Apple Lays Off 100 Employees as Company Focuses on AI

Apple’s Latest Layoffs in Its Digital Services Division

Apple Inc. has recently undertaken a significant reduction in its workforce, targeting approximately 100 positions within its digital services division.

This move notably impacts teams dedicated to the Apple Books app and the Apple Bookstore, as reported by Bloomberg News.

The layoffs encompass a range of roles, including those in engineering and other services teams such as Apple News.

The precise number of employees affected in the services division remains unclear, but Apple’s workforce was about 161,000 full-time equivalents as of 30 September 2023.

The decision comes amidst Apple's ongoing challenges in its third-largest market, China, where sales have plummeted by 6.5% in the last quarter.

Despite the cutbacks being relatively modest compared to other tech giants' recent reductions, they are significant for Apple.

CEO Tim Cook has previously emphasised that layoffs are a last resort, adding a layer of gravity to this development.

Impact on Apple Books and Apple News

The layoffs have particularly targeted Apple Books and Apple News.

Apple Books, once a significant player, is now expected to see reduced focus as Apple reevaluates its priorities.

This shift could be attributed to the lack of a subscription model for the Apple Bookstore, unlike Amazon's Audible, which offers a subscription service that provides access to a vast catalogue of audiobooks.

Apple Books faces a quiet storm as layoffs cut deep, reshaping its role in Apple's digital empire.

The legal challenges Apple faced years ago, including a court ruling against its ebook business practices, have further diminished the competitive edge of Apple Books.

With eBooks generally failing to match the high margins of App Store revenue, Apple’s strategy now appears to pivot away from this segment.

In contrast, Apple News, despite its challenges, remains a focal point for revenue generation.

This service, which includes a paid subscription for unlocking magazines and puzzles, will continue to be emphasised in Apple’s services revenue strategy.

Apple is Now Prioritising on AI

The layoffs at Apple are part of a broader restructuring effort that includes halting projects such as the high-end Vision headset and scaling back on microLED research and development.

Additionally, the company recently terminated a project related to its own smartwatch displays.

These moves reflect a recalibration of priorities, particularly in the realm of artificial intelligence (AI).

As Apple prepares to launch the iPhone 16 Pro next month, it is positioning this model as a significant step into the realm of generative AI.

The iPhone 16 Pro will support new AI functionalities that current iPhones do not.

However, the generative AI features will not be fully available at launch; instead, they will be rolled out through an OS update scheduled for October, with the full suite of capabilities expected by the end of the year.

A Leap into AI with iPhone 16 Pro

Mark Gurman’s reports indicate that Apple’s retail staff are undergoing training for the iPhone 16 Pro, focusing on its new features and AI capabilities.

The training, scheduled earlier than usual, aligns with the iPhone 16 Pro’s launch date of 9 September, suggesting a strategic push to integrate Apple Intelligence into the sales pitch.

This new suite of AI features will be a major selling point, despite the initial software rollout being limited.

The iPhone 16 Pro will also introduce a new tetraprism-equipped telephoto lens with 5x optical zoom, an upgrade from the 3x telephoto lens of the iPhone 15 Pro.

LG Innotek will supply this lens for the initial stock, with Foxconn and Cowell expected to take over later in the year to reduce costs.

This hardware enhancement is a notable difference between the iPhone 15 Pro and the 16 Pro, which could influence purchase decisions.

Balancing New Features with Existing Models

For those contemplating an upgrade, the iPhone 15 Pro remains a compelling option.

It is capable of running Apple’s upcoming AI software and may see price reductions as the iPhone 16 Pro is released.

Given that the iPhone 16 Pro’s AI features will not be fully realised until later, some might find it more prudent to wait for the iPhone 17 Pro, which is anticipated to include more substantial hardware upgrades and refined software capabilities.

As Apple navigates these transitions, its strategic focus on AI and its evolving service priorities will shape the future direction of its product offerings.