Apple is entering a new phase under CEO John Ternus as the company confronts rising memory costs, tighter semiconductor supply and pressure to make its organization more efficient. Ternus is reportedly pursuing a leaner corporate structure that could involve additional layoffs, while Apple also faces growing costs for the memory components used across its major hardware products.

Ternus Pushes for a Leaner Apple

Ternus, who succeeded Tim Cook as Apple CEO in September 2026, is reportedly seeking to reduce organizational layers and place greater emphasis on engineering and faster product development. The company has already dismissed a number of engineering program managers in its hardware division, including several senior directors. Employees who do not find other positions within Apple are expected to leave the company later this year.

The restructuring could extend beyond those initial reductions. Ternus has previously advocated for a smaller and more efficient organization, arguing that Apple should hire fewer employees while asking existing engineers to accomplish more. The company is also reviewing planned budgets and staffing levels as it seeks to reduce costs and accelerate its development cycle.

AI Demand Is Driving Up Memory Costs

At the same time, Apple is dealing with a significant increase in the cost of memory chips. Demand from AI data centers has redirected substantial semiconductor capacity toward high-bandwidth memory and other components required for advanced computing infrastructure. That has left consumer electronics manufacturers competing for a more limited supply of memory.

Tim Cook warned during his final earnings call as CEO that Apple would face significantly higher memory costs in the September quarter and beyond. Apple had already increased its inventory to help absorb the supply shock, with inventories reaching $11.09 billion at the end of the June quarter, up 87% from a year earlier. The company had used $5.46 billion in cash over nine months to build that inventory position.

Margins and Product Pricing Face Pressure

Higher memory costs create a difficult equation for Apple because the company must decide how much of the additional expense can be absorbed without putting excessive pressure on margins. The alternative is to raise prices, potentially affecting demand for iPhones, Macs, iPads and other products.

The pressure is particularly relevant as Apple expands its product portfolio. The company has introduced higher-priced devices, including its first foldable iPhone, while Ternus is reportedly considering more frequent and experimental product launches. A leaner workforce and tighter spending could therefore help offset some of the additional costs associated with components and product development.

Investors will be watching Apple’s headcount decisions, memory supply agreements, gross-margin trends and pricing strategy in the coming quarters. The key question is how successfully Ternus can combine organizational efficiency with faster product development while managing an input-cost environment shaped increasingly by the global AI infrastructure boom.