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Journalism of Courage
There’s a reason why Apple Inc. is under less pressure than tech peers to slash jobs during the current slowdown: It hired more efficiently in the first place.
During the industry’s pandemic-fueled hiring binge, Apple added fewer employees than other big tech firms. On top of that, the company generated far more revenue per new hire than its peers, according to data compiled by Bloomberg.
That more cautious approach is paying off now. Though Apple has frozen hiring in some areas and is keeping a lid on spending — especially outside research and development — it hasn’t yet resorted to the mass layoffs underway at Amazon.com Inc., Alphabet Inc.’s Google, Meta Platforms Inc. and other tech giants.
“This signals a better quality of management at Apple compared to other technology companies that clearly read the signals during the pandemic the wrong way,” said Saxo Bank A/S’s Peter Garnry.
The company announced plans to shore up its human resources this week by hiring its first chief people officer. HR duties had been overseen by retail chief Deirdre O’Brien in a dual role.
Many tech companies admit that they hired too much during the pandemic, betting that lifestyle changes — including remote work, e-commerce spending and video-game habits — would bring a bigger windfall. Now they’re dealing with the aftermath. Zoom Technologies Inc., one of the biggest beneficiaries of Covid-19 lockdowns, just announced this week that it was cutting 15% of its jobs.
Apple, meanwhile, was more cautious. Its headcount increased just 20% from 2020 to 2022, compared with a 60% gain at Alphabet and a near-doubling at Amazon. Those two companies went on to announce playoffs of roughly 30,000 combined.
Apple also generated much more revenue per additional employee during the pandemic years than it did in the previous three-year stretch. That’s a sharp contrast with most of its technology peers.
However, headcount can’t fully explain Apple’s edge over competitors. The company also generates some of the highest sales per square foot — an indication that its efficiency goes beyond hiring policies.
“Apple is frugal by nature,” said Credit Suisse Group AG analyst Shannon Cross. “It comes down to the management’s stewardship of shareholder dollars and a tight focus on what growth opportunities to invest in.”
