Apple, despite being one of the most valuable companies on Earth, has just laid off hundreds of California employees in a massive layoff round. The layoffs come amidst numerous challenges, such as an anti-trust suit from the Department of Justice, but most of the layoffs appear to have been related to Apple’s failed electric vehicle project, one just down in February of 2024.
The layoffs come amidst a broader slashing of jobs in the tech industry, with Apple’s fellow Big Tech companies slashing a massive 60,000 employees from their payrolls since the big layoff rounds began in 2023. However, so far as firings go, Apple’s round of layoffs was still relatively small, as only about 600 employees were let go, and it had about 161,000 full-time employees as of year-end 2023.
According to Business Insider, which relied on filings with the California Employment Development Department, the layoffs mainly came from the scrapped EV project and from an internal project attempting to use microLED technology to create brighter screens for smartwatches, such as Apple’s highly popular Apple Watch.
Commenting on the potential cause for Apple’s decision to shutter the projects and lay off those employees involved in them, Business Insider noted that the moves could signal that Apple CEO Tim Cook is attempting to push the company in a more focused direction as the economy appears to weaken and the company faces legal challenges over its alleged monopoly status.
As to what the shuttering of the EV program could signal to investors and market watchers, Ben Bajarin, the CEO of a consulting firm called Creative Strategies, was quoted by Reuters as saying, “If it is true, Apple will put more focus on GenAI and that should give investors more optimism about the company’s efforts and ability to compete at a platform level on AI.”
In terms of legal spats, the DOJ claims that Apple has managed to monopolize the smartphone market, and it is now attempting to fend off that anti-trust suit. Meanwhile, the European Union’s new Digital Markets Act, a law aimed to force Apple to open its App Store to competition, has foisted another serious pressure on Apple in that market.
In its suit, the DOJ claimed that Apple engaged in a patter of anti-competitive conduct, wielding its market power to maintain a dominant position in what it refers to as the “performance smartphones” market. The DOJ alleges that Apple’s conduct led to higher prices for consumers, reduced innovation in the space, and limited choices for consumers.
Across the Pacific, in China, Apple does not face the same sort of legal challenges, but does face stiff competition from Chinese smartphone companies, namely Huawei, which has phones that are gaining favor amongst Chinese smartphone buyers. According to data from the Chinese market, iPhone sales fell by 24 percent in the first six weeks of 2024. Further, overall shipments in February were a massive 33 percent lower than in February of 2023.
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