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In less than three months, four of the big five US tech companies have cut tens of thousands of employees combined, shattering myths about the industry’s seemingly unstoppable growth in the process. But there has been one notable exception: Apple.
To date, Apple has not announced any substantial cuts, thanks in part to slower headcount growth than some of its peers during the pandemic and continued demand for its core products. Some analysts think more modest cost cuts could be coming, however. Over the past months, all major tech companies have announced layoffs. However, there’s one exception, which also happens to be the world’s most valuable company by market cap: Apple.
Apple has not laid off employees during any of the last two tech recessions and has resisted doing so, even now. In 2001, when the Dotcom Bust hit, Amazon’s revenue declined by 13% and it responded by reducing its headcount by 13%. In the next two years, Amazon still reduced its headcount:
In 2001, during the Dotcom Bust, Amazon’s revenue growth slowed sharply. Amazon responded by letting staff go. For the next two years, it slightly reduced headcount, until year-on-year revenue growth was back above 30% in 2004
Apple, however, did not respond in the same way to the Dotcom Bust. Despite a major revenue drop, the company kept hiring:
In 2001, Apple’s revenue declined by 33%. The company did not lay off but did slow its hiring pace in the following years until revenue growth caught up. In 2009, Microsoft saw a dramatic growth slowdown from 17% revenue growth in 2008 to a 3% revenue contraction in 2009. Microsoft let go about 6% of its staff – 5,000 people. Similarly, in 2009, Apple’s revenue growth slowed to 15% from 56% the previous year. Apple slowed hiring but executed no cuts. And Apple has also resisted layoffs when its revenue growth turned negative, in recent times. In 2016, the tech giant posted an 8% decline in revenue, but still did no layoffs.
Looking back on the past 20 years, it’s remarkable that Apple has been the only major tech company to not execute mass layoffs, regardless of how its revenue or profits changed. The last time Apple made significant job cuts was when Steve Jobs returned to the company as CEO in 1997 and cut 4,100 jobs from the about 14,000 employees the company had at the time.
The company resisted growing quickly when all other Big Tech companies started to hire faster. Another interesting insight comes from looking at how quickly tech companies have been hiring over the past few years. I crunched the numbers to see how rapidly each business expanded and found that Apple has been the Big Tech that resisted growth the most. Here’s the comparison of the headcount growth of Google, Meta, Microsoft, and Apple, and how their profitability changed over the same time period:
Headcount growth year-on-year and the change in annual profitability across Big Tech. Apple has had the lowest headcount growth across the group of companies since 2018.
In analyzing why Google did its historic job cuts I previously pointed to the connection that both Microsoft and Google laid people off after employee headcount growth raced ahead of revenue growth.