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Apple joins other tech giants in stopping hiring

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Apple Inc. is the latest big tech company to trim its hiring and spending plans, adding to the evidence that even Silicon Valley’s advocates are worried about a recession in the coming months.

The iPhone maker is trying to limit spending and job growth in some of its businesses, Bloomberg reported Monday, although Apple hasn’t adopted a company-wide policy. The more cautious stance mimics the approach of its tech peers, including Amazon.com Inc., Alphabet Inc.’s Google and Microsoft Corp., all of which have taken steps to rein in spending.

The news sent stocks tumbling and increased concerns about the tech earnings season, which is in full swing this week. It can be difficult for companies to calm nervous investors. International Business Machines Corp. posted better-than-expected sales growth on Monday, only to see its shares slide in late trade.

Right now, most of the biggest tech companies aren’t talking about cutting jobs, just cutting hiring rates. And overall US job growth has not stalled. The number of people employed rose by 372,000 in June, beating the estimate of 265,000, with manufacturing jobs helping to prop up the numbers.

In the US, 25,000 information centers were created in June, 105,000 more in this category than just before the pandemic.

However, some tech companies are going so far as to cut jobs. That includes Microsoft, which said last week it would trim some positions as part of a restructuring.

The layoffs affect less than 1 percent of its 180,000 employees, and Microsoft still expects to end the year with a higher headcount. But it follows a move in May to slow hiring across its Windows, Office and Teams lines of business “as Microsoft prepares for the new fiscal year.”

Last month, Tesla Inc. laid off hundreds of workers and shut down a California facility dedicated to Autopilot self-driving technology, according to people familiar with the matter.

Chief Executive Elon Musk previously said layoffs were necessary in an increasingly shaky economic environment. In a subsequent interview with Bloomberg, he clarified that about 10% of employees would lose their jobs in the next three months, although the total number of employees in a year could be higher.

Former pandemic high-flyers like Netflix Inc. and Peloton Interactive Inc. have also laid off employees in recent months. Netflix cut a few hundred jobs in June, and Peloton just announced plans to shut down its own manufacturing.

Facebook parent Meta Platforms Inc. has cut spending on some executive positions and slowed hiring. In April, the company announced plans to cut spending by $3 billion this year. The idea is to align Meta’s product teams around core priorities like the Metaverse and its TikTok clone, Reels.

Meta also halted development of one of its early smartwatch prototypes and repositioned its in-home video device, Portal, to focus more on business users than regular consumers.

Last week, Google CEO Sundar Pichai told employees the company plans to slow hiring for the remainder of 2022 — a rare move for the internet giant, which typically adds tens of thousands of employees each year. Google will focus its hiring on technical and “other critical roles” this year and next.

“We need to be more entrepreneurial, work with more urgency, sharper focus and more hunger than we’ve shown on sunnier days,” he said.

Other companies are attempting to complete ambitious growth plans without major layoffs.

Amazon has increased staff during the pandemic to cope with a surge in e-commerce spending. That has meant it’s now overstaffed in its warehouses, but the company has said it’s working through this wear-and-tear issue.

In some cases, Amazon is subletting storage space and has suspended development of facilities for office workers because it takes more time to determine how much space workers need for hybrid work.

Amazon CEO Andy Jassy said the company made a decision early in the pandemic to stay on the side of having too many workers and too much warehouse space — not too little.

“We knew this could mean we could have more capacity for a short time,” he said.

A key question during the last earnings season is whether consumer demand has eased. Apple warned in April that its final quarter would be bumpy, but mostly because of supply chain challenges.

These issues are expected to take as much as $8 billion out of Apple’s sales in the quarter. Investors should get a clearer picture of the damage — and Apple’s prospects for the coming months — when the company reports results on July 28.

https://www.independent.ie/business/world/apple-joins-fellow-tech-giants-in-putting-a-lid-on-hiring-41850263.html Apple joins other tech giants in stopping hiring

Fry Electronics Team

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