Apple will cut spending and hiring in some areas in 2023

First modification: 07/19/2022 – 04:39

Apple Inc. announced it plans to slow hiring and spending growth next year at some units to weather a possible economic downturn, according to a Bloomberg News report.

Apple, the world’s most valuable company, would join a growing group of US companies, including Meta Platforms and Tesla Inc., in slowing down hiring.

Following the release, Apple shares were trading down 1.6% at $147.6. The Bloomberg report, citing unnamed sources, said the changes would not affect all devices and that Apple was still planning a 2023 product launch schedule that includes a mixed reality headset, its first major new category since 2015.

“Apple’s move reflects a broader slowdown in investment in new things, new companies and new products,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh. “It means that inflation is a problem for these companies,” she added.

In recent months, fears of a recession have increased due to aggressive increases in interest rates by the Federal Reserve to curb rising inflation.

Rising prices raise concerns that customers may curb spending on discretionary items like smartphones. Smartphone shipments fell 9% in the second quarter, according to data from Canalys.

Despite this, Apple’s iPhones remain the world’s best-selling phones, with a 17% market share, just behind market leader Samsung. Apple usually introduces a new version of its iPhone and other portable products in September, before the holiday season.

Wall Street ended lower after Apple shares fell following the release.

with Reuters