Apple to slow hiring and spending in 2023: Report
Yahoo Finance Live anchors discuss reports that Apple will be slowing down its hiring amid uncertain times.
Video Transcript
- We want to come back to what's going on in the high ring space, right? We talked about a note from Goldman Sachs yesterday that expected job growth to slow. And Apple the latest example of that, it's grown its headcount steadily over the past decade. Now, the tech giant is taking a cue from other megacap tech companies, banks like Goldman Sachs as well. The iPhone maker reportedly, according to Mark Gurman over at Bloomberg, is going to be slowing down its hiring.
Now, we've talked about a lot of companies that are going to reportedly slow down their hiring. It's notable with Apple. First of all, we don't usually hear about Apple's plans from itself, right? It's pretty private with these kinds of plans. But according to the reporting here, the company has a policy to be more cautious during uncertain times. So guess what? We're in more uncertain times. And so that would seem to check the box.
- Yeah, and for Tim Cook, I think this really signals the shift in how a company and Apple may look at an uncertain time in this era versus even when we were thinking about the global financial crisis, and the company was under different leadership at that time. The economic pullback that was seen among consumers, how they were spending into certain categories, and the discretionary spending that was actually diminished during that period of time, and the specific types of products. Even though at that time, Apple was rolling out its highly coveted, now Apple iPhone, and that grew up to be the product that it was accounting for more than half of their revenue.
At this point, it's clear that consumers have a little bit more inclination to begin that pullback earlier on where possible, and that's showing up already in some of the Apple data as we had seen even in the last quarter. And on the average selling price, even though that is, of course, higher year over year, particularly because the price of the phone continues to go up, what's really notable on the consumer pullback and their spending is how that impacts certain parts of the Apple business and where that headcount and those reductions may actually take place in this near term.
- Yeah, we don't know that yet, right? The highest number of employees is at those retail stores. So it's unclear whether they would have fewer--
- Corporate or retail.
- Right, we don't know yet where that would be. But really, as I mentioned, this is just the latest we've heard. Vimeo, I think there was some reporting that it was going to be cutting back late yesterday, we've had a host of other companies. Goldman Sachs said it is planning to slow its hiring as well. It's going to have annual performance reviews.
We talked a little bit yesterday about the idea that the balance of power has shifted back a little bit towards employers from employees. And the Goldman Sachs was a good example of that, where the-- and not just Goldman Sachs but the Wall Street industry generally, where junior bankers were getting record salaries. It looks like that era is over, or at least on pause.
- Right, and the calculus of figuring out how you maintain the necessary headcount for when things do start to pick it back up. And the demand on a business to business and business to consumer side of the equation starts to pick back up so much so that you're able to ramp up some of those long-term investments that each of these companies had talked about even prior to what we're staring down at this point in time in a potential recession, either technical or real as that may be in the future.
- And we want to remind our viewers again that David Solomon, the CEO of Goldman Sachs is going to be joining our Brian Sozzi in just a little bit. And I imagine this will be one of the topics of conversation or at least the environment and how Goldman Sachs is reacting to it.
