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Apple reportedly set to slow hiring and spending

Yahoo Finance Live anchors Dave Briggs, Seana Smith, and Rachelle Akuffo discuss a new report that Apple will be slowing down hiring and spending in some of its divisions. The stock is dragging markets lower.

Video Transcript

DAVE BRIGGS: But Jared talked about the Apple News dragging the markets down, and what is that news? Well, "Bloomberg" reporting the slowdown is coming next year in some divisions. That they will slow hiring and slow some expenses, but again not all teams will have this news. Those teams that usually do grow, it's between 5% and 10%.

But look, this is like a lot of reports that have come out from bank earnings, like a lot of the reports that we've been sifting through in recent days. There is plenty of good news on the Apple side too. Just within the last two hours, news came out that slowing demand on smartphones, down 9% year-over-year, but guess what, really didn't impact Apple. Their market share is up from 14% to 17% from the year a year-over-year.

So look, again, I just-- there's so much bad news being sifted about. There's plenty of good news that we're also not focusing on. And Apple will still roll out their first new product since 2015, that mixed reality, augmented reality headset in 2023. Plenty of good happening with Apple over the course of a year. Just a tidbit of bad news on there.

SEANA SMITH: There is. I mean, Apple certainly is going to be just fine, but I think we're seeing this reaction not only in Apple stock, but in the broader market. We saw the fact that we gave up those earlier gains because of worries about a recession and exactly how big of a slowdown we could potentially see. Because Dave, like you were saying, Apple is not the first company to come out and say that they do plan to slow hiring.

We heard that from a number of some of its competitors within the tech industry. We heard it from Goldman Sachs actually this morning. Another bank coming out saying that they're not sure what the next few months is going to hold. There's so much uncertainty out there. We know that obviously having employees is very, very expensive.

Goldman, for example, setting aside to get the $7.8 billion for worker compensation and benefits through the first six months of the year. So when there's so much uncertainty out there, companies are going to pull back, if they're not laying off workers, they're going to slow down hiring and just wait and see until we get things maybe a little bit more figured out going into 2023.

RACHELLE AKUFFO: And I think it's tough, because when people look at Apple, you think, who has a bigger budget than Apple, and if Apple has to slow down and try and tighten its budget, what hope does that leave for some of these other companies, if you say a smaller company? Now, obviously, as you were saying there, they are slowing down in some aspects. We're also seeing some tech companies saying, look, we're slowing down here, but we are going to continue hiring in other areas, perhaps a shift of direction.

I think a lot of times as we're trying to figure out what the consumer wants, what they want from their technology, we're also seeing some of these companies try and play catch up as well. There was also, of course, a lot of over hiring during the pandemic. So a lot of that also being trimmed to try and cut costs as well. Obviously, a tough time if you're in the tech sector, but as you mentioned, not across the entire tech sector, but certain aspects are struggling.

DAVE BRIGGS: Yeah, and look, we'll learn a lot more in 10 days when Apple reports earnings. That's July 28th, but it's a lot like the bank earnings. There are two completely different stories, if you look at Goldman or if you look at JP Morgan, if you look at Citi, which is very positive, or if you look at Wells Fargo. Plenty of good data.

I'm just saying, at some point it feels like it's going to be a self-fulfilling prophecy that we are going to have some type of mild recession, but it certainly doesn't feel like a deep recession.

SEANA SMITH: I hope you're right. I do.

DAVE BRIGGS: Maybe I'm just trying to be optimistic here.

SEANA SMITH: And we need to be optimistic.

DAVE BRIGGS: There's so much pessimism out there.

SEANA SMITH: There certainly is, especially at the top of the show. It's very, very important to be optimistic.