Apple to reportedly reduce new hires amidst slumping iPhone sales
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 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.
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.
Comments
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.
That would be nice.
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.
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.