Despite the current state of the economy, Apple has yet to announce any layoffs among its employees. This distinguishes it from several of its contemporaries in the tech industry, like Microsoft, Amazon, Alphabet, and Meta, all of which have recently undergone employment layoffs.
The cause for these layoffs in tech firms is frequently attributed to macroeconomic conditions and the prospect of a recession. However, another aspect is the tremendous expansion of recruiting in the technology sector during the last two years.
With the broad implementation of Covid lockdowns, internet applications became increasingly crucial, resulting in increased sales for numerous technology companies. As a result, they continued to hire in significant numbers, expecting future expansion. However, with growth slowing, these businesses are changing their staff proportionately.
Microsoft has joined the list of tech companies that have announced substantial layoffs. The company stated on Wednesday that it planned to reduce 10,000 jobs, or 5% of its staff, over the next few months, with some of the cuts taking effect immediately. This comes on the heels of significant layoffs at Salesforce and Amazon earlier this month, and Meta’s in November.
The layoffs are the latest proof that none of the tech titans will be immune to the market collapse, even though neither the employees nor Wall Street is surprised by them.
Companies like Microsoft, Salesforce, Amazon, and others have hired thousands of additional employees due to their rapid growth in recent years. However, analysts think they have run into a roadblock.
“We are seeing the clock strike midnight for the tech sector after a decade of hyper-growth, and now major layoffs are being seen at MSFT, Salesforce, Meta, Amazon, among many others across the Valley,” wrote Dan Ives, an analyst at Wedbush, in a note to clients.
He referred to it as a “tear the band-aid off moment” to protect margins and reduce costs in the face of rising interest rates and inflation. “It’s a strategy that will allow these IT titans to withstand the current crisis and prove significant,” he continued.
Microsoft’s massive layoffs draw attention away from Google and Apple.
Apple has also avoided layoffs, but a hiring freeze may be in effect until September. During Apple’s third-quarter results call, CEO Tim Cook stated that the business will do so “deliberately in recognition of the realities of the environment.”
Alphabet, Google’s parent firm, did lay off workers in Verily, its health sciences subsidiary, but no substantial layoffs have occurred at Google.