Revealing the secret: It turns out that Apple did not fire employees because…

A year ago, technology companies caused a wave of layoffs that shocked the world. On Wednesday, January 18, Microsoft announced it would lay off 10,000 employees, reduce its workforce by 5%, and begin a “purge” of 18,000 jobs.

“Accompanying” Microsoft are Amazon, Alphabet and Meta – large companies that have laid off employees in recent months. In addition, billionaire Elon Musk also made many mass layoffs for Twitter’s employees.

Previously, as of October 2022, Twitter had 7,500 full-time employees, but now it has reduced to about 3,700 people after mass layoffs since November 4 last year. And yet, according to the latest information, this social network will have the next layoff in 2023.

Although each company has a different business situation, when explaining the reason for the layoff, they all think that the main reason comes from macroeconomic problems and the possibility of an economic downturn in the future. .

But one reason that has always been “ignored” is that the hiring rate of technology companies has increased so quickly in the past two years, leading to massive layoffs.

In 2020, due to the Covid pandemic, people had to isolate at home. This makes internet applications “indispensable” for everyone, thereby boosting the business of many technology companies.

As sales and profits continue to grow in 2021, many Big Techs continue to add large numbers of employees in the hope that they will scale and become more successful. Whatever comes must come, dreams turn out to be just dreams. Since the world lifted the blockade, people returned to work, the growth rate of internet applications has slowed, causing many companies to adjust their policies.

And Apple is an exception: the company has not recruited too many employees in the past 2 years, so it also did not announce layoffs.

Fast-growing tech companies during the pandemic

At the end of June 2022, Microsoft had a total of 221,000 full-time employees, an increase of 40,000 employees (22%) compared to the same period in 2021. The year before that, Microsoft hired 18,000 more employees, an increase of 11%.

Amazon has a more complicated model than Microsoft because it has a huge workforce working in warehouses as well as other office workers. And Amazon has grown tremendously. In 2020, the company recruited 500,000 more employees (up 38%) and added 310,000 people in 2021.

Overall, Amazon reports 1.6 million employees as of the end of December 2021, of which about 300,000 are in the corporate office. An Amazon executive said that the “massive” job creation during the pandemic has led to the current widespread layoffs.

“During the Covid era, our top priority is to scale up to meet the needs of our customers while ensuring the safety of our employees. I’m extremely proud of these people during the pandemic,” said Doug Herrington, Amazon’s retail director.

Meta (formerly Facebook) has grown thousands of employees a year since going public in 2012, according to a US Securities and Exchange Commission (SEC) filing.

In 2020, Meta added more than 13,000 employees, an increase of 30% and the biggest hiring year in the company’s history. In 2021, the company also added 13,000 more workers. In terms of total employees, these are the two largest years of expansion in Facebook’s history.

Alphabet, formerly Google, hasn’t cut as many employees as other large-cap companies. In 2021, the company added more than 21,000 employees, representing a 15% increase. In 2020, Google also added more than 16,000 employees, representing an increase of nearly 14%.

However, that growth predates the pandemic as Alphabet has increased headcount at least 10% annually since 2013 and also added more than 20% new employees in 2018 and 2019.

But in recent weeks, the company has cut 240 positions at Verily, its biotech and medical research subsidiary, and laid off 40 people at Intrinsic, its robotics division. The fact that Alphabet is cutting fewer people than some other companies also means its growth rate is also slower.

Apple’s Strategy

In fact, Apple’s hiring over the past few years has followed the same general trend since 2016.

As of September 2022, Apple has 164,000 employees, including corporate as well as retail staff for its stores. But that’s just a 6.5% increase year-on-year in 2021, which equates to an increase of 10,000 employees. Apple has also been hiring conservatively in 2020, adding less than 7,000 employees.

And when the wave of layoffs exploded in the technology village, Apple had a “strange” strategy. In 2022, Apple CEO Tim Cook said that while the hiring process at the company is slowing down, Apple is “still recruiting talent” on a planned basis and not across all departments.

“We believe in long-term strategies. And we don’t think the layoffs will make the company better,” said Tim Cook.

Reference: CNBC