Apple Inc is the latest major technology company to rein in hiring and spending plans, adding to the evidence that even Silicon Valley stalwarts are worried about a recession in the coming months.
The iPhone maker is looking to limit expenditures and job growth at some of its divisions, Bloomberg reported on Monday, though Apple has not adopted a companywide policy.
The more cautious stance mimics the approach of its tech peers, including Amazon.com Inc, Alphabet Inc’s Google and Microsoft Corp, which have all taken steps to decelerate spending.
Photo: Reuters
For now, most of the biggest tech companies are not talking about eliminating jobs, just reducing the rate of hiring. Moreover, overall US job growth has not stalled. Payrolls increased 372,000 last month, beating the 265,000 estimate, with manufacturing jobs helping bolster the numbers.
However, some tech companies are going as far as cutting jobs. That includes Microsoft, which last week said that it was eliminating some positions as part of a reorganization.
The reduction affects less than 1 percent of its 180,000 workforce, and Microsoft still expects to end the year with increased headcount. However, it follows a move in May to slow hiring at the Windows, Office and Teams divisions “as Microsoft gets ready for the new fiscal year.”
Last month, Tesla Inc laid off hundreds of workers and shuttered a California facility devoted to its Autopilot self-driving technology, people familiar with the matter said.
Former pandemic highfliers like Netflix Inc and Peloton Interactive Inc have also been laying off workers in recent months. Netflix trimmed a few hundred jobs last month, and Peloton just announced plans to shutter its in-house manufacturing.
Facebook parent Meta Platforms Inc has cut spending and slowed hiring for some senior-level positions. In April, the company announced plans to slash expenses by US$3 billion this year. The idea is to refocus Meta’s product teams on core priorities, such as the metaverse and its TikTok clone, Reels.
Meta also halted development on one of its early smartwatch prototypes and repositioned its in-home video device, Portal, to focus more on business customers instead of regular consumers.
Last week, Google CEO Sundar Pichai told staff that the company planned to slow hiring for the remainder of this year — a rare move for the Internet giant, which typically adds tens of thousands of employees every year. Google will be focusing its hiring on technical and “other critical roles” through this year and the next.
Other firms are looking to wind down ambitious growth plans without the need for major layoffs.
Amazon staffed up during the pandemic so it could handle a surge in e-commerce spending. That has left it overstaffed in its warehouses, but the company has said it is working through that problem with attrition.
A key question during the latest earnings season is whether demand from consumers has softened. Apple in April warned that the latest quarter would be bumpy, but mostly because of supply-chain challenges.
Those problems are expected to erase as much as US$8 billion from Apple’s sales in the quarter. Investors should get a clearer picture of the damage — and Apple’s outlook for the coming months — when it reports results on Thursday next week.
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