Apple inc. AAPL has been hit with a new problem – and this time it has nothing to do with its beloved product portfolio or its growing services business.
What happened: Apple sees an “unprecedented” turnover at the executive level, that of Bloomberg Mark Guerman said in his weekly “Power On” newsletter. Since the second half of 2022, the company has lost 11 senior executives, just below the senior vice president level reporting 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 effort, aspects of hardware and software engineering, privacy issues, sales in emerging markets, subscription services and purchasing , the columnist said.
And while the company has been hiring executives at the same time, the departures have in many cases caused Apple to redistribute responsibilities or promote people from within, Gurman said. While Apple has had candidates to fill for most roles, it hasn’t found a replacement Evans Hankey, head of industrial design. The design team now reports to the Chief Operating Officer Jeff Williams, he noticed.
Gurman added that the most recent departures involved Apple veterans, noting that several vice presidents of design and services at Apple were in the prime of their careers and may later assume the role of senior vice president could achieve.
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Only the beginning: Gurman said the wave of exits could be just the beginning, as some vice presidents who have worked at Apple for decades could retire in the coming years. Longtime Apple mainstays that helped reinvent the company are also nearing the end of their careers, he said, while also forecasting lower-tier sales.
Some of the reasons Gurman cited for the latest developments include:
- A growing burden of responsibilities
- Increase in bureaucracy, especially with regard to product development
- The massiveness of the company, making it difficult for an individual to make their mark
- Internal politics and cross-departmental bickering
- A shift of resources to longer term initiatives
- Manager dissatisfaction with the loss of people to efforts like mixed reality and self-driving vehicles
- Uncertainty about promotions that can bring a four- or five-fold increase in salary
- Apple’s organizational structure
- The decline in Apple’s stock compared to compensation received, as stocks can be more than half of VP-level wages
However, there is one person who does not see Gurman leave the company.
“[N]no one should really worry that the CEO is going anywhere anytime soon: his shares will remain vested until 2027,” Gurman said.
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