Apple (AAPL) has laid off about 100 contract workers as it slows new hires and spending. Citing people with knowledge of the matter, Bloomberg reports that the tech giant let go of contract-based recruiters. Apple stock fell a tad bit by 0.09% after the news.
Apple Targets Contractual Workers
The company employs contract workers for technical support and customer service tasks. Contractors are also tasked with localizing products and improving the mapping service. Unlike full-time workers, contract workers receive fewer benefits and have fewer protections.
Apple has retained recruiters who were full-time employees. Additionally, it did not fire all of its contractors. Terminated workers were to receive pay and medical benefits for two weeks. The layoffs affected workers across many regions, including the company’s offices in Texas and Singapore.
The tech giant is moving slowly with new hires after years of staffing up. It currently employs more than 150,000 people. However, Chief Executive Officer (CEO) Tim Cook has already confirmed that the iPhone maker intends to be more deliberate in its spending even as it invests in new areas.
The iPhone maker is not the only one to slow down new hires. Meta Platforms (META), Tesla (TSLA), Microsoft (MSFT), Amazon (AMZN), and Oracle (ORCL) are some of the companies that have suspended new hires. The pause is in response to a slowdown in tech spending.
Is Apple a Buy or Sell Now?
Yesterday, Credit Suisse analyst Sami Badri upgraded Apple stock to a Buy from a Hold. The analyst has an Apple target price of $201, implying 16.16% upside potential to current levels. According to the analyst, Apple’s services and software offerings are well positioned to enjoy increased adoption. Backed by a 1.8 billion base of installed devices, the company should benefit from stickier customer relationships. A large cash balance also leaves the company in a good position to pursue organic investments.
The Street is optimistic about the stock, with a Strong Buy consensus rating, based on 23 Buys, four Holds, and one Sell. The average Apple price target of $182.07 implies 5.2% upside potential from current levels.
Key Takeaway for Investors
Apple laying off contractual workers underscores its focus on keeping operating costs low amid a challenging macro environment. Consequently, it should be able to bolster its margins. The company’s assurance that it will be deliberate on new hires should avert any concerns about future investments.
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