24/7 Wall St. Insights
- Apple Inc. (NASDAQ: AAPL) cut 100 jobs from its Services segment.
- Was the change part of a larger trend?
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Apple Inc. (NASDAQ: AAPL) may be the only company where modest layoffs create significant headlines. Among the most prominent stories at Bloomberg today is “Apple Cuts Jobs in Online Services Group as Priorities Shift.” The people were in the News and Books app segments. The total layoffs–only 100.
Bloomberg thinks the change is part of a larger trend. And perhaps so. The workers are part of Apple’s “Services” business, which is the fastest growing of its five divisions. Investors had hoped the segment would grow fast enough to take the pressure off iPhone revenue. That has not worked.
In the most recent quarter, total Apple revenue was $85.8 billion. Services revenue was $24.2 billion, up from $21.2 billion in the same period a year ago. Over the same period, iPhone revenue was $39.3 billion, down slightly from $39.7 billion in the same quarter a year ago. Services is Apple’s second-largest segment, well ahead of Mac, iPad, Wearables, and Accessories.
The size of Services revenue compared to that of iPhone puts even more pressure on the release of the iPhone 16 on September 9, and later the iOS, which includes Apple’s artificial intelligence (AI) features. Each needs to be a significant success to keep the company’s revenue growing.
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