- Apple on Wednesday announced plans to open a new campus in the United States and said it would hire 20,000 new employees over the next five years.
- It also says it plans to pay $US38 billion in repatriation tax. CNBC estimated that with the new repatriation tax rate of 15.5%, the company would bring nearly all its overseas cash, or about $US245 billion, back to the United States.
Apple on Wednesday announced plans to open a new campus this year as part of an effort to hire 20,000 new workers over the next five years.
The company said in a statement that it would “establish an Apple campus in a new location,” to be announced “later in the year,” that would “initially house technical support for customers.”
Apple declined to give more information on the location of the new campus, though it says it’s building a separate new facility in Reno, Nevada.
Apple also says it will make a “direct contribution” of more than $US350 billion to the US economy over the next five years through making new investments and purchasing materials from American companies. Apple estimates it will spend $US55 billion this year with its more than 9,000 American suppliers and manufacturers.
Apple may bring a lot of money home
Apple said in the announcement that it expected a repatriation tax bill of about $US38 billion because of changes from the new tax law.
With the new repatriation tax rate of 15.5%, that means Apple would repatriate $US245 billion, or nearly all of its overseas cash, CNBC estimated. Apple declined to comment on CNBC’s maths.
Apple invests in and purchases parts from American companies like Finisar, a laser company, and Corning, which makes the hardened glass that iPhones use, through its Advanced Manufacturing Fund, which Apple on Wednesday said had increased to $US5 billion from $US1 billion.
The Trump effect
President Donald Trump has prioritised striking deals with American companies to save or create jobs, one of his campaign promises.
Because Apple manufactures most of its products in Asia, it has become a target for Trump, who has blamed the company for contributing to the long trend of US companies moving their manufacturing overseas and encouraged it to build factories in the US.
That’s why Apple makes such a big deal about its supporting American manufacturing and the fact that many of the companies that supply parts for the iPhone and other Apple products have factories in the US.
In late 2016, Apple reportedly asked its Asian manufacturing partners, including Foxconn, to look into building its products in the US.
Cook was one of several elite technology CEOs who met with Trump in December 2016.
The full announcement is below and on Apple’s website:
Apple accelerates US investment and job creation
$US350 Billion Contribution to US Economy Over Next Five Years
Cupertino, California – Apple today announced a new set of investments to build on its commitment to support the American economy and its workforce, concentrated in three areas where Apple has had the greatest impact on job creation: direct employment by Apple, spending and investment with Apple’s domestic suppliers and manufacturers, and fuelling the fast-growing app economy which Apple created with iPhone and the App Store. Apple is already responsible for creating and supporting over 2 million jobs across the United States and expects to generate even more jobs as a result of the initiatives being announced today.
Combining new investments and Apple’s current pace of spending with domestic suppliers and manufacturers – an estimated $US55 billion for 2018 – Apple’s direct contribution to the US economy will be more than $US350 billion over the next five years, not including Apple’s ongoing tax payments, the tax revenues generated from employees’ wages and the sale of Apple products.
Planned capital expenditures in the US, investments in American manufacturing over five years and a record tax payment upon repatriation of overseas profits will account for approximately $US75 billion of Apple’s direct contribution.
“Apple is a success story that could only have happened in America, and we are proud to build on our long history of support for the US economy,” said Tim Cook, Apple’s CEO. “We believe deeply in the power of American ingenuity, and we are focusing our investments in areas where we can have a direct impact on job creation and job preparedness. We have a deep sense of responsibility to give back to our country and the people who help make our success possible.”
Apple, already the largest US taxpayer, anticipates repatriation tax payments of approximately $US38 billion as required by recent changes to the tax law. A payment of that size would likely be the largest of its kind ever made.
Growing Apple’s US Operations
Apple expects to invest over $US30 billion in capital expenditures in the US over the next five years and create over 20,000 new jobs through hiring at existing campuses and opening a new one. Apple already employs 84,000 people in all 50 states.
The company plans to establish an Apple campus in a new location, which will initially house technical support for customers. The location of this new facility will be announced later in the year.
Over $US10 billion of Apple’s expanded capital expenditures will be investments in data centres across the US. Over the last decade, Apple has invested billions of dollars in data centres and co-located facilities in seven US states, including North Carolina, Oregon, Nevada, Arizona and a recently announced project in Iowa.
Today, Apple is breaking ground on a new facility in downtown Reno, which will support its existing Nevada facilities.
All of Apple’s US facilities, including offices, retail stores and data centres, are powered by 100 per cent renewable energy sources like solar, wind and micro-hydro power, which Apple generates or purchases from local projects. The new campus announced today will also be powered entirely by green energy.
Investing in Apple’s Domestic Suppliers and Manufacturing Partners
Building on the initial success of the Advanced Manufacturing Fund announced last spring, Apple is increasing the size of the fund from $US1 billion to $US5 billion. The fund was established to support innovation among American manufacturers and help others establish a presence in the US. It is already backing projects with leading manufacturers in Kentucky and rural Texas.
Apple works with over 9,000 American suppliers – large and small businesses in all 50 states – and each of Apple’s core products relies on parts or materials made in the US or provided by US-based suppliers.
Preparing Students for the App Economy
Apple, which has a 40-year history in education, also plans to accelerate its efforts across the US in support of coding education as well as programs focused on Science, Technology, Engineering, Arts and Maths (STEAM).
The iOS app economy has created more than 1.6 million jobs in the US and generated $US5 billion in revenue for American app developers in 2017. With demand for coding skills stronger than ever, today there are more than 500,000 unfilled programming-related positions across the country, and the US Bureau of Labour Statistics predicts that by 2020 there will be 1.4 million more software development jobs than applicants qualified to fill them.
To address the coding skills gap and help prepare more people for jobs in software development, Apple created a powerful yet easy-to-learn coding language called Swift, the free Swift Playgrounds app and a free curriculum, App Development with Swift, which are available to anyone and are already being used by millions of students at K-12 schools, summer camps and leading community colleges across the country. Over 100,000 students and teachers have also attended coding classes at Apple retail stores.
Apple will expand these initiatives and add new programs to support teachers and teacher training. The company is also increasing funding for its ConnectED program, so students in historically underserved communities have a chance to learn app coding skills and enjoy other benefits of technology in the classroom.