Apple's Recent High-Profile Departures Just Beginning, Tim Cook May Not Go Anywhere Soon, Says Gurman - Apple (NASDAQ:AAPL)

Apple, Inc. AAPL has been hit with a new problem  — and, this time, it has nothing to do with its much-loved product portfolio or its growing services business.

What Happened: Apple is seeing an “unprecedented” level of turnover at executive levels, Bloomberg’s Mark Gurman said in his weekly “Power On” newsletter. Since the second half of 2022, the company has lost 11 high-ranking executives just below the senior vice president level that reports directly to CEO Tim Cook.

Some of the high-profile departures include vice presidents overseeing areas such as industrial design, the online store, information systems, Apple’s cloud efforts, aspects of hardware and software engineering, privacy matters, sales in emerging markets, subscription services and procurement, the columnist said.

And while the company has hired executives at the same time, the departures has led Apple to redistribute responsibilities or promote people from within in many cases, Gurman said. While Apple has had candidates to fill in for most of the roles, it hasn’t found a replacement for Evans Hankey, head of industrial design. The design team is now reporting to Chief Operating Officer Jeff Williams, he noted.

Gurman added that most recent departures involved Apple veterans, remarking that several design and services vice presidents at Apple had been in the prime of their careers and could have potentially reached the role of senior vice presidents down the line.

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Just The Beginning: Gurman said that the flurry of exits could be just the beginning, as a few vice presidents who have been with Apple for decades could retire in the next few years. Longtime Apple mainstays who helped reinvent the company are also nearing the end of their careers, he said, while predicting turnover in the lower ranks as well.

Some of the reasons Gurman cited for the latest developments include:

  • A growing burden of responsibilities
  • Increase in bureaucracy, especially related to product development
  • The company’s massiveness, which makes it difficult for an individual to make their mark
  • Internal politics and cross-department wrangling
  • A shift of resources to longer-term initiatives
  • Disgruntlement of managers over losing people to endeavors like mixed-reality and self-driving vehicles
  • Lack of clarity surrounding promotions that could fetch a four- or five-fold increase in salary
  • Apple’s organizational structure
  • The fall of Apple’s stock compared to the compensation received, as stock could be more than half of the pay at VP level

There is, however, one person Gurman doesn’t seeing exiting the company. 

“[N]obody should be truly worried about the CEO going anywhere soon: His shares continue to vest into 2027,” Gurman said.

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