Apple is the latest major technology company to rein in hiring and spending plans, evidence that even the Silicon Valley giant is worried about a slowdown in the months ahead.
The iPhone maker is looking to limit spending and job growth in some of its divisions, Bloomberg reported on Monday, though Apple hasn’t adopted a company policy.
The more cautious stance mimics the approach of its tech peers, including Amazon, Alphabet’s Google and Microsoft, which have all taken steps to reduce spending.
The news added to the fall in stocks and panic in technical earnings season, which is in full swing this week. It can be difficult for companies to reassure jittery investors. International Business Machines Corp posted better-than-expected sales growth on Monday, only to see its shares fall in late trading.
For now, most of the biggest tech companies aren’t talking about eliminating jobs, just slashing hiring rates. And overall US job growth hasn’t stopped. Payrolls increased by 372,000 in June, beating estimates of 265,000, helped boost the number by manufacturing jobs.
The US added 25,000 information jobs in June, putting that category at 105,000 more than just before the pandemic.
But some tech companies are even going to cut jobs. That includes Microsoft, which said last week that it was eliminating some positions as part of a restructuring.
That shortfall affects less than 1% of its 180,000-person workforce, and Microsoft still hopes to end the year with increased numbers. But it follows a move in May to slow hiring across the Windows, Office and Teams divisions “as Microsoft gets ready for the new fiscal year.”
Last month, Tesla laid off hundreds of workers and closed a California facility dedicated to its Autopilot self-driving technology, according to people familiar with the matter.
Chief Executive Officer Elon Musk previously said layoffs would be necessary in an increasingly volatile economic environment. He clarified in a later interview with Bloomberg that about 10% of salaried workers will lose their jobs in the next three months, although the total workforce could be higher in a year.
Former pandemic highfliers such as Netflix and Peloton Interactive have also been laying off workers in recent months. Netflix laid off a few hundred jobs in June, and Peloton announced plans to wind down its in-house manufacturing.
Facebook’s parent meta platforms have cut spending and slowed hiring for some senior-level positions. In April, the company announced plans to cut expenses by $3 billion this year. The idea is to refocus Meta’s product teams on core priorities, such as the Metaverse and its TikTok clone, Reels.
Meta also halted development on one of its early smartwatch prototypes and rebranded its in-home video device, the Portal, to focus more on business customers rather than regular consumers.
Last week, Google CEO Sundar Pichai told employees the company planned to slow hiring for the remainder of 2022 — a rare move for the internet giant, which typically adds thousands of employees each year. . Google will focus its recruitment on technical and “other important roles” this year and next year.
“We need to be more entrepreneurial, work with more urgency, sharper focus and more appetite, as we have shown on sunny days,” he said.
Other companies are looking to pull off ambitious growth plans without requiring major layoffs.
Amazon worked during the pandemic to handle the surge in e-commerce spending. It has now been left overstaffed in its warehouses, but the company has said it is working through that problem.
In some cases, Amazon is subleasing warehouse space and halting development of facilities for office workers, saying it needs more time to determine how much space employees will need for hybrid work. .
Amazon CEO Andy Jesse said the company made the decision early in the pandemic to err on the side of too few workers and too much warehouse space — rather than too little.
“We knew that could mean we could have more capacity for a somewhat shorter period of time,” he said.
A key question during the latest earnings season is whether consumer demand has softened. Apple warned in April that the latest quarter would be a bumpy one, but mostly because of supply-chain challenges.
Those problems are expected to erase up to $8 billion from Apple’s sales in the quarter. Investors should get a clearer picture of the loss — and Apple’s outlook for the coming months — when it reports results on July 28.