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US tech giant announces recruitment cutback

Written on Tuesday, 22 January 2019 06:26

US technology giant Apple has announced that it will impose a recruitment cutback - which has been primarily forced due to weak sales on the company’s iPhone devices in the lucrative Chinese market.

Bloomberg has reported that Apple CEO, Tim Cook, announced the recruitment cutbacks just a day after he sent a letter to Apple investors that warned the company was bracing itself for a year-on-year decline in revenue for its fiscal Q1, which would shave $5bn from its guidance. 

In a series of meetings that were held following the disclosure, it was reported that Cook informed some staff that a number of divisions would reduce hiring, but stated that he didn’t think a complete freeze in recruitment would be an appropriate solution to take.

In addition to this, it has been further disclosed that the CEO is also yet to determine which divisions will face hiring cutbacks. However, it is believed that divisions such as Apple’s AI team will not be affected due to the leverage of investment made by the US tech company into the emerging technology.

The move will also not affect plans to open a state-of-the-art new office in Austin, Texas or its expansion plans in Los Angeles, where the company is fleshing out its original video content ambitions.

Bloomberg also pointed out that Apple has hired new staff at a significant rate over the past decade. The company recruited 9,000 workers in its most recent fiscal year, taking the total up to 132,000, while adding 7,000 a year earlier.

Published in Devices

A regulatory filing with the U.S. Securities and Exchange Commission recently revealed that Microsoft is planning to layoff approximately 2,850 staff over the next 12 months. The job cuts will be primarily across the company’s dwindling smartphone business, marking the fourth significant workforce reduction in this area for Microsoft.

These latest job cuts, representing 2.5 percent of Microsoft’s global workforce, were announced just a few months after the company announced 1,850 layoffs in May, which were also from its struggling smartphone business. Microsoft has been cutting its smartphone division since 2014, when the company cut 18,000 jobs (it’s largest layoff to date), with majority of staff cut from its Nokia Devices and Services Division. Microsoft acquired Nokia’s handset business in 2013 for $7.2 billion.

Following the 2014 job cuts, in 2015, Microsoft approved a restructuring plan to cut 7,800 jobs worldwide, primarily in its smartphone division. According to a report by Information Week, the restructuring at the time was aimed at streamlining Microsoft’s handset business. But the company never really managed to do so.

“We periodically evaluate how to best deploy the company’s resources. In the fourth quarter of 2016, management approved restructuring plans that would result in job eliminations, primarily across our smartphone hardware business and global sales,” Microsoft states in its regulatory filing, referencing the 1,850 layoffs announced in May and the 2,850 cuts that will be added as an extension of those earlier announced cuts.

“We are focusing our phone efforts where we have differentiation, with enterprises that value security, manageability and our continuum capability, and consumers who value the same,” said Microsoft CEO Satya Nadella.

Some Microsoft employees have expressed respect for the company and its process of letting staff go. For example, in a post on TheLayoff.com, a user states: “900 have been notified, so in a week all 2,850 will know. It’s an old Microsoft layoff style – they do it swiftly and the layoff packages are great.”

Published in Finance