Apple (NASDAQ: AAPL) is reportedly preparing for workforce reductions under newly appointed CEO John Ternus, as surging memory chip costs and slowing services revenue put fresh pressure on the tech giant.
Ternus is planning layoffs ranging from small-scale cuts within large teams, while also canceling certain projects, according to a Bloomberg report.
The move follows a pattern common among incoming chief executives, who frequently restructure headcount to align the business with their own strategic vision.
In this case, however, the layoffs appear driven less by executive preference and more by genuine financial strain bearing down on the company.
Tech expert Rohan Paul summarized the dual pressures facing Apple in an X post, stating: “Money pressure is coming from 2 directions: a memory shortage is raising component costs, and services revenue fell quarter over quarter in June for the first time since 2022.”
Apple issued cautious revenue guidance for the current quarter in late July, citing its inability to source enough memory chips to meet consumer demand.
The memory supply problem is not new — it is one that former CEO Tim Cook acknowledged and expected to persist well beyond his tenure.
Cook addressed the pricing situation directly on his final earnings call, stating: “We reluctantly raised prices, I would say. We did it because we’re in what I would characterize as a 100-year flood on the memory pricing, with exponential increases in memory prices.”
Profit margins came under significant pressure in Apple’s most recent quarter compared to the preceding quarter, driven largely by those elevated memory chip costs.
The broader memory chip market has tightened considerably as demand for high-bandwidth memory and advanced DRAM used in AI servers continues to outpace available supply.
Major memory producers including SK Hynix (SKHY), Samsung Electronics (005930.KS), and Micron (NASDAQ: MU) have largely sold out their premium AI memory capacity through much of 2026.
Customers such as Nvidia (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), and Meta (NASDAQ: META) have been racing to secure memory supply as they build out AI infrastructure at scale.
The resulting shortage has handed memory suppliers substantially greater pricing power after several years of weak industry conditions.
Experts expect memory supply to remain constrained well into 2027, creating a favorable backdrop for the industry’s largest producers while sustaining cost pressures for buyers like Apple.
Layoffs under Ternus could help Apple offset some of that pricing pressure and potentially avoid more significant price hikes in 2027 should the memory shortage persist.
