After Google and Amazon, Apple to limit hiring and spending plans

Apple Inc is the latest major technology company to rein in hiring and spending plans, adding to the evidence that even Silicon Valley stalwarts are worried about a recession in the coming months.

The iPhone maker is looking to limit expenditures and job growth at some of its divisions, Bloomberg reported on Monday, though Apple hasn’t adopted a companywide policy. This comes on the heels of Amazon.com Inc, Google and Microsoft all taking steps to decelerate spending.

The news sent stocks sliding and even International Business Machines Corp, which posted better-than-expected sales growth on Monday, saw its shares slip in late trading.

Also read: Microsoft cuts 1% workforce amid recession fears; Google goes slow

For now, most of the biggest tech companies aren’t talking about eliminating jobs, just reducing the rate of hiring. And overall US job growth hasn’t stalled either.

Microsoft to cut jobs

But some tech companies are cutting jobs. That includes Microsoft, which said last week that it was eliminating some positions as part of a reorganisation. The reduction affects less than 1 per cent of its 180,000-person workforce, and Microsoft still expects to end the year with increased headcount. But it follows a move in May to slow hiring at the Windows, Office and Teams divisions “as Microsoft gets ready for the new fiscal year.”

Last month, Tesla Inc laid off hundreds of workers and shuttered a California facility devoted to its Autopilot self-driving technology, according to people in the know. CEO Elon Musk said earlier that lay-offs would be necessary in an increasingly shaky economic environment. He clarified in a subsequent interview with Bloomberg that about 10 per cent of salaried employees would lose their jobs over the next three months, though the overall headcount could be higher in a year.

Lay-offs at Netflix

Former pandemic highfliers like Netflix and Peloton Interactive also have been laying off workers in recent months. Netflix trimmed a few hundred jobs in June and Peloton just announced plans to shutter its in-house manufacturing.

Facebook parent Meta Platforms Inc has cut spending and slowed hiring for some senior-level positions. In April, the company announced plans to slash expenses by $3 billion this year. The idea is to refocus Meta’s product teams on core priorities, like the metaverse and its TikTok clone, Reels.

Last week, Google CEO Sundar Pichai told staff that the company planned to slow hiring for the remainder of 2022 — a rare move for the internet giant, which typically adds tens of thousands of employees every year. Google will be focusing its hiring on technical and “other critical roles” through this year and the next.

“We need to be more entrepreneurial, working with greater urgency, sharper focus and more hunger than we’ve shown on sunnier days,” he said.

Overstaffed Amazon

Amazon staffed up during the pandemic so it could handle a surge in e-commerce spending. That’s now left it overstaffed in its warehouses, but the company has said it’s working through that problem with attrition.

Also read: Apple set to choose India over China to boost production: Report

In some cases, Amazon is sub-leasing warehouse space and has paused development of facilities meant for office workers, saying it needs more time to determine how much space employees will require for hybrid work.

Amazon CEO Andy Jassy said the company made the decision early in the pandemic to err on the side of having too many workers and too much warehouse space — rather than too little.