Apple Inc. has put hiring in corporate roles on hold, though exceptions have been made for the Research and Development department. According to informed sources, the move is an escalation of the earlier plan to reduce the budget for the following year.
The company took the step in October ahead of its next quarterly earnings, saying that growth would be slow in the coming holiday season. The hiring pause does not apply to teams working on long-term initiatives and future devices. However, specific corporate, software, and hardware engineering functions will be affected.
Sluggish spending by consumers grappling with high inflation and interest rates has ensured that Apple Inc. is not alone, as other peer tech companies are also putting brakes on hiring. The iPhone maker has performed better than many others in the tech industry in 2022. Still, overall, the smartphone and computer industry is facing a slowdown.
Apple issued a statement saying it will continue to hire but considering the economic situation currently, it is making informed decisions in certain parts of the business.
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Apple has been increasing its spending steadily on research on new products. The Cupertino, California-based tech giant said it wants to make smart decisions to enable them to continue innovations for the long term.
The shares of Apple were trading higher Thursday but fell 1% to $137.55 after Bloomberg News reported their hiring plans. The stocks closed at $138.88 but are down 22% this year, affected by the overall decline in tech stocks.
The company is continuing with hiring advertisements on its website, where specific teams can hire under exceptional circumstances. New roles hiring is open, but the general hiring has been put on hold.
The decision by the company is to de-accelerate headcount for come teams in 2023 in a broad effort to control budgets. This plan was first reported by Bloomberg news in July. As a part of the downsizing, the company terminated 100 contract-based recruiters in August. According to insiders, a hiring freeze is underway in the company.
Increased R&D Spendings
The QTR 4 report confirms that the research and development budget is not curtailed. In the 2022 fiscal, the spending increased by 20% compared to 17% in the previous year. Apple Inc. continues its work on AR and VR products and autonomous vehicles.
Apple, in its filing, said the growth in R&D expenses was related to an increase in headcount and engineering program costs. Total operating expenses increased by 17% in 2022.
Job cuts and hiring slowdown is not restricted to Apple alone. Amazon Inc. said Thursday it was pausing the hiring of its corporate employees due to economic uncertainty. Lyft Inc., Stripe Inc., and Chime Financial Inc. are cutting jobs. At the same time, Twitter is set to lay off nearly 50% of its employees following Tesla’s Musk takeover.
