Apple Avoids Big Tech Layoffs, Other Tech Giants Focus on AI

Originally published at: Apple Avoids Big Tech Layoffs, Other Tech Giants Focus on AI - TidBITS

Amidst nearly 75,000 tech industry layoffs in the last year, Apple alone has avoided cutting headcount. Why? And what does it mean that the other tech giants all reference AI in their letters to employees?

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As I posted on PED30.com:

“To match and fuel that growth, we hired for a different economic reality than the one we face today.” Pichai said in the email.

Does anyone else wonder what ‘economic reality’ Pichai thought was going to occur in the face of Covid AND Putin’s War?

I may have mentioned this here before, but with this topic, I believe it bears mentioning again and illustrates just how Apple thinks differently:

During the height of the worst of the pandemic, Apple closed all its retail stores for five months. In that time, ALL retail employees were retained. Salary and benefits continued for the duration until stores reopened. Employees were given the option to work from home via AppleCare support, but it was an option only, not a requirement.

I don’t know of any other company, tech or otherwise, who would have retained thousands of employees for so long and continued to pay them and provide benefits until business resumed as normal.

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I believe Viking cruises did the same. I think a lot of their crew are contract, but they honored their full contract commitments and paid to send them home, and continued to pay salary and benefits to their regular employees. Or so I heard.

Of course where I live famously polar fleece textile manufacturer Malden Mills continued to pay people for a couple of years after a devastating fire.

But, yes, this is rare.

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I keep reading that Apple continues to keep its pedal to the metal on AI for for an Apple Car:

I think it’s a lame cop-out excuse.

Any software engineer who is in any way competent should be able to learn new tech and switch to new development in a short period of time (maybe 3-8 weeks). And paying for training is less costly than paying severance for a layoff and then hiring new people with different buzzwords on a resume.

But manager-type people often don’t understand this. I can’t tell you how many times I’ve had to explain that arguments like “we need a Python programmer and you’ve been working in C++” is complete insanity. Because any good C++ programmer can pick up the basics of Python in less than a week and become proficient enough to be productive soon afterward. Ditto for any other tech buzzword you can think of.

Of course, it could also be that the “different economic reality” they’re talking about is a fantasy world where inflation and interest rates remain near-zero forever and customers never change their purchasing habits no matter how the economy changes. Which also wouldn’t surprise me.

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Tim Cook took a 40% pay cut instead of lay offs. Leadership.

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I did read yesterday that Google, Amazon. Microsoft all had employee growth of nearly or at least 100% since 2019, while Apple was only 20%. They were quite a bit less than the other major tech companies. So, that may also explain why the others have massive layoffs while Apple has none. (Again, that’s an example of good management, even though we often criticize Apple for being slow to fix software bugs, hardware shortcomings, etc.)

Amazon, Google and Microsoft’s business models are extremely dependent on advertising sales. Ad sales revenue been declining across the board since the debut of the pandemic.

Though there were rumors spreading for some time now that Apple is thinking about going gang ho into ad sales since it inked the deal with the ad driven Major League Soccer, nothing has appeared yet. So regarding ad sales at the moment, it’s nothing lost and nothing gained for Apple.

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I don’t think it was to avoid layoffs. It was in response to shareholder concerns about executive pay.

Apple’s compensation committee said it made the change in response to last year’s say-on-pay vote, in which 64% of shareholders approved of Cook’s compensation, down from 95% who approved it for Apple’s 2020 fiscal year.

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Doug,

And, unfortunately, Malden Mills, as run by Aaron Feuerstein, is no more. However, I think that was the correct decision, though its repercussions are still being felt today in Lawrence, MA.

But, back on topic, I saw it written somewhere recently that those companies were hiring “talent” to keep them from working for competitors or creating startups.

The one where interest rates remain low and demand remained at pandemic-elevated levels. Both things we can criticize them for now, but expanding capacity was a reasonable response to expanded demand. Same thing happened with shipping – the shipping companies increased capacity because of the supply logjam in 2021 and now that that’s eased the rates are crashing back to earth (down 80% in less than a year).

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Don’t discount the coming effects of AI! It’s going to absorb a lot of tedious and routine jobs and do a better job. I hope, and I’m quite sure, Apple will get into the AI business is some useful and profitable way.

As for authoring TIDBITS, yes your brain is still going to be King!

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Malden Mills was a former client of mine, and one that I was very glad to work with. They were a good and socially responsible company that was benevolent to its employees and committed to bettering the environment. What very sadly did them in is that their very popular Polartec fabric could be easily and much less expensively knocked off, and the knockoffs could be manufactured and produced much less expensively in China.

Feurstein could have moved production to China, but he was 100% committed to manufacturing in the US. He was also committed to running a union shop, and was beneficial to employees at all levels. But for decades, Malden Mills has been just a textbook case in management and manufacturing.

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Such claims have been made about all kinds of technology over the past several centuries.

Sometimes it proves to be true. Quite often, it doesn’t. And although many tedious and routine jobs may be eliminated, you can be sure it will usher in a whole new era of different tedious and routine jobs that we haven’t even thought of yet.

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I don’t think that’s justified, TBH.

Covid meant ramping up mass hiring to meet demand increases across the tech sector, seeing a strong economic environment post-covid. Then Putin’s war (invasion!) didn’t begin until just last year (24 Feb 2022, to be precise), at the tale-end of the main 2020-21 pandemic period.

So the ramifications of that are only a few months old, thus causing the economic uncertainties that have meant ramping staffing levels back down again, which all these companies did. Now they’re moving said staffing levels sideways into the AI area, hoping to capitalise on growth in future years as the macro-economic cycle improves.

I have always just assumed that Adam was employing AI to master the entire Mac world.

When it was just Meta (11,000 jobs cut) and Twitter (3,700) and Snap (1,000), it was easy to think the problem was just with social media. When layoffs hit Coinbase (2,000) and Crypto.com (500), we could hope it was merely the overheated crypto world being exposed to reality, particularly in light of FTX’s ignominious collapse. When Amazon laid off 18,000 employees, it might just have been a correction to the pandemic hiring spree that doubled Amazon’s headcount to 1.6 million by the end of 2021. But now Microsoft has laid off 10,000 workers and Google has cut 12,000, suggesting larger problems in the industry and the economy.

Those numbers add up to 58,200. So, where were the other 16,800 layoffs?

Salesforce account for 8,000. In the Bay Area, numerous companies I haven’t heard of have had layoffs. Interestingly, one company that hasn’t announced any is Pinterest (I have a particular interest as a close relative wroks there).

Microsoft losing 10,000 employees looks bad, but this is only 5% of their employees, and their employees increased from 181,000 in 2021 to 221,00 in 2022 (an increase of 22%) according to Wikipedia, which obtained it from the annual reports. I think Microsoft is also making large investments in AI firms, and they will see a growth in employment. The big thing in the next few years will be AI (AI actually is a bad description, but it is a bit late now) mainly natural language processing an linking that to databases, which is what chatGPT does. What everyone is going to be looking at is enabling people to have conversations with computers, moving away from point and click interfaces. Someone rings up their local Italian restaurant and has a conversation with a computer, like I would like to order 2 pizzas, and then they have a nice conversation about size, what ones do they have with chicken, etc.