Apple plans to slow hiring and spending in some of its divisions next year as the iPhone maker faces a possible economic slowdown, according to a report in Bloomberg.
The news makes Apple the latest technology company to slow hiring plans as tech stocks take a dive. Shares of Apple fell more than 2% after the report on Monday, before regaining its losses on Tuesday as stocks recovered.
Apple did not respond to a request for comment from CBS News.
The news makes Apple the latest large tech company to pare its spending amid an uncertain market outlook. Last week, Google told workers it would slow hiring for the rest of the year, according to Gizmodo.
“Like all companies, we’re not immune to economic headwinds,” Sundar Pichai, CEO of parent company Alphabet, said in a memo, noting that “we’ll be slowing the pace of hiring for the rest of the year, while still supporting our most important opportunities.”
Microsoft also implemented a small round of layoffs, cutting less than 1% of its 180,000-strong payroll, according to CBNC.
While the cuts are small, they’re “indicative of a larger rollback or slowdown in tech hiring across the sector,” said CBS News tech reporter Dan Patterson.
Twitter last week cut 30% of its talent acquisition team. Netflix is laying off workers as it tries to shore up slowing subscriber growth. Smaller tech companies, including Vimeo, TikTok and the NFT platform OpenSea, continue to announce job cuts.
The slowdown is a sign that fast-growing and high-spending technology companies, which boomed during the last two years as Americans moved large portions of their lives online, arefor a potential downturn.
“Technology companies are also cutting workforces as inflation and recession concerns deepen,” Andrew Challenger, vice president of outplacement firm Challenger, Gray and Christmas, said in a June report. “Some firms are offering voluntary severance or, as is the case with companies like Meta and Tesla, creating environments where workers may want to quit,” he noted.
Meta, Facebook’s parent, has encouraged team leaders to cut workers they consider low performers, The Information reported, while Tesla CEO Elon Musk has said that corporate workers who aren’t in the office at least 40 hours a week will be fired.
To be sure, the job market remains tight, with about 1.8 open jobs for every unemployed worker, and payrolls in the tech sector are growing by more than 20,000 a month, according to the Labor Department.
But technology is seen as a bellwether for broader economic trends, since the sector is among the most sensitive to recession worries. Investors in tech need a relatively high risk tolerance, as many startups fail, and those that eventually turn a profit can take years to do so. When the economy is expanding, these investors are often willing to forgo profitability for growth, but that calculus changes when the economy looks less rosy.
Such an outlook would affect other tech-adjacent industries, including advertising.
“Tech giants, ad agencies, and brands are all preparing for an industrywide downturn—but how severe it will be is unclear,” Insider Intelligence, a marketing analytics company, wrote on Monday, noting that 1 in 5 marketers has cut spending this year and marketing companies are also announcing layoffs.