Apple avoided tech layoff rush with 1 decision

Apple avoided tech layoff rush with 1 decision

There’s a reason why Apple Inc. is under less pressure than tech peers to cut jobs during the current downturn: it hired more efficiently in the first place.

During the industry’s pandemic-fueled hiring spree, Apple added fewer employees than other big tech companies. On top of that, the company generated significantly more revenue per new hire than its peers, according to data compiled by Bloomberg.

This more cautious approach is now paying off. Although Apple has frozen hiring in some areas and maintains a cap on spending – particularly outside of research and development – it has yet to resort to the massive layoffs underway at Inc., Alphabet Inc. Google, Metaplatforms Inc. and other tech giants.

“This signals a better quality of management at Apple compared to other tech companies that have clearly interpreted signals during the pandemic the wrong way,” said Peter Garnry of Saxo Bank A/S.

The company announced plans strengthen its human resources this week by hiring its first director of human resources. Human resources duties had been overseen by head of retail Deirdre O’Brien in a dual role.

Many tech companies admit to overhiring during the pandemic, betting that lifestyle changes — including remote working, e-commerce spending and video game habits — would bring a bigger boon. Now they face the sequel. Zoom Technologies Inc., one of the biggest beneficiaries of the Covid-19 lockdowns, has just announced this week that he was cutting 15% of his jobs.

Apple, meanwhile, was more cautious. Its workforce has only increased by 20% between 2020 and 2022, compared to a 60% gain at Alphabet and a near doubling at Amazon. These two companies then announced playoffs of approximately 30,000 people combined.

Apple also generated significantly more revenue per additional employee during the pandemic years than in the previous three years. That’s a stark contrast to most of its tech peers.

However, the headcount cannot fully explain Apple’s advantage over its competitors. The company also generates some of the highest sales per square foot, indicating that its efficiency goes beyond hiring policies.

“Apple is frugal by nature,” said Credit Suisse Group AG analyst Shannon Cross. “It comes down to management’s stewardship of shareholder dollars and a narrow focus on growth opportunities in which to invest.”

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