Tim Cook said he is yet to fully determine which divisions would cut back on hiring.Apple Inc.
will cut back on hiring for some divisions after selling fewer iPhones than expected and missing its revenue forecast for holiday quarter, according to people familiar with matter.Tim Cook, Apple's chief executive officer, made disclosure to employees earlier this month in a meeting day after he penned a letter to investors about company's recent struggles, particularly in China.
During meeting, Cook was asked if company would impose a hiring freeze in response.
He said he didn't believe that was solution.
Instead, Cook said some divisions would reduce hiring, according to people, who asked not to be identified discussing private matters.Cook said he is yet to fully determine which divisions would cut back on hiring, but said that key groups such as Apple's artificial intelligence team would continue to add new employees at a strong pace.
He also emphasized that a division's importance to Apple's future isn't measured by hiring rates.An Apple spokesman didn't respond to a request for comment.
Apple has been on a hiring spree in past decade, but pace of headcount growth has slowed in recent years.
The company added about 9,000 workers in its most-recent fiscal year for a total of 132,000.
A year earlier, Apple added roughly 7,000 employees.Apple shares slipped less than 1 per cent in extended trading on Wednesday.
The hiring pullback won't affect plans to open new offices in Austin, Texas, nor expand in Los Angeles area, where Apple is building out its original video content team, CEO also said.Following Cook's talk with employees, some Apple senior vice presidents held separate meetings with vice presidents, senior directors and other managers in their groups to emphasize that iPhone sales slowdown is an opportunity for new innovation, according to one of people.On January2, Apple cut revenue guidance for holiday quarter to $84 billion from between $89 billion and $93 billion.
That was first time Apple reduced its sales forecast in almost two decades.
The company blamed lower outlook on weaker iPhone sales due to economic and industry headwinds, mostly in China.The Cupertino, California-based technology giant also said iPhone upgrades were not as strong as expected in some developed markets because of fewer carriers subsidizing phone purchases, higher prices and consumers holding on to older iPhones longer due to cheaper battery replacements.In a memo to employees after announcement, Cook told staff that he wouldn't use "external forces" as an excuse.
"This moment gives us an opportunity to learn and to take action," he added.While lower iPhone sales dragged down revenue, Cook noted earlier this month that company's services business would grow to $10.8 billion in sales during holiday quarter.
In his meeting with employees, Cook stressed importance of services to company's future.In recent months, Apple has signaled a shift in its services strategy, opening up Apple Music to Amazon devices, adding ability to stream media directly from iPhones and iPads to TV sets and releasing an iTunes video streaming app for Samsung TVs.
The company is continuing to work on new partnerships and plans to expand services like Apple Music to more third-party platforms, according to a person familiar with strategy.The missed iPhone sales and reduction in hiring come just months after iPhone maker became first United States publicly traded company to pass $1 trillion market capitalization threshold.
Since then, Apple has lost almost $300 billion in value.