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Amidst rampant tech layoffs, Apple (NASDAQ:AAPL) has grabbed the attention of many analysts as one of few tech giants with a clear rap sheet as it pertains to job cuts. Indeed, as the likes of Google (NASDAQ:GOOG, NASDAQ:GOOGL), Meta (NASDAQ:META), and Microsoft (NASDAQ:MSFT) deal with the fallout from staff reductions, AAPL stock has remained afloat on its historically strong hiring practices. But with speculation circulating that a recession is coming sooner than later, are Apple layoffs on the way?
Well, depending on who you ask, you’ll receive a variety of different answers. Earlier this week, Tom Forte, DA Davison Senior Research Analyst, told Bloomberg he expects Apple to eventually jump on the tech layoff bandwagon:
“So Apple will cut headcount. They’ll do it in one of two ways. If you look back to Amazon between the first quarter and second quarter of last year, they cut about 100000 heads, mostly at the Solomon Center level when they acknowledged that they were overbuilt for the current level of demand. So Apple could cut by attrition, much like Amazon did. They’ve been one of the companies who’s been in the news for wanting their employees to return to headquarters, to return to office for a greater period of time. You could insist on that and then have some attrition there. They could also layoff their employees at the retail level.”
Reasonably so. With the Cupertino giant projected to post its first revenue decline since 2019 in its Q4 earnings call this Thursday, layoffs may be a natural follow-up.
Not for nothing, Apple has struggled with supply issues for much of the past year. Hot-ticket items like the iPhone 14 Pro And iPhone 14 Pro Max were out of stock for much of the holiday season. Combined with a general slowdown in PC and smartphone sales in the face of worsening economic conditions, paints a relatively grim picture for Steve Jobs’ wonder child.
Despite this, not everyone’s in agreement over Apple’s path forward, especially as it pertains to layoffs.
Apple Layoffs ‘Not [Needed]’ Says Dan Ives
While the prevailing narrative has Apple floundering on Thursday, according to one analyst, the company may have shielded itself from the mass layoffs many are decrying.
On Monday, Wedbush analyst Dan Ives predicted that Apple’s relatively conservative hiring practices over the past year should alleviate any layoff pressure even amidst wider economic slowdowns.
“Apple never hired at the pace of these other tech giants,” Ives told Yahoo Finance Live. “You’ll see cost-cutting around the edges, but Cupertino — I mean, they’re tacticians…I think it just shows why Cook is a Hall of Fame CEO. And I think he’s able to navigate another situation here in terms of not needing to do the layoffs that other tech firms have done.”
Fair point, Apple only expanded its workforce by about 7% in 2022. Unlike many tech companies that rapidly expanded following 2021’s gangbuster growth, Apple was reluctant to wear the same rose-colored glasses.
This mirrors a point Jefferies analyst Brent Thill made last month, following staggering layoff announcements from the likes of Salesforce (NYSE:CRM), Amazon (NASDAQ:AMZN), and more.
“Right now, I think what’s happening is many of these companies have overforecasted on the top line, and that’s not coming in. And now they’re having to cut expenses. They’re having to cut employees. They’re actually slowing their hiring. And this is going to last into the front half of ’23.”
Heading into Thursday, AAPL stock remains a cautionary tale in the eyes of many analysts. Whether Wall Street’s bearish sentiment is justified, remains to be seen.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
With degrees in economics and journalism, Shrey Dua leverages his ample experience in media and reporting to contribute well-informed articles covering everything from financial regulation and the electric vehicle industry to the housing market and monetary policy. Shrey’s articles have featured in the likes of Morning Brew, Real Clear Markets, the Downline Podcast, and more.
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