Apple Avoids Tech Layoffs: What Are They Doing Differently? | WSJ Tech News Briefing

foreign [Music] this is your Tech news briefing for Thursday January 26th I'm Zoe Thomas for the Wall Street Journal the tech industry has been hit hard by layoffs for those keeping track more than 200 000 roles have been cut intact since the start of 2022. according to layoffs.fyi a website that tracks the cuts among those making large staff reductions are Google parent alphabet Microsoft and meta notably not on that list Apple so what has kept the iPhone maker from announcing layoffs and will it be able to keep bucking that trend joining me to talk about this is our Apple reporter Aaron Tilley hi Aaron thanks for joining me hey thanks for having me a lot of other tech companies scaled up during the pandemic adding you know more people to their head counts and they're now having to rethink those Staffing numbers in the face of some changing economic conditions is Apple in the same boat no Apple's not in the same boat throughout the pandemic for the past three years pretty much all the big Tech players really escalated their Workforce grew it by quite a bit except apple apple was really conservative and it's Workforce growth it grew about 20 percent over the past three years while other companies like Amazon doubled Microsoft 50 alphabet 57 and meta also around doubling their Workforce why didn't Apple grow at that same pace well Apple has always been much more of a leaner company than the rest of tech they're very conservative they try to make the most out of what they currently have you know the last actual real set of mass layoffs happen back in 1997 when Steve Jobs returned to the company as enough to save the company that was under a lot of pressure so throughout the history they've just been slowly but steadily growing but always been very lean Lee run is there something about Apple's business model that has made it more resilient then than some of these other companies well I think a lot of these other companies have been a lot more vulnerable to shifts in the economy during the height of the pandemic their businesses really accelerated but coming out of it they've hit some snags they've hit some troubles you know especially in the digital ad markets e-commerce those have slowed down quite a bit some of that slow down in the digital ad markets has been due to changes Apple has made actually so uh Apple's partially the cause of that slowdown but also there's this broader slowdowns economically happening and with Apple's business the iPhone still Reigns Supreme it is still around 50 percent of their business and demand really hasn't subsided that much the big trouble for them is making enough and there's certainly a lot of troubles there in manufacturing these phones you mentioned Apple running kind of a lean business when it comes to Staffing I mean are there other ways that they run the business that have kind of helped keep them on track to avoid some of the job Cuts other companies are having to make well the main thing is how conservative they grew their Workforce you know there's all sorts of little other things on top they don't offer free lunches unlike a lot of the other Tech players it's not huge but it's interesting and I think symbolic of Apple's leanness other Tech Giants also don't offer free lunch but companies like alphabet and meta they are kind of famous for their employee perks and apple just never did that what about in terms of investing in other products I mean not only did a lot of big tech companies add body counts they also added new projects during the pandemic kind of thinking these good times would roll did Apple follow any of that model yeah so uh meta and alphabet are also famous for these really ambitious projects that will probably never pan out in terms of making real business out of them Apple has some ambitious projects itself that are certainly risky such as a AR VR our headset supposed to come out later this year and they're trying to build their own car it's really uncertain when that'll come out but these projects that apple is building out there is a rationale there is a I think fundamental business plan in place they are trying to execute on La is reporting its earnings next week what do we expect from that well Apple just went through its holiday quarter with its brand new iPhone 14s and the thing that happened in this previous cycle was that manufacturing just went crazy for them China were Apple manufacturers pretty much all of its phones really had some issues with its zero coveted policies their most important facilities iPhone City hundreds of thousands of workers shut down over some of these zero coveted policies or protests and riots and Manufacturing really slowed down for them that the wait times reached the highest that they've ever seen for a new iPhone launch and so what we're gonna see I think is some disappointment in the numbers analysts though are expecting some of that demand to be pushed out to the March quarter so there's not a whole lot of concern from Wall Street now they've tempered their expectations but it doesn't mean demand's gone for the iPhone it's just Apple has to get the trains running on time and get their manufacturing back up to speed so we don't expect investors to turn around and say this isn't the rosy picture we were after why don't you make Cuts like everyone else no I think they understand what's on the rise and what's coming next week but we'll have to see how bad these manufacturing issues hit Apple if it's surprising if it's much worse than what everyone all the analysts are expecting I think there could be a chance that there would be questions around layoffs at Apple and should Apple be doing that too but we'll have to wait and see how bad this manufacturing hiccup hit Apple all right that was our reporter Aaron Tilley Aaron thanks so much for joining us yeah thanks for having me and that's it for today's Tech news briefing for more Tech stories check out our website wsj.com I'm Zoe Thomas for The Wall Street Journal thanks for listening [Music] [Music]

Channel: Wall Street Journal

Views: 292,665

Keywords: big tech, layoffs, tech layoffs, tech, tech industry, netflix, amazon, facebook, meta, netflix layoffs, amazon layoffs, facebook layoffs, meta layoffs, mark zuckerberg, zuck, jeff bezos, bezos, faang, tech sector, tech layoffs 2022, lyft, lyft layoff, silicon valley, tech company, job cuts, snap layoff, snap, twitter layoff, twitter, shopify, shopify layoffs, ceo, revenue, tiktok, social media, apple, apple privacy, apple ask not to track, employment, tech jobs, job cuts 2022, news, techy

Id: 42s8pULEbZM

Length: 7min 2sec (422 seconds)

Published: Thu Jan 26 2023