more than a decade ago.

The new law lowers the corporate tax rate to 21 percent on US profits while providing a sharper discount on overseas cash this year.

“Apple is a success that could only have happened in America, and we always felt a very big sense of responsibility to give back to our country and the people who have made our success possible,” chief executive Tim Cook said during a ceremony celebrating a new warehouse being built in Reno, Nevada.

The White House applauded Apple’s commitment.

“Just as the president promised, making our businesses more competitive internationally is translating directly into benefits for the American worker, through increased wages, better benefits, and new jobs,” White House spokeswoman Lindsay Walters said.

LOCATION

Apple, which just spent an estimated US$5 billion building a Cupertino, California, headquarters that resembles a giant spaceship, plans to announce the location of a second campus devoted to customer support later this year.

The company did not say how big the second campus would be, or how many of the additional 20,000 workers that it plans to hire would be based there.

About 84,000 of Apple’s 123,000 workers are in the US.

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