Eric Platt and Ben Duronio | May 1, 2012 - Business Insider
After taking heat for shipping jobs to China and contracting to employers with questionable labor conditions, Apple (rather publicly) took credit for creating more than half a million jobs in the U.S.
514,000 to be exact.
That figure included nearly 50,000 employees in its retail network and its corporate headquarters, where products are designed.
But it also included FedEx and UPS employees who deliver its products and employees at Corning who make glass for iPads and iPhones.
So Apple basically counts anyone vaguely associated with the company or its products as a job that Apple created.
But what about the competitors Apple has bumped off in its relentless move to the top? What about the once-profitable markets, products, and companies it has destroyed? What happened to those jobs?
Business Insider analyzed data on Bloomberg, went through dozens of 10-Ks, and read through layoff announcements to see how Apple's peers have done.
What we found:
Apple has destroyed nearly as many jobs as it helped create, eliminating some 490,570 positions.
After taking heat for shipping jobs to China and contracting to employers with questionable labor conditions, Apple (rather publicly) took credit for creating more than half a million jobs in the U.S.
514,000 to be exact.
That figure included nearly 50,000 employees in its retail network and its corporate headquarters, where products are designed.
But it also included FedEx and UPS employees who deliver its products and employees at Corning who make glass for iPads and iPhones.
So Apple basically counts anyone vaguely associated with the company or its products as a job that Apple created.
But what about the competitors Apple has bumped off in its relentless move to the top? What about the once-profitable markets, products, and companies it has destroyed? What happened to those jobs?
Business Insider analyzed data on Bloomberg, went through dozens of 10-Ks, and read through layoff announcements to see how Apple's peers have done.
What we found:
Apple has destroyed nearly as many jobs as it helped create, eliminating some 490,570 positions.
Click here to see the jobs that Apple has destroyed >
So even if Apple had created all the jobs it takes credit for creating, its chest-thumping would be misplaced, to say the least.
The truth, of course, is it is not "companies" or "entrepreneurs" who create jobs--it is healthy economic ecosystems that create jobs. (If Apple's customers couldn't afford to buy Apple's products, Apple wouldn't create a single job, no matter how cool Apple's products were). Companies are an important element of those ecosystems, but to credit them for job-creation is to give them a lot more credit than they deserve.
But that's another story.
For now, let's take a detailed look at all the jobs Apple has destroyed or helped destroy.
Here's our methodology:
Business Insider identified some 50 companies that Apple's success has impacted, including big names like IBM and HP, and smaller ones like Barnes & Noble and Adobe.
Some companies and peers prospered. Most did not, announcing a combined 306,606 layoffs over the past several years.
In choosing the companies, Business Insider took a liberal approach to the businesses hit by Apple. Could you attribute all of Circuit City's problems to Apple? Probably not. BI used similar definitions as Apple to identify these companies.
Apple was unresponsive to repeated request for comment.
Those layoffs include direct competitors like Cisco's flip camera business, which the company shuttered after poor sales, and companies like AOL, which lose out on lucrative search traffic because of Apple's choice to default to Google.
We also looked at Apple's decision to contract to private companies like UPS and FedEx instead of using public services like the U.S. Postal Service, as well as loopholes it uses in U.S. tax law to save billions of dollars a year.
The figure above does not include the jobs Apple could have created had it manufactured its products in America — instead of at Foxconn plants in China — because the corporate mantra to cut costs and build products overseas is not simply tied to the Cupertino, Calif., based company.
Business Insider also considered the ripple effect of layoffs in the U.S. When a company fires hundreds of employees, it curtails regional spending, causing restaurants and retailers to close their doors, decreases tax collection at the state, local, and federal level, and can trigger other rounds of layoffs elsewhere in the economy.
Using data from the Economic Policy Institute, coupled with average pay in industries that saw lay offs because of Apple's success, Business Insider estimated the additional loss to the employment picture at some 180,000 jobs.
Taking that into account with the 306,000 layoffs from competitors, Apple has destroyed some 490,570 positions in the U.S.
Circuit City Layoffs: 42,974At its peak, Circuit City employed more than 42,000 people in its stores and corporate offices, offering the only real competing electronics network to Best Buy. But as Apple took greater share of the PC market, and had sustainable margins, Circuit City had difficulty keeping up. Add in the collapse of LCD TV prices and by the holiday season in 2008, Circuit City filed for bankruptcy and laid off its staff.Source: Bloomberg and Company Filings
Federal Government Layoffs: 42,105One of the biggest revelations from the recent New York Times piece was the amount of money Apple saved by using tax loop-holes. Sullivan estimated that number at $2.4 billion in 2011 (Federal Taxes). Divide that by the average rate of pay for public employees in 2011 and you get to some 42,000 lost jobs.
Kodak Layoffs: 28,000Kodak has had problems for a number of years - with total employment declining from more than 100,000 to just 17,100 today. The iPhone and other mobile devices have eliminated the demand for stand alone cameras, and Kodak was a company that suffered greatly from the link between cameras and phones. The 131-year-old company filed for bankruptcy in January.Source: Company Filings
Hewlett Packard Layoffs: 16,995The iPad has made what was once a dominant PC builder an afterthought. HP attempted to enter the tablet game, but their touchpad was a disaster and they have laid off thousands of employees over the past few years (especially after costly purchases like Compaq).Source: Bloomberg
Motorola Layoffs: 16,474Motorola has had a painful decade after the success of its Razr - only recently regaining some strength in mobile. But after the Razr fizzled, Motorola hemorrhaged money, as well as headcount, as it tried to create a product that could compete with the iPhone.Source: Company Filings
Borders Layoffs: 16,600
Apple hardware made a number of businesses obsolete: including the need to buy physical copies of books, movies and music. Borders went bankrupt after consumers moved to digital downloads and streaming online, all fueled by Apple.
Source: Company Filings
Sprint Layoffs: 14,600
Sprint struggled to gain post-paid subscribers for years because it did not offer a device comparable to the iPhone. After AT&T and Verizon exclusivity deals finally expired, it gained the iPhone and saw some growth in subscribers.
Source: Bloomberg
IBM Layoffs: 12,668
IBM conducted a number of layoffs over the past several years, including several thousand people in research in development roles and those in certain hardware businesses that it could not compete in - on the consumer side, that was fueled by gains at companies like Apple.
Source: Bloomberg
Musical Group Layoffs: 12,500
Performing art and spectator sport employment declined from a peak of 415,000 in 2007, to a preliminary estimate of 402,500 in March of 2012. The music industry has faced substantive difficulty since Napster hit (and continues with the lower share groups are paid on iTunes), making it harder for music groups to sign with a label and get backing.
Source: Bureau of Labor Statistics (ID: CES7071100001)
Ericsson Layoffs: 10,690
GlassdoorIn the 1990's Ericsson actually had abot 35 percent of the cell phone market. Needless to say, they did not keep up with the technology to compete with Apple and the rest.
Source: Bloomberg
U.S. Postal Service Layoffs: 10,615
Apple attributed part of its 514,000 job creation figure to shipping giants UPS and FedEx. But the truth is, it just moved the needle away from the U.S. Postal Service by using the private providers. According to Bloomberg estimates, Amazon accounts for 1.9 percent of big brown's revenue. Using that as a reference point, and the fact that Apple revenues are more than twice Amazon's, Business Insider constructed the number of jobs Apple could have sustained if it shipped its products through the USPS.
Source: Business Insider Estimate
Barnes & Noble Layoffs: 9,000
The Nook has kept Barnes & Noble around as competitors like Borders failed, but its core business remains significantly challenged as Apple's products have moved consumers away from traditional physical units. BKS has closed a number of stores and employs 9,000 fewer people today than it did in 2007.
Source: Company Filings
Blockbuster Layoffs: 7,200
Streaming services have butchered the DVD and VHS business, and Blue Ray has not been the boon many industry analysts thought it would. Since 2007, Blockbuster has laid off more than 20,000 employees. BI attributed a third of those who lost their jobs to Apple.
Source: Company Filings
CompUSA Layoffs: 6,300
It's a repeat of Circuit City, just on a smaller scale. The computer superstore withered in the face of intense electronic retail competition and closed 126 stores, as Apple prospered and gained share.
Source: Business Insider Estimate
Sony Layoffs: 6,000
Sony once held a dominant market position in the portable music business with the Sony Walkman and other entertainment devices. The iPod made the Walkman the new 8-track player, and Apple has pressured Sony in the laptop market as well with the iPad and its Mac lineup. (These figures do not include mobile layoffs, attributed to Ericsson).
Source: Bloomberg
RadioShack Layoffs: 6,000
This retailer has faced significant challenges over the past few years as its main wireless offerings (Sprint, T-Mobile) did not sell the iPhone. RadioShack did have AT&T, and recently switched T-Mobile for Verizon Wireless. Still, its shelves are purgatory for HDMI cables and old electronics Apple seems to have made obsolete.
Source: Company Filings
Microsoft Layoffs: 5,827
Microsoft has struggled in the ancillary businesses Apple is prospering in, such as mobile, portable music, and the tablet industry. These struggles forced the software juggernaut to make cuts over the past few years.
Source: Bloomberg
Yahoo! Layoffs: 5,780
Yahoo! has struggled over the years as it has been outmoded by Google. So why is Apple to blame? The default search engine on all of Apple's products are Google, which gives the search giant a nice leg up.
Source: Bloomberg
Xerox Layoffs: 5,400
Xerox has laid off thousands of employees as its printer business steadily declined. Part of that has to do with difficulty within both the PC and inkjet sectors — industries you don't need when you use a Mac. The Xerox layoffs are based on total company announced firings, multiplied by the company's long-term asset base in the U.S. as a percent of global operations (to exclude impact to its international offices).
Source: Bloomberg
AMD Layoffs: 4,460
Apple uses intel chips in their Mac computers, which means AMD misses out on a huge potential market.
Source: Bloomberg
Best Buy Layoffs: 3,400
With Apple retail stores opening (and intense competition from Amazon) Best Buy has struggled to turn weak comparable store sales around. The company recently announced 400 layoffs in corporate as well as the closing of 50 stores.
Source: Company Filings, Business Insider Estimate
Tower Records Layoffs: 3,000
Apple's assault on the music industry hit retailers particularly hard, with stateside closings of Virgin, HMV and Sam Goody. The iPod greatly accelerated the losses of record stores as consumers switched to digital downloads (whether legal or through sites like Napster and LimeWire).
Source: New Reports
Trans World Entertainment (Sam Goody, F.Y.E.) Layoffs: 2,900
Tower Records part two. Trans World, the owner of chain stores including Coconuts, Sam Goody, and Record Town, has closed hundreds of stores and laid off thousands. Blame the iPod.
Source: Company Filings
Gateway (Acer) Layoffs: 2,500
Gateway once ran quite the successful retail chain, but a crowded environment made its PCs seem outmoded and overly expensive. Gateway ultimately closed its entire 188-store division, invested in eMachines and was then bought out by Acer during a period of consolidation. Apple did not have the same problem with its growing Mac business.
Source: News Reports
EMI Layoffs: 2,000
EMI is another record label drastically hurt by the world's move away from CDs. As the big five record companies became four, and now three, EMI had to layoff thousands and cut costs. Universal Music Group purchased EMI as greater consolidation became necessary to eek out some profits from online sales. Apple's role in the shift to digital (even as it offers a new revenue source) is pretty clear.
Source: News Reports
Lenovo Layoffs: 2,000
Lenovo was on the up when it purchased the ThinkPad unit from IBM with the goal to turn it into a dominant PC player. Unfortunately, PC sales were challenged during the recession, even as consumers scooped up Apple's Mac line up. Lenovo announced more than 2,000 layoffs to prop up margins (not included in figures for IBM).
Source: Bloomberg
Adobe Layoffs: 1,950
Adobe's issues with Apple are well documented. The company started a viral campaign to convince Apple to put Flash in its mobile devices. But Steve Jobs didn't warm to that approach, firing off a memo on his thoughts of Adobe (not too flattering). Adobe ultimately had to layoff some 1,950 as it focused on core operations and curtailed special projects.
Source: Bloomberg
T-Mobile Layoffs: 1,900
T-Mobile has lost share without having the iPhone in its device lineup, a sore point for the company that pinned its hopes on joining forces with the carrier that first offered it. But with the FCC blocking the AT&T merger, T-Mobile has had to pare back its operations to invest in 4G technology.
Source: Bloomberg
EMC Layoffs: 1,476
The very profitable cloud computing company has had to issue job cuts after competitors gained share in the market it helped create. Those competitors, like DropBox, have leveraged Apple's iOS platform and taken share through strong offerings on the iPad and iPhone.
Source: Company Filings
Palm Layoffs: 1,247
Palm hoped that the Pre and Pixi smartphones could compete with the iPhone and that it could offer some semblance of a comeback. After first sales looked promising, the products withered as Apple (and Android), continued to grow. Palm was then purchased by HP, before the company decided to shutter the whole unit. (Palm layoffs not included in HP figures).
Source: Company Filings
Virgin Megastores Layoffs: 1,060
Virgin Megastores had a surprisingly profitable run, with giant stores in Times Square generating healthy margins. But when digital sales decimated book, movie and music sales, Virgin decided to cut its losses and sell off its coveted real estate holdings which housed the Megastores.
Source: News Reports
Dell Layoffs: 905
Against Apple's strong gains with its Mac computers, Dell has seemed staid. The company has difficulty competing with Apple's premium offerings, and when demand for its PCs slumped, it saw margins substantively pressured. Dell has yet to find a way to successfully compete with any of Apple's other products — including mobile, mp3 players, and tablets.
Source: Bloomberg
AOL Layoffs: 800
AOL was supposed to be the darling of the Internet age, until it wasn't. Torn up by larger competitors like Google, AOL has forged ahead with a push into content. But what the company used to bet on, search, is stymied by Apple's choice to default to Google on its iPad, iPhone and MacBook lines.
Source: Bloomberg
Cisco Layoffs: 500
Networking giant Cisco has tried to push into the consumer sphere for sometime, and it thought it had a hit with the well priced flip camera business. But the camera never took off as consumers defaulted to their iPhones to take photos. Cisco ended up closing the business and laying off the employees in the division.
Source: Bloomberg
Warner Music Group Layoffs: 300
Warner Music Group is yet another music company hit by the move to digital and purchases on iTunes (you could argue that it performed better than most of the industry during the transition). Warner was forced to lay off 300 employees as revenues struggled.
Source: Company Filings
Hasbro Layoffs: 200
Who needs board games when you can use an iPad or iPhone to entertain yourself? Hasbro decided to close its board-game manufacturing plant in Massachusetts after demand dried up. You can blame that on the success of games like Words With Friends on your iPhone.
Source: Bloomberg
IAC (Ask.com) Layoffs: 170
Ask.com was once a powerhouse in search (depending on how you define powerhouse) but as the iPhone and iPad grew mobile search, Ask lost out. The company decided to axe some 170 employees over two different periods as it gave up on the product.
Source: Bloomberg
Universal Music Group Layoffs: 110
Universal, much like Warner, is one of the three main remaining music companies. The company has laid off some 110 employees as traditional CD sales tumbled. Recording companies have been upset with Apple's pricing strategy for some time, but that has lessened as Apple changed it's $0.99 per song requirement.
Source: News Reports
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