According to a Bloomberg News report on Tuesday, Apple's new CEO, John Ternus, is considering a major reorganization of the company. The goal of these changes is to strengthen the engineering focus, increase the frequency of new product introductions, and form a more compact organizational structure.
Among the early ideas under consideration are abandoning Apple's traditional product release cycle, which is tied to spring and autumn, as well as eliminating some middle management positions. This aims to reduce the distance between engineers and senior management, according to the report citing sources familiar with the matter.
Ternus, an Apple employee with 25 years of experience who long held the position of hardware chief, overseeing several generations of iPhone, took over after Tim Cook on September 1. Analysts note that the change in leadership underscores the key role of Apple's hardware ecosystem in the company's growth.
Apple announced the leadership change on April 20, receiving unanimous approval from the board of directors. Tim Cook, who led the company for 15 years, became executive chairman, mandated to interact with global politicians. Under his leadership, Apple's market capitalization grew from approximately $350 billion to $4 trillion, and annual revenue increased from $108 billion in fiscal year 2011 to over $416 billion in fiscal year 2025, according to the company itself.
Artificial intelligence (AI) is viewed as the most significant challenge inherited by Ternus. Ternus joined Apple's product design team in 2001, became Vice President of Hardware Design in 2013, and entered the executive team as Senior Vice President of Hardware Design in 2021. A graduate of the University of Pennsylvania's School of Engineering, he worked as a mechanical engineer at Virtual Research Systems before joining Apple. The company recognizes his central role in the introduction of the iPad and AirPods, as well as in creating many generations of iPhone, Mac, and Apple Watch. His attention to detail, such as the screw with ten extra grooves compared to what Apple specified, was highlighted in a profile published after his appointment.
How to remain competitive in the age of artificial intelligence
The report states that cost-cutting efforts have already begun, and Ternus is also seeking new revenue streams and ways to derive greater value from existing products. Bloomberg News reported that Ternus signaled internally the need for faster product time-to-market and a more experimental approach so that Apple can maintain competitiveness in the AI era.
Apple typically holds major annual events in June and September; the developer conference focuses on software, while the September event is dedicated to new iPhones and other consumer devices. Earlier this month, Apple introduced its first foldable smartphone—the iPhone Duo priced at $1999. Analysts believe that Apple's entry into this market could help foldable devices become mainstream, similar to how smartwatches and wireless earbuds did.
Apple's hardware design department has begun reducing positions related to engineering program management. Bloomberg News added that the cuts affected several program managers, including about half a dozen directors. Ternus no longer heads this department. On the day of the leadership change announcement, Apple appointed Jony Srouge as Chief Hardware Specialist, placing both hardware design and the hardware technology group, which he previously led, under his control. Srouge joined Apple in 2008 to lead the development of the A4 processor, Apple's first self-developed processor.
The company has also made significant reductions in teams working on the digital assistant Siri, the Vision Pro headset, and AI-related software, some of which were tied to employee performance. Reductions in the Siri division occur amid the launch of an updated assistant. Siri AI, the new version of Siri powered by Apple Intelligence, began rolling out in beta with iOS 27 on September 14, initially only in English and not in the EU. Apple stated that certain Apple Intelligence features dependent on its servers, including Siri AI, are subject to daily usage limits, and expanded access will be offered for a fee in the future. It is this additional value from existing products, as the Bloomberg report notes, that Ternus is seeking.
Furthermore, the report indicates that Ternus has explored the possibilities of using AI to accelerate the product development process and automate tasks currently performed by employees.