Home » Employment News » Apple to slow hiring and spending for some teams next year amid fears of economic slowdown

Apple to slow hiring and spending for some teams next year amid fears of economic slowdown

By Nagasunder in Employment News, posted July 19, 2022

Apple will slow hiring and spending in several of its divisions next year to prepare for a future economic slump.

Bloomberg reports that, according to anonymous sources within the company, Apple has decided to be more cautious amid uncertain times.

The changes will not affect all the teams, and Apple is still anticipating a flurry of product launches in 2023, including a mixed-reality headset, the company's first significant new category since 2015.

But Apple's more cautious tone is striking for a business that has consistently outperformed Wall Street forecasts throughout the Covid-19 outbreak and has withstood prior economic crises better than a lot of its competitors.

Apple shares plunged 2.1 percent to $147.07, the greatest one-day drop in over three weeks.

Microsoft Corp., Tesla Inc., and Meta have all gone so far as to lay off employees, something Apple has never done.

Apple, headquartered in Cupertino, California, distributes a certain amount of money to each main division each year for research and development, resources, and recruiting.

It is providing chosen teams with a lower-than-expected budget for 2023.

For certain groups, the corporation will not expand employment in 2023, despite typically hiring 5 percent to 10 percent more people in a given year.

It also intends not to replenish positions left vacant by exiting employees in some groups.

Over the previous few years, Apple has made significant investments in research and development, hired aggressively from its competitors, and introduced a number of new products.

However, it has faced supply-chain issues, including the recent halt of manufacturing in China. a number of new goods

Apple warned in April that the issues may cost it up to $8 billion in the most recent quarter.

Analysts predict Apple will announce third-quarter revenue of around $83 billion, slightly higher than the year-ago period, when it reports results on July 28.

During the most recent results call, Apple CEO Tim Cook stated that the company was "seeing inflation," which was seen in both gross margin and operating expenditures.

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The company also cited the continued negative impact of Covid-19 and rising freight costs.

It declined to provide specific revenue guidance.

Even as it prepares to cut expenditure in some areas, Apple intends to increase its overall compensation budget this year to deal with a tighter labor market.

The corporation is also dealing with moves to unionize its stores across the United States.

Apple recently boosted wages for many hourly retail and technical support staff, with employees reporting rises ranging from 5% to 15 percent.

Simultaneously, Apple is developing a torrent of new items.

The firm plans to release four iPhone models, three Apple Watch versions, new Mac desktops and laptops, and an upgraded Apple TV set-top box later this year.

Source: Bloomberg News