Tim Cook Under Pressure Amid Scrapped Apple Car Project, iPhone’s Fading Appeal

Apple is cutting about 600 employees at facilities near its Cupertino, Calif. headquarters.

Tim Cook
Tim Cook recently visited China on a charm offensive after iPhone sale plunged in the country. Lionel Hahn/Getty Images

Apple (AAPL) CEO Tim Cook has come under pressure as the tech giant has made its first round of layoffs since the Covid-19 pandemic following the abandonment of several ambitious projects and falling iPhone sales in China, its largest overseas market. Apple will cut 614 workers across eight different facilities in Santa Clara, Calif., near the company’s Cupertino headquarters, effective May 27, according to a state filing this week.

Sign Up For Our Daily Newsletter

By clicking submit, you agree to our <a rel="noreferrer" href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime.

See all of our newsletters

The layoffs were likely related to Apple’s recent shuttering of its Special Projects Group, a secretive initiative launched a decade ago whose projects include the development of a fully autonomous, electric car. Apple also recently scuppered a project to build next-generation Apple Watch screens utilizing microLED technology at the end of last month, Bloomberg reported, as the undertaking proved too costly and complex.

Though small compared to the 161,000 full-time workers Apple employed at the end of the company’s last fiscal year, the recent layoffs are particularly significant given that the iPhone maker has until now avoided making cuts even as its Big Tech peers slashed tens of thousands of jobs in the first quarter of 2024, according to a report by job market consulting group Challenger, Gray & Christmas.

The company is also facing serious headwinds in China, as iPhone sales have plunged in the country by 24 percent over the first six weeks of the year, according to Counterpoint Research.

Last week, just after an antitrust lawsuit from the U.S. Department of Justice accused Apple of monopolizing smartphone markets, Cook visited Shanghai on a charm offensive as his company grapples with increasing geopolitical tensions between Washington and Beijing and stiffening competition from homegrown rivals, particularly Huawei.

Current obstacles aside, Counterpoint predicts that Apple’s annual revenue will cross the $100 billion mark for the first time in 2025 as the company is expected to reveal its highly anticipated artificial intelligence strategy at a developers’ conference on June 10 and more emerging markets embrace the iPhone, likely offsetting falling sales in China.

Also this week, Cook sold 200,000 shares of Apple stock, worth $32 million, according to SEC filings. The sale netted Cook about $16 million. Apple shares have slid 8.6 percent in 2024 so far, slashing the company’s value by more than $200 billion.

Tim Cook Under Pressure Amid Scrapped Apple Car Project, iPhone’s Fading Appeal