New Apple CEO Ternus Plans Layoffs, Cancels Early Projects

Apple's new CEO John Ternus is planning layoffs across multiple departments and the cancellation of some early-stage development projects with limited revenue contribution, according to Bloomberg on September 29.

Over the past two weeks, Apple's hardware engineering department has eliminated some engineering program manager (EPM) positions, including about six director-level managers. Affected employees have been given several weeks to find internal transfer opportunities; those who cannot find new roles are expected to leave later in 2026. Siri, Vision Pro, and AI software engineering teams have also undergone small-scale adjustments. In addition, a plan formed in summer 2026 to cut about 5,000 AppleCare support staff, replacing them with improved AI-based customer service, has been put on hold under Ternus.

The layoffs come as Apple faces soaring memory chip costs. Morgan Stanley estimates Apple's fourth-quarter 2026 gross margin guidance is in the 47-48% range, largely due to memory costs. TrendForce data shows that for a 256GB iPhone 18 Pro, total component costs have risen about 38% year over year, with memory's share jumping from about 10% a year ago to around 34%, expected to exceed 40% in the first half of 2027. Tim Cook described memory prices as a "once-in-a-century flood" and said Apple raised prices reluctantly.

Apple's services business is also under pressure. In the June 2026 quarter, services revenue was $30.74 billion, up 12% year over year but down nearly 0.8% sequentially, the first quarterly decline since 2022. App Store net revenue also saw its first year-over-year decline in four years. Ternus aims to protect margins through cost cuts and project cancellations, creating room for the 2027 product cycle.