Apple Inc. (NASDAQ: AAPL) shares declined approximately 2% on Tuesday, as investors weighed reports that newly appointed Chief Executive John Ternus is considering significant changes to the company's management structure and product development process. The potential overhaul comes less than a month after Ternus officially succeeded Tim Cook as CEO on September 1, 2026.
According to a Bloomberg report, Ternus is exploring measures aimed at making Apple more engineering-focused, faster, and leaner. One proposed change involves reducing layers of middle management that separate engineers from senior leadership. The report did not specify how many positions could be affected or provide a timeline for any restructuring.
Ternus, who previously led Apple's hardware engineering organization, is also reportedly considering adjustments to the company's traditional spring and fall product launch cycles. These moves would represent some of the first major organizational changes under his leadership, as part of a broader cost-cutting effort and an attempt to identify additional revenue opportunities, including increasing revenue from existing products and services.
The reported restructuring follows recent cuts within Apple's hardware engineering division, where engineering program manager positions have been trimmed over the past two weeks. Roughly half a dozen directors were affected, with roles responsible for managing timelines and coordinating work between teams. Affected employees will have the opportunity to find other positions within Apple before leaving the company.
Apple has also reduced teams associated with the Vision Pro headset and the Siri digital assistant, according to previous reports. The company has cut some employees working on its Fitness+ service and has been evaluating the service's future as its Health app increasingly overlaps with it. Additionally, Apple considered cutting roughly 5,000 AppleCare customer service positions during the summer, although that plan was ultimately put on hold.
In addition to the management changes, Apple's stock decline came as Bank of America reiterated its Buy rating on the company while warning about potential changes in consumer behavior driven by artificial intelligence. The bank said concerns surrounding Meta's Muse AI assistant may be overstated but identified a potential risk to Apple's ecosystem.
Bank of America analyst Wamsi Mohan noted that Apple could continue to retain handset sales while losing some activity related to product discovery, referrals, and transaction initiation. Muse, an AI agent designed to perform tasks such as browsing websites, completing forms, and continuing work after users leave an app, has gained access to commerce services from Shopify, Expedia, and PayPal. Amazon has blocked Muse.
Bank of America said Apple's large installed base, user trust, and privacy-focused technology could help offset the emerging competitive pressure. Apple's updated Siri, released with iOS 27, uses Apple Foundation Models and Private Cloud Compute. However, Mohan said Siri currently lacks some of Muse's background task capabilities and broader third-party actions.
Investors are closely monitoring these developments as Apple navigates a period of leadership transition and competitive challenges. The company's ability to adapt its organizational structure and product strategy will be critical in maintaining its market position.
This article is for informational purposes only and does not constitute financial advice.
