It’s been a sad time for many working in big tech companies. Following the economic slowdown, many companies cut down their workforce and crushed the dreams of many.
While almost every tech brand has announced layoffs, one brand is still staying strong and letting employees enjoy the fruit of their labor. I’m talking about Apple.
On observing, one might wonder what Apple did differently to protect its employees from unfortunate events such as layoffs while also reducing costs to please shareholders.
Join me as I explore where other tech companies faltered and how Apple remains strong.
Pandemic and mass hiring
As the world stayed at home to survive the pandemic, major tech companies ran around recruiting employees, primarily due to the increase in demand for online services such as shopping, online platforms, and so forth.
Here’s an interesting fact. Amazon and Meta almost doubled their workforce, Microsoft and Google increased by almost 50%, and Apple increased their workforce by just only 20%.
Things were going great for everyone. The consumers were enjoying the services without any issues, and the employees were enjoying their jobs. Little did anyone know that their world was going to turn upside down.
What’s happening with Big Tech right now?
Surprisingly, Big Tech hired rampantly during the pandemic and couldn’t fathom the future. The inevitable had to happen – most tech giants have announced mass layoffs:
It began with Meta, the parent company of Facebook, which laid off more than 11,000 employees. It was followed by Twitter, which laid off 4,400 out of 5,500 contract employees, almost 80% of its contract staff.
There was a misconception that these were mainly caused by Meta losing money and Twitter being run by Elon, whose management style was widely criticized.
However, no one anticipated layoffs from other big names. Here are some companies that announced mass layoffs:
- IBM: 3900 employees, accounts for more than 1.9% of the workforce.
- Alphabet (Google): 12,000 employees were laid off, roughly 6% of the workforce.
- Amazon: Cut 18,000 jobs worldwide, which included 1% of the global workforce and 3% of the corporate workforce.
- Snapchat: 20% of the workforce laid off.
The worst thing about these mass layoffs was the abruptness. Tech companies had to fire some of their experienced employees without any notice.
Things were so unplanned that, as reported by Bloomberg, Twitter recalled many of its core employees stating it was a mistake. Imagine being recalled by the company that humiliated you!
Reasons for mass layoffs
- Pandemic gets under control: While that’s a great thing to know, it didn’t go well for the companies reaping profits from the services enjoyed by consumers staying at home. Once the pandemic was under control, consumers began going out, thus spending less time on online services.
- Financial distress: As service consumption decreases, revenue drops – it’s like a chain reaction. Furthermore, many companies took out loans to meet “expected” surges in demand for online services but were snubbed by the lifting of quarantine worldwide.
- Mergers and acquisitions: Several big sharks have acquired or merged to form larger companies. In addition to serving customers better, the mergers also brought together the debts of each company, forcing the brands to take action to deal with them.
- Seasonal fluctuations: As one can now understand, there have been fluctuations based on a particular time, and once it’s over, companies have to look for measures to handle expenses.
How Apple is handling current issues
The world only began noticing Apple’s calculative steps when the CEO cut his paycheck to save costs and avoid firing employees. The world was shocked when Tim Cook took a salary cut of more than 40% and only took $49 million in 2023, compared to last year’s 89 million, as reported by CNBC.
This made everyone wonder and question, “Is Apple recession-proof”? Well, the answer will be a yes and no. Since Apple is one of the few brands that hasn’t laid off employees during this period, many might wonder how it’s staying strong. However, there are several reasons for Apple’s success.
The main reason is that it never went overboard while hiring. The brand had only increased its workforce by 20% during the pandemic and hadn’t made thoughtless acquisitions, which many companies regretted later.
The pandemic has also been rumored to have forced Apple to scale back its product ambitions instead of expanding like its competitors. Apple also ensured that its expenses would not increase during the pandemic, resulting in lower operating expenses for the brand.
What lies ahead for Apple?
While Apple hasn’t taken any desperate measures, it is pretty evident that the recession is close, and the necessary steps must be taken to handle it. No, none of these companies will go bankrupt, especially brands like Apple, which has billions in reserves.
However, the situation begs to answer one question: Has Apple ever done mass layoffs before? The answer is yes, it has. In 1997, Apple laid off about 4100 employees. It was the year when Steve Jobs returned to the company and tried to save it from imminent disaster. Since then, Apple has always ensured to take every step with caution.
Right now, Apple might need to take desperate measures once again to keep the investors happy. The company’s earnings call on 2 February 2023 might give us an indication of where the company is headed.
Regardless of how Apple will handle the recession, we need to appreciate the brand for protecting its workforce rather than just abandoning it after benefitting from them.
Businesses worldwide should learn from Apple how not to jump into something because of greed or trend, and also keep in mind each company’s social responsibility to society.
Many companies did offer a severance package to employees who were fired unexpectedly, but had they been careful while hiring, many wouldn’t have suffered. I do believe there is something called karma, and it will eventually be reflected in Silicon Valley.
Best Wishes for Apple ❤️
I really hope Apple will be able to get through the recession without cutting its workforce. No, I do not wish anything bad for the other companies, but I just hope they will realize their mistakes and ensure that things like these don’t happen again.
More interesting reads to check out:
- Apple Service Programs: Complete Guide
- Is Apple becoming a service-driven company?
- The history of the Apple Watch: 7 years and counting