Apple freezes hiring for jobs outside R&D in cost cutting push

The pause does not apply to teams working on future devices and long-term initiatives

An Apple store in New York. Apple joins other technology companies in tapping the brakes on hiring, a response to sluggish consumer spending and higher interest rates. AFP

Apple has paused hiring for many jobs outside of research and development, an escalation of an existing plan to reduce budgets heading into next year, according to sources.

The company took the step last month, before the release of a quarterly earnings report where it said that growth would slow during the holiday period.

The pause generally doesn’t apply to teams working on future devices and long-term initiatives, but it affects some corporate functions and standard hardware and software engineering roles, said the sources.

Apple joins other technology companies in tapping the brakes on hiring, a response to sluggish consumer spending and higher interest rates.

The iPhone maker has fared better than many tech peers this year but it is still facing an industry-wide slowdown for smartphones and computers.

Apple said that hiring was continuing “but given the current economic environment, we’re taking a very deliberate approach in some parts of the business”. The company said it was confident about the future.

“We want to be thoughtful and make smart decisions that enable us to continue fuelling innovation for the long term,” the Cupertino, California-based company said.

Apple shares, which had been up in late trading on Thursday, fell 1 per cent to $137.55 after Bloomberg News reported on the plans. The shares are down 22 per cent this year, part of a broader pullback for technology stocks.

Some teams within Apple are still able to hire in special circumstances, according to the sources, and the company continues to advertise new roles on its recruiting website.

While new roles remain open, the actual hiring process has largely been placed on hold.

The move is part of a broader effort to rein in budgets, not backfill roles and decelerate headcount growth for some teams next year. Bloomberg first reported on the push in July.

As part of the belt-tightening, Apple laid off about 100 contract-based recruiters in August. Online media company Insider reported this week that hiring freezes were under way at the company.

Apple’s fourth-quarter report confirmed that its research-and-development budget was not being squeezed. R&D spending rose 20 per cent in fiscal 2022, compared with a 17 per cent gain in the previous year.

The company continues to work on future augmented and virtual reality products, as well as a self-driving vehicle.

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Apple Store, Brompton Road, London. Courtesy Apple

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Apple said in a filing alongside its earnings report that the growth in R&D spending was “driven primarily by increases in headcount-related expenses and engineering programme costs”. Total operating expenses increased by 17 per cent.

The job slowdown goes well beyond Apple. Amazon said on Thursday that it has halted hiring of corporate employees due to an “uncertain” economy.

Lyft, Chime Financial and Stripe are cutting jobs as well while Twitter is bracing for layoffs following Elon Musk’s takeover.