With major layoffs already happening at massive technology companies, Apple is bucking the trend by avoiding such decisions, instead resorting to slowing down new hires and delaying bonuses for various divisions. However, one report states that if the company proceeds with cutting off employees, not only will it deliver crippling damage to the company morale, but it will create a negative perception about a firm that is seemingly viewed as unstoppable, even in a slowing economy.
New report also says that Apple would have a more difficult time justifying layoffs, as it is currently sitting on a mammoth-sized cash pile of $165 billion
More evidence suggesting that Apple does not want to proceed with layoffs comes in the form of a pay cut taken by CEO Tim Cook. Last year, Cook’s compensation was $99.4 million, but for 2023, the Chief Executive is said to have taken a 40 percent pay reduction, taking home $49 million. Cook also stated during the company’s previous earnings call that laying off employees would be seen as a last resort.
If Apple had started laying off employees, Bloomberg’s Mark Gurman says in his latest Power On newsletter that the company would have a difficult time justifying this decision. This is because Apple has been more profitable than any other technology giant, generating $30 billion in profit and sitting on a cash pile of $165 billion.
Also, assuming it goes through with these layoffs, the results would be more damaging for the company morale and public perception that a cash-rich behemoth like Apple can also be in a position to lay off employees. Another reason that layoffs are not happening is that talented individuals are working on next-generation products, including the rumored AR headset.
“Apple’s top executives are seen as some of the most tactical minds in the industry. Layoffs would either signal that they’d made a strategic blunder or the global economy is in even worse shape than people feared. Either way, it could send ripples through different industries and economies.”
If layoffs occur, there could be significant product delays, including the mixed-reality headset’s unveiling. In fact, a former Apple engineer who worked on the AR headset’s development said that the company is under immense pressure to launch the product, despite the fact that it might not sell well. As a trillion-dollar company that has always generated revenue in the billions annually, there is always that mounting pressure on the technology giant to stay a dominant position in the market.
To remain the top player in the industry, Apple needs to keep its workforce motivated and employed on a steady payroll, or risk heavy losses in the future, which will obviously not sit well with the company’s shareholders.