End of an Era
Apple Price Cut
Google Slows Hiring
According to the New York Times, Apple has ended its consulting agreement with its long-time design director.
The Point: You might not know Jony Ive's name, but you've certainly used the products he helped create. Ive led Apple's design team for over three decades before leaving the company in 2019. Since then, he's remained on the payroll as a consultant. According to this report, the two sides are officially breaking up. Why's this important? Because perhaps no one outside of Steve Jobs was more pivotal to Apple's renaissance than Ive. The designer's fingerprints are on almost every product Apple has created over the last three decades. So, yea, it's safe to say that Ive is leaving some pretty big shoes to fill.
Speaking of Apple, Citi analyst Jim Suva cut his price target for the stock from $200 to $175. However, Suva still maintains a buy rating for Apple.
The Point: On the positive side, Suva's new target still represents about a 20% gain from the current price. And Suva remains bullish on Apple's near-term prospects. The analyst cited the upcoming release of the iPhone 14, the company's planned $90 billion stock buyback, and "sticky" services revenue as reasons to remain upbeat. So why is Suva cutting his target? Simple. He expects consumer spending to slow down due to an "inflationary/recessionary environment." Arguably no company is better prepared to weather an economic storm than Apple. But even one of the biggest companies in the world won't be able to avoid the impact of an economic downturn.
In a memo to employees, Google CEO Sundar Pichai said that the company would be "slowing down the pace of hiring for the rest of the year."
The Point: Google is the latest tech giant to tighten its belt in response to deteriorating economic conditions. Already Meta, Spotify, and Netflix, among others, have downshifted their recruiting efforts or laid-off employees. In his note, Pichai said that the company would still look to hire for critical roles but otherwise asked employees to become "more entrepreneurial." Look, this probably doesn't impact Google all that much. The company is obviously well staffed with over 130,000 employees already. But it's noteworthy as a sign of how big tech expects economic conditions to evolve in the coming months.
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