Tim Cook revealed during the Apple earnings call that the tech giant will not be laying off employees, despite the lackluster sales of the newest iPhone and the current situation of the industry.
Silicon Valley has been in a perpetual state of despair, and this week’s marathon session of financial reports didn’t make conditions any better. Even while Amazon’s earnings fell short of forecasts, Facebook’s parent company Meta, and Google’s parent company Alphabet both used their earnings calls to suggest the likelihood of additional cost-cutting beyond their most recent significant layoffs. However, this specific hurricane has had one port. Apple has survived the perfect storm of rising inflation, and supply chain problems brought on by the epidemic and the crisis in Ukraine without having to significantly reduce its staff.
Apple earnings call revealed that there will be no layoffs
Tim Cook, Apple‘s CEO, addressed the challenges the company is experiencing during the company’s quarterly results call on Thursday afternoon. However, any mention of cost-cutting, layoffs, or strategy changes was conspicuously absent. Contrary to popular belief, Cook stated during the conference call with Wall Street analysts that “whatever challenges we face, our strategy is always the same,” citing the company’s investments “in innovation, in people.”
To be sure, there were some negative aspects to the company’s earnings report. Apple reported Christmas quarter sales that were 5% lower than the same time last year, the company’s first such fall in sales since 2019. It reported earnings of $1.88 per share and revenue of $117.5 billion for the quarter, both of which fell short of Wall Street projections.
Cook, though, spoke upbeat throughout the earnings call. He emphasized the fact that there are currently 2 billion active Apple devices and said that the supply chain problems that limited the availability of the iPhone 14 and iPhone 14 Pro Max through the end of last year have been resolved. Cook added that the company anticipates that total iPhone demand would have stayed stable during the quarter if not for the shortfall of certain models. The company anticipates that rather than a sharp decline, revenues for the current quarter will be roughly equal to those for the holiday quarter.
At least partially, Wall Street seemed to be persuaded by Cook’s more optimistic prognosis. After Apple announced the report, shares fell more than 4%, but after the call ended, there was just a slight decline of about 2%. That’s not to the lofty heights of Meta, which closed Thursday up more than 23% after announcing cost-cutting and raising the possibility of additional layoffs on Wednesday evening, but it’s also not the kind of dramatic roller-coaster ride that typically leads management to decide to take drastic action, like layoffs, to appease investors.
In the end, the tech sector is fast-paced, and what seems certain today may turn out to be a major flop tomorrow. Even if Tim Cook didn’t announce any layoffs today, that doesn’t guarantee the company will always be able to avoid that destiny. Credit where credit is due, though, and Cook’s methodical approach — which has occasionally been referred to as “boring” in both positive and negative ways — has kept Apple afloat with little turbulence, even as its competitors struggle to stay up.
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