Apple (NASDAQ:AAPL) is planning its first round of internal job cuts since before the pandemic. Indeed, the iPhone maker is terminating several roles in its corporate retail teams. What do you need to know about the Apple layoffs?
Well, it seems the job cuts hammering the tech sector only continue to add more names to the list. Last week, Apple employees were informed via video conference that they had until Friday to apply for new roles within the company. It’s currently unclear how many positions were affected by the “organizational change,” but employees are referring to the move as a layoff.
Apple has long been one of the few tech companies slow in making job cuts. Even as the likes of Meta (NASDAQ:META), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN) layoff tens of thousands of employees in the face of rising interest rates, Apple has typically opted for alternative ways to rein in costs. This includes delaying bonuses for corporate teams, pushing back specific projects, and cutting budgets across certain teams.
Reasonably, Apple is well tilted towards the value side of the growth-value spectrum, earning $30 billion just last quarter. Unlike its growth-centric competitors, Apple hasn’t been quite as affected by the change in economic conditions, in no small part due to its prudence.
Apple maintained relatively conservative spending during the pandemic. This contrasts with companies like Meta, Amazon and Microsoft (NASDAQ:MSFT), which famously went on hiring sprees during the quarantine. Paired with hefty investments into somewhat speculative markets, like metaverse and artificial intelligence (AI), it’s no surprise to see the chicken home to roost as things start to slow down.
Apple Layoffs Ring Recession Alarms
Apple cutting jobs is particularly concerning because of its implications for the greater economy. Apple’s status as a premier and steadfast tech winner means any narratives against the company’s strength raises concerns over the strength of the business and economic conditions worldwide. In fact, should the Apple layoffs prove more devastating that most currently assume, it could be a troubling sign that the global economy is doing worse than most economists give it credit for.
To be clear, no one knows the ultimate impact of Apple’s current layoffs in progress. The employees in the eliminated roles may be simply relocated to different positions.
AAPL stock is up more than 30% year-to-date, making it one of the few Big Tech winners. Whether the trend continues following the company’s latest staffing changes remains to be seen.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
