Apple CEO Eyes Faster Product Releases, Fewer Middle Managers

SPEAKER_1 (0:02)

Bloomberg Audio Studios, podcasts, radio, news.

SPEAKER_2 (0:08)

You're listening to Bloomberg Businessweek with Carol Massar and Tim Stenovec on Bloomberg Radio.

Tim Stenovec (0:15)

Let's talk about Apple.

Carol Massar (0:16)

Let's do it. Apple CEO John Ternus just weeks into the role is moving to overhaul the iPhone maker.

It's all about an effort to accelerate product development, broaden its range of devices, and also create a leaner and leaner perhaps organization with a greater focus on engineering. Got to say, this Bloomberg exclusive is among the most read stories on the Bloomberg today. And let's get to the reporter who got the details first. Back with us, Bloomberg News, managing editor for Global Consumer Tech. He is Mark Gurman. He is in the Bloomberg LA News Bureau. He's also host of the new Power On podcast launching this Thursday. You can subscribe to also the Power On newsletter. You can find that on the Bloomberg and at bloomberg.com. You're a busy dude. This story, Mark, as I said, among the most rare.

What did you find out about John Ternus? Is this just about making his mark on the company?

Mark Gurman (1:07)

Yeah, first of all, let's just talk about the podcast for a second if I may. I'm really excited for it. It's going to be my first podcast. It'll be every Thursday on all the podcast networks. On YouTube, we'll have video as well. We're going to have a lineup of some great guests over the next several months and hopefully far longer than that. So I encourage everyone to subscribe and listen.

So thanks for giving me this opportunity to talk about it.

Tim Stenovec (1:32)

Well, you know what I was thinking, Mark? I was thinking you don't really have enough to do, so you should add some more stuff to your repertoire.

Mark Gurman (1:39)

What does Ryan Seacrest say? He has every job in LA.

Carol Massar (1:43)

Yeah, exactly. You're getting there.

Tim Stenovec (1:45)

Yeah, you are getting there.

And I prefer to listen to Mark Gurman. Hey, Mark, we'll talk a little bit more about the podcast. Congratulations on this. I'm looking forward to checking it out.

Mark Gurman (1:56)

Yes, but Ternus, right? Let me answer.

SPEAKER_2 (1:59)

Ternus, exactly.

Carol Massar (2:00)

What's he up to?

Mark Gurman (2:02)

Yes, so he is going to be putting his mark on Apple. Obviously, it was run extremely well under Tim Cook the last 15 years, but that was a different business. That was a business focused on expanding the product portfolio, getting the iPhone and the other products into as many new markets as possible. This was about creating a services engine that's able to augment revenue from hardware.

Ternus' Apple is about new products, new pipeline, new offerings, new looks, new designs.

He wants Apple to go back to an engineering driven culture. He wants Apple to go back to a culture where they're coming with major new product categories and innovations. He wants Apple to be a machine for experimentation and new types of products. He wants to launch new devices much more frequently. He wants to move away from the spring and fall product cycles that Apple has been locked into for a decade at this point. He just wants to generally just move faster and leaner. Layoffs, there have been small rounds of layoffs. What Apple likes to do are these tiny layoffs where they can avoid having to file notices with governments and having to disclose these things. They do them in very small waves, very small groups of people at a time, but they add up. You've seen big Vision Pro and Siri layoffs in recent weeks. Two weeks ago, this was a big one, they did a layoff in the hardware engineering division of engineering program managers, EPMs. It's a key way that projects are run at Apple. These are basically the project managers, so Apple got rid of a bunch of them, including directors, which is a pretty senior role at the company. If they don't find new jobs, they're going to be essentially terminated.

So just leaner, leaner, leaner. The other thing, Apple was set to layoff 5,000 people. So the first mass layoff at Apple in maybe 30 years, 20 years at least, from AppleCare over the summer. But they iced that. They're not doing that at this point.

Carol Massar (3:55)

That's good to know, because some of us lean on AppleCare when things go wrong. I think we can still get the care.

Tim Stenovec (4:02)

That's true, that's true. Do we still get the care?

Carol Massar (4:04)

Hey, how much of this is Ternus looking, you know, when I heard about finding like kind of new types of products and so on and so forth, about looking for new sources of revenue?