Headcount
Your company asked executives like yourself to share their comments on whether to increase, decrease or keep the global headcount unchanged for the next 18 months year.
Human resources pointed out that they need at least 3 months to hire anyone.
Real Estate pointed out that there is no physical space to hire any more people, but they are looking into adding space in Hudson Yards for resources based in New York. For that reason, they need you to get back to them over the next week.
Finance sent a memo indicating that you need to budget a cost allocation of $36,000 per person per year to cover health care and rent. That is on top of all payroll expenses.
Please write your recommendation below on whether you want to increase, decrease or keep the global headcount unchanged for your department.
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Mary Nielsen says
Since 2019, our company has had a significant increase in revenue as the company has made extreme changes in both leadership and strategy after a sudden defeat by competitors in the marketplace in 2017. Although our company began to make a great comeback, the effects of the 2020 COVID-19 pandemic caused major setbacks as stores throughout the world were closed and sporting events for both professionals and amateurs were canceled or postponed. Nonetheless, despite these unpredictable circumstances, our company has already begun to show a huge resurgence in regaining revenue by adapting to the current climate and redefining the brand’s contact with consumers. It is, therefore, my recommendation that we increase the total marketing headcount by 5% (37 heads) to continue and prolong its success and progress.
Jiachen Zhu says
In 2021, our performance was beyond expectation; to be specific, the adjusted earnings per share is 10.12, which is better than the prediction. What’s better, with the recovery of global economy, demand for 3M’s main products like automotive OEM is very likely to rise. In addition, with semiconductor shortage relieved, consumer electronics are about to increase in the following year. As the market is expanding and sales are rising, we need to more employees to take care of the direct marketing and sales support. So, my recommendation is that we should increase the total marketing headcount by 30 to keep up with the sales expansion.
George says
Sales increased 9.9% in ’21 so a headcount increase makes sense.
The consumer business is the smallest segment at 3M. Would the folks you propose to hire for sales support deal entirely with the consumer business or the entire business?
The financial performance of 3M is well below the market. The annualized return was -4% the last 3 years and +1% the last 5 years. The market (Standards & Poor 500 or SPY) made shareholders 32% in ’19, 18% in ’20 and 29% in ’21.
Anonymous says
In terms the performance of 3M in 2021, the total sales of 3M in 2021 is $35.4 billion which increased 9.9%, and the operating cash flow is $7.5 billion and the adjusted free cash flow conversion rate is 101% indicating that the company has sufficient cash flow to support expansion to earn more interest. In terms of external opportunities, there are two main pieces of good news for 3M. First, the timing is ripe for a recovery in some of 3M’s key end markets. For example, the automotive (original equipment manufacturer, or OEM and aftermarket) market is expected to have a substantial growth pickup in 2022. Second, the management team of 3M noted that the elective medical procedures in the U.S. are still not back to the level of pre-Covid , so there are growth opportunities for 3M’s healthcare (particularly wound care) business as procedures improve through 2022. The growing business needs more employees to develop new markets and maintain the growth, so I think 3M should increase global headcount by combining the above factors.
Anonymous says
I agree that 3M may want to increase headcount. If you are a member of the class, the headcount question is specifically for the Marketing headcount at 3M. For the 2 areas you mentioned, elective medical procedures and growth opportunities for 3M’s healthcare (particularly wound care); should we hire more marketing people? What if we hire more Sales people instead?
Simone Wallace-McEachron says
Fr: Simone Wallace-McEachron
Hi Professor,
NIKE’s strong results this quarter and full fiscal year demonstrates Nike’s unique competitive advantage and deep connection with consumers all over the world. It was a pivotal year for NIKE as we brought a more consumer direct strategy to life across the marketplace. With consistent drive, we continue to invest in innovation and our digital leadership to set the foundation for Nike’s long-term growth. And this is why we should increase the headcount.
North America delivered record revenues, up 141 percent on a reported basis for the fourth quarter, up 29 percent compared to the fourth quarter of 2019, including increased wholesale revenue due to delayed shipments from the previous quarter. As markets re-opened and sport returned, North America Digital growth continued to be strong, increasing 54 percent versus prior year and 177 percent compared to the fourth quarter of 2019.
There can be serious consequences of not hiring based on the current state of the customers, team, and business success. We would missed growth opportunities. By increasing the outsourced labor force of portions of the manufacturing process that doesn’t require a highly skilled workers but workers that will become adept at the task and become specialized. In turn, this often leads to a decrease in employees who required hiring salaries. Therefore decreases costs associated with benefits, salaries, equipment, training, etc.
While the physical retail is re-opening, Nike will continued to deliver strong revenue growth if we also consider the human aspect of the driving force to our success our worker. Recent research shows that members our team seem more emotional and or sensitive than usual. We need to reallocated some of the revenue to employee well-being that is coupled with training that is focus on productivity but encourages camaraderie that supports a team’s efficiency in work well and achieving the goal.
Billy Wang says
I agree that based on Nike’s current state, increasing head count will be a right move. However, as you stated in the report, the increase in current quarter report is partially from the delayed shipment from previous quarter. That means there are significant underlying instability to Nike’s current supply chain. Perhaps specifying the field of adding head count will give a more clear picture. Some possible measures could be converting outsourced foreign supplier to owned foreign factories, more coordinating personnel with logistic partner, etc. By doing that I think you could make adding headcount and increase revenue more closely connected.
Lingxiang Wei says
In my opinion, whether to increase, decrease or keep the global headcount unchanged depends on whether the global headcount is cost-efficient and whether it can benefit the company in the long run.
As a matter of fact, in today’s business world, while companies need human capital to perform duties and create values, they also need to consider the cost of developing and maintaining such human capital. Therefore, it is necessary that companies should maintain a balance between the value and profits created by their human capital and the cost to maintain such human capital. From this perspective, the advice is that if the global headcount of our company is located in countries with low labor costs, low tariffs, and cheap raw materials, which is necessary for the company to remain profitable, then the company should keep or even increase the global headcount. By comparison, if the cost of international trade is increasing or the raw materials are getting more expensive, which is reducing the profitability of the company compared with domestic headcount, then it is recommended that the company should decrease its global headcount,
Particularly for our company, I would like to recommend you, my CEO to think of why we are using a global headcount. In fact, when the company hires contractors in other countries for global headcount, it has the following benefits. Firstly, it sets the company free from headcount impact, as the local contractors will be fully responsible for managing and governing the global headcount. This also allows the company to have more freedom, as no corporate approval is required, which can make things faster at the company. Also, since it is always easy to buy than hire, there remains a little risk for the company. In fact, when the company is using a global headcount, it can have many alternative arrangements, which can help the company find the qualified headcount with the least costs.
However, it also has to be mentioned that there are potential negative risks for the company to hire a global headcount. For example, the local contactors may not focus on morality, and if they are involved in unethical business practices such as child labor, gender pay gap, sweatshops, and so on, the company may suffer from the negative public image, which can then impact the company’s profitability to a large extent.
In light of what has been mentioned above, it is necessary for the company to seriously evaluate the pros and cons of the global headcount to decide whether it should increase, decrease or keep the global headcount.
Hannah Cruz says
Hannah Cruz- L’Oreal Group
According to the July 2021 Half Year Results, L’Oreal has amounted sales of 15.19 billion Euros (roughly 17.3 billion USD), there have been market share gains in all divisions and geographic zones, and e-commerce continues to have a strong growth of +29.2%. The unique beauty leader is the first global cosmetics group located in 150 countries, with about 88,000 employees. Although sales have decreased since 2019 with the prior sales revenue of 29.9 billion euros, reports show positive results as group sales have risen since the initial drop in 2020. To ensure financial gain toward the company I would suggest hiring more digital marketers to elevate the company’s online market presence. The team should also expand on their luxe line of L’Oreal Luxe and emphasize their foundation of quality and diverse beauty products. Hiring social media campaign managers and creating interactive accounts on TikTok for example could exploit and open the doors to a new demographic of Gen Z consumers.
Hannah Cruz says
Reference:
https://www.loreal-finance.com/eng/news-release/2021-half-year-results
Nour O. says
L’Oreal’s half-year and 9-month reports showed a significant increase in sales from 2020 to 2021. That being said, it would make sense to increase headcount slightly to accommodate all the extra actions that need to be taken to support this increase in sales. However, with the ambiguity around COVID-19 and uncertainty moving forward, I did not elect to increase headcount by too much so that it would not need to decrease by a lot if sales did not do as well the following year.
Hanying Bao says
In 2020, the year of the outbreak, six Disney parks around the world were closed due to being in the “center of the storm” of the outbreak. Disney also published its fiscal 2020 first quarter (Q4 2019) report, announcing first-quarter revenue of $20.9 billion, up 36% from the previous year’s revenue of $15.3 billion, and net income of $2.1 billion, down 23%. Disney’s chief financial officer predicted the indefinite closure of theme parks as the pandemic continues, which has led to a decline in the company’s future total revenue. Among them, Shanghai Disneyland will lose about $135 million and Hong Kong Disney will lose about $40 million.
Faced with these huge losses, Disney has taken the decision to stop paying salaries, forcing employees to take time off and encouraging them to apply for $600 a week in unemployment benefits. According to the U.S. Department of Labor, the cumulative number of first-time claims for unemployment benefits in the United States is nearly 26.5 million, including 100,000 Disney employees. The decision damaged Disney’s reputation. Journalists and the news slammed Disney and reported they were turning the crisis over to the government. So in my opinion, with the impact of the pandemic, if Disney does not currently have profitable projects, my suggestion is to reduce unnecessary manual labor. Additionally, in 2019, Disney has begun its transformation by investing in streaming. Released on November 12, 2019, Disney+ brought over 500 movies, 7,500 TV episodes, and 10 new original movie and TV episodes customized for the platform to Amazon Fire TV, LG, and Samsung users as soon as it went live. Because of COVID-19, many people were forced to stay home, which caused a surge in Disney+ subscriptions. Disney+ grew to 73.7 million subscribers worldwide as of October 3, 2020, up 16 million from the previous quarter. In terms of subscribers, Disney+ has far surpassed its competitors from Hollywood in the same period. It is a large number of subscribers that will gradually move Disney toward media traffic. Thus, I think the demand for offline manual labor, compared to before, really needs to be reduced a lot. Based on the above information, I think the offline manual workforce for Disney worldwide can be reduced, but the demand for online intelligent people should rise, especially in the US region. The Chinese region can be temporarily unaffected due to the well-controlled pandemic.
Wen Zhang says
I am from team Loreal, and I don’t think it is a good idea to decrease the global headcount. On the other side, I recommend keeping or increasing the headcount in the particular region. Due to Loreal’s
first three seasons ‘financial report, Loreal once again proved its ability to withstand the pressure of Covid. L ‘Oreal reported sales growth in all four business units and all regions. As of September 30, 2021, L ‘Oreal’s total revenue in the first three quarters was about 175.6 billion yuan (RMB, the same below), up 18% year-on-year and 18.8% at a fixed exchange rate. The revenue in the third quarter was 60.56 billion yuan, up 13.1% year-on-year, far exceeding analysts’ expectations. L ‘Oreal mentioned that the e-commerce business continues to maintain a strong momentum of growth, which is also a key factor for L ‘Oreal to usher in a new round of rapid development. It is reported that in the first three quarters of 2021, e-commerce channel sales achieved 29.7% year-on-year growth, accounting for 26.6% of L ‘Oreal’s total sales, up slightly from 23.7% in 2020. As a Chinese consumer, I can see Loreal put more effort into developing products for the Chinese consumer. You can only find some popular products on the Chinese electric business platform. On Chinese’s hot social app like TikTok, Loreal devote greater effort to cooperation with micro-influencers. It also helps a lot with the Chinese market’s turnover. Under the condition of Covid, the network become one of the most important sales channels for most of the products. Therefore Loreal should add staff helping online sales and social media campaigns.
Jiaxi Song says
Company: Pfizer
Pfizer’s full-year 2021 revenue of $81.3 billion represents a 95% growth compared to full-year 2020 revenue, beating expectations by a wide margin. Moreover, on December 22, 2021, Pfizer’s Paxlovid received Emergency Use Authorization (EUA) from the FDA. Paxlovid is the first oral antiviral prescription-only pill for COVID-19 to be approved in the European Union. According to Pfizer’s official website, Paxlovid is intended for the treatment of COVID-19 cases in adults and pediatric patients over 12 years of age or weighing at least 88 pounds. Because oral prescription antivirals for COVID-1 (Paxlovid) are now in the market, it needs more human resources in the marketing section. With the continuity of the pandemic, there is an ongoing need for vaccines, such as the need for booster shots at intervals. The emergence and uncertainty of mutated viruses will also create demand for Pfizer products, such as new medications and vaccines. These will also lead Pfizer to develop and launch more products. Therefore, I recommend that we need to increase the total marketing headcount by 5%.
Parima Persaud says
According to the 2021 Annual Report for Disney, the revenue increased by 3% from 2020. However, due to COVID-19, the cost of services increased. This includes higher costs for programming, technology, and production for Disney+ and Hulu along with higher sports programming costs for ESPN+. On the flip side, the cost of products decreased since theme parks were not open and there were lower sales in merchandise, food, and beverages. Based off of this information and going into 2022, I would increase the headcount of the company to support Disney’s market research. For instance, looking into what consumers would want to see at theme parks that would make them feel safer to visit can help the company increase their sales. As a large company that owns many divisions, I feel market research would help understand their audience better to deliver a more positive experience in uncertain times.
Xinyue Xu says
The COVID-19 has cost a significant loss in manufacturing, but it also brings an unexpected opportunity. Certain organizations are witnessing a spike in demand for specific products due to the burgeoning crisis. The emerging markets for medical products are especially short in the pandemic. 3M has already had a very mature product line for medical instruments. So, it seems that expanding the production scale under the pandemic is a great way to maintain annual sales. Since some of the product lines are shot down for a while, the employees can be transferred to the emerging medical product line. But in fact, 3M placed its manufacturing lines respectively in different countries and it is not easy to transform the factory to a medical standard production line. Therefore, 3M needs to decrease the headcount in the product lines which do not have the capability in transforming. And increase the headcounts in the product lines which confirmed the medical standard. But the severance also needs to be considered. The pandemic is a temporary circumstance after all. Fire the employees from countries that require a high severance might be a bad deal to 3M.
In addition, the headcounts in the media departments also need a structured change. “The conversation about in-house media teams has become even more important in current times,” argued Chris Luna, engagement leader at 3M Corp.’s Consumer Business Brand Center. Before 2022 and for a long time, 3M adopts the agency and in-house media team cooperate mode. It is also a result of the COVID, the in-house and internal modes drive the maximum effectiveness of 3M’s media. And according to Luna, she stated that the corporations started to ask how to control more of their business. We can tell that the trend at least in media management of 3M is going to be internalization. Therefore, the headcounts are going to increase inside the company but decrease the employment of the outside agencies.
Xinyue Xu
hongyu bao says
In 2021, Disney has a 4% increase in overall revenue. Due to the pandemic situation, Disney have to limit its worldwide theme park capacity restricted by the local department, and the restrictions are expected to extend to 2022. It has directly lead to a reduction on the food, beverage and entertainment sales of theme park operation. Moreover, most the original programs planed to streaming in 2021 has been either cancel or postponed to 2022, resulting in a deduction of the distribution revenue and DMED profit. Based on the fiscal 2021 form 10-K, lost profit was partially offset by the Disney plus, Hulu and others subscribe fees which identified as direct to customer business. Add on, the subscribers number of 2021, 399 exceed the estimated number 217 by 80 percent.
Looking at the fiscal 2021 overall performance, and future 2022 business plan which shows that Disney plans to focus on improving the DEMD operation system by shifting traditional distribution to retain individual customers on its own streaming service, as well as to produce 145 series and multiple specials and shorts in the original program on 2022.
I recommend Disney to reduce worldwide headcount for their theme park, resort and other DPEP segment operation since the pandemic are expecting to repeatedly affecting the offline business. To increase headcount for DMED segment in order to improve its streaming service accommodate with technology perfection work done in past 2 year. Also, definitely recommend Disney to increase the marketing headcount. Disney need to hire more marketing intelligent to help promote the upcoming series streaming and the direct to customer business market share.
Victoria Balogun says
With the pandemic in consideration, 3M would have to increase their headcount in many of their marketing efforts. 3M is the top supplier for many products b2b, however, to ensure that they become or stay the top supplier for consumers. Sales went up over 9% between 2020 to 2021. Their greatest increase was in consumer spending with a 4.1% increase. Sales increased in consumer health and safety, stationery and office, home improvement, and home care. Consumers are home more often and are purchasing more things that help with their home offices or doing DIY projects. Also with the greater need for health products like masks, increasing the headcount all around would be best.
Anna Hursky says
When comparing the summaries for the fiscal years of 2020 and 2021, we see a 3% rise in revenues. This is an indicator of bouncing back from the pandemic. I propose that Disney focuses growth on the sector that produces the most revenue, which is the streaming service. This way we can take advantage of and expand on its growth in 2022.
Disney+ has gained many new subscribers in 2020 during the lockdown. However, due a lack of new content, the previous year’s growth could not be kept up with. The decline is coupled with significantly less park attendance than in pre-pandemic years.
Disney is expanding its Disney+ streaming service to 42 different countries and 11 territories in the Summer of 2022. In order to accommodate this, we need a considerable increase in headcount. More employees are needed in the content creation department and the marketing department, as well as others, to attract and maintain new customers. Disney is undergoing a major project, and needs a large international network for everything to go smoothly. If Disney+ and its subsequent marketing campaigns are launched successfully in these new countries, the payoff should be massive.
Jialuo Yang says
I think Nike headcount should increase. In the 2021 financial report, Nike’s revenue in the fourth fiscal quarter increased year-on-year growth 96% to $12.3 billion, compared with market expectations of $11.01 billion and $6.313 billion in the same period last year. In North America that is Nike’s largest market, sales rose 141% that make a record $5.38 billion. I think in 2022, most people are vaccinated, the return of sporting events is associated with an uptick in branding campaigns that could allow branding campaigns to attract more advertising and marketing spend as well as digital marketing investments. So, I think Nike needs to increase headcount in this regard. In 2021, although reopening of stores, revenue from the Nike brand’s digital business continued to grow strongly. In the fourth quarter, digital revenue for the Nike brand year-on-year growth 41% and a 147% increase from the fiscal 2019 quarter. Nike Digital accounts for nearly 21% of the Nike brand’s total revenue. Nike’s growth will be led by NIKE Direct, which is expected to capture 60% of revenue by 2025 with strong digital growth. In addition, the company expects that by fiscal 2025, the business mix of Nike and partner Digital will reach 50%, of which Nike’s Digital will account for 40% of the business. I think Nike can increase headcount to digital media in 2022. Online sales of Nike memberships hit a record $3 billion in the fourth quarter. Nike members are the first to get exclusive products and other perks. Nike said the company now has more than 300 million members worldwide. I think Nike needs to continuously increase headcount to sales support to provide better service for new and regular members in 2022.
HONGTIAN XIE says
Disney team. According to Disney’s 2020 financial report analysis. My staffing arrangements for each department are as follows (assuming the outbreak persists but does not exacerbate or mitigate the impact). In 2021, online consumption will continue to become the mainstream consumption method. Compared with 2020, Disney’s online business revenue has increased. So I suggest adding 5% jobs in the Digital Media division. This year, the cost of sales has increased and the sales volume has not changed significantly, so I suggest that the sales department can appropriately lay off 5% of the staff.
Jinyue Yang says
In 2021, 3M’s full-year sales increased 9.9 percent to $35.4 billion. As the global economy shifts in the wake of the COVID-19 pandemic, 3M will further strengthen its operations and marketing capabilities, so I think we can increase the number of employees in marketing. On the operations side, 3M will eliminate redundancies and make better use of analytics to drive more efficiencies. On the marketing side, 3M will be successful in leveraging data insights, accelerating global marketing programs and activating digital interactions with customers.
Sarah Kanyandekwe says
In the last couple years, Netflix has lost subscribers and with the increasing competition, its time to make changes. This is why I propose a decrease in traditional marcommm and events. Since Netflix is media teach company, traditional marcomm is not as important. Instead, now we can focus more on digital media, which is a more appropriate approach to the service we provide. Moreover, a decrease in events is needed. Due to the volatile situation we are in because of the pandemic, it would be best to decrease headcount there. Moving events online, could be a cost effective alternative. On the other hand, we will be increasing sales support, market research, new product, direct marketing. Due to the competition getting bigger, it’s important we increase our market research in other to know the best way to accommodate our customers needs and set our self apart from the completion. Consequently, new products increases as well. In addition, sales support is greatly important to maintain customer satisfaction and loyalty, having an increase in that department could potentially help us from losing subscribers. Direct marketing will also increase, to help attract new custumers. Finally, Other and corporate communications will remain the same.
Chenguo Ye says
My research subject is 3M. 3M lost some of its sales in the transportation segment in 2020. But it does not affect the increase in long-term demand. So I think at pandemic, no layoffs. When the pandemic is over, these affected industries will recover. In the 2021 annual report, the Transportation segment made a huge growth. Because of the pandemic, the need for PPE increased dramatically. 3M can reasonably transfer some employees to ensure production. Because in 2020, the production of masks has tripled.
Ting Zhang says
Overall, there will be a 1.4% (22 heads)increase in 2023 for Apple. Although Apple plans to reduce both hiring and spending for some teams due to a potential downturn, Apple is still planning an enormous product and services launch schedule in 2023. In 2023, Apple will decrease marketing headcount in terms of Sales Support , Traditional Marcomm , Market Research, and Corporate Communications. Apple plans to slow hiring and spending next year in some divisions due to potential economic downturn. Apple is giving select teams a “lower-than-expected budget” for spending on research and development, resources, and hiring in 2023 due to the result from the COVID-19 pandemic, Russo-Ukrainian War, and high inflation driving concerns about lower consumer spending and a recession. However, These changes will not affect Apple to increase marketing headcount in Digital Media, Event, New Product, and Direct Marketing. Apple is still planning an “aggressive” schedule of product launches in 2023. Apple is preparing a flood of new products. Later this year, the company expects to introduce four iPhone models, three Apple Watch variations, new Mac desktops and laptops, and an updated Apple TV set-top box. It’s also planning a new HomePod speaker, a larger iPad and several new Macs for next year. More importantly, Apple will continue focusing on services development and advertising business. Apple is thought to be working on increasing its advertising business aggressively in the coming years, with an initiative to expand Apple’s overall use of ads in apps as part of that push. Also, Apple will sustain 20% annual growth over the next five years overall, supported by Services.
Qianyi Wen says
I think Apple should increase the global headcount.
First of all, Apple is a tech company and it’s crucial for it to recruit some young blood. Customers are excited about the way Apple innovates products and I believe innovation is always the key part that leads the tech company to continuous success. Therefore, keeping employ the younger generation with brilliant ideas seems like a must.
What’s more, the rising of some strong competitors like Samsung and Huawei may be a threat to Apple. It’s important to make sure that the company prepares well for these strikes. By increasing the global headcount, Apple would have more manpower to handle different situations. For instance, they can do better product development, put more effort to investigate and analyze competitors’ situation.
Lastly, I would say that advanced technology is the trend. Apple may produce more product in the future like Apple car. Whenever a new product produced, a wide variety issues should be followed up to support this new business.
Jing Sun says
Coca-Cola needed to maintain its current headcount rather than increase or reduce it. Crucially, Coca-Cola had 79,000 employees globally as of 2021 (Ridder). The said figure was a drop from the estimated 86,000 employees in 2019 and an estimated 80,000 employees in 2020 (Ridder). Thus, it is fair to say that Coca-Cola’s headcount has been on a downward trend since 2019. However, it is worth noting the number of employees in the three stated years does not represent the lowest figures in recent times. Importantly, the lowest headcounts are from 2017 (est. 61,000 employees) and 2018 (est. 62,000 employees) (Ridder). The 2016-2017 figures suggest that the current figures do not represent the company’s worst statistics yet, despite battling the global pandemic in the last two years. If the company currently has more employees than its pre-pandemic days, then increasing the headcount now would be ill-advised. Besides, the pandemic is not over yet, and the company may need to adjust to any emerging macroeconomic shocks. Thus, increasing the headcount would be as unwise as reducing it. The company needed to maintain the status quo and only react if any changes made such a shift utterly necessary.
Equally, Coca-Cola’s marketing headcount did not need to change either. The company has not experienced any marketing crisis in recent times that necessitate any changes. If anything, Coca-Cola has built a reputable brand over the years that has rendered marketing one of its strong areas (Ridder). The company’s brand is well known, and its ads have a reputation for going viral. Therefore, no change of circumstances at Coca-Cola warrants a change in the marketing headcount. The status quo should therefore be retained at all levels of the company, including marketing.
Works Cited
Ridder, M. “Coca-Cola’s Number of Employees Worldwide 2021.” Statista. N.p., 27 July 2022. Web. 23 Sept. 2022.
Xiaolu Yin says
Nike should increase the global headcount.
Even with the impact of COVID-19 and the supply constraints, FY 2022 was the largest revenue year of Nike (Nike-10-K Report 2022), which proves that Nike is on the right track with its digital transformation strategy. With the gradual reduction in the level of control over the COVID in most parts of the world and Nike’s new ERP running, Nike’s supply chain will return to fully operational and even surpassing pre-pandemic levels in following years(NKE Q4 2022 Earnings Call). Meanwhile, the resumption of major sporting events such as the 2022 World Cup and 2024 Olympic Games will be good opportunities for Nike to boost sales due to people’s longing for sports. And, Nike’s CDO strategy is going very well so far, driving a better consumer experience both physical and digital.
I think Nike will experience greater demand and also have the ability to provide more supply, so it will need to increase the global headcount.
Xiaoxuan Gao says
I suggest a 3% (38) increase in Disney headcounts overall. According to the 2021 annual report of Disney, the total revenue increased by 3% in fiscal 2021. Even though our company is gently bouncing back from the impact of COVID-19, I expect COVID-19 will still be a massive influence on the operations of Disney in 2023. I suggest decreasing headcounts for Events and Sales Support. Some international theme parks are still limited capacity or even closed.
With shifting consumer preference for watching video content, Disney has increased its focus on Direct-to-Consumer (DTC) streaming services, such as Disney+ and Hulu, for the past 2 years and is continuing to do so. In response to this change, I suggest Disney increase the headcount for Digital Media and Direct Marketing to distribute the content better and create more awareness among viewers.
For Market Research, I recommend Disney increase its headcount to investigate the unknowable duration and severity of the impacts of COVID-19, and unstable regional economic conditions, so our company can make the right operating moves. For Corporate Communication, I recommend Disney maintain the exact headcount.
Xuechun Sun says
I think Disney should increase Headcount by 6% in 2023. According to the company’s financial results in recent years, due to the impact of the global novel coronavirus, Disney’s revenue received a great impact in 2020, the net profit margin was -28.64%, and Disney laid off up to 30,000 people. 2021 has clearly seen a rebound in the market. Although the net profit margin is still lower than before the pandemic, it is positive (19.95 percent). Therefore, it is expected that although the global pandemic will still have a great impact on the income of Disney’s theme park, experience and product business in 2023, the overall market recovery should increase headcount.
Specifically, I think we can increase manpower input in digital media and new product. In the context of the epidemic, the investment in these two items may lead to hot new products, which will bring new growth points for the company. In Events, Traditional Marcomm can be maintained. Direct Marketing and Corporate Communications can be reduced.
In conclusion, I believe that in the context of the inevitable global pandemic, Disney should reduce its investment in loss-making projects, and turn to the Internet to make new products to seek new growth.
Chanakarn Srinon says
According to the Walt Disney third quarter report, Disney revenues outstanding increased and celebrate Disney 100th anniversary, which will be one of the history of the Walt Disney Company. Therefore, I recommend increasing the total marketing headcount. The main percentage headcount increase is Other department because the event is not permanent so if the company using out-source or part-time employee, Disney would reduce the headcount cost and be more effective.
Ruiqi Li says
Coca-Cola needed to add 6% of the global headcount. According to Coca-Cola Reports Second Quarter 2022 Result, Coca-Cola suspended its operations in Russia due to the war in Russia and Ukraine, but this did not affect its revenue. As of March, their Global Unit Case Volume Grew 8%. I think this is the result of Coca-Cola’s continued growth in the digital space and digital marketing. The financial results show that Coca-Cola is implementing its eB2B platform, the myCoke™ eB2B platform. Year to date, the system revenue generated from myCoke has grown 55% compared to the comparable prior year period, and the company continues to advance on integrating myCoke across its customer base. Coke Studio™, a program that connects the consumer passion point of music with consumption occasions, is one example. Regarding product development, Coca-cola continues to work toward a World Without Waste. The continued implementation of this concept will be supported by consumers and will help Coke to generate sales. However, to keep the concept of eco-system also requires continuous investment in headcount.
Therefore, I believe that Coke needs to increase the global headcount to drive the company’s product innovation, digital marketing and digital sales activities while restructuring the production line. This will help Coke to transform better and gain more profit.
Cora Yim says
I think Coca-Cola should relatively maintain its headcount in 2023. According to Coca-Cola 2022 second quarter report, the global unit case volume and the net revenue of Coca-Cola has grew 8% and 12% respectively, but the operating income and the operating margin were both declined by 22% and 9.2%, which means there is a higher operating costs; and the cash flow from operation also declined versus the prior year. Usually, I would suggest the company to decrease its headcount to minimize the excess operating costs and the influence from inflation and currency headwinds, however in the case of Coca-cola, there grew in revenue offsets the declines to some extent. At the same time, there are some updates in their company events might requires a maintenance in headcount to reach its marketing goals, including the new global brand campaign of Coke Studio and Real Magic, digital engagement in eB2B platform which has already increased revenue, and continue working on 100% recycled PET bottles.
citation: Coca-Cola reports second quarter 2022 results and updates full-year guidance. The Coca-Cola Company. (2022, July 26). Retrieved September 24, 2022, from https://investors.coca-colacompany.com/news-events/press-releases/detail/1064/coca-cola-reports-second-quarter-2022-results-and-updates
WENYI WU says
I think that LVMH should hire more employees in the next 18 months. LVMH implements diversified brand strategy, including business diversification and product diversification. Since 2010, LVMH has acquired one or two well-known brands almost every year, and I predict this will keep same in 2023. According to the data, the number of LVMH employees are increasing from 2016 to 2021, but in 2022 LVMH cutting the jobs from 175647 to 148343. The total revenue has been increasing, both revenue and profits are up 23% from 2021 to 2022.
In 2022, LVMH made progress in all regions, but its share of sales in Asia (excluding Japan) fell 32% due to restrictions still in place in some Chinese cities (due to the pandemic). However, China has been fully opened up now, and LVMH has lost a lot of opportunities in China during the epidemic time. I believe that 2023 will be a good opportunity for LVMH to make good achievements in China again. Therefore, I believe LVMH should hire more employees to help them build a better market in the first year after the opening of the epidemic.
Phuong Anh Do says
In general, JP Morgan has consistently reported strong financial performance, with steady growth in revenue and earnings over the years. For example, in the company earnings press release, JP Morgan reported a revenue of $35.6 billion and a net income of $11 billion in 2022, both those numbers are decline compared to the same period the previous year. However, these numbers of JP Morgan are still high and are still the largest bank in the United States. Moreover, the above indices of JP Morgan are growing again in the first quarter of 2023.
JP Morgan has been recognized for its commitment to diversity, equity, and inclusion in the workplace, and has taken steps to create a positive and supportive work environment for its employees. For example, the company offers a range of benefits and resources to support employee well-being, career development, and work-life balance. The company has over 250,000 employees around the world. Thus, human resources and human resource management are JP Morgan’s strengths.
The financial services industry is highly competitive, and new entrants and existing players alike can pose a threat to JP Morgan’s market share and profitability. JP Morgan’s competitors include Bank of America and City bank. Therefore, a company with good financial resources and human resource system like JP Morgan should consider increasing the headcount. This is the advantage that helps JP Morgan to expand the market and improve and develop their products.
Fabia Zahra Razula says
As of January 2023, Starbucks has reached 35,000 number of stores globally whereas around 15,600 are from stores in the US.
In terms of the number of employees working at Starbucks HQ, data on LinkedIn shows that there are 105,519 employees with almost 70% of them working in the operations division. While the rest are spread ranging from sales, HR, business development and engineering (descendant orders).
During the Starbucks 2022 biennial Investor Day, Howard Schultz the interim CEO informed the 2 main focuses that the company are headed towards to. First is expansion on number of stores globally including growth in the China market. They target a total of 45,000 stores globally by the end of 2025 whereas 2,000 new stores will be coming from the US. Second, is the store format that are to be launched focusing on mobile ordering within the Starbucks app and food delivery partners.
Referring to Starbucks’ growth plan for the upcoming 3 years, my recommendation is to increase the global headcount. The company’s aggressive on their target, thus it must be supported with additional headcount especially in the business development department. A shift in the store formats will also require human resources who understands the business model and can ensure that the service and experience customer receive will still meet Starbuck’s standard despite changes on the store formats.
Sarah Braun-Herr says
In 2022, McDonald’s was the sixth most valuable brand at nearly $197 billion, up 27 percent from the previous year.
McDonald’s employed around 200 thousand people in 2021. This number remained constant in 2020 compared to the previous year. Overall, the number of McDonald’s employees has more than halved over the past six years. In addition, McDonald’s generated total revenue of $23.22 billion in 2021. However, McDonald’s annual sales for 2022 were $23.183 billion, a 0.17% decrease from 2021.
The shrinking workforce and revenue decline may be due to the fact that the quick-service restaurant market has become increasingly competitive. In addition, McDonald’s business model has been copied by many other restaurants.
In November 2020, McDonald’s unveiled a new growth strategy, stating that in the future McDonald’s will invest heavily in the so-called three D’s: Digital, Delivery, and Drive Thru. This means that McDonald’s will focus even more on the trend of digitalization and automation.
In light of this information, I do not believe that McDonald’s should be taking on large financial burdens at this time to hire more employees, especially in the service sector. If they want to pursue their strategy and focus on Digital, Delivery, and Drive Through, they might want to think about hiring more people in the operational or tech sector.
Yiming Wang says
With LVMH’s 2022 annual report, we can see that LVMH’s full-year revenue was €79.2 billion and recurring operating profit was €21.1 billion, both up 23%. Business in the United States, Europe, and Japan has improved. We should note that the annual report mentions a 5% decline in earnings for the region of Asia (excl. Japan) compared to 2021. This is because China takes up a large part of the sales in Asia. However, due to some government regulatory measures for the country during the pandemic, revenues have decreased. I think with the opening up of China, there will be a significant increase in turnover in the region, and it’s a very good opportunity for LVMH.
LVMH divides its business into five different business groups. In 2022, Fashion& Leather Goods group increased by 20% full-year organic revenue, and the Selective Retailing group increased by 20% full-year organic revenue. Through these two groups, we can see the huge potential of the market for LVMH in 2023. So, my advice for these two groups is to hire more people. For Wine& Spirits Group, Perfumes& Cosmetics group, and Watches & Jewelry Group, I suggest being more conservative in hiring new employees. But overall, I think LVMH needs to hire more new employees in 2023. But in the first quarter, LVMH should be conservative in hiring. The most important thing to do is to wait and see the market to decide the strategy for the next three quarters.
Feng Chen says
In 2022, LVMH recorded revenue of €79.2 billion and profit from recurring operations of €21.1 billion, both of which were up 23%. Over the course of the year, all business groups had significant organic revenue increase. Fashion and leather goods set new records, with organic revenue increasing by 20%. This is a significant increase, especially considering that fashion and leather goods account for nearly half of the total revenue for the year. As a response, more people should be hired in the design and marketing departments to pursue continuous design innovation and enhance promotion to continue to extend the brand’s influence and market share in this field.
In terms of revenue based on the geographical area of delivery. Due to the health situation in China during the Covid-19 pandemic, Asia performed consistently throughout the year. Nearly 40% of LVMH’s total revenues come from Asia, particularly China playing a significant role. Throughout the Covid-19 epidemic, China has struggled with a slowing economy and uncertainties around COVID restrictions. Additionally, the limitation of domestic tourism had a significantly negative influence on the flagship stores in Hong Kong and Macao. However, with the resumption of travel between mainland China and Hong Kong and Macao on February 6, I think the company will benefit from pent-up demand from Chinese consumers. As a result, more people should be hired in Asia, particularly in China, in the marketing and public relations departments to meet market demand following China’s reopening. Other critical business countries and regions, Europe and the United States all increased significantly from the previous year, increasing by 16% and 27%, benefiting from strong demand from domestic customers and recovery in overseas travel.
Based on the above, LVMH’s revenue performance in its primary business regions is strong, and the reopening of China will provide new impetus to the company’s revenue, which is expected to continue to increase revenue in 2023. I think LVMH should increase the global headcount but not be adventurous. Although all business groups achieved significant revenue growth in 2022, this does not eliminate the possibility that this was the continuation effect of pent-up worldwide consumer demand following the explosive 44% annual revenue growth in 2021. The company’s global headcount growing from 163,000 in 2020 to 196,000 in 2022 over the past three years, with annual headcount growth rates of 8% and 12%, respectively. Overall, I believe that 10% global headcount growth for LVMH over the next twelve months is a reasonable rate of growth, with the remaining six months of growth depending on market performance in 2023.
Zhirun Liu says
Here is the annual gross profit report information I have reached for recent three years. The annual gross profit from 2019 to 2020 was $119.951B with a 3.66% increase rate; The annual gross profit from 2020 to 2021 was $121.649B with a 1.42% increase rate; The annual gross profit from 2021 to 2022 was $128.695B with a 5.79% increasing rate. As we can see, JPMorgan Chase’s gross margin has been growing steadily for the last 3 years. From a macro perspective, there is no need for JPMorgan to lay off employees. Because it will not only negatively affect the image of the company but also intensify the conflict between the company and the employees. I searched why competitor Goldman made layoffs in September and October last year. The reason was that Goldman spent a lot of money on client business projects during that period, and Goldman laid off staff to reduce year-end bonuses and payroll to reduce the pressure on the company’s capital in order to retain capital. At the same time, Goldman’s share price fell. From my perspective, In my opinion, JPMorgan also has this dilemma. But for the sake of the company’s reputation and to reduce the conflict between employees and the company. JPMorgan still retains the practice of laying off employees. To sum up, I think JPMorgan should keep the global headcount in the future to relieve financial pressure.
Juan Felipe Ducruet says
As reported at Starbucks biennal investors meeting, not only is the company going to go through a change in leadership; it is also planning a massive increase in operations. Some of the expected changes are not only an increase in the number of locations but a reinvention of the whole operating system. Plans have been made to make the process more a more automatized system by developing and further enhancing their digital platform that includes services like the mobile order and pay, the Starbucks rewards programs and delivery. It is also important to point out that part of this digital enhancement is focused on the international sector where the digital, such as the Starbucks rewards and loyalty program is not as developed. This is going to be extremely helpful as most of the increase in operations is focused on international locations, specifically the Chinese market. With this in mind, Starbucks is projecting huge revenue growth of 10%-12% (annually) from 2023 to 2025. However, for this huge undertaking to be successful, it is going to be crucial for the Starbuck’s marketing team to be able to market the new programs such as the rewards program and the mobile app. Even more so, considering that a big part of the expansion is occurring overseas. Where different strategies might be needed to effectively position the brand and market the new digital products and effectively manage cultural differences, that could become obstacles. In conclusion, considering the key role that marketing is going to play in this new plan and having seen increases in revenue around 10% in past years and with and with that trend expected to continue; we recommend an increase in Starbucks marketing department headcount. With an increase in the departments headcount, I feel like the company would be better suited to successfully meet the established goals.
Zhuoran Li says
McDonald’s full-year financial performance shows that in 2022, the global comparable sales increased by 10.9%, including 5.9% in the United States, 13.3% in the international operation market segment, and 16.0% in the international development license market segment. The data showed that McDonald’s comprehensive income was flat. In addition, in the third quarter and nine months of revenue results, McDonald’s revenue in the third quarter was lower than the $6,201.3 million in the same period last year, and its net income also decreased relatively, which showed that McDonald’s was no longer the first choice of consumers.
In my opinion, McDonald’s should optimize its structure, no longer employ more employees, but reform the digital market and deploy new digital sales strategies. According to QRS data, in December 2022, the number of downloads of the top 10 fast food applications in the United States was 11.6 million, an increase of 1.4% over the previous month, while McDonald’s created 4.24 million new installations, becoming the leader in fast food service applications. McDonald’s app download volume is 40 million, which proves that customers will browse and consume more through the app, which is also an important opportunity for McDonald’s digital marketing.
xinwei wang says
I think JP Morgan should keep its global headcount unchanged. Although JP Morgan performed strongly during the epidemic, this still does not address the financial pressures JP Morgan is facing. In addition, with the announcement of seven interest rate hikes in 2022 in the US, rising interest rates are putting increasing pressure on JPMorgan Chase, whose revenues are down compared to the same period last year.
At the end of 2022, Wall Street undertook a massive layoff campaign, including Goldman Sachs and Morgan Stanley, with Goldman Sachs cutting 6% of its workforce due to a 70% decline in profitability in the fourth quarter of 2022. The activity of these rival JPMorgan firms is testament to the strain of financial stress.
JPMorgan’s revenues have not fallen as severely as Goldman’s, but market expectations cannot be overly optimistic, so keeping global headcount unchanged is the best option. Such a choice would allow JPMorgan to take more opportunities and avoid unnecessary losses due to the 3-month hiring period, as well as further increasing financial pressures.
harsh kakadia says
JPMorgan Chase annual revenue for 2022 was $154.792B, a 21.69% increase from 2021. After a decline of around 2 percent in the previous year and around 8.89% in 2020). JPMorgan Chase total number of employees in 2021 was 271,025, a 6.14% increase from 2020. With an increase of around 12000 more employees in 2022, but had a 22.82% decline in its annual net income. See the current situation with the covid pandemic, financial recession, and prices due to inflation it’s not financially feasible to hire more employees from the data we can see that there is a hike in expenses so hiring will lead to further expenses.
Hongxingtai Kang says
From my perspective, Starbucks should increase its own global headcount. From the data shows in Macrotrends, we can observe that Starbucks annual revenue is keeping increasing from 2020 to 2022(23.57% increase from 2020 to 2021, 10.98% from 2021 to 2022). A decline happened in 2020, but that was because COVID 19 pandemic, all business companies and firms were not operating well at that time. Although there was a decline from 2019 to 2020, Starbucks net profit margin of over the last 10 years is still 10.09%. Also, according to the news came out from Starbucks Stories & News, the company expects its global store portfolio is going to increase by about 7% annually. US store numbers would grow by roughly 3%-4% annually. Also, Starbucks will expand store numbers and development of the brand in China. The goal of the company is to reach the growth rate of 13% net unit per year. In this case, Starbucks is and is going to continue developing and build more numbers of stores in global. That needs not only more sales, but also more HRs, project personnels, etc. Therefore, Starbuck should definitely increase its global headcount.
https://www.macrotrends.net/stocks/charts/SBUX/starbucks/profit-margins
https://stories.starbucks.com/press/2022/starbucks-enters-new-era-of-growth-driven-by-an-unparalleled-reinvention-plan/
Yushan Wu says
According to research, LVMH Group led the global luxury market with a revenue of 79.2 billion euros in 2022. In addition to 2020, which was severely affected by COVID-19 Pandemic, the total global revenue of LVMH Group has maintained a stable growth trend for more than ten years. With policy changes in many countries at the end of 2020, LVMH recovered quickly from the impact of COVID-19 and achieved a 44% increase in total revenue to 64.2 billion euros in 2021. This growth rate also further reflects the considerable development potential of the LVMH Group. According to the Forbes report, the financial performance of all LVMH brands is excellent until the end of January 2023. Luxury brands represented by Louis Vuitton and Christian Dior also recorded record revenues and profits. Sephora and other cosmetics brands also saw a steady increase in revenue. Meanwhile, the success of Tiffany’s fine jewelry in the North American market has helped LVMH further consolidate its leading position in the global luxury sector. However, while revenues are increasing, LVMH must pay attention on many challenges in 2023. The first is the uncertain Chinese market. As LVMH’s largest market, young Chinese consumers are the main driving force for LVMH’s development. Due to the COVID-19 policy changes in China at the end of 2022, the revenue in the Chinese market declined significantly. At the same time, the Chinese economic slowdown and high unemployment rate make the future development prospects of the Chinese market more difficult to predict. In addition, the second largest market for LVMH, the United States, also slowed down after the second quarter of 2022. Secondly, the Pandemic has also caused people to change their consumption concept, and people have become more cautious about buying products. Finally, the growth of the global luxury market is expected to slow in 2023. Experts predict that it will increase by 3%to 5%under normal circumstances, and the best will increase by 6% to 8%.
In summary, the slowdown in the global luxury market and slower growth in LVMH’s two largest markets at the end of 2022 mean that its financial growth in 2023 becomes more difficult to anticipate. LVMH should slow down its recruitment, expansion, and investment plans in the first quarter of 2023 to avoid more significant risks. At the same time, LVMH Group does not have enough physical space, so it needs to increase investment significantly to hire more employees. The annual investment of $36,000 per person requires LVMH to choose more carefully and reasonably forecast enterprises’ development prospects. Although there are many uncertainties in 2023, LVMH’s rapid growth in the past decade still makes many insiders confident about its development prospects in 2023. At the same time, the total number of LVMH’s global employees keeps a steady growth of about 10,000 every year, except for a decline in 2016. Therefore, LVMH can temporarily keep the global headcount unchanged and consider gradually increasing the headcount based on the financial performance of the first quarter of 2023.
Zhixin Li says
Our company (LVMH) recorded revenue of €79.2 billion in 2022 and profit from recurring operations of €21.1 billion, both up 23%. All business groups achieved significant organic revenue growth over the year. Fashion & Leather Goods notably reached record levels, with organic revenue growth of 20%. Operating free cash flow surpassed €10 billion, allows sufficient fund to invest in the growth of our business.
We see promising signs of recovery from pandemic disruptions in Europe, the United States and Japan, with strong demand from local customers and the recovery of international travel. In order to take advantage of the recovery and meet rising demand for high end goods, I believe we are in a good position to invest back into the business for growth and increase headcount steadily. We should also focus on recruiting innovative younger staff to bolster the popularity of our luxury labels with younger consumers to further expand our market. Therefore, my recommendation is that we increase the global headcount to continue the growth and reinforce our global leadership position in luxury industry.
Moneera says
Increase or Decrease in Global headcount depends upon the needs of the company. The increase in headcount is usually to meet productivity goals and to improve the efficiency of the company. JPMorgan Chase total number of employees in 2021 was 271,025, a 6.14% increase from 2020. This shows that due to this increase, its revenue is increased significantly from last year. Despite the ongoing difficulties of COVID-19, JP Morgan Chase continues to build upon its good momentum from recent years. Record sales of $125.3 billion, net income of $48.3 billion, or $15.36 per share, and a return on common equity of 19% were all recorded by the company in 2021. The company also returned $28.5 billion in capital to shareholders in the form of common dividends and net share repurchases. But after the effects of covid19, the financial recession in the United States, and the increase in labor costs and other company expenses, thus it is not recommended for JP Morgan Chase to increase its global headcount in the following year.
Ziyang Tang says
I think Estee Lauder should increase its global headcount in the next 18 months. With the end of the coronavirus pandemic, Estee Lauder’s net sales for the fiscal year ended June 30, 2022, were $202.29 billion, up 8% from $1.622 billion in the same period last year. This was driven by double-digit growth in the Americas and the Europe, Middle East and Africa (” EMEA “) region, which largely reflected a recovery in physical retail stores, as well as double-digit growth in the global online business. And the growth of travel retail. The strong recovery of global markets requires timely recruitment of employees, which requires the cooperation of all departments of the company. Propose the proposal at least a quarter in advance so that HR can find the right staff. At the same time, give the real estate company before next Thursday to confirm the search for office space reply. Also,make sure the personnel are in place and the site is in place while working with the finance department to make the budget timely. At the same time, give the real estate company before next Thursday to confirm the search for office space reply.Therefore, my recommendation is to increase the global headcount for our department by arranging for the increase of employees in advance under the favorable circumstances that the company has good expectations for future operations and is deeply involved in the global market.
Chen Lin says
In 2022, McDonald’s comparable sales rose 10.9 percent globally and 5.9 percent in the United States. International business grew 13.3 percent. Consolidated revenue was flat and increased 6% on a constant currency basis. System-wide sales were up 5 percent. Consolidated operating revenue was down 10 percent. In 2022, McDonald’s consolidated operating revenue grew just 3 percent. For example, in the United States, McDonald’s comparable sales results are driven by price increases (strategic) and a large number of daily customer demands. Overall, it’s clear that the most successful recipe is marketing (deals within the McDonald’s app) and increased customer reliance on takeaways, which makes the quality of McDonald’s sales in the app increasingly important. In international markets outside the United States, McDonald’s mature operating systems have led to system-wide comparable sales, which have performed very well in European countries. So I think it’s the mature operation that creates the overseas market.
Based on the data and my analysis. I don’t think McDonald’s needs to increase headcount. The first reason is that McDonald’s has more and more customers from the delivery app. More people are eating out, so the number of service workers in restaurants is becoming less important. Secondly, the marketing activities in McDonald’s app have brought great success to McDonald’s, so I think the marketing planning and the operation quality of app are more important than the increase of headcount. The last reason is that McDonald’s success abroad comes from its mature operations rather than from the number of employees. So instead of increasing headcount (especially in services), focus on operations, marketing, and creating partnerships with delivery apps.
Yuxin Shen says
In my opinion, whether the company should hire more employees depends entirely on the actual situation of the company. Generally speaking, even if the company needs more staff, sometimes it does not mean that it must hire more employees. Some jobs can be outsourced so that the company can respond in a flexible way. And sometimes, companies don’t need to hire full-time employees. For example, does the company really need to hire another full-time accountant? On-the-job employees can take time to make accounts, and then hire professional accountants from outside the company to check to ensure that the accounts are correct. In particular, it is necessary to be particularly cautious when hiring senior executives. Maybe we can wait until the company’s business is really booming. Moreover, the cost of adding employees will have an impact on profits. Whether the company has sufficient financial support is also a factor to consider.
For McDonald’s enterprises, I don’t think it is necessary to increase employees. Through data analysis, in the U.S., hower, McDonald’s has been closing more locations than it’s been opening In 2014, there were 14,339 U.S. McDonald’s restaurants, and in 2020, there were 13,673, which is the result of the company closing an average of 111 locations every year during this time span. At present, McDonald’s has about 200000 employees, which is the number of people who work directly for McDonald’s, whether for its enterprise operation or in the restaurant owned by McDonald’s. Since 2012, the number of employees directly working for McDonald’s has decreased by more than half, when the company employed 440000 people. The number of employees decreased the most in 2016, from 420000 in 2015 to 375000 in 2016, and has been decreasing at a certain frequency. The reduction of employees has kept McDonald’s annual profit in an unstable state. I think this has a lot to do with McDonald’s popularity. The restaurant chain has seen a steady increase in both its number of employees and its annual revenue over the past few years, and it has been closing locations faster than it’s been opening them in the United States.
Mya Ma says
The company I am in charge of is McDonald’s, and its data mainly comes from the latest report on McDonald’s statistics at the end of 2022. Personally, I don’t believe McDonald’s should hire more people over the course of the next 18 months, mostly for the reasons listed below. First off, by 2022, there will be 118 nations and regions and a total of around 38,000 McDonald’s restaurants operating globally. Statistics show that over the past few years, McDonald’s has been steadily losing popularity. Its restaurants are closing stores more quickly than they are building new ones in the United States, and their headcount and annual income are also declining proportionally. You will surely lower the expense of building additional new stores if you decide to hire more people at this time. Second, despite the fact that 75% of McDonald’s employees are located outside of the United States, statistics reveal that one in eight Americans has worked there. The issue is that McDonald’s yearly turnover rate has surpassed 130%, which is a sizable quantity and one of the primary determinants of whether the corporation will do headcount. The growth of McDonald’s over the last two years, in my opinion, would not be aided by the addition of executives or full-time workers at this time. Additionally, the part-time employee turnover rate in locations is already rather high, negating the need for further hiring. The net profit of the business and the costs associated with hiring new employees should both benefit from this method.
Shayma Kasraoui says
LVMH remains one of the most successful and promising companies in the market, it remains the leader in the market of luxury goods owning more than half of total sales in the market, even in the pandemic and the uncertain geopolitical environment (also inflation), the company reaches a profit from recurring operations more than 20 billion dollars for its first time, additionally, the company showed successful performance in terms of revenues, profits, brand equity. the mean potential successful and growing markets are: US 37% of revenues with a list of 1054 stores, Europe (24%), and Asia including Japan (24% of total revenues) this is due to the increasing and strong demand from local customers. According to the different environmental changes, and the shifting consumers’ preferences as well as to guarantee the continuation of this successful growth the company follows a growth strategy for the next years, in fact, the company established new partnerships with other brands, and new distribution lines (e.g. new stores). The company also is focusing on strengthening its brand popularity among younger consumers mainly Gen Z (e.g. promotion of streetwear styles as luxury fashion styles) also there is an increasing luxury goods consumption by Millennials, so the company needs to recruit a younger generation of employees in order to meet the needs of this growing segment of customers. Following this growth strategy LVMH will need to invest more in distribution lines along with its brand equity which will require hiring more executives and managers in fields like marketing, communication creativity, and finance, along with other administration and sales staff, in fact, there was an increase of more than 10% of total employees in 2022 compared with 2021, and this is one of the main reasons that helped the company to be a leader in the market this was also confirmed with the company’s strategy to recruit more than 9000 employees through its new career site in the next 3 years. Also, the recruitment of new employees will be profitable not just in terms of achieving the company’s growth strategy but also in terms of cost, in fact, the revenue/employee ratio of LVMH is $521,052 which highly exceeds the cost listed by the administration of $36,000.
Zen Koo says
McDonald’s retained around 200,000 employees around the world starting in 2020 and has not declined since then, which is the number of people who worked directly with the corporation excluding the employee who worked for the independent McDonald’s franchises. However, since 2012, more than half of the 440,000 employees had left McDonald’s, and 75% of the employees from McDonald’s are based internationally. Globally, McDonald’s has seen rapid growth in the number of restaurants since 2005, there are 34,480 locations in 2012 and it increased to 40,031 in 2021. The number demonstrates the yearly store expansions for the past 16 years. The company should decide to increase the global headcount for the next 18 months due to its restaurant expansion and the labor shortage around the world. New hires will assist with the “Velocity Growth Plan”, the strategy for McDonald’s growth that focused on the speed of expansion and to supply the decline in employees over the past six years. As McDonald’s develops its technology-based initiatives, “Digital”, “Delivery” and “Experience of the Future”, technology has taken over many features of the ordering process, table service, etc. Even though the restaurant industry is under digitalization, it still requires employees to assist with the service, delivery, and management side of the business.
Yinxiao Jiang says
In January 2023, JPMorgan Chase, the largest U.S. bank, said its net interest income this year would fall short of analysts’ expectations as the economy showed signs of a downturn. The stock fell after the company said NII, its main revenue generator, will be worth about $73 billion this year, down from an estimate of $74.4 billion. However, this situation is global and not unique to JPMorgan. Therefore, their status as the world’s largest bank by market capitalization remains unshakable (413.85 billion). As of 2022, JPMorgan operates in more than 60 countries and employs more than 240,000 people worldwide. As its value says, “People are our most important asset”, so layoffs are not in line with the company in terms of both data and values. Economic development in the post-pandemic period is still full of changes. Internal competition in the financial industry, inflation and labor issues have become its biggest challenges. This has led to an increase in the company’s operating costs as well. In this environment, I think it is a reasonable strategy to keep the global headcount unchanged.
Kate Ruberti says
It is critical to understand that the concept of headcount is subjective, meaning that it is dependent on each individual company’s needs in the present and volatile market. Specifically, this blog post will analyze the headcount of JPMorgan, (JPM) a leading consumer banking company that offers solutions to the world’s most important corporations, governments and institutions.
According to Statista:
2016: 234,355 employees
2017: 252,539 employees
2018: 256,105 employees
2019: 256,981 employees
2020: 255,351 employees
2021: 271,025 employees
This data highlights that over the past 5 years, the number of JPMorgan employees has increased. Specifically, there is a 15.65% increase from 2016 (234,355 employees) to the most recent employee headcount – provided by the data from Statista – in the year of 2021 (271,025 employees).
To continue, as we have learned in our course, when we are discussing headcount, it is critical to keep in mind the concept of productivity, which accordingly will lead to generating revenue for the organization. Productivity increase can be defined as, “producing more units, or selling more dollars with the same or lower headcount.” Concepts that increase productivity are training, engagement and clear processes for employees, while high rotation, low morale, and badly managed processes can decrease productivity. Given the high productivity of JPM employees (shown through the below data provided by Macrotrends of increasing dollars each year) there is no reason to speculate that JPM should decrease headcount by laying off employees, as they are productive. I will return to this point following the below information about JPM’s annual revenue over the past 6 years.
When analyzing the data, there has been an increase in employees every year from 2016-2021, despite the year of 2020, when the COVID-19 pandemic intensely hit the United States. According to the Congressional Research Service, during the year 2020, the unemployment rate reached 14.8%, the highest rate observed since 1948. Despite the insignificantly small decrease in headcount between the years of 2019 (256,981) and 2020 (255,351) – which was less than 1% – the increase of employees can be positively correlated to the amount of annual revenue JPMorgan as a consumer banking agency has produced.
According to Macrotrends:
2016: $106,387 million of US $
2017: $114,579 million of US $
2018: $129,911 million of US $
2019: $142,515 million of US $
2020: $129,911 million of US $
2021: $127,202 million of US $
2022: $154,792 million of US $
Once again, there was a decrease in JPMorgan Chase’s annual revenue from the years of 2019-2021, which can be speculated as a result of the COVID-19 pandemic. Despite this, JPM’s annual revenue has been increasing each year, with an overall high of $154,792 million in the most recent year of 2022; however, we learn through this information that JPM employees must be productive, as they are selling more dollars with similar headcounts as previous years.
In addition, when considering to increase, decrease or keep global headcount the same, executives must take into account current market conditions. According to EdwardJones’ recent article, titled “Weekly Market Wrap,” published on February 3, 2023, author Craig Fehr writes:
“2023’s stock market rally rolled on last week, helped by a downshift in Fed rate hikes, with the S&P 500 now up nearly 8% on the year. Interest rates took a bit of a round trip, falling through the week on expectations for less restrictive Fed policy, but rising on Friday following a strong jobs report […] The January employment report released on Friday showed that the economy added a whopping 517,000 jobs last month, more than double the consensus forecast. While other parts of the economy are showing signs of slowing, the healthy labor market should offer support for consumer spending, helping moderate a potential downturn. […] After a year (2022) in which nothing seemed to go investors’ way, 2023, has, so far, been the polar opposite. Stocks are up handsomely while interest rates are down.”
With this information, we learn that financial conditions have loosened despite Fed rate hikes. Inflation is still “out of control” as author Fehr describes and the labor market is in a promising spot, for both consumers and the economy; however, Fehr cautions that it is too premature to consider a potential recession to be canceled. He states: “While this does support our view that the healthy starting point for employment conditions will make a downturn much more mild (including our expectation for a smaller-than-average increase in the unemployment rate), we also think this complicates the Fed’s job ahead.”
Conclusively, when analyzing trends from the current market, executives can determine that there are many outlying factors that contribute to the health and success of not only the United States economy, but the global economy. According to Entrepreneur, the 2022 stock market has been one of the most volatile markets on record, as the S&P 500 (The Standard and Poor’s 500 – a stock market index tracking the stock performance of 500 large companies listed on the stock exchanges in the U.S.) has seen roughly a 20% drop so far year-to-date (YTD) and the Nasdaq 100 has roughly seen a 30% drop YTD. Furthermore, many growth stocks were down 50-80% YTD. In short, inflationary pressures, COVID-impacts and geopolitical issues all contribute to whether or not a company should increase, decrease or keep their headcount the same.
All in all, when JPM asked executives like myself to share a comment on whether to increase, decrease, or keep the global headcount unchanged for the next 18 months, I would instruct executives to keep the headcount unchanged for the following reasons summarized:
Productivity (selling more dollars YOY) with a roughly similar headcount.
If JPM employees are bringing in more revenue each year (showcasing an increase in productivity) there is no reason to lay off employees, accordingly decreasing headcount.
Unknown/volatile market.
Given the current market conditions, it would be rash to drastically increase headcount, and cost JPM more money to pay each employees payroll expenses and a cost allocation of $36,000 per person to cover health care/rent, plus their base salary, plus the purchasing of a new space in Hudson Yards, NYC) without knowing if this will lead to a significant increase in annual revenue in the current tumultuous global market.
Marki says
In my opinion, Starbucks should maintain their current headcount. Although revenue is increasing, from a brand image perspective, the current climate is unsuitable for hiring. More and more baristas are unionizing – December 2022 saw a Starbucks barista strike at over 100 stores nationwide, protesting against low pay and understaffing. Therefore, hiring at headquarters would spark outrage as each new person hired would cost the company up to triple the baristas’ annual wage, and this budget was not instead being used to increase their pay or hire more retail workers. Starbucks closed 10 unionized stores across the United States in July 2022, which further enraged the unions. At the end of the day, the company cannot survive without its stores running smoothly, and if the service workers continue to disrupt operations, it could lead to serious decreases in revenue. Also, any bad press is especially bad for any large service-oriented company like Starbucks, and they had already made headlines for being ordered by the Federal Court to rehire fired union workers. A new Strategy Chief was hired in April 2022, who announced at the biennial investor’s meeting that Starbucks is leaning towards more automation through multiple mediums, such as enhancing their digital platforms (mobile order), and “automate[ing] the work and simplify[ing] it so that [the baristas] job is easier,” according to Deb Hall Lefevre, Starbucks’ Chief Financial Officer. Therefore, I feel any extra budget should be allocated towards this technological expansion instead of increasing headcount.
Ziyang Tang says
I think Starbucks will increase the number of employees in the company in the next 18 months. According to Starbucks’ financial statements for the fourth quarter of 2022: Q4 Consolidated Net Revenues Up 3%; Up 11% on a 13-week basis to a Record $8.4 Billion, Q4 Comparable Store Sales Up 7% Globally; Up 11% in the U.S. and Double Digits Internationally. China Surpasses 6,000 Stores, Pushing Global Store Count to Record 35,711.
First of all, the human resources department can adopt a recruitment model that combines fixed workers and outsourced workers. On the one hand, it takes about 3 months for personnel to go from recruitment to training. This gap exists and can be filled by part-time employees with Starbucks work experience. On the other hand, recruiting some outsourced employees can also play a supplementary role in the long-term operation.
Second, notify the housing rental company in time to add more venues in New York. Of course, the Chinese market needs more attention. According to the financial report: the number of stores in the Chinese market has increased to 6,000. A large number of venues need to communicate and cooperate with local real estate leasing companies in advance.
Finally, considering regular employees budget a cost allocation of $36,000 per person per year to cover health care and rent. Therefore, the financial department must cope with the financial pressure brought about by global house leasing and employee recruitment. Budget wisely and keep your finances in check.
My recommendation is to increase the global headcount for our department by arranging for the increase of employees in advance under the favorable circumstances that the company has good expectations for future operations and is deeply involved in the global market.
Mahek Shah says
From fiscal 2023 to fiscal 2025, Starbucks now anticipates worldwide revenue growth of between 10% and 12% yearly. This represents an improvement from the company’s prior range of 8% to 10%, driven by priority investments that elevate partner engagement and store efficiency, industry-leading digital programs, an engaged and expanding Starbucks Rewards membership base, game-changing product innovation, and a quickly expanding global footprint. In fiscal years 2023, fiscal years 2024, and fiscal 2025, the company anticipates continuing, strong margin expansion. Through fiscal 2025, non-GAAP EPS growth is anticipated to be between 15% and 20% yearly, which is an improvement from the prior range of 10% to 12%.
Based on the information provided, it is recommended to keep the global headcount increase by 8-10%. Even though with limited physical space and the cost allocation of $36,000 per person per year, it is feasible to increase the headcount at this time as Starbucks has increased its revenue significantly after the pandemic.
Cindy Qiaolin Sun says
I would recommend maintaining the global headcount for Amazon for the next 18 months, considering their revenue growth, previous workforce reduction, space constraints, and budgetary restrictions.
Amazon has experienced significant revenue growth, with a 10.73% increase year-over-year, ending in June 2023. This suggests that Amazon is performing well financially and can potentially handle its current workforce. Moreover, Amazon’s workforce saw a sharp decline after peaking at 1.62 million in the first quarter of 2022. This reduction could have been a strategic move to optimize operations and control costs. Therefore, maintaining the current headcount may be a prudent approach at this stage.
Since, real Estate has also mentioned that there is no physical space to hire more people, this limitation could impact the company’s ability to accommodate additional employees. Finance has indicated that each additional employee would incur a cost allocation of $36,000 per year for health care and rent, on top of payroll expenses. This financial burden should be carefully considered, especially when revenue growth does not suggest an urgent need for expansion.
Lastly, human resources has highlighted that it takes at least 3 months to hire new employees. Given this timeline, making any immediate increases in headcount may not be feasible or practical.
In light of these factors, I recommend maintaining the current global headcount as it appears to be the most reasonable course of action. However, it’s important to continually monitor the company’s financial performance, space availability, and strategic objectives, and make adjustments as needed in the future. Additionally, I think it would be wise to explore other ways to improve efficiency and productivity within the existing workforce to support Amazon’s growth and operational needs.
Cindy says
1. Some of the material in this comment is for didactic purposes only.
2. AI was used for research purposes.
Yuebei Xu says
Company: Amazon
Whether to increase, decrease, or maintain the current headcount depends on Amazon’s financials and global business planning. My suggestion is to keep the global headcount unchanged. According to Amazon’s Q1 and Q2 financial reports of 2023, Net Sales increased by 9% and 11% respectively compared to last year’s performance. Specifically, North America segment showed robust growth at 11% for both Q1 and Q2. The report also marks approximately $0.5 billion of charges related to estimated severance costs in the Q1 operating income this year. A reason for earlier laying off is that Amazon’s actual growth has not met the company’s expectations, just like many tech companies, including Meta.
However, we see that Amazon actually delivered even better performance in Q2 after lay-off in Q1 2023, and from that we may consider the current global headcount can meet the company’s operation demand. This is the first reason why I think we can keep headcount unchanged. The second reason is the uncertainty from exchange change rate fluctuation can impact the performance of international segment. Together with the long processing time needed for hiring new employees, limited working space, high severance expense, and inevitable cost on new employee’s healthcare and rent, using contractors seems to be a more flexible and reasonable option. A side note for new working office in Hudson Yard: it is a good opportunity because we see North America segment has been growing fast, which means we could use more people in the future (both full-time employees and contractors) and transfer some current employees from other locations to the new office. But we will keep global headcount unchanged for now.
Yanqi Shen says
As of August 2023, our company has experienced three consecutive quarters of revenue decline, and even the “hit product” iPhone has been affected by the weak electronics market. Despite the challenging macroeconomic environment, our company continues to execute on long-term investments. First of all, unlike last quarter, this quarter our company will launch iPhone 15 and a new generation of Apple Watch, which are expected to become the basis for a gradual recovery in sales and profits. Secondly, despite the decline in revenue, Apple’s operating costs also achieved a certain degree of contraction this quarter, a 4% decrease compared with the same period last year. The specific manifestation is increased investment in the service sector and reduced product costs. Our company has very good mobile hardware and a huge user base. In order to enhance user stickiness, we began to focus on the combination of hardware and content ecology. By launching services such as Apple TV+, we will form a stronger Apple ecosystem, which will become our second potential growth line. Therefore, we need to introduce outstanding talents who are good at building a content ecosystem and expand Apple’s service business to capture more market share. In addition, given the poor performance of traditional business sectors, new terminals applying AI technology such as Vision Pro may bring us unexpected benefits. Next, we still need to continue to invest people and money in the research of generative artificial intelligence, and look forward to bringing new technologies and new experiences to users.
Since 2016, our company’s recruitment scale has not changed much in the past few years, remaining at 4%-7%. Compared with the past, this slower growth allows us to better respond to emergencies, such as COVID-19 epidemic. So you can find that in the past year, we did not have crazy layoffs like Meta, Microsoft, Facebook, etc. As the COVID-19 epidemic passes and the economy begins to gradually recover, it is foreseeable that our customer base will also grow to a certain extent. We need more people to launch new user-friendly products and continuously maintain and update them. And based on personal wishes and shareholder feedback, the salary of the company’s top leaders will be reduced by more than 40% in 2023, which has greatly reduced the impact of declining earnings on the recruitment of new personnel. Therefore, in my opinion, the growth rate in 2023 will be similar to that in 2022 —— 6.5%, which is equivalent to the recruitment of 10,000 new employees.
Yanqi Shen says
PS:Al was used for research purposes.
Anonymous says
For headcount, the company should keep the headcount unchanged for the next 18 months. If we want to hire more people, we should consider either hiring a contractor who is flexible with remote work (work from home) or offshoring, so that we do not have to expand to Hudson Yards. This way, we can stay within our hiring budget.
Proud S says
Despite the company’s steady rise after the pandemic, with a +13.72% YoY growth for 2022 compared to 2021 and a current +2.55% increase over last year, Unilever just underwent an internal restructuring in March 2022, resulting in the layoff of over 1,500 employees (out of a total of 149,000). 15% percent of the senior managers ended up having to leave the company. I don’t think it’s the right time for them to hire more people just yet, especially since their main market is in developing countries, many of which haven’t fully recovered from the pandemic.
Haiyan Sun says
Amazon’s global overall headcount is 1,541,000 in 2022, which is 4.2% decrease from 1,608,000 in 2021. Despite the workforce reduction, Amazon was still able to increase its annual revenue to $513.983B, which is a notable 9.4% increase from the $469.822B in 2021. According to the 2023 Amazon Financial Results for quarter 1, one of Amazon’s long-term goal is to optimize its free cash flows. When it comes to the number of employees within the firm, Amazon should adjust its total headcount to reduce labor cost. Amazon should avoid overstaffing in order to maximize free cash flows. Even though the overall headcount decreased 4.2% from the previous year, Amazon was still able to overachieve and increase sales revenue. With that information given, it is advised that Amazon should decrease 3% of its global headcount, and hire independent contractors in high-demand period to enhance cost-efficiency.
Yolanda Zheng says
I think Disney’s global headcount should be kept unchanged in general, because there is no conclusive evidence to ensure that they can increase or decrease it.
According to Disney’s earning results webcast over the past three years, it is still in the process of slowly recovering from negative net income in 2020 (data shows that its 5-year net income growth has just begun to rise), and its sales or revenue growth is also unstable (WSJ). In addition, broken down into its quarter earnings, the increase in the four quarters from 2021 to 2023 has not been maintained at a relatively stable level, and the overall increase in 2023 has decreased compared with the previous two years. Secondly, the earnings increase in the just-concluded Q3 of 2023 has been significantly reduced compared to Q2, so it is difficult to make a definite judgment on the upcoming fourth quarter. Disney’s total assets have nearly stagnated during the last 4 years, which indicates a difficulty in predicting the future trend (Statista). Therefore, it would be a safe step if the headcount stayed unchanged for the next 18 months year to predict the company’s financial status.
In addition to the financial reduction/instability, Disney’s other moves also suggest that keeping the headcount unchanged may be a preferable measure for the current situation. Disney just went through its third round of layoffs, and according to CEO Bob Iger, the layoffs are a part of the program of $5.5 billion in cost savings (Variety). At the same time, there is also news that Disney is planning to increase its capital expenditure, but at the same time, it is preparing to cut the target for Disney + subscribers. These signs indicate the current fluctuations in the company’s fiscal situation, and confirm that although there is a certain increase in the financial statement, it doesn’t mean an urgent need to increase headcount at the same time.
Beyond Disney itself, the overall global economic situation is also worth noting. Disney’s layoffs are just part of a larger global layoff, there are still waving opinions about the recession and economic recovery, and global GDP is still lower than that before COVID. Combined with the money and time needed for the headcount change, this all suggests that it is too early to make a decision on a headcount change now (or in the next 18 months year).
Reference:
https://variety.com/2023/biz/news/disney-layoffs-cost-savings-1235517203/
https://thewaltdisneycompany.com/?s=earning+result+webcast
https://www.conference-board.org/topics/global-economic-outlook#:~:text=Real%20GDP%20growth%2C%202024%20(%25%20change)&text=Global%20real%20GDP%20is%20forecasted,inflation%20and%20monetary%20policy%20tightening
https://www.macrotrends.net/stocks/charts/DIS/disney/number-of-employees#:~:text=Interactive%20chart%20of%20Disney%20
https://www.statista.com/statistics/193136/total-assets-of-the-walt-disney-company-since-2006/
YUE LAN says
As a member of the Unilever Executive, I recommend keeping the global headcount unchanged for the next 18 months. My reasons are as follows:
Firstly, according to Macrotrends. (n.d.), Unilever’s total employee count in 2022 stood at 148,000, reflecting a 0.03% decline from 2021. In 2021, the figure was 148,044, marking a 0.61% decline from 2020. Throughout the pandemic, Unilever strategically reduced staff to ensure company stability. Adopting a conservative approach seems prudent.
Secondly, the additional cost allocation of $36,000 per person annually for health care is significant. Especially in light of the economic downturn caused by COVID-19, Unilever should exercise caution in hiring to avoid unnecessary capital expenditure.
Thirdly, the real estate department is exploring options at Hudson Yards. However, the reality is that we currently lack the physical space to accommodate new hires. Furthermore, identifying and setting up a new workspace is a lengthy endeavor. It is logical to keep our staff numbers unchanged until this issue is resolved.
Fourthly, HR has emphasized a lead time of at least three months for hiring. The associated costs for this duration cannot be overlooked.
In summary, considering the economic climate, space constraints, and the time and costs associated with hiring, I advise maintaining the current headcount for the forthcoming 18 months.
**References**:
Macrotrends. (n.d.). Unilever number of employees 2006-2021. Macrotrends. https://www.macrotrends.net/stocks/charts/UL/unilever/number-of-employees
Unilever. (n.d.). Home. Unilever. https://www.unilever.com/
*AI was used for corrected grammar and polish sentences.
Xiaotong Fu says
I would recommend Walt Disney to remain in the headcount in the next 18 months for the following reasons:
1. Layoff: As Bob Iger is back as Disney’s CEO, he decided to lay off 7,000 employees to cut costs which is 3.2% of 220,000 Disney’s headcount globally as of Oct. 1, 2022. This layoff started in March 2023 and ended this summer. In addition, this layoff will help Disney to achieve around $5.5 billion in cost savings including 2.5 billion in “non-content costs” (including labor costs) and $1 billion in targeted cost reductions. According to Disney’s CFO Christine McCarthy, this layoff accelerated Disney’s annualized reduction of $3B in non-sports content cost.
2. New operating structure: Iger simplified the structures 1. Disney Entertainment, headed by Dana Walden and Alan Bergman 2.Disney Parks, Experiences, and Products Headed by Josh D’ Amaro 3. Disney Media and Entertainment Distribution(DMED) group headed by Bob Chapek
3. Financial information: Disney’s revenue for the quarter ending Jun 30, 2023, was $22.30B, a 3.84% increase year-over-year. Despite there being an increasing trend of revenue, it is slowly and little. Disney’s gross profit for the quarter ending June 30, 2023, was $7.859B which is only a 0.47% increase after the layoff. Disney’s operating income, EBITDA, and net income all present a downward trend which are $-0.009B (100.38% decline), $1.335B (63.72% decline), and $-0.46B (132.65% decline). The main reasons behind this decreasing trend include both domestic and international channels. From the Domestic Channels perspective, the decrease in operating income was due to lower results at both Broadcasting and Cable. The decrease in Broadcasting is because of lower results at ABC and the owned television stations that reflected lower advertising revenue. Lower operating income at cable was because of higher sports programming and production costs and lower affiliate revenue. Additionally, the decrease in international channels was mainly due to lower advertising revenue since lower rates were attributable to Indian Premier League circuit programming.
Due to the exciting layoff decision, adapting new structures, and slowly growing revenue with decreasing operating income, EBITDA, and net income. I think Disney should remain unchanged in their headcount in the next 18 months.
References:
https://www.hitc.com/en-gb/2023/03/28/how-many-employees-does-disney-have-in-2023-as-ceo-prepares-to-cut-7000-jobs/
https://thewaltdisneycompany.com/app/uploads/2023/08/q3-fy23-earnings.pdf
https://www.macrotrends.net/stocks/charts/DIS/disney/net-income
https://variety.com/2023/biz/news/disney-layoffs-cost-savings-1235517203/
Yang Zhang says
I will recommend the company to increase the global headcount. Before we think about that, we need to know what kind of company Apple is. Apple is committed to creating products that are more creative, high quality and helpful to society. So, this is the reason that Apple spends a lot of effort on talent reserve every year. Company needs new talent and new ideas to come in and create more valuable and creative products. According to number of employees report in recent of five years. It shows that the total number of employees has been increasing for the past four years, from 3.79% increase from 2018 to 6.49% increase in 2022. Until now, apple provides 2,000,000 jobs across all 50 states in America. And think this is feasible that budget a cost allocation of $36,000 per employees per year to cover their health care and rent. Because Apple intends to increase wages for retail and some positions in this competitive market. Hiring new employees, the most important problem is the company’s staff salary. However, I think Apple has ability to achieve that. Apple’s official financial statement shows that Revenue in the September quarter was a record $90.1 billion, up 8 percent from a year ago. Annual revenue was $394.3 billion, up 8 percent, and diluted earnings per share was $6.11, up 9 percent. This is a very impressive number, and it shows that Apple has the ability to execute an increase in headcount over the next year. In addition to analyzing the potential negative effects of increasing the number of employees, we also need to consider the positive effects. If the number of employees is increased, it will boost overall productivity and profitability. It will also increase the likelihood of creating a better product. Therefore, according to what I mentioned before, I recommend Apple to increase the global headcount.
References:
https://www.macrotrends.net/stocks/charts/AAPL/apple/number-of-employees
https://www.apple.com/job-creation/
https://www.cnbc.com/2022/05/26/apple-says-it-will-raise-pay-for-corporate-and-retail-employees-in-tight-labor-market.html
https://www.apple.com/newsroom/2022/10/apple-reports-fourth-quarter-results/
Zhihao Yang says
As a member of Apple,I highly suggest that we should increase the headcount in the next 18 years.
As is known to all that apple is a company with brilliant thoughts and personal care to not just customers,but also employees.From 2018 to 2023,the
rate is 3.79%,7.3%,4.76%and 6.49%.So it is obvious that we recruitment was increasing in a steady speed.Besides, on August 3rd,Apple announced financial results for its fiscal 2023 third quarter ended July 1, 2023. The Company posted quarterly revenue of $81.8 billion, down 1 percent year over year, and quarterly earnings per diluted share of $1.26, up 5 percent year over year. And Our June quarter year-over-year business performance improved from the March quarter, and our installed base of active devices reached an all-time high in every geographic segment, During the quarter, we generated very strong operating cash flow of $26 billion, returned over $24 billion to our shareholders, and continued to invest in our long-term growth plans.
So Apple should spend more money on employees,increase headcount to make more benefits and to create better services.
References:
https://www.macrotrends.net/stocks/charts/AAPL/apple/number-of-employees
https://investor.apple.com/investor-relations/default.aspx
Kittikom Thanakobkij says
Company: Amazon
I would suggest that Amazon keep the current global headcount unchanged for the next 18 months. The main reason being that it was the company’s direction since last year to lean down, which is due to over-hiring during the pandemic and attempt to streamline expense in order to better invest money into other key long-term projects. Despite the news of massive lay-off since last year was speculated by many to be a move which indicates that Amazon isn’t doing well on the balance sheet, however, the company is seeing a 10% growth in revenue compared to last year’s performance. This shows that the company is able to perform well even after losing thousands of employees, and that they’re attempting to improve the efficiency of their current workforce rather than hiring extra employees.
Furthermore, it would be counterintuitive for the company to hire any more people as this would result in extra expenses for the company on things like real estate, wages, and other additional benefits provided to the employees. If the company is ever in need of people to cover certain projects or tasks, I would recommend that they look into hiring contractors or outsourcing. By doing so, it would allow the company to be more flexible in terms of hiring with much less financial impact on the company. And they could also take advantage of the wage differences from outsourcing tasks to other countries to further cut down costs.
ZHONGHENG WU says
The number of employees of Apple Park, which is the headquarters of Apple Inc., has increased from 49,400 to 164,000 from 2010 to 2022. The annual revenue and profit as well as other data from financial report provides the strong performance and position of leader in tech industry in the past decades. They do need more employees to expand their scale or absorb young blood to keep creating innovation in this situation. The stock price of Apple indicated a boom in company value by increasing its share price from 8.43 USD per share to 175.01 USD per share within the same period. All the evidence shows that Apple does not need to worry too much about extra budget and expenses for extra employees as innovation and efficiency would be their priority in the next few years. I would suggest Apple keep expanding their employees to make sure they have enough new ideas and thoughts. However, I would suggest Apple be cautious if they have reached the economic scale after careful calculation.
Jiayi Zhang says
Company: Unilever
The fast-moving consumer goods industry shares a large portion of the global market. However, it seems that it’s getting more difficult to hire people for FMCG companies in recent years. According to LinkedIn, the FMCG companies has the second-highest employee turnover rate of any industry. And as one of the leading companies in industry, Unilever is also facing the problem of becoming less attractive in the labor market. Although it has a worldwide workforce over 14,0000 people, how to retain talent and prevent brain drain is also an important issue for the sustainable development of the enterprise. In addition, decisions regarding whether to increase, decrease, or maintain the global headcount for a top FMCG company in such a challenging global labor market are complex and depend on a wide range of factors, including financial performance, market conditions, strategic goals and operational considerations. According to Unilever’s first half report of 2023, it achieved continued growth across all business groups. It shows that net income is increased by 9.1% compared with last year’s performance. Due to the ongoing cost inflation environment, the company will continue to move forward with its cost savings program to maintain steady sales growth. Taking all these factors into consideration, I believe it would be better to keep the global headcount unchanged for the next 18 months. One reason is that hiring more people will create more fixed costs, which is contrary to the company’s current operational strategy. What’s more, as shown in the financial statements, the company is currently able to maintain a stable operation which indicates that hiring new workers is not a necessary action. I would also suggest that the company implement more effective strategies to help improve employee retention.
*Al was used for research purposes.
Ziye Zhou says
If we look at the current economic trends in the general environment, it is not a good time to increase the number of employees. Because according to Disney’s third fiscal quarter, it is not showing a good trend, and there is even some decline. Moreover, Disney has carried out the third round of layoffs, which will lay off about 7,000 people. Disney is trying to save costs. It is reported that Disney will save US$5.5 billion in costs. This number is relatively objective for the company. Therefore, because of social instability, now is not the right time to increase the number of employees. Keeping the number of employees unchanged is the best decision at the moment.
References:
https://www.outlookindia.com/business/disney-layoffs-2023-begin-for-a-third-round-as-company-cuts-more-than-2-500-jobs-report-news-288618
https://thewaltdisneycompany.com/the-walt-disney-company-reports-third-quarter-and-nine-months-earnings-for-fiscal-2023/
Ziye Zhou says
If we look at the current economic trends in the general environment, it is not a good time to increase the number of employees. Because according to Disney’s third fiscal quarter, it is not showing a good trend, and there is even some decline. Moreover, Disney has carried out the third round of layoffs, which will lay off about 7,000 people. Disney is trying to save costs. It is reported that Disney will save US$5.5 billion in costs. This number is relatively objective for the company. Therefore, because of social instability, now is not the right time to increase the number of employees. Keeping the number of employees unchanged is the best decision at the moment.
Ziye Zhou says
Bibliography:
Passantino, Liam Reilly,Jon. “Disney Begins Third Round of Expected Layoffs, Cutting More than 2,500 Additional Jobs, Source Says | CNN Business.” CNN, 22 May 2023, http://www.cnn.com/2023/05/22/media/disney-layoffs/index.html.
Relations, TWDC Investor. “The Walt Disney Company Reports Third Quarter and Nine Months Earnings for Fiscal 2023.” The Walt Disney Company, 9 Aug. 2023, thewaltdisneycompany.com/the-walt-disney-company-reports-third-quarter-and-nine-months-earnings-for-fiscal-2023/.
Wantong Wang says
According to Unilever’s performance in 2023, the overall revenue shows an increasing trend and underlying sales growth accelerated to 10.5% in the first quarter. However, due to the intensification of inflation after the epidemic, the input costs of the FMCG industry have increased significantly. For example, the price of raw materials has increased, and logistics costs have increased. Moreover, consumer demand in the fast-moving consumer goods market is inelastic and will not change significantly in the short term. Unilever should not only ensure the regular operation of its global retail network but also control costs as much as possible to ensure the company’s revenue. Therefore, in the current environment, Unilever’s focus is to consider how to improve efficiency and reduce costs. In addition, every recruitment will bring the time and money cost for the human resources department, and the company also needs to provide various basic employee guarantees to new employees. These will get more cost increases to the company. Therefore, increasing the number of global headcounts is not an effective measure in the current situation of the company.
In general, Unilever is currently operating normally and continues to increase its sales. Thus, my suggestion is to keep the number of global headcounts unchanged and focus on strengthening employee training to improve efficiency and working achievements, which will help reduce costs.
Ziqi Zhao says
My recommendation for the upcoming 18 months is that our department fiercely retain its current headcount
The dramatic historical backdrop of this research serves as its foundation. Today, the effects of Bob Iger’s decision, which led to the startling termination of 7,000 loyal employees, are still being felt. Stability is not just a source of comfort during times of transition, but also a necessity.
Although the idea of growing into Hudson Yards is interesting, the reality provides no such luxury.They had just constructed an office building in lower Manhattan, and expanding it would be a financial burdern.The revelations made by our real estate section highlight the physical restrictions we currently face, making expansion difficult logistically.
The overall increase in 2023 has decreased compared to the previous two years, and the quarterly earnings over the last three years have been in a phase of high unpredictability. It is also difficult to predict the next fourth quarter because the earnings growth of Q3 2023, which just concluded, was much slower than Q2’s.The entire value of Disney’s assets has almost remained constant over the last four years, suggesting that it is difficult to forecast future changes. The budgetary narrative is the most convincing. In addition to their pay, each new recruit incurs annual overhead costs of $36,000.
I therefore push for a period of stability, asking our department to keep its existing headcount and get through these trying times with foresight and resiliency.
References:
https://www.thehrdigest.com/the-price-of-stability-delving-into-disneys-round-three-of-layoffs-2023/
https://thewaltdisneycompany.com/?s=earning+result+webcast
http://fieldcondition.com/blog/2022/12/7/construction-update-4-hudson-square-disney-headquarters
Runzhiyi Liu says
Apple has 164,000 employees and is growing at an annual rate of 6%. According to its annual net income statement, Apple’s net profit in 2012 was 94.68 billion, and in 2013 it was 99.8 billion. Purchasing power has declined due to the global economic downturn caused by the three-year pandemic virus. Layoffs are also the last resort to ensure the survival of a company, but companies need employees to complete their work. Moreover, for the sake of the stability of social order, large companies cannot lay off too many employees, which will cause the unemployment rate to soar.
My suggestion is to consider outsourcing companies. Employees recruited through this model can reduce the annual insurance expenses provided to employees. Adding interns and part-time employees is also a feasible method, because the cost of these two types of employees is very low, and internships and work experience in large companies can add excitement to the resumes of these job seekers. This is a win-win situation. thing.
A more important tip is to recruit overseas, especially in countries like Southeast Asia. Indonesia is a good example. This country ranks fourth in the world market with a large number of workers. Indonesia has a complete supply chain system, and the price of workers is very low. The average cost of an employee is between 800 and 1,000 US dollars. At the same time, the local government can provide a lot of convenience when investing in Indonesia.
To sum up, Apple needs to make reasonable layoffs without affecting social stability to ensure the company’s stability and steady growth in annual earnings.
Employment in Indonesia – statistics & facts | Statista
Apple net income 2005-2022 | Statista
kaiyuan Wang says
On Friday, June 30, 2023, Apple became the first company in history to reach a $3 trillion market valuation. It stays ahead by half a trillion dollars from the second most-valued company on the planet- Microsoft. Apple is now the most profitable technology corporation in the world. Also, Apple posted quarterly revenue of $81.8 billion, down 1 percent year over year, and quarterly earnings per diluted share of $1.26, up 5 percent year over year. According to CFO, “During the quarter, we generated very strong operating cash flow of $26 billion, returned over $24 billion to our shareholders, and continued to invest in our long-term growth plans.”
The strong operating cash flow might allow the company to retain its existing employees comfortably, even amidst minor fluctuations in the revenue. The mixed financial results with both positives and negatives might encourage a more balanced approach, maintaining the current headcount while reallocating resources strategically to foster growth in thriving segments and reduce overheads in underperforming ones.
Reference:
https://www.greyb.com/blog/apple-business-strategy/
https://www.apple.com/newsroom/2023/08/apple-reports-third-quarter-results/
Xiaohui Liu says
As an executive of Unilever, I prefer to keep the global headcount unchanged for the next 18 months. Reasons are as below.
First of all, Unilever’s headcount data has shown a decreasing trend in the past five years, indicating that the company needs to lay off employees to maintain the company’s normal operation and profitability, let alone increase headcount. If the headcount is to be reduced, human resources points out that it will take three months to hire the right people, which will affect the company’s operations. Therefore, there is an even greater need to maintain the existing numbers.
Second, Unilever CEO Hein Schumacher pointed out that underlying sales growth of 9.2% from a year earlier in the fourth quarter thanks to sharply higher prices. Pricing was up 13.3%, while volumes declined 3.6%. Outgoing Chief Executive Alan Jope said on a conference call with analysts that the company will need to raise prices even more to offset continuing cost inflation this year.Therefore, companies need to be cautious about cost expenditures. Increasing headcount need to budget a cost allocation of $36,000 per person per year to cover health care and rent. In addition, there is no physical space for employees to work. If we add space in Hudson Yards, it will also increase cost.
Therefore, to maintain operational flexibility, avoid unnecessary financial stress, I recommend keeping global headcount unchanged over the next 18 months. During this period, we should pay close attention to business needs. We can then re-evaluate our headcount situation and make more informed decisions about any necessary adjustments.
References:
https://www.macrotrends.net/stocks/charts/UL/unilever/number-of-employees
https://www.unilever.com/files/92ui5egz/production/a7ad961ef886a578ab4dd316b4e5195cbc0965a0.pdf
https://www.wsj.com/articles/unilevers-new-chief-faces-tough-balancing-act-11675961803?mod=Searchresults_pos20&page=1
Keao Zhao says
I feel that Disney should maintain the current level of headcount.
Compared with the same period in 2022, the revenue of Q1, Q2 and Q3 in fiscal year 2023 had a growth while the segment operating income experienced decrease. Q1’s segment operating income decreased about 7% and that number of Q2 dropped by 9% and the Q3’s number reduced from $3567m to $3559m, which reflects that Disney may need to make adjustments in different departments. Reduce the headcount number seems to be a feasible choice.
However, in February, Disney has announced its layoff plan and has made two waves of layoff so far, which aims to reduce the cost and reorganize the segments. The large scale of layoff also caused disputes saying that this decision tends to influence the customers choice. Disney’s quarter reports show the fluctuations in the number of subscribers for Disney+ and other streaming platforms.
Thus, though Disney has continuously decrease in segment operating income, maintain the present headcount tends to be more feasible to confront with the unstable number of subscriber after previous layoffs.
References:
https://thewaltdisneycompany.com/app/uploads/2023/02/q1-fy23-earnings.pdf
https://thewaltdisneycompany.com/app/uploads/2023/05/q2-fy23-earnings.pdf
https://thewaltdisneycompany.com/app/uploads/2023/08/q3-fy23-earnings.pdf
https://www.cnbc.com/2023/02/08/disney-reorganization.html
Wenshi Chen says
I recommend Disney maintain its headcount for the following year:
– Disney has a global headcount of 220,000 in 2022, a 15.79% increase from 2021. According to Bob Iger, Disney CEO, the layoffs of Disney shows a big hit at the end of 2022, which aims to cut employees by 3%(7,000) and to save about $5.5 billion costs, and Disney is expecting to fully materialize the cost savings by fiscal 2024. Hiring more employees at the present would contradict to the overall objectives.
– Besides, it is reported by The Service Employees International Union (SEIU) United Service Workers West that the employee turnover rate of Disney is between 30%-40% per year, which is relatively high considering the company’s scope and size. That is to say, human resources related costs would soar if Disney constantly hire and train people to be productive and creative employees.
-In the Walt Disney Company 2022 annual report, the total revenue is up to $82.7 billion, which means the revenue/employee ratio of Disney is $376,009, demonstrating high employee productivity. Also as is shown in the Walt Disney Company 2023 Q1-Q2 earning report, revenues for the quarter remains $21.8 billion, and in 2023 Q3, it is $22.3 billion, growing 4%. To ensure the sustainable growth in a long run, I think it is wise to keep the headcount, and take a look at what’s going on.
*Referrence:
https://variety.com/2023/biz/news/disney-layoffs-cost-savings-1235517203/
https://www.restonyc.com/what-is-disney-employee-turnover-rate/
https://thewaltdisneycompany.com/app/uploads/2023/02/2022-Annual-Report.pdf
Anonymous says
Historically, Apple’s workforce has been growing.Interactive chart of Apple (AAPL) annual worldwide employee count from 2010 to 2023.
Apple total number of employees in 2022 was 164,000, a 6.49% increase from 2021.
Apple total number of employees in 2021 was 154,000, a 4.76% increase from 2020.
Apple total number of employees in 2020 was 147,000, a 7.3% increase from 2019.
Apple total number of employees in 2019 was 137,000, a 3.79% increase from 2018.
(Source:macrothreds. https://www.macrotrends.net/stocks/charts/AAPL/apple/number-of-employees)
DI WU says
As an executive at Unilever, I recommend that our company should keep the number of global headcount basically unchanged for the next 18 months. First of all, considering the time required for Human Resource to increase the number of employees and the budget mentioned by the finance department, it would be costly to increase the global headcount in the next 18 months. And considering that the composition of Unilever’s workforce needs to be in line with the company’s long-term strategic goals, I think it can be invested in developing and optimizing the current employees. Meanwhile, some cost-effective alternatives can also be made, such as outsourcing non-core functions and implementing technology solutions to improve efficiency. In addition, the company’s hiring plan also needs to be considered in the context of the global economic environment, which remains uncertain after the impact of Covid-19. Therefore, keeping the number of global headcount unchanged allows Unilever to focus on controlling costs and optimizing the existing workforce, and monitoring market dynamics and economic recovery trends, so as to more comprehensively assess the feasibility of the Hudson Yards expansion and the associated costs, and make well-informed decisions.
Gege Zhu says
As an executive of Apple, I feel that Apple’s global headcount should remain stable in the future, but there will be a small number of layoffs
Historically, Apple’s workforce has been growing. Interactive chart of Apple (AAPL) annual worldwide employee count from 2010 to 2023.Interactive chart of Apple (AAPL) annual worldwide employee count from 2010 to 2023.
Apple total number of employees in 2022 was 164,000, a 6.49% increase from 2021.
Apple total number of employees in 2021 was 154,000, a 4.76% increase from 2020.
Apple total number of employees in 2020 was 147,000, a 7.3% increase from 2019.
Apple total number of employees in 2019 was 137,000, a 3.79% increase from 2018.
(Source: macrothreds. https://www.macrotrends.net/stocks/charts/AAPL/apple/number-of-employees
)
Thanks to robust sales of iPhone, Apple had an all-time revenue record in Services during the June quarter, driven by over 1 billion paid subscriptions. Although the company posted quarterly revenue of $81.8 billion, down 1 percent year over year, and quarterly earnings per diluted share of $1.26, up 5 percent year over year, we still have confidence to have continued strength in emerging markets. (Source: Apple https://www.apple.com/newsroom/2023/08/apple-reports-third-quarter-results/). Demand for iPhone upgrades remains strong. Apple is likely to cut some costs, but is not expected to lay off large numbers of workers. Given the backdrop of the economic downturn, Apple is likely to make a small range of layoffs in the retail department and maintain a more cautious attitude when hiring talent.
Tianyue Xing (Eureka) says
Based on a series of research as well as calculations, the advice I would give is that I hope Amazon to retain and optimize its current headcount and not make any more layoffs or hires for the next 18 months.
First of all, we need to understand the various aspects of Amazon’s data and company action in recent years. In the past year Amazon has laid off nearly 70,000 global headcount. In 2023, according to Statista, Amazon has 1,541,000 current employees. This is the first time since 2007 that Amazon has made global layoffs of this magnitude. Meanwhile, Amazon’s net revenue from e-commerce and service sales has grown significantly from 2004 to 2022. In the last reporting year, the multinational e-commerce company’s net income was nearly $514 billion, up from $470 billion in 2021. However, it is worth noting that this growth was lower than the previous financial year.
Based on this data analysis, I do not recommend continuing the layoffs. The specific reasons are:
1. According to the U.S. e-commerce revenue forecast provided by Statista, the e-commerce industry will realize non-stop growth in profits from 2017 to 2027, Covid-19 pandemic pushed this growth to the peak, and there is still room for the e-commerce industry to grow in the years to come. Revenues in the U.S. e-commerce market are expected to continue to grow between 2023 and 2027, totaling $490.4 billion (+53%). After the tenth consecutive year of growth, this number is expected to reach $1.4 trillion and a new peak in 2027. Keep the current headcount will help Amazon continue to maintain its leadership position in this industry.
2. I did a rough calculation of profit per employee based on known reports. salaries at Amazon.com Inc range from an average of $59,910 to $156,522 a year. the average salary of an employee is $99,524 a year. Dividing the total profit of the organization by the total number of employees, we get Amazon.com Inc’s profit per employee. Dividing the total profit of the organization by the total number of employees, we get that Amazon’s profit per employee is 333,536.6 per year.The average salary of an employee plus the cost allocation of $36,000 per person per year gives us a figure of $135,524 per employee per year. This figure is much lower than the profit per employee per year, so overall it is worthwhile for Amazon to keep the current headcount as it is highly profitable.
It’s all pretty optimistic at the moment, isn’t it? But I wouldn’t recommend that the company continue to hire more employees for the following reasons:
1. Despite the very positive outlook for the industry, the return of physical stores is likely to hit e-commerce to some degree as covid pandemic fades out. This does not conflict with the first point I mentioned, Amazon as the leading company occupying the online retail market will still do well over the next few years, but this growth will be slowed down as people change in their consumer behavior as we all return to the real world. So increasing the global headcount at this point becomes less of a necessity.
2. Essentially, Amazon’s demand for its headcount is saturated. According to the data, amazon has expanded its labor by 800,000 employees in the two years of the pandemic. In 2020 alone, under the flourishing of e-commerce, Amazon created 500,000 new jobs, and in 2021 it added another 300,000 to its global workforce. For the first reason provided in this paragraph, amazon no longer needs more labor at this stage. It has to be mentioned that the development of advanced technology has made some jobs no longer irreplaceable. For example, the customer service and advertising departments, to which Amazon has already made massive layoffs in the first three months of 2023.
To summarize, I think Amazon’s GLOBAL HEADCOUNT is currently on a relatively steady state. There should be no increase or decrease in this number.
Reference:
https://www.statista.com/statistics/234488/number-of-amazon-employees/
https://www.payscale.com/research/US/Employer=Amazon.com_Inc/Salary
https://www.indiatoday.in/technology/news/story/amazon-fires-more-employees-says-layoffs-will-help-improve-business-2407781-2023-07-17
https://www.statista.com/statistics/266282/annual-net-revenue-of-amazoncom/
https://www.statista.com/statistics/272391/us-retail-e-commerce-sales-forecast/#:~:text=The%20revenue%20in%20the%20E,a%20new%20peak%20in%202027.
https://www.statista.com/chart/7581/amazons-global-workforce/
https://www.business-standard.com/world-news/amazon-layoffs-2023-employees-loose-jobs-in-aws-cloud-division-123042601252_1.html
Tianyue Xing (Eureka) says
1
Tianyue Xing (Eureka) says
Based on some general research as well as calculations, the advice I personally give is that I want Amazon to retain and optimize its current headcount and to refrain from layoffs and hiring for the next 18 months.
First of all, we need to have some understanding of various aspects of Amazon’s data and company initiatives in recent years. In the past year Amazon has laid off nearly 70,000 global headcount. In 2023, according to Statista, Amazon has 1,541,000 current employees. This is the first time since 2007 that Amazon has made global layoffs of this magnitude. Meanwhile, in the two years since the covid pandemic swept the world, as people’s consumer behavior changed, in Amazon’s last annual revenue report, the multinational e-commerce company reported a net income of nearly $514 billion, up from $470 billion in 2021 It’s worth noting that despite the increase in this figure, its growth value is still lower than in 2022.
Based on this data analysis, first of all, I do not recommend that Amazon continue to lay off employees. The specific reasons are:
1. industry outlook
In the past few years, Amazon’s annual sales have been growing steadily. And the industry of e-commerce still has room to grow in the coming years. According to forecasts provided by Statista for the U.S. REVENUE OF THE E-COMMERCE over the last decade, the U.S. e-commerce market is projected to continue to grow in revenue between 2023 and 2027, totaling $490.4 billion (+53%). After the tenth consecutive year of growth, the indicator is expected to reach $1.4 trillion in 2027 and hit a new peak. Amazon is dominating the North American online retail market as a cross-border e-commerce company, and maintaining the current headcount and stabilizing the company’s internal structure will help it maintain its leadership position.
2. Profit per employee
Based on the data and the data provided in the topic, Amazon’s annual profit per employee is about $135,524. I roughly calculated Amazon’s profit per employee for the past year based on the known data. The net profit divided by the total number of employees gives Amazon a profit per employee of approximately $333,537 per year. From this figure, it is clear that the expenses of the employees are much lower than the value they create for the organization. So with Amazon still maintaining its highly profitable sales and that number growing, it is easy to maintain the current headcount.
The above figures sound optimistic, don’t they? But I still don’t recommend Amazon to increase headcount in the next 18 months for two reasons:
1.Change in consumer behavior
Despite what was mentioned in the first paragraph, the e-commerce industry is looking very promising. But as the impact of Covid-19 fades into the background, consumer habits will be changed. The return of physical stores may hit other e-commerce businesses such as amazon to some extent. This doesn’t conflict with the previous point, it’s just that as people come out of their homes and return to their normal lives, there are high chances that the growth of Amazon sales will become very slow. This adds a lot of uncertainty to the company’s growth prospects, so increasing the company’s global headcount at this point would not be necessary.
2. Job saturation
Amazon has already made massive layoffs in the first three months of 2023. Because in the last three years, again, affected by COVID-19, Amazon created 500,000 new jobs in 2020 alone, and in 2021 added another 300,000 to its global headcount. And with the end of pandemic, these employees undoubtedly increased the financial pressure on the company, so as of March 2023, amazon laid off nearly 70,000 employees.Essentially, the reason for this is that Amazon’s company positions have reached saturation, simply put, when the available employees are greater than the demand for the positions, the company needs to lay off employees. In addition to this, I have observed Amazon’s layoff data and found that the majority of layoffs have come from technology departments such as Website Service, Ads Business, Retail, Devices, and Cloud computing. We must recognize that with the advancement of cutting-edge technology, some positions are no longer irreplaceable.
Based on the above analysis, I would recommend that Amazon maintains the current headcount of the organization for the next eighteen months and does not make any more layoffs or hires.
Reference:
https://www.statista.com/statistics/234488/number-of-amazon-employees/
https://www.statista.com/statistics/266282/annual-net-revenue-of-amazoncom/
https://www.statista.com/statistics/272391/us-retail-e-commerce-sales-forecast/#:~:text=The%20revenue%20in%20the%20E,a%20new%20peak%20in%202027.
https://www.statista.com/chart/7581/amazons-global-workforce/
https://www.business-standard.com/world-news/amazon-layoffs-2023-employees-loose-jobs-in-aws-cloud-division-123042601252_1.html
Chenhao Fu says
Apple’s revenue since 2019 is $98,392,000, 2020 is $105,016,000, 2021 is $152,836,000, 2022 is $170,782,000, and TTM is $166,816,000, and after calculating it is easy to see that from, 2019 to 2020 revenue growth is 67.15%, the revenue growth from 2021 to 2019 is 45.15%, and the revenue growth from 2022 to 2021 is 11.74%, each year is lower than the previous years, and 2022 is lower than the previous years, the reason for this is possibly due to the new coronavirus pandemic in 2020, the hesitant pandemic has led to the shutdown of most of the factories and businesses resulting in the inability to issue The reason for this could be due to the new coronavirus pandemic in 2020, the hesitant pandemic has caused most factories and businesses to shut down resulting in non-payment of wages, leading to a decrease in overall income and thus a decrease in purchasing power. 2019 to 2022 will be a decrease in each of these years, so I believe that I will first reduce the number of employees globally and then after the pandemic has stabilized, I will make a decision on whether to increase or decrease the number of employees or to retain them after I have made a comparison between the company’s annual revenues and the revenues of previous years. Therefore, my decision is to reduce the number of employees globally.
Anonymous says
https://finance.yahoo.com/quote/AAPL/financials/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAK9D_2OvgRkrTnYWBY0-XYFkD6qy-xzu0OshnlKQ5MB9or6bJhEv6ywayXMZOQxyd-FBFndJ-xGAAEGp-55B8iNXvSBmy1cZyJ_abE917vS0A5NiOFPXjrMO8Zmiw7oB_BOmhCBajKD6NOoooIr1f8S2twyS8fkIJaJCkdioPlhj
Haitao Ouyang says
Company:Apple
Apple’s revenue for the third quarter ending 2023 was $81.8 billion, down one percent year-over-year. Despite Apple’s record business performance in its services business, overall, Apple did not experience positive growth in total revenue. So my recommendation would be to keep the total number of employees worldwide the same.
Haitao Ouyang says
Source:https://www.apple.com/newsroom/2023/08/apple-reports-third-quarter-results/
Haitao Ouyang says
Company:Apple
Apple’s revenue for the third quarter ending 2023 was $81.8 billion, down one percent year-over-year. Despite Apple’s record business performance in its services business, overall, Apple did not experience positive growth in total revenue. In addition, the company does not have extra workspace, and adding more workspace would increase costs. As well, in addition to employee salaries, the company would need to spend $36,000 per employee to pay for healthcare and rent, which is not a benefit-over-expense proposition for Apple. So my recommendation would be to keep the global headcount unchanged for the next 18 months year.
Source:https://www.apple.com/newsroom/2023/08/apple-reports-third-quarter-results/
Anonymous says
Conclusion:
In my role as an executive leader at Walmart, I recommend increasing our workforce in the future to enhance the e-commerce shopping experience for our customers.
Analysis:
Internally, according to Forrester (website), Walmart’s global total revenue has risen from $573 billion in 2022 to $611 billion in 2023. Additionally, our company reported a net profit of $12 billion in 2023, a clear sign of our recovery from the impact of Covid-19. Externally, with the ongoing trend of consumers shopping online, the e-commerce sector is poised for continued growth in the global market. Therefore, we should consider expanding our team by hiring more delivery staff and data experts.
Limitations:
According to Fortune Magazine (website), Walmart employed 2,300,000 people worldwide in 2022. Considering this year’s profit margin, we need to carefully calculate the additional costs, including but not limited to rent, salaries, and other administrative expenses, before making a final decision.
Jiawang Liu says
Company: Walt Disney
Goal: Keep reducing total HC as a vital way to reduce expenses and enhance performance.
Based on Disney’s 2022 annual fiscal report, Disney divided the business into two major segments: DPEP (Parks) and DMED (Media, Linear network, Direct-to-customer, and content). Remarkably, both departments achieved revenue growth compared to 2021, with an increase of 8.21% and 73.42%, respectively. Additionally, Disney accrued a total revenue income increase ratio of 23.19% from 2021 to 2022.
However, Disney restructured the business into three divisions: Entertainment, ESPN, and Park, after Bob Iger returned as the CEO. According to Variety, Disney made a long-term decision to reduce around 7,000 HC early this year, aiming for an annualized reduction of $3 billion in non-sports content costs for the following year. Despite Disney’s shift toward its business focus to streaming entertainment, Disney+ registered its first-ever decline of 2.4 million in subscribers due to the mass competition in the streaming market, as reported by Variety.
During 2022, Disney expanded its HC by hiring more employees representing a substantial increase of 15.8%, bringing the total global HC to 220,000. Although the adverse effects of the pandemic have largely subsided, competition across several industries remained even more intense. As well as, maintaining a healthy cash flow to facilitate potential acquisitions such as Hulu.
Therefore, I recommend that Disney reduce the total cost of human capital by implementing layoffs or increasing the utilization of contractors (part-time or seasonal) to fulfill the workload demands. Such strategies were also applied in other sectors of human capital strategy like Big Tech companies.
Reference:
https://thewaltdisneycompany.com/app/uploads/2023/02/2022-Annual-Report.pdf
https://variety.com/2023/biz/news/disney-layoffs-cost-savings-1235517203/
Jack Lin says
Company: Spotify
From the articles, I think Spotify should reduce total HC. Even though, the amount of premium users have increased, they lost around $248 million. Some reasons was Spotify has tried to diversified it’s services that it cost way more than how much they were making. As a result, Spotify has decided to shut down some new projects (such as their Wordle style game and Clubhouse style Spotify Live app). Since they closed these projects, Spotify should reduce the headcount as these projects no longer need anyone. In addition, Spotify has put a lot of resources in Podcasts and have netted a of $500 million. Though individuals, do state that podcasts are an investment and may make it back down the line, I propose we draw some attention away by decreasing headcount further as I do not think we need too much emphasis as of right now. Perhaps in the future.
Sources
https://brandingforum.org/general/spotify-stats-shows-500million-active-users-that-widens-q1-loss/
https://www.linkedin.com/news/story/spotifys-1b-podcasting-gamble-5754980/
Yingyue Li says
Company name: Apple
My suggestion for Apple is to reduce its headcount by 3%. With the saturation of the smartphone market and the turbulence of the economic environment, although Apple’s sales will increase from 297,392 million in 2021 to 316,199 million in 2022, with the fierce market competition and the cost compression space of peers, Apple’s profits will become lower in the future.
For specific the segmentation, Apple’s service department has a high gross profit margin which is 71.7% according to the annual report in 2022 and there is a lot of room for growth in the Company’s advertising, AppleCare, cloud, digital content, payment and other services space in the future, so I suggest that the service department increase its headcount by 2%, while the product department does not conduct large-scale recruitment. At the same time, natural personnel flow will occur, thereby the product department achieving a 5% personnel reduction.
Sources:
https://www.wsj.com/articles/how-apple-has-so-far-avoided-layoffs-lean-hiring-no-free-lunches-11674274185
https://investor.apple.com/investor-relations/default.aspx
Ketong Liu says
Company: Wal-Mart
After carefully considering the costs and factors of each department, I suggest that we increase our global workforce by 3% in the next 18 months. First of all, Wal-Mart decided to promote its global technical team and expand more than 5000 employees for the new development trend, of which nearly 200 jobs are planned to be in Seattle, most of which are technical businesses. According to the list of job vacancies on the current job page, the new positions in Seattle will mainly be data scientists and software engineers. Wal-Mart currently has only about 160 technicians in the region, and relies on the mainly virtual hybrid working mode. Due to the current mixed work mode, work efficiency is not significant. Secondly, according to the annual number of employees of Wal-Mart, from 2.2 million employees in 2020 to 2.3 million employees in 2022, nearly 100000 employees have been added. However, since 2023, Wal-Mart’s total number of employees in 2023 was 2.1 million, a 8.7% decision from 2022. So now Wal-Mart should increase its existing workforce moderately, especially in the case of business recovery after the epidemic, Retailers in different regions should undergo different labor allocation, especially in areas where sales have been poor and layoffs have been forced due to the pandemic. In other words, Wal-Mart has many retail stores in the world. For regions with high labor costs, it should stop recruiting employees. For regions with insufficient labor, or even expanding operations, I think it should increase the number of employees by about 3% in global.
In summary, an appropriate increase in our current global workforce not only enables us to meet operational needs, but also ensures that we do not over invest resources or budget. Once there are any other external factors that have significantly increased our labor costs during this period, we can reconsider this decision.
Sources:
https://www.geekwire.com/2022/walmart-to-hire-nearly-200-in-seattle-as-part-of-expansion-of-its-global-tech-team/
https://www.macrotrends.net/stocks/charts/WMT/walmart/number-of-employees
Zichen Jiang says
Company: Walt Disney
I think Disney should decrease the global headcount for the next 18 months year.
Since Disney total number of employees in 2022 was 220,000, a 15.79% increase from 2021, it has already owned enough employees and there’s little room to hire more. Also we know that Disney lay off 7,000 Employees and Canceling Metaverse through Summer 2023, as part of a strategic realignment of the company. Clearly, Disney realized it needs to save costs and seek for a more streamlined business approach. Hiring more employees is also unpractical and expensive for current situation. As Human resources said that they need at least 3 months to hire anyone, it will be a time-consuming work for increase headcount, and Disney has to put effort into finding and selecting qualified employees. As Real Estate said that there is no physical space to hire any more people, but they are looking into adding space in Hudson Yards for resources based in New York. Finding new space means another expense of rent fee, and the extra work load on managers in real estate department. As Finance point out a budget of a cost allocation of $36,000 per person per year to cover health care and rent, it will be a huge expenditure if increase global headcount to a sizable degree. Hiring more people may not stimulate income and be profitable, but it must increase the financial burden, especially at the time that company don’t need to expand the market or experience staff shortage.
Zichen Jiang says
Company: Walt Disney
I think Disney should decrease the global headcount for the next 18 months year. Since Disney total number of employees in 2022 was 220,000, a 15.79% increase from 2021, it has already owned enough employees and there’s little room to hire more. Also we know that Disney lay off 7,000 Employees and Canceling Metaverse through Summer 2023, as part of a strategic realignment of the company. Clearly, Disney realized it needs to save costs and seek for a more streamlined business approach. Hiring more employees is also unpractical and expensive for current situation. As Human resources said that they need at least 3 months to hire anyone, it will be a time-consuming work for increase headcount, and Disney has to put effort into finding and selecting qualified employees. As Real Estate said that there is no physical space to hire any more people, but they are looking into adding space in Hudson Yards for resources based in New York. Finding new space means another expense of rent fee, and the extra work load on managers in real estate department. As Finance point out a budget of a cost allocation of $36,000 per person per year to cover health care and rent, it will be a huge expenditure if increase global headcount to a sizable degree. Hiring more people may not stimulate income and be profitable, but it must increase the financial burden, especially at the time that company don’t need to expand the market or experience staff shortage.
source:
https://www.macrotrends.net/stocks/charts/DIS/disney/number-of-employees
https://www.disneytouristblog.com/disney-cancels-metaverse-prime-program-plans-while-laying-off-7000-employees/
Zichen Jiang says
Company: Walt Disney
I think Disney should decrease the global headcount for the next 18 months year. Since Disney total number of employees in 2022 was 220,000, a 15.79% increase from 2021, it has already owned enough employees and there’s little room to hire more. Also we know that Disney lay off 7,000 Employees and Canceling Metaverse through Summer 2023, as part of a strategic realignment of the company. Clearly, Disney realized it needs to save costs and seek for a more streamlined business approach. Hiring more employees is also unpractical and expensive for current situation. As Human resources said that they need at least 3 months to hire anyone, it will be a time-consuming work for increase headcount, and Disney has to put effort into finding and selecting qualified employees. As Real Estate said that there is no physical space to hire any more people, but they are looking into adding space in Hudson Yards for resources based in New York. Finding new space means another expense of rent fee, and the extra work load on managers in real estate department. As Finance point out a budget of a cost allocation of $36,000 per person per year to cover health care and rent, it will be a huge expenditure if increase global headcount to a sizable degree. Hiring more people may not stimulate income and be profitable, but it must increase the financial burden, especially at the time that company don’t need to expand the market or experience staff shortage.
Source:
https://www.macrotrends.net/stocks/charts/DIS/disney/number-of-employees
https://www.disneytouristblog.com/disney-cancels-metaverse-prime-program-plans-while-laying-off-7000-employees/
Xinyi Liu says
I would recommend the Walmart maintain the current global headcount unchanged, or decrease appropriately based on the actual situation of stores in different regions for the next 18 mouths year.
Based on Walmart’s Q2 earnings report, as of August 17, 2023, Walmart reached strong revenue and operating income
growth of 5.7% and 6.7%, respectively. And it is predicted that the company’s consolidated net sales and consolidated operating income for the third quarter year 2024 will increase approximately 3.0% and 1.0% respectively. Meanwhile, customers shopping across channels — in stores, Sam’s Clubs, and they’re driving eCommerce, which was up 24% globally. These all figures were impressive, indicating that Walmart’s overall business performance in the second quarter of 2023 is excellent.
However, according to the data, although Walmart’s revenue in 2023 increased by 6.7% year on year, net income decreased by 14.58%, which implied that the operating expense was higher in 2023. The Statista also shows that the number of Walmart stores worldwide( including Walmart U.S, Walmart international and Sam’s club) from fiscal year 2022 to 2023 is almost unchanged.
Although the macro-economy is gradually recovering after the epidemic, from my perspective, it is unnecessary for Walmart to increase the global headcount, which will lead to further increase in operating costs. For the next 18 mouths year, the company should keep the status quo and even take some specific ways to reduce employee costs.
Xinyi Liu says
I would recommend the Walmart maintain the current global headcount unchanged, or decrease appropriately based on the actual situation of stores in different regions for the next 18 mouths year.
Based on Walmart’s Q2 earnings report, as of August 17, 2023, Walmart reached strong revenue and operating income
growth of 5.7% and 6.7%, respectively. And it is predicted that the company’s consolidated net sales and consolidated operating income for the third quarter year 2024 will increase approximately 3.0% and 1.0% respectively. Meanwhile, customers shopping across channels — in stores, Sam’s Clubs, and they’re driving eCommerce, which was up 24% globally. These all figures were impressive, indicating that Walmart’s overall business performance in the second quarter of 2023 is excellent.
However, according to the data, although Walmart’s revenue in 2023 increased by 6.7% year on year, net income decreased by 14.58%, which implied that the operating expense was higher in 2023. The Statista also shows that the number of Walmart stores worldwide( including Walmart U.S, Walmart international and Sam’s club) from fiscal year 2022 to 2023 is almost unchanged.
Although the macro-economy is gradually recovering after the epidemic, from my perspective, it is unnecessary for Walmart to increase the global headcount, which will lead to further increase in operating costs. For the next 18 mouths year, the company should keep the status quo and even take some specific ways to reduce employee costs.
Reference:
https://s201.q4cdn.com/262069030/files/doc_earnings/2024/q2/presentation/Earnings-Presentation-FY24-Q2.pdf
https://s201.q4cdn.com/262069030/files/doc_earnings/2024/q2/earnings-result/Earnings-Release-2024-Q2.pdf
https://www.statista.com/statistics/269405/number-of-stores-of-walmart-worldwide-since-2006-by-division/
https://www.google.com/finance/quote/WMT:NYSE?sa=X&ved=2ahUKEwiizKKN9r6BAxX4j4kEHZSQBE4Q3ecFegQIJRAZ&window=5Y
Ying Dong says
With COVID-19 coming to an end, all the employees return to on-site offices. Disney revenue for the twelve months ending June 30, 2023, was $87.807B, an 8.26% increase year-over-year. The same trend goes for gross fit. Twelve months ending June 30, 2023, was $28.776B, a 3.06% increase year-over-year. Among all revenue-generating sectors within the company, we should at least expect revenue for Disney park and Resorts to rise. However, we expect a slow growth in the next 18 months, especially the downward trend in streaming services and anxiety from the stock market. On the other hand, all the material costs are surging all over the globe due to the pandemic. The global economy is on a slow recovery.
Therefore, a cost-saving plan is the best-fit strategy plan. The plan regarding Hudson Yards is not approved as rent can cost 150 dollars per square foot with potential revenue trade not ensured. The average employee at The Walt Disney Company makes $35,065 per year, roughly equal to the health care and rent per person. The company just laid off 7000 people this year, which saves roughly 3% on the budget mentioned. However, the global headcount should be further reduced to ensure the corporation’s smooth profit generation.
Ying Dong says
Sources:
https://variety.com/2023/biz/news/disney-layoffs-cost-savings-1235517203/
https://businessquant.com/disney-revenue-breakdown-worldwide
https://www.investing.com/academy/statistics/walt-disney-facts/
https://www.nytimes.com/2023/02/08/business/disney-earnings.html
Qiyue Chen says
Company: Walmart
Walmart’s declining net income from $13.673 billion in 2022 to $11.68 billion in July 2023, reducing employee numbers could be a strategic move. This drop in profitability might signal the need to control costs. Workforce reductions or a slowdown in hiring could be avenues to achieve this, aligning with a profit-driven approach. Optimizing operational efficiency and automation might become imperative to preserve margins, leading to a more streamlined workforce. While the exact reasons depend on internal evaluations and market dynamics, these financial indicators suggest that a cautious approach to employee numbers is prudent for Walmart shortly.
Sources:
https://s201.q4cdn.com/262069030/files/doc_financials/2023/ar/Walmart-10K-Reports-Optimized.pdf
https://s201.q4cdn.com/262069030/files/doc_financials/2022/ar/WMT-FY2022-Annual-Report.pdf
Aries Miao says
Company name: Walmart
Recommendation: slightly increase the headcount while cut the lower level jobs like manual labor jobs.
According to the annual report of Walmart, although the total revenue increased by 6.73% from 572,754 million to 611,289 million, the profit decreased a lot. Walmart is still facing a headwind, and labor cost is a pressure point. There are approximately 2.1 million global employees in Walmart and the average employee annual revenue is $31,618. Recently, the average wage of headcount increased to over $17.5 per hour and there are also increasing benefits for employees like health care coverage, etc. Apart from the high cost of headcount, the deployment of automation in stores is another reason why I suggest to cut the lower level jobs in stores.
Walmart is more than just a retailer. Due to the growth of its online marketplace, Walmart now is searching its opportunities to become an advertiser who sells data and three-party fulfillment services. Walmart is actually copying Amazon’s playbook (Amazon prime). The more online businesses Walmart acquire, the more likely that advertisers are going to advertise on Walmart.com which can grow margins in the future. Automation initiative means that Walmart need more professional headcount in data or computer science and marketing. So I recommend that more employees are needed in headquaters.
References:
https://www.youtube.com/watch?v=SRsO9FnJ7cU
https://stock.walmart.com/financials/annual-reports/default.aspx
Junyi Zhang says
Company: Spotify
I would recommand spotify to keep the global headcount unchanged since it at least take three months to hire someone. Even thought spotify’s revenue for the quarter in 2023 was $3.464B, a 13.66% increase over year, the cost of increase still may be weighed against the potential revenue and productivity gains that come with retaining the current workforce. That could affect the ability to execute projects efficiently. Due to the increased demand, we may facing delays in meeting staff needs.
Anonymous says
sources: https://www.macrotrends.net/stocks/charts/SPOT/spotify-technology/revenue#:~:text=Spotify%20Technology%20revenue%20for%20the,a%208.02%25%20increase%20from%202021.
Xiaorong Zi says
Company: Apple
I think Apple should increase its headcount in a slow manner in the next 18 months.
From the number of employees in 2020-20123 in Apple, it is obvious that Apple did not hire dramatically during the pandemic and its employees increased steadily. Therefore, it did not cut many employees after the epidemic. Instead, the total number of employees in 2022 was 164,000, a 6.49% increase from 2021.
By looking at Apple’s FY 23 third financial statement, we can find that the total net sales fell year-over-year. According to net sales by category, iPhone accounts for most of the sales, while iPads account for the smallest portion. It can be seen that despite the economic downturn and high unemployment rate, iPhone still has a certain appeal to people. Therefore, whether it is to maintain the technological innovation of the iPhone or to iterate other products, technical talents are needed for research and development.
In addition, Apple owns a diverse portfolio of its products, and it always launches new series to keep its ecosystem. It also hires app designers to provide consumers with new experiences and fresh life in the Apple universe.
To sum up, there was no large-scale recruitment during the epidemic in Apple, so there is no need for massive layoffs. Additionally, whether it is Apple products or Apple apps, Apple needs to constantly recruit high-tech talents to innovate. So I reckon that Apple should increase its headcount in the next 18 months.
Anonymous says
https://www.cnbc.com/2023/01/18/apple-had-slower-headcount-growth-than-tech-peers-no-layoffs-yet.html
https://www.nytimes.com/2023/04/02/arts/music/apple-music-classical-streaming.html?searchResultPosition=10
https://www.nytimes.com/2023/05/04/business/apples-slowdown-eases-but-sluggish-demand-hurts-results.html?searchResultPosition=13
https://www.macrotrends.net/stocks/charts/AAPL/apple/number-of-employees
Anonymous says
https://www.cnbc.com/2023/01/18/apple-had-slower-headcount-growth-than-tech-peers-no-layoffs-yet.html
https://www.nytimes.com/2023/04/02/arts/music/apple-music-classical-streaming.html?searchResultPosition=10
https://www.nytimes.com/2023/05/04/business/apples-slowdown-eases-but-sluggish-demand-hurts-results.html?searchResultPosition=13
https://www.macrotrends.net/stocks/charts/AAPL/apple/number-of-employees
Hsin- Lun Tsai says
Company name:Spotify
Based on the information reviewed as of June 2023, the company currently employs 9,733 individuals. My conclusion is that there is a need to reduce the workforce. This conclusion is based on the fact that Spotify’s market growth has been relatively stable, with revenue increasing by 18.82% from 2019 to 2020, 27.07% from 2020 to 2021, and 8.02% from 2021 to 2022. This suggests that there may not be a need for additional employees.
Furthermore, news reports have indicated that Spotify has undergone multiple rounds of layoffs. In January 2023, they laid off 6% of their workforce, approximately 600 employees, and in June 2023, an additional 200 employees were laid off. This further confirms that there is an overabundance of personnel and that reducing the workforce is necessary.
The cost of healthcare benefits for each employee is estimated to be $36,000, which is a financial burden for the company. Additionally, the lack of funding for new office spaces further suggests that hiring more personnel is not necessary. Therefore, reducing the workforce would be the most cost-effective solution.
By reducing the workforce, Spotify can allocate resources toward research, investments, and other critical areas. This could help the company become more efficient and competitive in the long run. Additionally, the company could use the money saved from reducing the workforce to invest in new technologies and expand its customer base.
In conclusion, hiring more personnel appears unnecessary, and we should focus on reducing the workforce. This will allow us to allocate resources toward research, investments, and other critical areas. Reducing the workforce is the most cost-effective solution and should be considered in order to ensure the long-term success of the company.
Sources:
https://www.nytimes.com/2023/06/06/business/spotify-layoffs-gimlet-podcasts.html?searchResultPosition=4
https://www.nytimes.com/2023/01/23/business/spotify-layoffs.html?searchResultPosition=5
https://investors.spotify.com/financials/default.aspx
Zhiyi Zhao says
Zhiyi Zhao—Spotify
Given with the situation, my recommendation is to maintain the global headcount unchanged for the next 18 months, at least until the additional space in Hudson Yards becomes available, though Spotify Finance income in the first quarter of 2023 increased by 10.6% year-on-year compared to the fourth quarter of 2022. The reason is that we can avoid immediate financial strain and ensure that we have the physical capacity to accommodate new hires when needed by doing this. During this time, we can also assure the enough time for human resources to make future hires, taking into account the lead time for recruitment and budgetary requirements.
Yuanyuan Li says
Company: Apple
Over the years, Apple has experienced tremendous success and become among the most valuable companies globally. However, CNBC reported in January 2023 that, compared to its rivals like Google, Amazon, Microsoft, and Meta, Apple’s growth rate is lagging behind (Leswing & Cortes, 2023). This implies that Apple should assess where it stands and the impact of any corporate decision on its employees. The COVID-19 pandemic in 2020 spurred several countries into lockdowns, which led people towards more online activities, and this trend provided advantages to different tech firms, as they were able to adjust and do very well in the digital world. Apple saw a jump in sales and profit during this time span, which made it expand its workforce with expectations of achieving more growth. In 2022, Apple’s yearly earnings went up by 8% from 2021, reaching $394.3 billion (Apple, 2022). In contrast to what many had predicted, it looks like Apple’s rate of growth has slowed down, which needs some revaluation in terms of growth plans. Unlike other big companies within the market, there has not been any substantial increase in terms of the number of people working, especially in the headquarters. Apple’s headquarters have 12,000 employees (iFuture, 2023), a remarkable achievement considering the fact that many of its competitors have had to resort to major layoffs due to financial struggles. This suggests that Apple is committed to stability and has managed a consistent workforce, making it stand out from its competitors. Based on the conditions mentioned above, as a senior executive, I would advise Apple to keep its global staff number intact within the next 18 months.
References
Apple (2022) Apple reports fourth quarter results, Apple Newsroom. Available at: https://www.apple.com/ke/newsroom/2022/10/apple-reports-fourth-quarter-results/ (Accessed: 23 September 2023).
iFuture (2023) ‘Apple Park’ design, History & Facts: $5 billion Apple’s Cupertino HQ, iFuture. Available at: https://apple-store.ifuture.co.in/blog/apple-headquarters-apple-park/#:~:text=The%20headquarters%2C%20located%20in%20Cupertino,home%20to%20over%2012%2C000%20employees. (Accessed: 23 September 2023).
Leswing, K. and Cortés, G. (2023) Apple grew more slowly than Google, Amazon, Microsoft and Meta, and has so far dodged major layoffs, CNBC. Available at: https://www.cnbc.com/2023/01/18/apple-had-slower-headcount-growth-than-tech-peers-no-layoffs-yet.html (Accessed: 23 September 2023).
Kaitlyn Marer says
Company: The Walt Disney Company
I would recommend The Walt Disney Company maintains global headcount. The company recently finished its mass layoffs that took place during Q2 and Q3 of the company’s fiscal year, in an effort to achieve $5.5 billion in cost savings. The company laid off 3.2% of their total headcount, and it wouldn’t make sense to start increasing total headcount at this point. Since the company is still working towards their cost savings goal, adding space in Hudson Yards does not seem like the right financial move at this point.
Another reason why I recommend the company maintains its global headcount is because of the company’s recent announcements. The Walt Disney Company just announced that it plans on investing $60 billion into its parks over the next 10 years. During D23, the company also announced park expansions not only in the States, but globally (new land opening in 2024 in Tokyo, and two new cruise ships sailing by 2025). With these events occurring over the next 18 months, it is not a good idea to reduce the workforce. It’s important to have the headcount to staff these projects and if the cast members are overworked due to staff shortages, employee turnover could continue to increase.
Sources:
• Disney Layoffs End, 7,000 Jobs Cut (variety.com)
• Disney Parks Unveils Future Projects, Surprises at Destination D23 – D23
• Disney Plans to Expand Parks Investment, Doubling Capital Expenditures Over 10 Years – The Walt Disney Company
Naaz Parvaz says
Company: Disney
Recommendation: Disney must decrease its global headcount over the course of next 18 months.
Explanation:
In the most recent quarter, Disney’s streaming operation incurred a loss of $512 million due to a loss in 11.7 million subscribers worldwide. As a result, Disney’s primary aim is to turn its streaming division into a profitable enterprise. There are two strategies that Disney can follow in order to achieve this goal. Firstly, by increasing the subscription amount and secondly, by adopting cost-saving methods. Cost-saving means reducing the business’ expenses. At the moment, Disney is seeking a cost-saving of $5.5 billion. Out of this amount, $2.5 billion represents non-content costs which includes labor costs.
One way of reducing non-content expenses is by laying off employees or reducing the global headcount of the company.
According to reports, the average annual payroll of Disney Corporate Jobs category is $77,332 a year. My working ahead is based on that average.
As per the memo sent by the Finance team, a cost of $36,000 per employee must be allocated to cover healthcare and rent on top of the payroll. This means on an average, the cost per employee is $113,332 ($77,332 + $36,000).
Other than the mentioned costs, there will be some additional costs that Disney would have to bear including taxes, paid vacations, etc. which would further increase the cost per employee.
Moreover, adding a space to incorporate more people would further add to the company’s cost. The message from Real Estate informed about the lack of space for hiring any more employees in the current office, as a result of which they are exploring adding space in Hudson Yards for resources based in New York. An office in Hudson Yards in New York costs approximately $120 per square foot. Although the space a certain person requires in an office generally depends on their duties, as per reports, the average office space that a single person requires is about 150 square feet. This means, the cost of office space per person is $18,000 ($120 x 150).
This approximately brings the cost of hiring a new employee to $131,332 ($113,332 + $18,000)
Reducing the global headcount will not only prevent Disney from incurring additional cost of renting out a new property in addition to hiring and accommodating new employees, but the layoff will also help them save cost by reducing the present expenditure on redundant employees. This in turn would allow Disney to direct its focus on the company’s content executives and offer them more power. In my opinion, Disney must identify redundant employees globally and reduce the headcount over the course of the next 18 months.
https://www.economist.com/graphic-detail/2023/02/08/disney-will-cut-7000-jobs-as-it-restructures-its-business
https://www.wsj.com/articles/disney-to-cut-employees-from-espn-parks-in-second-round-of-layoffs-c6777e50?mod=article_inline
https://www.wsj.com/articles/disney-to-start-its-7-000-job-cuts-this-week-6192d51e?mod=article_inline
https://www.ziprecruiter.com/Salaries/Disney-Corporate-Salary#:~:text=As%20of%20Sep%206%2C%202023,States%20is%20%2477%2C332%20a%20year.
https://www.nytimes.com/2023/08/09/business/media/disney-earnings.html#:~:text=Disney's%20streaming%20operation%20lost%20%24512,to%20more%20than%20%2411%20billion.
https://www.squarefoot.com/office-space/m/ny/new-york/hudson-yards/94236c4b-87d1-44fc-b2ac-5a9c6bfeab6e
Zichen Jiang says
Company: Walt Disney
I think Disney should decrease the global headcount for the next 18 months year. Since Disney total number of employees in 2022 was 220,000, a 15.79% increase from 2021, it has already owned enough employees and there’s little room to hire more. Also we know that Disney lay off 7,000 Employees and Canceling Metaverse through Summer 2023, as part of a strategic realignment of the company. Clearly, Disney realized it needs to save costs and seek for a more streamlined business approach. Hiring more employees is also unpractical and expensive for current situation. As Human resources said that they need at least 3 months to hire anyone, it will be a time-consuming work for increase headcount, and Disney has to put effort into finding and selecting qualified employees. As Real Estate said that there is no physical space to hire any more people, but they are looking into adding space in Hudson Yards for resources based in New York. Finding new space means another expense of rent fee, and the extra work load on managers in real estate department. As Finance point out a budget of a cost allocation of $36,000 per person per year to cover health care and rent, it will be a huge expenditure if increase global headcount to a sizable degree. Hiring more people may not stimulate income and be profitable, but it must increase the financial burden, especially at the time that company don’t need to expand the market or experience staff shortage.
Source:
https://www.macrotrends.net/stocks/charts/DIS/disney/number-of-employees
https://www.disneytouristblog.com/disney-cancels-metaverse-prime-program-plans-while-laying-off-7000-employees/
Xinyi Wang says
Recently, Walt Disney has undertaken multiple rounds of layoffs involving thousands of jobs in an attempt to cut 7,000 positions and save $5.5 billion. I think a big part of the reason for it is due to the continuous losses in the traditional media lines of business and the decline of subscribers in Disney+. As we can see, cutting expenses is the most important thing that Disney should take instead of adding jobs over the next 18 months. Thus, it is not necessary to add space in Hudson Yards for resources based in New York.
While Disneyland’s revenues were holding up respectably, it was likely due to rising ticket prices and the fact that more and more paid services were no longer covered. However, that still didn’t quite make up for the hit that traditional media has taken from digital media. Streaming platforms are considered the future of entertainment and are slowly replacing traditional media. Disney entered the streaming business in November 2019 with the launch of Disney+. In the second quarter of 2023, Disney saw a loss of subscribers due to a sharp decline in subscribers to Disney+ Hotstar, the company’s streaming platform for the Southeast Asian and Indian markets. Disney’s streaming business lost $512 million in the most recent quarter, bringing the total streaming losses since the launch of Disney+ in 2019 to more than $11 billion. In the three months ending July 1, Disney+ lost about 11.7 million subscribers worldwide, bringing the total to 146.1 million. Therefore, more effort and funds should be put into helping Disney Streaming at this critical time, rather than hiring more people. Cutting labor expenses, empowering Disney content creators, and producing more creative content is the priority at this time.
https://www.theguardian.com/film/2023/apr/24/disney-latest-job-layoffs
https://www.investing.com/academy/statistics/walt-disney-facts/
https://www.nytimes.com/2023/08/09/business/media/disney-earnings.html
Anonymous says
My suggestion is the Walt Disney Company maintains headcount.
Zichen Jiang says
Company: Walt Disney
I think Disney should decrease the global headcount for the next 18 months year. Since Disney total number of employees in 2022 was 220,000, a 15.79% increase from 2021, it has already owned enough employees and there’s little room to hire more. Also we know that Disney lay off 7,000 Employees and Canceling Metaverse through Summer 2023, as part of a strategic realignment of the company. Clearly, Disney realized it needs to save costs and seek for a more streamlined business approach. Hiring more employees is also unpractical and expensive for current situation. As Human resources said that they need at least 3 months to hire anyone, it will be a time-consuming work for increase headcount, and Disney has to put effort into finding and selecting qualified employees. As Real Estate said that there is no physical space to hire any more people, but they are looking into adding space in Hudson Yards for resources based in New York. Finding new space means another expense of rent fee, and the extra work load on managers in real estate department. As Finance point out a budget of a cost allocation of $36,000 per person per year to cover health care and rent, it will be a huge expenditure if increase global headcount to a sizable degree. Hiring more people may not stimulate income and be profitable, but it must increase the financial burden, especially at the time that company don’t need to expand the market or experience staff shortage.
Source:
https://www.macrotrends.net/stocks/charts/DIS/disney/number-of-employees
https://www.disneytouristblog.com/disney-cancels-metaverse-prime-program-plans-while-laying-off-7000-employees/
Xinmiao Tong says
Company: Spotify
Recommendation: Spotify should decrease its global headcount over the course of next 18 months.
Explanation:
First of all, Spotify already lacks cash flow and struggles with making profit. In the past three years, Spotify was not profitable overall. The company’s net loss in 2022 was €430million. While the net losses in 2021 was €34 million and €581 in 2020. For one thing, Spotify expanded it scale during pandemic and this resulted in more operation expends. For another, Spotify did short term and long term investments, which endangered the company due to investments may be risky. Even though Spotify has raised their service fees, trying to gain more profit from their premium subscription, high cost of royalties makes it hard to boost gross margin.
Secondly, Spotify needs to adjust their budget allocation. While the premium membership is not that profitable due to the royalties, Spotify needs more money to be invested on other service for more profit, such as content creating. In Q2 of 2023, R&D spending increased by 34%, which aimed to improve service for better competitiveness. However, Spotify needs to figure out how to spend money sustainably, instead of spending more money on R&D and expanding. For instance, dealing with the losses of investment deficit is should be emphasized as well.
In conclusion, the financial condition of Spotify right now could hardly empower headcount increasing. Meanwhile, $36,000 per person per year for a new employees will give more burden for Spotify to operate. I suggest Spotify to do some layoffs gradually and optimize their headcount structure at the same time. Clearly, Spotify needs to properly allocate money on efficient service updates. Their investment section also requires more experts to reverse the situation of big losses.
Sources:
https://s29.q4cdn.com/175625835/files/doc_financials/2023/q2/1eb37b78-b453-4891-935f-52c06e4ea670.pdf
https://fourweekmba.com/is-spotify-profitable/
https://www.fool.com/investing/2023/07/26/can-spotify-finally-turn-a-profit-after-raising-pr/
Xiangning Chen says
I recommend Walmart to maintain the current headcount for now.
According to Walmart’s 10K report, 2022 revenue grew $14 billion YOY to $572.8 billion, and net sales increased by 2.26% from 2021 to 2022, reaching $567,762 million. Meanwhile, Walmart’s International business net sales reached 101 billion. As of January 31, 2023, Walmart International had over 2900 pickups and about 2500 delivery locations[1]. The data indicates that Walmart overall has a good performance and steady growth. Normally this may suggest an increase in corporate headcount, but more factors need to be considered.
Previously, Walmart had hired extra associates at the end of 2021 to cover those who were absent due to COVID-19, but employees went back to work sooner than expected. During the first quarter of fiscal year 2023, CEO Doug McMillion said the company experienced “weeks of overstaffing” [2]. In response, Walmart’s total number of employees remains the same from 2021 to 2022 and has declined 8.7% from 2022 to 2023[3]. Excessive situation needs to be controlled. In addition, Walmart’s net income dropped from $13,940 million to $11,292 million, and ROI dropped from 14.9% to 12.7% from fiscal year 2022 to 2023. Walmart has been investing in wage improvement, which contributes partially to its 23-basis-point increase in operating expenses as a percentage of net sales compared to the previous fiscal year 2022. Further increase in headcount will put too much pressure on expense control.
Overall, the current headcount should meet the needs. Part-time/contractors can remain to be considered if sudden demands increase.
Reference
[1]https://s201.q4cdn.com/262069030/files/doc_financials/2023/ar/Walmart-10K-Reports-Optimized.pdf
[2] https://www.businessinsider.com/walmart-amazon-overstaffed-q1-profit-impact-2022-5
[3] https://www.macrotrends.net/stocks/charts/WMT/walmart/number-of-employees
Yubin Ma says
Company: Walmart
As one of the world’s largest retailers, Walmart has also been greatly impacted in the past few years by the pandemic. We must appropriately adjust our policies in a timely manner based on real-time financial conditions to help the company’s development. According to Walmart’s net income, we find that Walmart’s annual net income for 2023 was $11.68 B, a 14.58%decline from 2022(13.673B), and even Walmart’s annual revenue for 2023 was a 6.73%increase from 2022. So we need to consider more rather than directly increasing the global headcount, what we need more is to focus on training and improving the productivity of current employees, identifying employees who are not capable of supporting work efficiency, and replacing them in a timely manner. In this case, the budget can be placed on more needed technical training and employee replacement, which can increase the efficiency of the group and advance Walmart’s overall goals. So I think we should keep the global headcount unchanged in general.
References:
https://www.wsj.com/market-data/quotes/WMT/financials/annual/income-statementhttps://www.macrotrends.net/stocks/charts/WMT/walmart/revenue
Gonzalo Gatti says
Company: Spotify
Recommendation: Keep global headcount over next year and a half.
Reason: Last year, Spotify’s revenue grew from $5.2B to $11.7B. It’s premium subscriber list hit 551M. And yet, after 15 years, and letting go of 1,000+ employees, it still operates at a loss. Naturally, one would assume Spotify needs to find a way towards profitability. So, freshening up the corporate lineup (and perhaps some leaders in other business units) might seem like a naturally good idea. However, real estate costs are through the roof. As well as the incurred costs of acquiring top-tier developers, engineers, and so on. So why not hire top-tier specialized consultants instead?
Naer A says
Walt Disney should increase its global headcount.
First of all, more and more guests are starting to re-enter Disney after the Pandemic, which means we need more staff for in-park operations, customer service, and other tasks. Considering the hiring progress, we should use more contractors in our Disney land.
Second, Walt Disney needs more EMPLOYEES for creative work. Disney has 220,000 employees in 2022, but the IPs that Disney has created in the last two years are not as popular as they once were. For example, Elemental, Mulan, and Pinocchio are not popular in overseas markets. We need more creative people like special effects designers, writers, and directors. Disney needs to create work more aligned with Disney’s quirks rather than hiring outside studios entirely. I believe more creative people can lead to higher profits.
Thirdly, Hudson Yards in New York could be an excellent location. It is close to Broadway, and we can better grasp the market. For example, the musical Harry Potter, recently performed in New York, is a perfect IP conversion. Disney can also translate traditional IP into the theatre. This will be a new profit growth point for Disney.
https://www.macrotrends.net/stocks/charts/DIS/disney/number-of-employees
Kara Guioguio says
In light of Delta Air Lines’ recent financial performance and market dynamics, maintaining the current global headcount for the next quarter, with a subsequent review in the following 14 months, is advisable. This approach is crucial for operational efficiency and cost management, particularly in view of the robust fourth-quarter revenue of $13.66 billion, an 11% increase from last year (Wall Street Journal, 2023). The airline industry’s stock downturn in January, including Delta’s 8.6% decline (Financial Times, 2024), highlights market volatility and underscores the need for cautious stewardship. Additionally, practical considerations such as limited space for new hires, with ongoing expansion plans in Hudson Yards, and the HR department’s three-month hiring process, reinforce this decision.
The recent incident with a Delta Boeing 757, where a nose wheel malfunctioned before takeoff (CNN, 2024), amplifies the necessity for risk aversion. This event stresses the importance of a stable, skilled workforce to ensure safety and reliability. CFO Dan Janki’s emphasis on operational improvement (CNBC, 2023) aligns with this strategy. Keeping our workforce stable allows Delta to stay agile and responsive to market and operational changes. For immediate manpower requirements, the company might opt for hiring contractual workers on a project basis, ensuring flexibility and efficiency without long-term obligations.
Kara G says
Sources:
Josephs, Leslie. “Delta Lays Off Some Corporate Workers to Cut Costs.” CNBC. Accessed January 25, 2023. https://www.cnbc.com/2023/11/01/delta-lays-off-some-corporate-workers-to-cut-costs.html
Singh, Hardika. “Delta Air Lines Reports Jump in Revenue, Strong Travel Demand.” The Wall Street Journal. Accessed January 25, 2024. https://www.wsj.com/livecoverage/stock-market-today-dow-jones-bank-earnings-01-12-2024/card/delta-air-lines-reports-jump-in-revenue-strong-travel-demand-h0QMuThV2bNlI1dkhesS
Smith, Alex. “Boeing 757 Nose Wheel Incident.” CNN. Accessed January 25, 2024. https://www.cnn.com/travel/boeing-757-nose-wheel/index.html
Johnson, Emily. “Delta Air Lines Stock Decline.” Financial Times. Accessed January 25, 2024. https://www.ft.com/content/fe86402f-c23d-47c1-be14-0922d91a9577
Xichen Qian says
From my point of view, Disney should increase their global headcount for the next 18 months. Here are my reasons.
First of all, according to Disney’s 2022 annual report, the key goal of Disney human capital management is to attract, retain and develop highest quality talent. Therefore, I think by increasing the global headcount can help them achieve this objective.
Secondly, the portfolio of Disney has been witnessed a growth around the world, thus I recommend them to increase the headcount.
Lastly, the growth in revenue also supports my idea.
Reference:
https://thewaltdisneycompany.com/app/uploads/2023/02/2022-Annual-Report.pdf
Jiayi Bai says
Company: Microsoft
I believe Microsoft should temporarily maintain its current workforce without increasing or decreasing it. The main reasons can be divided into two parts: reasons against reducing the number of employees at Microsoft and reasons against increasing the number of employees.
Firstly, the primary reason not to recommend a reduction in Microsoft’s workforce is the company’s continuous expansion in the fields of digitization and artificial intelligence. According to Microsoft’s 2023 annual report, the company’s current financial situation is favorable, with a 20% year-on-year decrease in stock buyback ratio compared to 2022, a 9% increase in dividend payouts, and sufficient financial strength to support the current employment and business operation model. In the report, Microsoft also expresses confidence in its cloud business, Azure, and plans to apply digital transformation and artificial intelligence research to assist in the development of cloud computing, having established a partnership with OpenAI. Therefore, it is evident that Microsoft’s ambitious business development requires substantial support in terms of manpower and resources. At this point, a significant reduction in the number of employees may lead to a shortage of manpower, further impacting business quality.
However, the reason not to recommend continued employee growth at Microsoft is based on the significant layoffs the company underwent in 2023, hidden beneath glossy financial reports and ambitious slogans, signalling a crisis in the market. The main reason is that, after the high-growth period in the internet and PC industries, the current growth rate has gradually slowed down. Coupled with economic downturns, this has brought considerable pressure to major companies. Looking at the results, Microsoft averaged nearly 1000 layoffs per department in 2023, with a total reduction of over 10,000 employees, representing close to 10% of the total workforce. This indicates that Microsoft currently does not require more employees. Additionally, hiring new employees would necessitate the construction of additional workspace and incurring extra costs, which would be a significant expenditure, especially in the current economic downturn.
Therefore, in summary, to support the normal operation of Microsoft’s business without adding too much additional cost, maintaining the current number of employees is likely the better choice.
Reference:
https://www.microsoft.com/investor/reports/ar23/index.html
https://www.microsoft.com/investor/reports/ar22/
Chiqui Tapawan says
After reviewing Apple’s financial statements from 2021-2023, we have made the following observations:
1) There is a 1% decline in Net Sales for 2023 vs. 2022.
2) Operating Expenses grew by 7% in 2023 vs. 2022.
3) Decline in 2023 Net Sales was consistent across regions except for a slight 1% growth in APAC. Also worth noting is that Apple is facing problems in China region due to the comeback of Huawei (which launched Mate 60 Pro in September 2023) and government policies that favor Chinese smartphone brands.
4) Decline in 2023 Net Sales is also consistent across product categories, with Mac at -27% growth vs. previous year. However, the Services category is growing steadily at 9%.
Given the following points, we recommend keeping the global headcount unchanged for all business units except for the Services category. Services can explore adding headcount to further drive business growth within the next fiscal year.
References:
Apple’s Financial Statements:
https://www.apple.com/newsroom/pdfs/fy2023-q4/FY23_Q4_Consolidated_Financial_Statements.pdf
https://www.apple.com/newsroom/pdfs/FY22_Q4_Consolidated_Financial_Statements.pdf
Wall Street Journal
https://www.wsj.com/tech/apple-aapl-q4-earnings-report-2023-ce899b21
Amelia Bakrie says
Group 3 | Company: Apple
By the end of 2023, the company saw a 2.1% increase in total net sales and a 13% increase in net income, with earnings per share rising by 15.9% to 2.19, the highest since 2021. Sales in Europe surged by 9.8%, but Greater China sales dropped by 12.9%, signaling competition from local rivals like Huawei and Xiaomi. By categories, Wearable, Home, and Accessories net sales fell by 11.3%
In its 10-K form, Apple acknowledged fierce competition of frequent product introduction and short product life cycles. Its industry demands rapid technological advancement. As such, the company implied its success due to the continuous introduction of innovative products, services, and technologies. In January 2024, Apple launched its latest wearable device, virtual-reality headset Vision Pro. Despite the social media hype, many app developers are worried that the product will be lacking as it does not offer a physical controller, a necessity in most VR games, resulting in the loss of many big VR game titles. Top media apps like Youtube, Spotify, and Netflix also showed no interest in collaborating with the device by the time of its highly-anticipated launch.
As of September 2023, Apple had 161,000 FTE employees. Based on the observations above, I recommend maintaining current headcounts for all departments except for research and development, where additional engineers may be needed to maximize the potential of Vision Pro. Timely introduction of products is crucial in tech, thus Apple should utilize the momentum of Vision Pro. Whereas for the marketing department, the top management should direct its marketers to shift their focus to drive growth for the new wearable.
Sources:
Tilley, A. (2024, January 30). Can Apple’s $3,499 Vision Pro Headset Win Over Wary Consumers? Wallstreet Journal. Retrieved February 1, 2024, from https://www.wsj.com/tech/apple-vision-pro-release-market-b3a6aa25
APPLE. (n.d.). FY23 Q4 10-K. Quarterly Earnings Reports. https://s2.q4cdn.com/470004039/files/doc_earnings/2023/q4/filing/_10-K-Q4-2023-As-Filed.pdf
APPLE. (n.d.). FY24 Q1 Consolidated Financial Statement. Quarterly Earnings Reports.
https://www.apple.com/newsroom/pdfs/fy2024-q1/FY24_Q1_Consolidated_Financial_Statements.pdf
Daniela Molano says
Team: LVMH
In my opinion, maintaining profitability is pivotal. I do not see the point in increasing our costs if it will not be increasing our sales. In 2022, LVMH increased their employees by 12%, reaching 196,006. Notably, the biggest workforce is in the Asia (47,860) and United States (41,936). In 2023, their marketing expenses were EUR 30,768 million and general/admin expenses, including salaries, at EUR 5,714 million. Additionally Q3 2023 only saw a 2% organic revenue rise in the U.S, and notably their wine & spirits sector dropped 14% in their organic revenue. To optimize our numbers, specifically our operating costs, I would recommend to maintain our headcount and look into offshoring the nonessential roles in the United States to somewhere where our salaries expense will decrease. I recommend this because the company is already in many regions such as France, Europe, Japan, and other markets. Offshoring from United States to other regions will help decrease our operating expenses and in turn increase our profits.
References:
https://r.lvmh-static.com/uploads/2020/02/2022-attracting-and-retaining-talents.pdf
https://r.lvmh-static.com/uploads/2023/10/lvmh-q3-2023.pdf
https://r.lvmh-static.com/uploads/2024/01/lvmh_financial-documents-december-31-2023.pdf
Anonymous says
I think Walt Disney should keep the global headcount unchanged. The first reason is that this year is the 100th anniversary of Disney. Disney has already taken several measures for its grand celebrity. Although Disney’s revenue has increased right now, it has already had a loss in the past years. Moreover, the influence of COVID-19 has not been past wholly. The other reason is that Disney should increase its investment to create new movies or characters to attract more consumers. Therefore, Disney should keep the global headcount unchanged to see how the world will change in the future.
Anonymous says
Resource:https://www.statista.com/statistics/224397/quarterly-revenue-of-the-walt-disney-company/
Qiyao Huang says
Company: Apple
Apple’s annual revenue for 2023 was $383.285B, a 2.8% decline from 2022. Apple’s annual revenue for 2022 was $394.328B, a 7.79% increase from 2021. Apple’s annual revenue for 2021 was $365.817B, a 33.26% increase from 2020.
As the climate warms, Apple is committed to reducing carbon emissions and then investing in premium carbon removal solutions to deal with the remaining emissions. Starting in 2023, the electricity used to make carbon-neutral models of Apple Watch and watch bands will be sourced from 100% clean electricity. This continues our work, which began in 2015, to source renewable energy and build new infrastructure, like solar and wind farms. Therefore, although Apple’s revenue in 2023 is lower than that in 2022, overall revenue is on an upward trend. With the continuous launch of Apple’s new products and the implementation of the emission reduction plan, I recommended increasing global headcounts.
References:
https://www.apple.com/job-creation/
https://www.apple.com.cn/environment/pdf/Apple_Environmental_Progress_Report_2023.pdf
Peter Dong says
Company: Microsoft
Looking at the number of people in Microsoft in previous years, the number of employees at the company is growing. Microsoft’s total number of employees in 2023 was 221,000, a 0% decline from 2022. In 2022 was 221,000, Microsoft total number of employees in 2023 was 221,000, a 0% decline from 2022. a 22.1% increase from 2021.in 2021 was 181,000, a 11.04% increase from 2020. And in 2020 was 163,000, a 22.1% increase from 2021. In 2021 was 181,000, a 11.04% increase from 2020. And in 2020 was 163,000, a 13.19% increase from 2019.
However, in 2023, the world is in a large proportion of AI growth, and all kinds of companies have different ranges in the use of artificial intelligence. Among them is OpenAI’s run-rate reportedly topped $1 billion in August and reached $1.3 billion two months later. The new report from The Information that OpenAI’s annualized revenue has passed $1.6 billion suggests that its run-rate grew more than 20% in the past two months. And at the same time Microsoft invested $10 billion in OpenAI and hired OpenAI’s former CEO. I think Microsoft needs to grasp the era of artificial intelligence and increase its research on artificial intelligence. This requires more employees to participate in AI projects. Half of the new employees can be taken off shoring to reduce the company’s expenditure on employees and save office space.
reference:
https://www.macrotrends.net/stocks/charts/MSFT/microsoft/number-of-employees
https://siliconangle.com/2024/01/01/openais-annualized-revenue-reportedly-tops-1-6b/
Peggy Janthanit says
Company: Apple
Based on my research, Apple can increase its headcount in the next 18 months to capitalize on its growth in the Services revenue and R&D for its new product (i.e., Apple Vision Pro). Factors I considered include financial performance, market conditions, Apple’s product and service pipeline, operational efficiency, and productivity.
1. Financial performance: Apple has outperformed the S&P 500 Index in the past 4 years — 52.41%, 51%, and 49.53%, respectively. This is an indication of Apple’s strong financial performance and positive outlook for 2024, as shown in its stock price performance and fiscal 2024 first-quarter performance, with quarterly revenue up 2% YoY and quarterly earnings per diluted share up 16% YoY. Apple also reported revenue growth spurred by its Services category and iPhone sales.
2. Looking forward, Apple’s Product and Service pipeline also remains strong, including the launch of its new Apple Vision Pro product and the potential in its Services line due to its impressive operating margins at 70.83%. In 2023, Apple also reported its YoY growth in R&D expenses, which was primarily driven by headcount-related expenses, in line with its expenditure in R&D (increasing by 3.5 billion from its 2022 total). With
With favorable market conditions and financial performance, Apple can afford to increase its headcount and should look to continue its investments across its businesses, especially R&D into its new products (e.g., Apple Vision Pro) and its Services business to stay competitive and ahead of the curve.
Resources:
a. https://www.statista.com/statistics/273006/apple-expenses-for-research-and-development/
b. https://www.apple.com/newsroom/2024/02/apple-reports-first-quarter-results/
c. Apple 2023 Form 10-K: https://s2.q4cdn.com/470004039/files/doc_earnings/2023/q4/filing/_10-K-Q4-2023-As-Filed.pdf
Canxin Chen says
Company: LVMH
I think LVMH should increase the headcount. Here are a few reasons.
– Firstly, according to Statista, the total number of LVMH’s employee worldwide grow steadily in the past ten years. Meanwhile, LVMH posts strong growth across core brands from its annual growth report. It achieved organic revenue growth of 8.8% in 2023 to 86.2 billion euros. Profit from recurring operations was up 8.3%. I think this trend of synchronous growth implies the need to increase headcount to ensure the long-term growth of the company.
– Secondly, customers’ increasing demands for luxury goods require more employees to take part in marketing, strategic planning, etc. And for the fashion and luxury brand who values craftsmanship, it requires more labor force to participate in manufacturing.
– Last but not least, the new space in Hudson Yards enables the development of human resources. Also, LVMH can hire offshore employees. As the world’s leading luxury products group, it needs to develop it global business in other countries, particularly the developing countries which are the main revenue contributors.
References:
[1]https://www.lvmh.com/investors/profile/financial-indicators/#groupe
[2]https://www.statista.com/statistics/245876/total-number-of-employees-of-the-lvmh-group-worldwide/
Jianghai Lyu says
Personally speaking, I think The Walt Disney should increase the global headcount in the next 18 months.
Firstly, according to the statistic from Statista, in 2023, revenue of The Walt Disney Company is 88.9 billion U.S. dollars, which is up from the revenue in 2022 which is 82.7, and it realized an annual growth of over 7%. The optimistic revenue growth of a company could reflect a the good development of it, which means that the company has the ability to enlarge its team.
Plus, in the last year, almost a half of the revenue came from the media and entertainment segment, and the company also stated clearly that it plans to expand parks investment in the future and double capital expenditures over 10 years. It means that The Walt Disney is trying to seize more opportunities and achieve a bigger success in the future. In order to realize a strong development, at this very beginning time, it’s crucial for the company to hire more right-hand men to make decisions and achieve the future goal wisely and efficiently.
Reference:
·https://www.statista.com/statistics/224397/quarterly-revenue-of-the-walt-disney-company/
·https://thewaltdisneycompany.com/disney-plans-to-expand-investment-in-parks-business/
Nick Ducheine says
In my opinion I believe that the Walt Disney Company should not increase its headcount over the next 18 months, even though 2023 posed an overall sales growth 7% going from 82.5 billion in 2022 to 88.4 billion in 2023 per the Wall Street Journal [1]. One of the major factors influencing my decision is the fact that Disney recently came off a series of layoffs totaling 7000 jobs internationally, in an effort to reduce about $5 billion in costs [2]. If the company begins expanding it’s headcount I do not believe that it could grant current and new employees the guarantee of job security which is very important to most people. The turnover would undoubtedly increase as employees would begin to seek out opportunities with companies that value career longevity instead of using it’s hard working employees as a major cost saving benefit. This decision is also amplified given the fact that CEO Robert Iger’s total compensation doubled in 2023 from $15 million to 31.6 million per the WSJ [3].
I think the company should focus on creating a more stable environment before thinking about increasing headcount. It has taken many loses in the past year including a $387 million dollar loss in streaming services during Q4 2023 [4]. It has also taken a big valuation hit in the planned sale of Disney India which was 3.9 billion dollars less than it was when acquired in 2019 [5]. This is a very shaky time for Disney, so I do not think it is safe to begin enlarging the workforce without creating a solid business plan to combat these recent losses. I would like to see the company have a steady increase in revenue over the next 18 months, focusing mostly on increasing the streaming service experience. I would want to also see incremental growth while higher ups reestablish trust amongst it’s employees by ensuring job stability. If these targets are hit after the 18 month period then I would beleive we can revisit our overall headcount numbers moving forward.
[1] https://www.wsj.com/market-data/quotes/DIS/financials/annual/income-statement
[2] https://www.cnbc.com/2023/04/24/disney-layoffs-second-larger-wave.html
[3]https://www.wsj.com/business/walt-disney-nominates-12-to-board-of-directors-says-ceo-igers-compensation-doubled-in-2023-1d99af69
[4] https://thewaltdisneycompany.com/disneys-fiscal-full-year-and-q4-2023-earnings-results-webcast/
[5] https://www.wsj.com/business/media/disneys-india-unit-takes-valuation-hit-in-planned-sale-a5ebd056
Xueyan Chen says
I will increase the number of people in a manageable way. Since the epidemic started, people are more likely to want to spend their money on things they can see, like real estate. Therefore, as the economy recovers, the demand for people to buy houses will probably increase and the company’s earnings are looking up, so it can COVER the 3,600 per person in salary and insurance premiums. At the same time, regarding the issue of space, you can choose to let employees work from home, a workstation two people rotate, which can save the expenses of the venue fee.
Ashna Siddiqui says
Company: Disney
Recommendation: Global Headcount Should Be Unchanged
From my perspective and research, Disney’s growth has been stagnant over the past few years. Changing the global headcount would not be the best idea right now because they need to make their revenue back and should continue to work on growing the business, which is what they always do. Disney has always made profits through various outlets such as their theme parks, television and movie business, streaming services, etc. I believe that they are making profits, but they have not been able to grow in the market. For instance, their highly profitable and big-budget movie businesses such as Marvel and Pixar have struggled when their movies come to the theaters and have not had any huge hits since pre-pandemic.. Another reason is that Disney has spent a lot of money on trying to grow their streaming service, Disney+, and acquiring Hulu and ESPN, and is not making their profits grow very quickly. Furthermore, in a post-pandemic world, Disney’s theme parks have had low attendance, which leads to people spending less amount of money on their attractions. All Disney parks were shut down during the pandemic and the company lost a lot of revenue because of that and is trying to make it back. After a change in leadership a few years ago, they have been consolidating their operations and reducing costs in all areas of the company, notably staffing cuts. Disney made about 7,000 layoffs in 2023 as a result of saving almost $5.5 billion in expenses. I do not believe it would be a smart idea to increase the headcount after they cut about 3.2% of their headcount last year and decreasing the headcount will make things harder on the company to fill the missing roles. Overall, Disney’s growth trajectory should be its focus for right now. Therefore, they should avoid hiring and firing more employees for the next 18 months in favor of concentrating on attracting and retaining talent as well as dealing with frequent employee attrition and turnover.
Sources:
https://thewaltdisneycompany.com/app/uploads/2023/11/q4-fy23-earnings.pdf
https://variety.com/2023/tv/news/disney-layoffs-end-7000-1235629809/
Tafannum says
I think the company should remain their headcount unchanged. Firstly we dont have the space for the employees. Building the extra space can be a burden on the budget. Even if we could solve that by having the employees work from home, the cost allocations for per person per year in much more than the company can handle. Focusing on optimizing the current workforce’s efficiency and productivity. This can entail putting in place new technology, streamlining workflow procedures, and conducting training sessions that boost output without immediately requiring more employees. We can make sure that our department stays flexible and responsive to both internal limitations and external market trends by concentrating on optimizing the current staff.
Jinjia Zheng says
Microsoft can hire some people to replenish its staff for the loss of employees due to retirement and job hopping. Microsoft doesn’t have to hire too many new employees because the cost of adding a new employee is very high nowadays, including his salary and other expenses. For every additional employee, the human resource cost will significantly increase. Microsoft could keep more of its older employees with work experience and only recruit employees that will help Microsoft’s future development to cope with the recent challenging economic situation. Microsoft could also outsource some of its operations to reduce human resource costs and increase the cash flow, which can be utilized in exceptional circumstances.
Pradumn Agarwal says
Group, after careful thought of HR, Genuine Domain, and Fund inputs, I suggest keeping up our current worldwide headcount for the another 18 months. This choice permits time for successful contracting, space investigation, and budget arrangement.
Xuezi Zhang says
Based on Google report, they has this smart way of handling their team size. They don’t just add more employee every time they need an extra help. Instead, they bring in contractors. it lets them quickly adapt to whatever projects or demands they need, without getting more financial needs for hiring full time employee.
Plus, they don’t have to worry about finding space for everyone or dealing with the extra costs like health benefits and office rent.
So, for us, considering the current constraints and financial implications, maintaining the global headcount unchanged is the most prudent situation. We can also hiring contractors to address immediate resource needs. Moreover, This decision allows us to manage our resources effectively, maintain financial stability, and prepare for a more strategic and justified expansion in the future, once more information and resources are available.
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Patrick Wei says
From my perspective, the company should decrease the global headcount and hire more contractors to do the work. The first reason is that according to Human Resources, the company need 3 month to hire a new employee and not just like that, we also need time to train new employees, which means hiring more people would cause more additional cost. And the company need to pay $36,000 for a employee to cover the health cover and rent, which is another big expense. The second reason is that the Real Estate said there is already no enough physical room for new employees, finding a new office for new employees is not a good deal for the company. The third reason is that the company could hire more contractors and set a reasonable salary range for them, it could bring many advantages. The company could save a lot money from the healthcare, rent, tax and other expenses. And it’s obvious better and more flexible to hire experienced contractors rather than hire new employees.
For our team’s company Nvidia, I would say the same suggestion, they should decrease their headcount and hire more contractors. Nvidia has achieved big success and amazing business growth and it is the company that has the NO.1 market value now. According to its 2024 annual report, its revenue is $60.9 billion which up 126% year on year, its gross margin is 72.7% which is up 15.8 points year on year, its operating income is $33 billion which is up 681% year on year, and it’s amazing that its 5-year TSR is 1436%. Because these achievements, I believe more they should decrease their headcount to avoid unnecessary expense, instead, hiring more contractors to help them. Nvidia is highly rely on TSMC to make GPU for them before, but now they are also stating cooperating with other contractors to make and distribute their GPU, this is a good example to prove what they should do.
resources:https://s201.q4cdn.com/141608511/files/doc_financials/2024/ar/NVIDIA-2024-Annual-Report.pdf
https://wccftech.com/nvidia-ceo-says-he-can-switch-from-tsmc-if-needed-outlines-non-ai-1-trillion-market/