A revenue of $90.75 billion for the fiscal Q2 2024 period and a profit of $23.6 billion was insufficient to keep Apple from introducing another round of layoffs, as according to the latest report, the company has trimmed its employee headcount by 100 from its Services arm. This is the fourth time that Apple has had to reduce its workforce, but what surprised us was that it was from a segment that has consistently shown incredible growth in the past several quarters.
The layoffs are part of a bigger strategy, with Apple Books said to be less of a priority for the company, according to the latest report
The Services division is an umbrella that houses various products, ranging from Apple Books, Apple News, and others. As reported by Bloomberg’s Mark Gurman, the layoffs were mostly engineering roles from the aforementioned services. Apple News will continue on, as the company’s focus for generating revenue. However, Apple Books will be given less importance and it is not that significant of a revenue driving force. Additionally, the Cupertino firm appears less interested in introducing a subscription model for the Apple Bookstore.
This category is primarily dominated by Amazon and its subscription service Audible. Also, the ebook market is not sizable enough for Apple to take it seriously, and even if it did introduce some business model down the road, there might not be enough upside for the authors and publishers to consider it a viable option. Compared to other technology giants, Apple’s layoff count is like a drop in the water, and that is because last year, during the company’s Q2 2023 earnings call, CEO Tim Cook stated that reducing the workforce would be viewed as a last resort.
The Chief Executive reduced his annual compensation to $40 million for last year, cutting it by 40 percent to free up some of the financial burden. Unfortunately, a string of setbacks prevented Apple from completely avoiding layoffs, with the cancellation of its highly ambitious self-driving car venture dubbed ‘Project Titan’ and the axing of microLED projects potentially resulting in trimming the headcount by 700 individuals. Shaving costs from the Services division can be considered a punch in the gut, especially when this business arm is estimated to bring in $100 billion by 2025, making it 25 percent of Apple’s total yearly revenue.
News Source: Bloomberg
About the author: Omar Sohail is a reporter and analyst for Wccftech's mobile section, specializing in the technology and business of the mobile industry. His expertise lies in the intricate hardware supply chain, covering developments in semiconductor manufacturing, chip lithography, and camera sensor technology.
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