Is Apple's downsizing of workforce restructuring move or cost-cutting measure
The layoff season has finally entered the impenetrable fortress of Apple. According to reports from Bloomberg and Business Insider, the iPhone maker is firing a small number of people from one of its retail teams. While its tech peers laid off employees left and right, Apple skirted layoffs until now. Let's understand what led Apple to make this decision finally.
Why does this story matter?
Layoffs have hit the tech sector hard. In 2023 alone, over 550 companies fired around 166,000 employees. Some of the biggest names in the industry, including Amazon, Alphabet, Meta, and Microsoft, fired their staffers. Among Big Tech, Apple was the only company not to succumb to macroeconomic headwinds. The number of employees getting fired might be less, but it is significant for Apple.
Apple's retail division is affected by layoffs
Apple is laying off employees in the division that is responsible for building and maintaining retail stores. The number of affected employees will be much lesser than in other tech companies. For instance, Google laid off 12,000 staffers, while Meta and Amazon fired over 20,000 employees. However, it appears that Apple has lost the right to boast its no-layoff record.
Affected employees can apply for other positions
It is unclear how many employees are affected by Apple's decision to cut jobs. The company has asked affected employees to apply for other positions in the company by the end of this week. Apple will provide up to four months of severance to those who leave. This is the first time Apple has axed full-time employees since the layoff season began.
Apple is not portraying its decision as a cost-cutting measure
Now, let's get to the most important question - why? Internally, Apple is selling its decision to fire a few employees as a measure to improve operations rather than as a way to cut costs. But is that the whole story? Although it did not fire any full-time employees until now, the company has been engaged in cost-cutting measures for a while.
The company has taken several measures to reduce costs
The company recently fired a few contractors to cut costs. Other cost-cutting measures Apple took include leaving positions unfilled, slowing down hiring, delaying bonuses, reducing travel budgets, and pushing back projects, among others. In February, CEO Tim Cook said he views layoffs as a "last resort kind of thing." It is tough to see the current decision separate from its other cost-cutting measures.
The layoffs can be considered a part of cost-cutting
Apple has waited a long time to lay off full-time employees. Like its peers, Apple has also felt the brunt of economic headwinds. Therefore, its decision to lay off employees, albeit small, must be considered as a way to cut costs. For all we know, there may be more job cuts on the way.
