Apple to reportedly reduce new hires amidst slumping iPhone sales

Posted:
in General Discussion edited January 17
Apple plans to reduce the number of new hires for certain divisions after the company missed revenue guidance for the December quarter on weak iPhone sales, according to a report issued on Wednesday.

Apple Store Employees
Apple store employees gather for a photo.


Citing people familiar with the matter, Bloomberg reports CEO Tim Cook disclosed the news to employees in an all-hands meeting earlier in January, when he was asked whether slumping iPhone sales would prompt a hiring freeze. In his response, Cook said a complete shutdown of hires is not a viable solution, adding that Apple's health is not measured by hiring rates, the report said.

The hiring reductions are not company-wide, with cutbacks to be spread across multiple divisions. Cook has yet to determine which segments will be impacted by the hiring policy, though he confirmed key teams like Apple's artificial intelligence group would continue to aggressively recruit new workers. The change does not affect plans for the company's new campus in Austin, Tex., or a buildout of its video team in Los Angeles, the report said.

In separate meetings with group managers, some senior vice presidents said the iPhone sales slowdown represents an opportunity for new innovation, the report said.

The all-hands meeting was held after Cook announced a surprise revenue guidance revision for Apple's important December quarter. In a note to investors, the chief executive said the company is anticipating $84 billion in revenue for the three month period, down from a forecast of between $89 billion and $93 billion stated in a quarterly earnings report last November.

The drop in revenue was blamed in large part on a slowdown in iPhone sales, particularly in China and other emerging markets. Cook in his letter also noted Apple saw fewer upgrades than expected over 2018, a phenomenon that could be due to an uptick in battery replacements.

According to a report on Monday, Cook, at the same all-hands meeting in January, revealed Apple replaced some 11 million iPhone batteries under a special repair program that slashed the price of said service from $79 to $29. The 11 million unit figure eclipses the 1 to 2 million replacements Apple expected under normal circumstances.

Beyond the decrease in new hires, Apple has responded to the iPhone sales by slashing iPhone production by 10 percent for the first calendar quarter of 2019. In a bid to goose sales, the company last year launched a promotional upgrade program that offers cheaper prices on its latest iPhone XS and XR lineups. Last week, the company cut iPhone XR prices for Chinese resellers in a bid to stoke demand in the country.
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Comments

  • Reply 1 of 25
    wood1208wood1208 Posts: 1,808member
    Better be proactive. One can resume hiring space as market dictates.Moreover, this gives Apple to access future trend and hire accordingly.
    JFC_PA
  • Reply 2 of 25
    Apple should really try to open Apple Stores in the richest parts of India,Bangladesh & South Africa. If they seek growth they need to try to bring Foxconn & Pegatron in these countries to avoid tariffs. Plus any diversification of manufacturing is good. If they don’t do these things they should at least bring the iPhone 6 32GB ($350) & iPhone 6S Plus 32GB($500)
    edited January 16
  • Reply 3 of 25
    Joe PiervincentiJoe Piervincenti Posts: 6unconfirmed, member
    Really kind of inaccurate to say they “launched” the upgrade program last year, they’ve had the trade in credit program for years, all they did really this generation was promote it heavier and let people know specifically they could get as much as $300 of the price of the XR, etc... that’s always been what you can expect to get for last years model.
    chasmbb-15ireland
  • Reply 4 of 25
    In times like these you want Cook over Jobs as CEO.

    Cook is a master of the supply chain/resources (including human).  The cash hoard exists to continue to innovate even when times get difficult.

    It will be interesting to see if Cook increases the dividend to 2% to stabilize the stock.  It’s more of throwing a bone to Wall Street, but it’s still a good idea.  The question is when...  I expect more pain in the short term.

    As a consumer, I like the discounted pricing of Apple products.  It’s happening outside the USA already (by significant percentages) we’ll see if that comes home.
  • Reply 5 of 25
    Apple should really try to open Apple Stores in the richest parts of India,Bangladesh & South Africa. If they seek growth they need to try to bring Foxconn & Pegatron in these countries to avoid tariffs. Plus any diversification of manufacturing is good. If they don’t do these things they should at least bring the iPhone 6 32GB ($350) & iPhone 6S Plus 32GB($500)
    Apple is not allowed to open their own-branded retail stores per regulations
  • Reply 6 of 25
    Apple should really try to open Apple Stores in the richest parts of India,Bangladesh & South Africa. If they seek growth they need to try to bring Foxconn & Pegatron in these countries to avoid tariffs. Plus any diversification of manufacturing is good. If they don’t do these things they should at least bring the iPhone 6 32GB ($350) & iPhone 6S Plus 32GB($500)
    Apple is not allowed to open their own-branded retail stores per regulations
    In which country?
  • Reply 7 of 25
    So much for doubling down on secrecy.
  • Reply 8 of 25
    Apple should really try to open Apple Stores in the richest parts of India,Bangladesh & South Africa. If they seek growth they need to try to bring Foxconn & Pegatron in these countries to avoid tariffs. Plus any diversification of manufacturing is good. If they don’t do these things they should at least bring the iPhone 6 32GB ($350) & iPhone 6S Plus 32GB($500)
    Apple is not allowed to open their own-branded retail stores per regulations
    In which country?
    India
  • Reply 9 of 25
    So much for doubling down on secrecy.
    The bigger and more popular you are, the harder secrecy becomes.  Google & MS are having the same problem
  • Reply 10 of 25
    aaarrrggghaaarrrgggh Posts: 1,570member
    In times like these you want Cook over Jobs as CEO.

    But do you really?  They are apparently investing a lot in video... does Cook have the “vision” there, because it appears to be a major bet for the company.
  • Reply 11 of 25
    In times like these you want Cook over Jobs as CEO.

    But do you really?  They are apparently investing a lot in video... does Cook have the “vision” there, because it appears to be a major bet for the company.
    Meh, considering that Netflix’s entire market cap is $153.24B and Apple brought in REVENUE of $266B in in 2018 alone, it’s not that big of a bet for the company. Amazon runs a video streaming platform on the side and gives it away for free. It mostly sucks, but it can’t be that big a bet if they can do that. Something like Apple Car would be a big bet, video is more along the lines of Music.
    tmayravnorodomnetmage
  • Reply 12 of 25
    The one place they can start reducing is in the virtue signaling department.
    beowulfschmidtdesignr
  • Reply 13 of 25
    In separate meetings with group managers, some senior vice presidents said the iPhone sales slowdown represents an opportunity for new innovation, the report said“.

    That would be nice. 
    designr
  • Reply 14 of 25
    irelandireland Posts: 17,547member
    Perhaps if Apple priced their products more sensibly more people would choose them more often. Competition and high iPhone prices is the main reason who less people are buying these phones. They are too darned expensive.
    edited January 17 ravnorodomdesignrmuthuk_vanalingam
  • Reply 15 of 25
    flydogflydog Posts: 181member
    Really kind of inaccurate to say they “launched” the upgrade program last year, they’ve had the trade in credit program for years, all they did really this generation was promote it heavier and let people know specifically they could get as much as $300 of the price of the XR, etc... that’s always been what you can expect to get for last years model.
    By using the word "launched" they can perpetuate the myth that the trade-in program is evidence of a massive downturn at Apple.  Goes with the "slumping sales" clickbait they chose for the headline.  If they used more accurate and reasonable language less people would click on the article.  
  • Reply 16 of 25
    flydogflydog Posts: 181member
    ireland said:
    Perhaps if Apple priced their products more sensibly more people would choose them more often. Competition and high iPhone prices is the main reason who less people are buying these phones. They are too darned expensive.
    Apple offers phones from $449, which is $300 less than the equivalent from three years ago.  The fact that they decided to expand the product line upwards with premium phones does not make the entire product line "too darned expensive," and is not the reason why "less people are buying these phones."  In fact, based on Apple's most recent comments, sales in the US are about the same as last year, and would have been higher but for people who chose to delay upgrading due to the battery program. 

    There is nothing inadequate about an iPhone 8, and even a more expensive option such as the XR is still cheaper than then top of the line iPhone from 3 years ago. These illogical rants about high prices come mainly from self-entitled techies who think if they can't buy the very best then their constitutional rights have somehow been violated. 

    The main reason people are buying less of these phones because we are in the midst of an economic downturn, particularly in China, and because pretty much who wants a smartphone already owns one. I personally own an iPhone X and did not upgrade because it is a perfectly good phone, not because of prices.  

    If Apple has miscalculated it is in their approach to China and India, where they continue to push the same exact phones at the same price points as in the US, where the per capita income is less than 20% of that in the US.  That simply will never work. 
    edited January 17 netmage
  • Reply 17 of 25
    The problem is multifaceted, and price is definitely one of the factors weighing in on the slowing upgrade cycle.  New phones are no longer the compelling night and day upgrades that they once were, and the wow factor has certainly been stifled as smartphones lurch towards a commodity-like product.  Apple has edged higher in the premium space, but they've also created the perception that there is an arbitrary increase in prices across the board, which is narrative that the common consumer has taken to heart.  As a techie of sorts, this combination of factors, as well as a shift to larger and larger form factors, has gutted my enthusiasm for a new phone.  
  • Reply 18 of 25
    gatorguygatorguy Posts: 20,016member
    flydog said:
    ireland said:
    Perhaps if Apple priced their products more sensibly more people would choose them more often. Competition and high iPhone prices is the main reason who less people are buying these phones. They are too darned expensive.
    Apple offers phones from $449, which is $300 less than the equivalent from three years ago.  The fact that they decided to expand the product line upwards with premium phones does not make the entire product line "too darned expensive," and is not the reason why "less people are buying these phones."  
    No they don't. Follow the bouncing asteriks.

    The least expensive new iPhone appears to be $749 (I'm willing to be corrected), but if you'll give them a decent phone in return they'll give you a credit towards it of as much as $300.
    But you can't buy a new iPhone in the US from Apple or anyone else for $449.00.

    It's not so different from getting a from truck dealers offer all the time saying you can buy a $55K truck for just $35K...
     ... after $7,000 down in cash or trade,  all known factory rebates with no guarantee you qualify for any of 'em, and financing thru the dealer. 
    edited January 17
  • Reply 19 of 25
    There is more reason now to disbelieve any reports about Apple coming from Bloomberg since they have never retracted their totally discredited “spy chip” story. To hell with them.
    randominternetperson
  • Reply 20 of 25
    fastasleepfastasleep Posts: 2,394member
    In times like these you want Cook over Jobs as CEO.

    But do you really?  They are apparently investing a lot in video... does Cook have the “vision” there, because it appears to be a major bet for the company.
    Maybe not, but he has generals working under him who do. It's not like this is going to empty out their piggy bank either, so why would it even concern you?
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