Apple Trims Employee AI Budgets, Deepening Worries Of Layoffs Under New CEO

Apple's decision to cut the amount some employees can spend on artificial intelligence tools is adding to anxiety inside the company about possible layoffs. The iPhone maker has lowered daily AI spending limits for some engineers and is weighing deeper cuts, even as it pushes staff to use AI more in their work. Some divisions have also brought in outside consultants to review their operations, and employees fear that could lead to restructuring. The moves come as new CEO John Ternus drives a leaner, faster Apple.

Caps cut, more reductions planned

Bloomberg reported that Apple quietly reduced the daily cap for some engineers using AI models from $300 to $200 last month, citing people with knowledge of the matter who were not authorised to speak publicly. Further cuts are being planned for some engineering teams, which could see their allowances fall as low as $100 a day.

Many groups outside engineering already operate under a $100 daily limit. Apple has considered cutting that to $25 for some teams, according to Bloomberg's sources. Employees who need more can ask senior leadership for an exemption.

Layoff fears and mixed reactions

Inside Apple, reactions are divided. Some staff argue that few people were using their full $300 allowance, so the old limit was more generous than necessary. Others read the cuts as a sign of wider cost-cutting that could lead to job losses, Bloomberg reported.

The unease is fuelled by Ternus, who became CEO on September 1 and is pushing for fewer management layers and faster decision-making. The consultant reviews in some divisions have added to the worry.

How the budgets work

The limits apply to tokens, the units of text and data that AI models process for each request. Providers typically charge by token volume, and more advanced models cost more. Heavy tasks such as writing and debugging code can use large numbers of tokens.

Some Apple teams have been told to use cheaper models or models that run locally on devices. Employees have access to Anthropic's Claude, OpenAI's ChatGPT and Google's Gemini.

Costs rising even as caps tighten

How much Apple will save is unclear, particularly if many employees were nowhere near their earlier limits. Deeper cuts could force heavy users to seek exemptions to keep using the tools they rely on.

Apple's overall spending is rising. The company said this week that research and development expenses grew 32 percent in fiscal 2026, driven by higher infrastructure and AI costs. Operating expenses rose 22 percent to $75.5 billion, about 16 percent of net sales.

Industry-wide squeeze on AI spending

Apple is not alone in tightening AI budgets. Microsoft has also restricted internal AI spending, and Tesla has imposed a $200 weekly cap per employee. Uber limits individual AI coding tools to $1,500 a month, while Meta has introduced token budgets and is steering employees toward its own in-house tools.