Employee Experience

What Makes Apple Different: How the Tech Giant Avoided Layoffs

Written by

ODG Team Contributor

Published on

2 May 2023

Just like any other industry, the IT sectors all over the world experienced a huge shift during the pandemic. As people were not allowed to leave their homes, many opted to use technology to meet their needs. Whether it was to buy groceries or interact with friends, the internet and their gadgets were their best friends. Even Microsoft CEO Satya Nadella deemed the first year of the pandemic as the second wave of digital transformation in all industries.¹

Although this rings true, the storm seems to have worsened in the face of the broader economic downturn and uncertainty we face. Tech companies are seen shifting gears from the improvement plans they excitedly shared two years prior to laying off employees as a remedy to their current issues.

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State of Other Big Tech Companies

In recent news, many giants in the tech industry are conducting massive layoffs in an attempt to readjust their initial goals and long-term plans.

Tech corporations in Silicon Valley are firing numerous employees just to stay afloat. According to Visual Capitalist, big tech layoffs have been done by many well-known names in the industry.

For example, Google let go of six percent of its workforce in January of this year, which is estimated to be about 12,000 people. Meta, formerly known as the famous social media platform Facebook, laid off 11,000 of its employees.

There were even firms like Katerra, a technology-driven construction company, that laid off 100 percent of its employees due to its closing.²

What could be the reason for so many businesses now dismissing their employees?

Reasons behind the layoffs

The strategic downsizing being done by many enterprises can be worrying for people within their industry. It can lead to distress for both employees who were laid off, and those who remain in the company.

What could possibly be the reason for the retrenchment that employers are willing to risk such a big change in their organization?

By listening to their statements, reading between the lines, and looking at data, the following are reasons for their decisions:

Increased Workforce Pre-2023

Before 2023, industry giants drastically increased their workforce to meet the sudden demands and needs of their customers.

Some executives like Amazon’s Chief Retail Officer Doug Herrington explained that they scaled their workforce to meet the needs of their customers while still ensuring the safety of their people.

In 2022, 40,000 employees joined Microsoft after the 18,000 people who joined in 2021. Meanwhile, Amazon added 310,000 jobs in 2021 to accommodate the service demands of their consumers. Meta added 13,000 employees in 2020 while Alphabet, the parent company of Google, hired 16,000 people in the same year.

Impending Recession

Although having an increased number of employees was advisable and reasonable then, the same doesn’t seem to be true after the pandemic. Now, more workers mean higher costs. It no longer makes sense to have a huge workforce ever since the lives of people began to go back to normal after COVID-19.

During recessions, both customers and businesses try to cut back on expenses. This causes reduced demand for services and products and in return, lower revenue for the business.

Employees are then dismissed in order to cut costs. Projects like virtual reality also gain less support, leading to dedicated teams being fired.

As publicly admitted by Alphabet CEO Sundar Pichai and Meta CEO Mark Zuckerberg, the austerity measures happening in their organizations are brought about by their misprediction about the future demands in the field of tech.

Culture Shift

The impending recession mixed with the wrong predicted trajectory of technology companies are mainly causing the retrenchments heard in the news.

Although not well-known, another factor is affecting the decision of the higher-ups to let go of their workers. The dismissal of employees is also caused by the adoption of scrappy culture by big names in the industry.

Scrappy culture is originally found in resource-constrained businesses and start-ups.⁵ It refers to an office environment where people are persistent, resourceful, and willing to go above and beyond their job descriptions or responsibilities.

This culture, also described as “hardcore” by Twitter CEO Elon Musk, aims to have fewer people working but with the same quality and quantity of products and services. Ideally, it produces an ideal set-up for companies since it means the same production but using less money.

What can you learn from Apple?

With numerous corporations conducting mass dismissals, there is one giant in the technology industry that has not let go of even one employee: Apple.

Based on statistics, Apple’s business is doing better at surviving the slump in the economy. It even reported an eight percent increase in sales just recently.

So how exactly is Apple keeping afloat without dismissing its people? What is it doing correctly?

Hiring Strategy

Unlike its competitors, Apple grew its company slowly throughout the pandemic. Instead of mass hiring to meet the expected demands of their customers, they retained their hiring trend that started in 2016.

Apple strengthened its workforce by only 20 percent from the year 2019 to 2022. This slow but sure pace helped them survive the impending recession since they did not have an overwhelming number of employees to compensate.³

Thanks to this deliberate pace, Apple was able to remain efficient and profitable—even doubling its revenue for each additional hire or headcount!

Product Reinvesting

Instead of finding the newest innovation and hiring research teams dedicated entirely to it, Apple is more cautious with what they invest in.

Usually, they use their budget to reinvest in the products and services they already have. For example, instead of experimenting with their new products, they release improved versions of their mobile phones that they know their customers like.

Apple focuses on research and development to grow rather than investing in the latest fad in the industry.

Consistency and Accountability

Although the scrappy or hardcore culture can lead to success for newer businesses, the problem in this context is that giants are not start-ups.

Changing the culture within the company can disrupt the productivity and structure that is already set. Adopting a culture for smaller groups is also not a good idea for a giant to do. This is because the workload and environment in both settings are completely different. Organizations are not assured of success once they shift culture.

Meanwhile, Apple has not participated in this change whatsoever. It remains consistent with its nature, structure, and environment providing stability for its employees.

Other than providing security, the CEO of Apple is also making sure to take accountability for his decisions.

Chief Executive Officers of other businesses were able to admit their mistake in predicting the economy, but Apple’s CEO took it one step further.

Tim Cook admitted to his mistakes and vowed to take accountability. Instead of laying off employees, he agreed to scale back his own compensation by a whopping 40 percent. This put his annual compensation down to 49 million from 84 million dollars.

How can you apply this in your own company?

Learning about how one company avoids an undesirable action can give clarity and guidance for you and your own company. But observing the good strategies of a business doesn’t mean you need to follow the exact same path.

All you need to do is reflect and find what is applicable to you. For example, here are some general takeaways you can get from Apple that you might be able to use:

Ambitious but cautious

The economy is never a constant or predictable path. You will never know if the decision you and your team came up with is the right option. For example, is investing in a current trend worth the effort and funds of your company? Is reinvesting truly the best way to keep customers happy?

You can remain enthusiastic and hopeful, just make sure you are still cautious. Choose options with higher possibilities of success than those with higher chances of failure.

Expect the unexpected

What if after all the pondering and decision-making, you still chose the wrong path? It’s okay. What’s important is that you have a backup plan.

Just like how Tim Cook handled the receding economy, you should also know possible remedies if things don’t go your way the first time around. Expecting the unexpected can help you be prepared for any possible outcomes. ¹

Create realistic goals

To avoid biting off more than you can chew, create goals for your company and employees that are palatable and achievable. Forcing your people to work for you beyond their roles and capacity is not sustainable. It can cause burnout, affect culture and promote quiet quitting.

Consider your long-term plan and choose milestones that can be reached. Don’t take shortcuts to your goal since this can muddy your perception. Small reasonable steps overtime can lead to big impact and managed risk.

Worried about the future of your company?

On-Demand Group is a technology consulting firm that has been helping our clients since the year 1996. If you need guidance in planning for your company’s future or deciding the next best action to take in this economy, we’re here to help!

Reach out and let’s have a conversation.

References:

Duffy, Clare. “How Big Tech’s pandemic bubble burst.” CNN, 22 Jan. 2023. https://edition.cnn.com/2023/01/22/tech/big-tech-pandemic-hiring-layoffs/index.html
Koop, Avery. “Ranked: America’s 20 Biggest Tech Layoffs Since 2020.” Visual Capitalist, 7 Feb. 2023. https://www.visualcapitalist.com/americas-20-biggest-tech-layoffs-since-2020/
Potuck, Michael. “Here’s why Apple hasn’t had to slash jobs like almost every other tech company.” AAPL Company, 10 Feb. 2023. https://9to5mac.com/2023/02/10/why-apple-hasnt-cuts-jobs/