Apple, the only Big Tech company that has avoided mass layoffs thus far, has allegedly started laying off third-party contractors. According to New York Post, the iPhone maker has started to cut ties with hundreds of contractors quietly.
Citing people familiar with the matter, over the past few days the iPhone maker has started to snip ties with hundreds of contractors — workers technically employed by outer agencies who work with Apple employees on projects – in what looks like a stealthy move to cut costs.
The iPhone behemoth has a huge number of contractor workers on teams such as technical support and customer service. They also depend mainly on contractors for things like the localization of products and services, as well as Apple Maps.
Last August, Bloomberg news reported that Apple had laid off “many of its contract-based recruiters in the past week, part of a push to rein in the tech giant’s hiring and spending.” It’s unclear whether the company has been continually laying off contractors since then or if what’s being reported by the New York Post is the second major round.
“Instead of waiting for contracts that are typically renewed every 12 to 15 months to expire, Apple is firing contractors outright, One contractor claimed to have been blindsided, saying Apple management had assured him that all jobs were safe. Only a few weeks earlier, some had been gloating that Apple hadn’t overhired like other tech companies, the source added,” the report read.
Apple did not comment on the matter. The report also said that laying off contractors is a move to snip costs. The company hasn’t revealed the size of its contractor workforce, but reports suggest it numbers in the thousands. Apple CEO Tim Cook had called layoffs at the company a “last resort kind of thing”, adding that “You can never say never”.
The Apple Inc logo is seen at the entrance to the Apple store in Brussels, Belgium November 28, 2022. REUTERS/Yves Herman
The CEO had told the Wall Street Journal that Apple is managing costs very tightly.
“We want to manage costs in other ways to the degree that we can,” he was quoted as saying. Apple faced supply chain disruptions in October and November as China faced a Covid surge and protests erupted at its key supplier Foxconn’s main factory in the country. Cook said that Covid-related challenges “significantly impacted the supply of iPhone 14 Pro and iPhone 14 Pro Max and lasted through most of December”.
Due to a challenging environment, “our revenue was down 5 per cent year over year”, he added. According to Wedbush tech analyst Dan Ives, “Apple didn’t overhire during the pandemic. Apple’s employee count went up by about seven percent in 2022 compared to 2021. Cook has already taken a huge pay cut of $35 million, or more than 40 percent of his compensation.”
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