Apple’s new CEO cuts management layers to speed up product launches

Apple’s newly appointed CEO, John Ternus, is overhauling the company’s structure to accelerate product releases and embrace a more experimental approach. The changes include layoffs, budget adjustments, and a strategic pause on a plan to replace thousands of AppleCare workers with AI agents.

Restructuring under new leadership

According to The Next Web, John Ternus became Apple’s CEO on 1 September, succeeding Tim Cook after a 15-year tenure. Ternus is immediately reshaping the company’s management structure to remove layers of middle management, aiming to speed up decision-making and product launches.

In recent weeks, Apple dismissed several engineering programme managers and directors within its hardware engineering group. The layoffs also extended to teams working on Siri, Vision Pro, AI software, and Fitness+, though the cuts were described as small.

The company is holding headcount flat and reducing budget increases planned for 2027. Marketing spending is also being cut, and perks like plus-ones for holiday parties have been eliminated.

AI and cost management

Apple had planned to lay off approximately 5,000 AppleCare support workers and replace them with AI agents, a proposal developed over the summer. That plan is now on hold, though the company already routes some AppleCare calls in the US and Canada to a generative AI assistant.

In July, Apple raised prices for AppleCare+, its premium support service. The company is also absorbing rising costs for memory chips, which have increased in price.

Services revenue, a key growth area for Apple, fell in the June quarter, marking its first decline since 2022. This has prompted Ternus, alongside Services Chief Eddy Cue and CFO Kevan Parekh, to seek new revenue streams.

New products and experimental approach

Apple is exploring several new products, including AirPods with cameras, its first smart glasses, and a foldable iPhone Duo. The latter was unveiled this month as part of Ternus’s first product lineup, priced at $1,999.

Ternus is pushing the company to move away from its traditional spring and autumn launch schedules, instead adopting a more flexible and experimental approach. This shift is part of a broader strategy to adapt to the AI era.

Eddy Cue, Apple’s Services Chief, has taken over the App Store from Phil Schiller in a late-August reshuffle, signaling further changes in how the company manages its ecosystem.

What this means

Lazyfounder analysis — our interpretation, not reported fact.

Apple’s restructuring under John Ternus reflects a broader industry trend: the pressure to innovate faster while managing costs. By cutting middle management and adopting a more experimental approach, Ternus is signaling that Apple can no longer rely on its traditional playbook. The pause on replacing AppleCare workers with AI suggests a balancing act—leveraging AI for efficiency without destabilizing its workforce.

For founders and operators, Apple’s moves highlight the importance of agility in leadership transitions. Ternus’s focus on speed and experimentation could inspire startups to rethink their own product development cycles, but it also serves as a reminder that cost management and revenue growth must go hand in hand.

Key takeaways

• Apple’s new CEO, John Ternus, is streamlining management layers to speed up product launches and adopt a more experimental approach.
• Recent layoffs and budget adjustments reflect a broader shift in Apple’s strategy, particularly in AI and cost management.
• Apple is balancing AI-driven efficiencies with workforce stability, delaying a plan to replace 5,000 AppleCare workers with AI.
• New products, including a foldable iPhone Duo and smart glasses, are part of Apple’s push for revenue growth.
• The company is moving away from rigid launch schedules to a more flexible, experimental model.

FAQ

Why is Apple restructuring under John Ternus?

Ternus aims to remove layers of middle management to accelerate decision-making and product releases. The goal is to make Apple more agile and experimental, particularly in the AI era.

How is Apple using AI in its operations?

Apple already uses generative AI for some AppleCare calls in the US and Canada. However, a plan to lay off 5,000 AppleCare workers and replace them with AI agents is currently on hold.

What new products is Apple developing?

Apple is exploring AirPods with cameras, its first smart glasses, and a foldable iPhone Duo, priced at $1,999.

How is Apple managing costs under the new CEO?

Apple is holding headcount flat, reducing budget increases for 2027, cutting marketing spending, and absorbing rising memory chip costs.

Related on Lazyfounder

• Apple
• More business news