Unlike many of its tech peers, Apple, Inc. (NASDAQ:AAPL) has so far refrained from any large-scale layoffs. The tech giant would have a harder time justifying such a step, said Bloomberg columnist Mark Gurman in his latest installment of the “Power On” weekly newsletter.
Few Things Going In Apple’s Favor: Apple is far more profitable than any other tech company and it earned $30 billion in profits in the December quarter alone, Gurman said. The company also has a war chest of $165 billion and a reputation for stability, he added.
Also, the company has some momentum currently, given the 20% year-to-date gain for the stock and the imminent launch of a new mixed-reality headset and operating system, the Apple writer said.
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Any potential layoffs at Apple, Gurman said, could be far more damaging to company morale and public perception than the recent cutbacks at Meta Platforms Inc. (NASDAQ:META), Amazon, Inc. (NASDAQ:AMZN) and Microsoft Corp. (NASDAQ:MSFT) and Alphabet Inc.’s (NASDAQ:GOOGL) (NASDAQ:GOOG) Google.
Also, top Apple executives, who are considered to have the most tactical minds in the industry, may see layoffs as signaling that they have committed a strategic blunder or that the global economy is in worse shape than feared, Gurman said.
Efficiency Focus: Gurman noted that Apple largely avoided hiring binges, even as most other companies went on a hiring spree during the pandemic. But other factors were outside the company’s control, such as spiking interest rates, currency fluctuations, the war in Ukraine and the lingering pandemic, he said.
Apple stayed focused on containing costs and making its operations more efficient — a process that began last summer, he noted.
See Also: Everything You Need To Know About Apple Stock
Initiates To Curb Costs: Gurman added that Apple has delayed bonuses for corporate teams, which previously received payouts twice a year. Among the other measures aimed at cost cuts are:
- Some projects such as a HomePod with a screen pushed back until next year
- Reining in budgets across teams
- Pausing hiring on some teams and severely limiting hiring on other teams
- Leaving some vacated positions open
- Limiting the ability of employees to switch departments or stores to avoid accompanying costs.
- Laying off of contractors
- Significantly reducing travel budgets
- Strict managerial supervision of office attendance
“While some of these moves have been upsetting to Apple’s rank-and-file staff, they’re clearly mild compared to what many companies have done,” Gurman said.
“Combined, Apple’s top rivals have laid off more than 50,000 people in recent months. That’s equal to nearly half of Apple’s corporate workforce.”
The columnist noted that Apple’s steps have worked thus far, as reflected by December quarter operating expenses coming in below guidance. The company also expects the growth of those costs to slow considerably in the current period compared with a year earlier, he added.
Apple closed Friday’s session down 0.55% at $155, according to Benzinga Pro data.
Read Next: Apple’s Recent High-Profile Departures Just Beginning, Tim Cook May Not Go Anywhere Soon, Says Gurman
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