When Apple CEO Tim Cook talks, everyone else listens.

“We believe the lion’s share of tech layoffs are now in the rearview mirror with Cook’s words echoing throughout the Valley,” Wedbush Securities analyst Dan Ives, who covers tech, tells me. Ives is referring to Cook’s comments on May 4 about mass layoffs: “I view that as a last resort and, so, mass layoffs is not something that we’re talking about at this moment,” he told CNBC. But he didn’t rule out the possibility of job cuts.

Apple has a “unique perch and perspective around consumer demand globally, and what this means for the path looking forward,” Wedbush analysts wrote in a May 1 note. So the company’s performance and practices, including Cook’s current stance on mass layoffs, hold weight. In addition, Apple has more flexibility because the company has been more prudent in hiring than its peers like Meta, Google, and Amazon which have laid off thousands of employees.

“Apple did not hire at the 1980s rock-star-like pace of hiring we saw from Google, Amazon, Meta, and others during the last few years,” Ives explains. “Now, Apple and Cook are in a position to gain market share and hire talent, which is a shot across the bow at the rest of the tech space.”

Apple (AAPL) announced on May 4, earnings for its quarter ending April 1. The company reported revenue of $94.8 billion, down 3%, but beating analysts’ expectations. iPhone revenue of $51.33 billion beat analysts’ estimate of $48.84 billion. Apple set an all-time record for Services (including App Store, Apple Pay, Apple TV+, Apple Music, and iCloud) reaching $20.91 billion. In the Mac unit, sales fell 31% to $7.2 billion, and iPad saw revenue fall 13% to $6.7 billion. Wedbush maintained an outperform rating for AAPL. On May 5, the stock price jumped 4.7% closing at $173.57. With Apple’s better-than-expected performance and favorable U.S. jobs data, the Dow had its best day since Jan. 6.

The mega-cap tech giant has, so far, been able to avoid mass layoffs and still remain profitable. That brings to mind a question my colleague Geoff Colvin brings up in a recent report—are layoffs a confession of bad management?

“Layoffs are definitely a confession of poor management,” Jeffrey Pfeffer, a professor of organizational behavior at Stanford Business School, told Colvin. Pfeffer’s reasoning is that “research shows that generally, layoffs don’t improve a company’s fortunes,” Colvin writes. “Quite the opposite: They don’t reliably raise a company’s profits or stock price, but they do reliably reduce remaining employees’ morale, commitment, productivity, and trust.” 

Are there difficult moments when layoffs are the best of bad options? “The evidence seems pretty clear that except for really unusual situations—the company is about to go under, it’s the start of the Great Recession—large layoffs actually seem to hamper the ability to restart when things improve,” Peter Cappelli, a management professor at the University of Pennsylvania’s Wharton School, told Colvin. 

Looks like Cook, at least, has done his homework on that front.

Sheryl Estrada
sheryl.estrada@fortune.com

Big deal

Global M&A activity remained depressed in the first quarter of 2023, according to S&P Global Market Intelligence's M&A and Equity Offerings Market Report. The value of global first-quarter M&A fell 45.1% year-over-year to $428.38 billion. And it was 61.7% lower than in the first quarter of 2021 when activity topped $1 trillion, according to the report. "The turmoil in the banking sector heightened economic concerns and slowed momentum for a deal recovery, and this will only add to the headwinds going forward," Joe Mantone, lead author of the report and editorial lead at S&P Global Market Intelligence, said in a statement.

Going deeper

"What Went Wrong at Bed Bath & Beyond," a report in Wharton's business journal, details the research of Barbara Kahn, marketing professor at Wharton. Kahn analyzes the downfall of the retailer, which went from dominating the housewares market to filing for bankruptcy. "Bed Bath & Beyond was unfashionably late to the e-commerce gala and didn’t adapt to changing consumer behaviors, but the company also made monumental financial mistakes," acccording to the report.

Leaderboard

Kapil Agrawal was named CFO at Outschool, an education platform that offers a variety of small-group classes online. Agrawal brings experience in finance and international expansion. Most recently, he served as interim CFO at Poshmark. Agrawal helped grow annual revenues and take the company public. He was also pivotal in improving Poshmark's gross margins, unit economics, and profitability. Before Poshmark, Agrawal served as global head of pricing at Uber Technologies, and before that, he was the head of business strategy at Capital One.

Gayle Jardine was named interim CFO at Coda Octopus Group, Inc. (Nasdaq: CODA), a real-time 3D/4D/5D and 6D imaging sonar technology company, effective May 4. The company’s CFO, Nathan Parker, has departed from his role, effective May 3. Jardine joined Coda Octopus Group as its European director of finance in 2015. Before that, she was the owner and director of Pentland Accounting Limited. Jardine also previously served as the operations and finance manager for Wireless Fibre Systems and has held management reporting leadership roles at Scottish Water Solutions and Honeywell.

Overheard

"Greg understands capital allocation as well as I do."

—Warren Buffett, chairman and CEO of Berkshire Hathaway, said of Greg Abel, his designated successor as CEO, during the company's annual shareholders meeting in Omaha on Saturday. In 2021, the company publicly confirmed Abel as Buffett’s successor, when Charlie Munger, Buffett's longtime business partner, let it slip during that year’s shareholders meeting that the executive would “keep the culture” of Berkshire Hathaway, Fortune reported. Buffett confirmed the news later that day.