How Apple is trying to prevent mass layoffs

Several tech companies, not a few from Silicon Valley in California, have made negative headlines in recent months by laying off more than 50.000 employees. But while Meta, Microsoft, Google, Amazon, Twitter and Co. are cutting the jobs and while the Silicon Valley Bank went bust is, since Apple seems to be able to keep the positions of permanent employees. In his “Power On” newsletter, Bloomberg journalist Mark Gurman highlighted the underlying strategies. In the following you will find the most important points translated and presented in summary form.

Tech companies like Meta, Microsoft, Amazon, Twitter and Google are using layoffs to cut costs. Apple seems to be trying to go the other way. Savings are being made in numerous places to keep employees. Here you will find a summary of the known measures.
Tech companies like Meta, Microsoft, Amazon, Twitter and Google are using layoffs to cut costs. Apple seems to be trying to go the other way. Savings are being made in numerous places to keep employees. Here you will find a summary of the known measures.

Apple's measures against possible mass layoffs

While the competition has laid off more than 50.000 people - in total almost half of all Apple employees - the iPhone manufacturer seems to be more secure in the saddle. But Apple is also struggling with lower sales, higher interest rates, the consequences of the pandemic and other problems in the market. The company is known for planning far ahead and acting extremely tactically. A wave of layoffs would be interpreted either as haphazardness on the part of Apple or as a sign that the economy is even worse than expected.

What it will look like in one or two years' time cannot be predicted with any certainty at the moment. However, when looking at Apple's current measures, it becomes clear that many attempts are being made to avoid the fate of the other technology giants - and thus also (further) negative headlines about the workforce. In the following I have listed what Apple has been trying to do to prevent layoffs since last summer and what differences to the other companies have ensured that the iPhone manufacturer is currently in a slightly more stable position:

  • Apple hasn't hired excessively in 2020 and 2021 like Microsoft and Meta - companies that are now having to lay off people and dismantle teams again because their plans didn't work out.
  • Since the summer of 2022, Apple has been cutting costs in several areas and making processes more efficient so that they become cheaper.
  • Bonuses for teams, which are otherwise paid out twice a year, are now paid out collectively in October so that Apple can use the money operationally for longer.
  • Some projects, e.g. B. for upcoming smart home devices, are deferred so that parts of their funds can be used for research and development of more important projects.
  • The budgets are now also being looked at more closely, and expenses or additional expenses currently have to be approved by senior managers.
  • New hires have been completely paused in some teams, drastically reduced in other teams.
  • In addition, some positions are not filled again if the relevant people leave the company.
  • The possibility of moving employees to other departments or shop staff to other locations has been restricted, as this also involves additional costs.
  • Last year, Apple terminated contracts with recruiters who were not permanent employees.
  • In the last few weeks, contract workers from engineering teams and other groups have also been let go or their contracts have not been renewed.
  • Travel budgets have been drastically reduced and business trips now require VP approval. In some departments, business trips have been completely discontinued.
  • Managers also seem to be increasingly enforcing office attendance (currently planned for Tuesdays, Wednesdays and Thursdays at Apple). It is suspected that an excuse is being sought here to fire people who do not want to do this or who want to stay in the home office.
  • In sales outlets, more attention is paid to the hours of attendance. It is also assumed here that people should be fired if they cannot work the required hours. Or they should be persuaded to resign, which would be cheaper for the company.
  • In addition, hours should not be replaced in the case of sick leave. And Apple continues to do away with the "special sick leave" it introduced for Covid-19 illnesses. Anyone who falls ill with Covid must take regular sick days.
  • The number of terminations is also said to increase in sales outlets – allegedly for standard reasons and not to force savings. Some of the positions that become vacant in this way are not filled again.

Mass layoffs cannot be ruled out at Apple either

Mark Gurman concludes his comments on the current measures, which seem to be working well at the moment, by saying that they certainly do not please everyone in the workforce. On the other hand, they are comparatively mild and an alternative to mass redundancies for the purpose of "normal" implementation of company processes. Certainly it can be seen as an advantage if someone is cut off from business travel and bonuses in the short term if that person can keep the job and probably continue to do it safely. 

But you should never say "never", because even the manufacturer of iPhone, Mac, AirPods and Co. is not safe from the real world. And the times when a visionary Apple CEO makes the world his own way have been over since 2011 at the latest. The last few years have shown that the world holds unpredictable scenarios (or scenarios that experts can predict, but not taken into account by the general public and the market) that mean extremely disruptive factors. Tim Cook, Apple's current CEO, has described layoffs as a "last resort."

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