In the last few months, several big tech companies on Wall Street announced layoffs as they continue to wrestle with quantitative tightening measures, interest rate hikes, supply chain disruptions, rising commodity prices, and a global economic slowdown. Prior to the COVID-19 pandemic, these companies enjoyed an elongated period of expansion.
In recent months, Alphabet (NASDAQ: GOOG) and Meta (NASDAQ: META) also announced layoffs to reduce their cost base and improve profit margins. Each of these companies has attributed layoffs to challenging macro conditions and the possibility of an upcoming recession. But tech companies across verticals also ramped up hiring at an aggressive pace since March 2020, when the ongoing pandemic first raised its ugly head.
As lockdowns were imposed all over the world, demand for tech applications, products, and services ramped up steeply, supercharging the revenue for many tech companies. Most tech stocks in the U.S. reported record sales in 2021 and expanded their workforce to meet additional demand. But they now have to readjust as growth is slowing rapidly in the near term.
However, Apple (NASDAQ: AAPL) is among the few big tech giants that have not disclosed any layoffs. It also did not increase its rate of hiring in the last two years. Let’s compare the hiring strategies of Apple with its big tech peers.
Microsoft: At the end of June 2022, Microsoft had 221,000 full-time employees, an increase of 22% year over year. In the year prior to that, it added 18,000 employees, increasing its workforce by 11% to keep up with elevated demand.
Amazon: The hiring structure of Amazon is complicated as it employs a significant number of hourly employees for warehouses and delivery. In 2021, Amazon added 310,000 jobs, while it grew its employee base by 38% in 2020 when it added 500,000 workers. At the end of 2021, its employee base stood at 1.6 million.
In a memo to employees, Amazon explained, “During Covid, our first priority was scaling to meet the needs of our customers while ensuring the safety of our employees. I’m incredibly proud of this team’s work during this period. Although other companies might have balked at the short-term economics, we prioritized investing for customers and employees during these unprecedented times.”
Meta: In 2020, Meta added 13,000 employees, increasing its total count by 30%. It also added 13,000 workers in 2021, which was the two biggest expansion years in the company’s history.
Alphabet: Compared to other tech firms, Alphabet’s layoffs have been marginal. It cut 240 jobs in its health sciences division and laid off 40 more in the robotics vertical. Alphabet ended 2021 with 156,500 workers, an increase of 15% year over year. It also increased workers by 16,000 in 2020, indicating an expansion of 14%.
In the last ten years, Alphabet has increased its employee count by at least 10% annually. In fact, in 2018 and 2019, its growth rates were well over 20%.
Apple: Unlike its tech peers, Apple grew at a much slower pace during COVID-19. The company’s hiring in 2020 and 2021 followed a similar trend observed in the prior years. At the end of fiscal 2022 (ended in September), Apple had 164,000 employees, an increase of 6.5% year over year. It also added less than 7,000 employees in the year before September 2021.