Will Apple Announce Workforce Reduction after Earnings?
Apple Inc. fortunately has so far avoided the cuts that other technology companies have done, but recent reports suggest that the Apple’s management may be heading in that direction. The company has gone on a hiring freeze that could possibly last until September 2023, which is the end of Apple’s fiscal year. This follows the news that the company had already severed ties with around 100 contract recruiters back in August 2022.
Apple currently employs around 165,000 workers and has grown its headcount dramatically in the past decade under CEO Tim Cook’s leadership. With fiscal Q1 earnings just a few days away, there is a possibility that any plans for workforce reduction in 2023 will be shared with investors and analysts.
Although Apple does not disclose its total employee compensation costs, it is believed that most of the employee-related expenses are allocated to R&D and SG&A. In fiscal 2022, Apple’s operating expenses surpassed $50 billion, or the equivalent of $313,000 per employee. A 5% reduction in workforce, similar to Microsoft’s, would mean job cuts totaling around 8,000 employees and an estimated cost savings of $2.5 billion per year.
The impact of job cuts on Apple’s stock price is hard to predict. On the one hand, layoffs could lead to a slight increase in share price based on the estimated 2% increase in annual EPS for each 5% drop in headcount. On the other hand, if layoffs are seen as a signal of a weaker sales outlook for 2023, Apple stock could take a hit as previously bullish investors choose to sell their shares.
Apple’s potential job cuts could bring cost savings, but the company must weigh the potential consequences on its image and stock price. Apple’s management team must communicate the reasoning behind any layoffs effectively to mitigate any negative impact on the company’s financial and public standing.
Apple Stock Forecast & Analysis
Apple Inc has received positive stock forecast from analysts, with the average target price set at USD 168.72 for the next 12 months. This target price is higher than the last closing price of USD 145.93, which reflects a positive outlook for the company’s stock. Furthermore, the average analyst rating for Apple Inc is “Strong Buy,” indicating that the majority of analysts believe that the stock will perform well in the near future.
Stock Target Advisor’s analysis of Apple Inc is “Slightly Bullish,” which is based on a combination of positive and negative signals. The analysis suggests that while there are some factors that could potentially hinder the stock’s performance, the overall outlook is positive.
Over the past week, Apple Inc’s stock price has risen by +5.85%, indicating that the stock is performing well in the short term. The stock price has also increased by +12.59% over the past month and +14.33% over the last year, showing a strong upward trend for the company’s stock.
In conclusion, based on the positive stock forecasts from analysts and the upward trend in the stock price, it appears that Apple Inc is in a strong position and is expected to continue to perform well in the future. Investors and analysts appear to have a bullish outlook for the company, which could potentially lead to further growth in the stock price.