Apple slows hiring as tech industry tightens belt, report says

Apple plans to curb 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 tech company to curb hiring plans as tech stocks fall. Shares of Apple fell more than 2% after Monday’s report, before recovering their losses on Tuesday as shares recovered.

Apple did not respond to a request for comment from CBS News.

The news makes Apple the latest big tech company to cut its spending amid an uncertain market outlook. Last week, Google told workers it would delay hiring for the rest of the year, according to Gizmodo.

“Like all companies, we are not immune to economic headwinds,” Sundar Pichai, CEO of parent company Alphabet, said in a note, noting that “we will slow the pace of hiring for the rest of the year, all and that we are still supporting our most important opportunities. ”

Microsoft also implemented a small round of layoffs, reducing less than 1% of its payroll by 180,000, according to CBNC.

While the cuts are small, they are “indicative of a larger setback or slowdown in technology hiring across the industry,” CBS News technology journalist Dan Patterson said.

Twitter last week reduced its talent acquisition team by 30%. Netflix is ​​laying off workers as it tries to curb subscriber growth. Smaller technology companies, such as Vimeo, TikTok and the NFT OpenSea platform, continue to announce job cuts.

The slowdown is a sign that fast-growing, high-spending tech companies, which grew over the past two years as Americans moved much of their lives online, are tightening the belt for a possible slowdown.

“Technology companies are also shrinking labor as concerns about inflation and the recession deepen,” Andrew Challenger, vice president of replacement firm Challenger, Gray and Christmas, said in a June report. “Some companies are offering voluntary compensation or, as is the case with companies like Meta and Tesla, creating environments where workers want to resign,” he noted.

Meta, the parent company of Facebook, has encouraged team leaders to reduce workers they consider low-performing, The Information reported, while Tesla CEO Elon Musk has said workers in companies who are not in the office at least 40 hours a week will be dismissed.

Of course, the labor market remains tight, with about 1.8 jobs open for every unemployed worker, and payroll in the technology sector is growing by more than 20,000 a month, according to the Department of Labor.

But technology is seen as a benchmark for broader economic trends, as the sector is one of the most sensitive to recession concerns. Technology investors need relatively high risk tolerance, as many startups fail, and those who ultimately make profits can take years to do so. As the economy expands, these investors are often willing to give up profitability for growth, but that calculation changes when the economy seems less optimistic.

This perspective would affect other industries adjacent to technology, including advertising.

“Technology giants, advertising agencies and brands are preparing for a fall across the industry, but it’s unclear how far it will go,” Insider Intelligence, a marketing analytics firm, wrote Monday. and noted that 1 in 5 vendors has reduced spending this year. and marketing companies also announce layoffs.