Apple is cutting costs across several teams while it looks for new revenue as growth in its services business slows. The moves include small layoffs, flat headcount and trimmed marketing budgets.
The details come from a Bloomberg report by Mark Gurman, which cites people familiar with the matter.
The cuts are happening under CEO John Ternus, who took over after Tim Cook stepped down. Ternus has argued for a leaner company for years, and he is also weighing year-round product launches and fewer layers of management.
Apple Has Trimmed Teams From Siri to Fitness+ and Held 2027 Budgets Flat
Apple has carried out a series of small layoffs across multiple teams. It has also started dialing back or canceling projects earlier in development, particularly when the work is seen as less essential to the bottom line. Cuts like these were once rare at Apple and have become common in recent months.
The affected groups include Siri, Vision Pro and AI-related software engineering, and some of those cuts were tied to employee performance. The Vision Pro group also went through a leadership reshuffle recently. Apple also made a small number of reductions to Fitness+, which had been developing audio-only versions of its exercise classes.
Early planning meetings for 2027 included the possibility of higher budgets and headcount in several divisions. In some cases, the planned budget increases were later reduced and staffing was held flat year over year. Other teams were told to cut marketing spending. Many employees expect more layoffs late this year or early next.
Over the summer, Apple worked on a plan to lay off about 5,000 AppleCare customer-service workers, many of them remote. The thinking was that improved AI phone and web agents could take over part of their work. Apple put the plan on hold and is not looking to take that step now.
Rising Memory Costs and Slower Services Growth Add to the Pressure
An industrywide memory shortage has raised the cost of key components. Apple has increased prices to offset the higher costs, but it wants to avoid sticker shock. That has led it to absorb some of the expense itself, at least for now.
Ternus, services chief Eddy Cue and Chief Financial Officer Kevan Parekh are also looking for new ways to bring in revenue. They have discussed launching new services and getting more money from existing products and offerings.
Services has long been one of Apple’s fastest-growing and most profitable businesses. Its revenue fell sequentially in the June quarter for the first time since 2022, although it stayed above the year-earlier level and set a record for that quarter. App Store economics are also under pressure.
The cost cutting has reached holiday parties too. Some teams have been told they cannot bring plus-ones for the first time in years.
