Recently, major tech companies such as Google, Meta, Microsoft, and Amazon have all been laying-off large parts of their workforce. There are two main reasons why these big tech companies have had to drastically reduce their workforce. Firstly, between September 2019 and September 2022, most tech companies saw the economic boom as an opportunity to expand their workforce. For reference, Amazon’s workforce doubled, Microsoft’s grew 53%, Google’s went up 57%, and Meta’s drastically increased by 94%. However, due to the current economic downturn it has become unsustainable to maintain current workforce numbers. Secondly, a lot of tech companies invested in very speculative projects such as self-driving technology and the metaverse. These job cuts have caused substantial losses for the big tech companies. In the past year, Meta (Nasdaq:META) fell 54%, Amazon's is down roughly 33%, Alphabet (Nasdaq:GOOGL) has dropped 25% and Microsoft (Nasdaq:MSFT) dipped 18.7%.
Apple has been able to avoid the large layoffs and is only down 13.4% (Nasdaq:AAPL) in the past year. Apple has avoided the large layoffs by not following the actions of its tech counterparts. Specifically, when other big tech companies were rapidly expanding their workforce, Apple only grew its workforce by 20%. Additionally, Apple avoided the speculative investing other big tech companies were doing at the time. Despite Apple remaining stronger than other big tech companies, it has had to make some changes. Apple has slowed hiring and CEO Tim Cook has taken a voluntary 40% cut in salary.
Article: https://www.bizjournals.com/sanjose/news/2023/01/23/heres-how-apple-has-avoided-big-layoffs-so-far.html
7 comments:
This isn't too surprising for Apple. Apple has always been one of the strongest tech companies and has different tactics to gain customer loyalty and produce products. As illustrated in the summary some tech companies also invest in speculative projects. However, Apple doesn't invest in these types of projects but has a consistent market projectile. Overall, this just demonstrates that Apple is a strong tech company that doesn't follow the norms of other companies.
As a result of the pandemic tech companies hired more workers since technology became even more in demand. Now that the pandemic isn't at its peak and demand isn't as high as before, it makes sense that these companies are laying off those workers especially if we end up going into a recession because it looks like we are headed in that direction.
I think this is wise of Apple to do. At this point, being one of the more senior tech companies there is and have gone through prior recessions, they have been here before. I also think that these layoffs are coming at a time where companies are trying to get people back into offices and minimize remote working and while probably only playing a small role in these current layoffs, could be a factor.
Hello Jack,
This is a really interesting topic and I think really relates to issues that we see currently but also issues we've seen in the last 2-3 years. One thing that I found super interesting is the fact that CEO, Tim Cook, took a voluntary 40% cut in his salary in order to avoid a large lay off in his company. To me, that shows real commitment and courtesy to his workers.
One thing that is important to note is how big of a deal this really is to the economy. With CEO, Tim Cook, doing his part to save jobs in such a large company, he is also saving the economic downfall that would occur within that decision. After all, we know that when people are laid off they receive unemployment which is paid through our taxes, and they are also unemployed. Consumer confidence falls along with overall consumption which is needed in a healthy economy. This decision was not only important to Apple's success but to the economy's success.
Overall, very well done. Good job.
-Ryan Stefancin
This just goes to show that it's not always a good idea to follow what the crowd does. If Apple had followed their counterparts they'd be much worse off but they thought ahead. Some people could've thought that Apple was idiotic for not hiring during such a great time to expand but time has shown that Apple actually had the best plan. Whether Apple anticipated this or simply hadn't thought of expanding at the time, it has still benefited them greatly and made them a lot better looking than their competition.
Jack, I think that the massive layoffs in tech companies have been major news for a very long time and it is a great topic to discuss. Tech companies did not consider the fact that even though Covid's existence made their industry one of the best performers since people were able to work from home, the pandemic's projected impact on the economy was yet to come. We see that as economists were suggesting, covid's influence on the economy has shown its true color 2 years later and most of the world is leading toward recession. Their strategy to hire more and more online-based employees to lead to a workforce who does not want to show up in the office anymore, because of their preference to work from home. Again, because of that, we received tens of thousands of layoffs in major tech companies leading to their overall poor performance and decreasing stock prices. I was saying in in my portfolio project that apple's struggle and decreasing stock price was temporary and it will go back to its feet shortly, because they did not use the tactic to hire as much workforce as possible like the other big tech companies.
Apple's actions have set them up well compared to other tech companies. It will be interesting to see how they proceed as current economic conditions remain uncertain. I think that we can expect a cooling in the labor market which will result in more layoffs. It will be interesting to see how tech companies such as Google and Microsoft will respond to having such big losses.
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