Don’t expect a mass layoff announcement from Apple (AAPL) despite global economic weakness weighing on iPhone and Mac sales, says Wedbush tech analyst Dan Ives.
That’s in large part because Apple CEO Tim Cook didn’t overhire during the pandemic, unlike many of Apple’s rivals.
“Apple never hired at the pace of these other tech giants,” Ives said on Yahoo Finance Live (video above). “You’ll see cost-cutting around the edges, but Cupertino — I mean, they’re tacticians…I think it just shows why Cook is a Hall of Fame CEO. And I think he’s able to navigate another situation here in terms of not needing to do the layoffs that other tech firms have done.”
Apple’s employee count only rose by about 7% in 2022 compared to 2021, according to company reports. If Ives’s prediction holds true that Apple will avoid mass layoffs, it will be the exception in tech.
Salesforce (CRM) said earlier this month it would slash 10% of its workforce and execute select real estate exits and office space reductions. Microsoft (MSFT) followed that news with 10,000 layoffs of its own. And Amazon (AMZN) then revealed 18,000 layoffs.
And the tech layoffs go even further over the last several months.
In November 2022, Meta (META) unveiled 10,000 layoffs. Snap (SNAP) canned 20% of its workforce in August, and Robinhood (HOOD) cut ties with 23% of its employee base that same month.
The layoff news out of big tech is the sector’s come-to-Jesus moment as C-suite execs face pressure from institutional investors to boost margins and cash flow in 2023.
“Headcount reduction is a result of overhiring during the pandemic and a slower growth outlook than originally forecasted,” Jefferies analyst Brent Thill wrote in a note to clients. “As growth expectations have tapered, companies have realized they over-hired during the pandemic and need to reduce headcount in order to regain operating efficiency with a headcount that matches current demand trends.”
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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