Wall Street and tech giants weed out workers as recession looms

Apple reportedly plans to join other tech giants in slowing hiring to prepare for a potential recession, while Goldman Sachs is reinstating its annual year-end job cuts after quarterly profits plunged 48 percent.

The major stock indexes erased gains on Monday after reported that Apple plans to slow hiring and spending growth next year in some divisions, citing people familiar with the matter.

With the move, Apple – the world’s most valuable company – joins a growing pool of tech giants seeking to rein in costs as an economic downturn looms, including Meta, Alphabet, Amazon and Tesla. 

Apple did not immediately respond to a request for comment from DailyMail.com on Tuesday morning. 

As of its last annual report, the Cupertino, California-based company had about 154,000 full-time equivalent employees. 

The Bloomberg report said the changes would not affect all teams and that Apple was still planning an aggressive product launch schedule in 2023 that includes a mixed-reality headset, its first major new category since 2015.

‘Apple’s move reflects a broader slowdown in investing in new things, new companies and new products,’ Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh, told Reuters. ‘It signifies that inflation is an issue for these companies.’

Meanwhile, Goldman Sachs warned on Monday that it may slow hiring and cut expenses as the economic outlook worsens.

The Wall Street titan reported a 48 percent slump in quarterly profit — which nevertheless beat analyst forecasts due to gains in fixed-income and commodities trading. 

Goldman Sachs CEO David Solomon said the market environment has become more ‘complicated’ due to a combination of economic conditions and geopolitics, bokep terbaru citing the war in Ukraine.

‘We see inflation deeply entrenched in the economy,’ he said. ‘And what’s unusual about this particular period is that both demand and supply are being affected by exogenous events, namely the pandemic and the war.’

In an interview on Tuesday with , Solomon said that the bank will ‘continue to hire, but the pace of the hiring is going to slow.’

‘There’s no question given the inflation that we have in our economy, you’re seeing a tightening of economic conditions, and there is certainly a chance that can lead to recession,’ he said. 

Goldman CFO Denis Coleman told analysts on an earnings call: ‘Given the challenging operating environment, we are closely re-examining all of our forward spending and investment plans to ensure the best use of our resources.’

‘Specifically, we have made the decision to slow hiring velocity and reduce certain professional fees going forward, though these actions will take some time to be reflected in our results.’

The bank will also reinstate its annual job cuts for employees at the end of the year, a process it had suspended during the pandemic, he said.

Typically, Goldman cuts the bottom 5 percent of performers every year, but had suspended the practice as it struggled to attract talent, despite offering entry-level employees straight out of school a salary of more than $100,000.  

The restoration of annual sackings for under-performers was the strongest signal yet that Wall Street banks may consider potential job cuts as outlook for dealmaking turns challenging. 

Across the board, Wall Street had eased up on hiring after a recruiting frenzy last year.

It follows moves over the past several weeks from many top tech companies to cut costs and scale back hiring.

Last week, Google parent Alphabet said it would slow the pace of hiring for the rest of the year.

‘Like all companies, we’re not immune to economic headwinds,’ Alphabet said in a regulatory filing. 

And earlier this month, CEO Mark Zuckerberg warned employees at Facebook-parent Meta that the company has cut plans to hire engineers by at least 30 percent this year.

Amazon is reportedly thinning the ranks of its hourly employees through attrition, and recently paused the construction of six new office buildings in Bellevue and Nashville.

A spokesperson for the online retail giant insisted that pausing and delay of construction will not affect Amazon’s hiring plans, reiterating the firm’s proposal to create 25,000 jobs in Bellevue and another 5,000 in Nashville. 

Fears have risen in recent months that aggressive interest rate hikes by the Federal Reserve to tame a persistent surge in inflation could tip the economy into a recession. 

Soaring costs for basic necessities have also raised worries that customers could curb spending on discretionary items like smartphones.

Smartphone shipments declined 9 percent in the second quarter, according to data from Canalys. 

Still, Apple’s iPhones remain among the most sold phones in the world, with the company holding a 17 percent market share just behind market leader Samsung, the data showed.

Apple typically launches a new version of its iPhone and other wearable products in September ahead of the busy holiday season.