Apple Stock Plummets Over 2% Following Report
Apple Stock Down 17% Year-on-Year This Year
[Asia Economy Reporter Kim Hyun-jung] iPhone manufacturer Apple plans to cut employment and spending next year as part of its response to the economic downturn. Even Apple, which had maintained relatively stable management despite adverse factors such as the COVID-19 pandemic, has entered a crisis response mode, increasing market anxiety.
On the 18th (local time), Bloomberg News cited sources familiar with the matter to report this. Although Apple has not officially announced this, the sources explained that the decision was made due to growing economic uncertainty. However, the company intends not to disrupt its management plans, such as scheduling the release of key products like mixed reality (MR) headsets for 2023.
Following the related report, Apple’s stock closed down 2.06% compared to the previous session. The decline in Apple’s stock price this year amounts to 17% compared to the previous year.
Over the past few years, Apple has made massive investments in research and development (R&D) and actively increased hiring to accelerate new product launches. In 2021, R&D investment surged 17% year-on-year to reach $22 billion. Capital expenditures that year exceeded $11 billion, up 52% from the previous year, and total operating expenses, including marketing, salaries, and equipment costs, rose 13% to $44 billion.
However, in recent months, Apple has been severely impacted by supply chain crises, including production stoppages due to lockdowns in China. In April, Apple estimated that this issue could cost up to $8 billion this quarter. Analysts expect Apple’s third-quarter revenue to be around $83 billion.
Not only Apple but also big tech companies such as Alphabet, Amazon, Meta, and Snap have announced they are entering austerity measures to prepare for the economic downturn. Companies like Tesla and Meta have even proceeded with large-scale layoffs to reduce staff.
However, Apple plans to increase its compensation budget for employees this year to cope with labor market conditions. Apple recently raised the hourly wages of many sales and technical staff, with increases reportedly ranging from 5% to 15%, according to employees.
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