Apple’s Austin hiring slows, but remains well ahead of pace promised as part of incentives deal

Posted December 28th, 2017

Apple Inc.’s pace of hiring tied to its new Northwest Austin campus slowed last year, but local job creation by the tech giant remains well ahead of schedule and it recently collected its first incentives payments from the city and Travis County – totaling a combined $3 million.

The 38-acre campus at West Parmer Lane and Delcour Drive — home to Apple’s Americas Operations Center, which runs many of its corporate functions throughout the northern hemisphere — employed 2,182 people at the end of 2016 who were hired to full-time positions since early 2012, when city, county and state leaders pledged a total of about $35 million in taxpayer-funded incentives to lure the project here. 

RELATED: Take a photo tour of Apple’s Americas Operations Center in Austin

The number of new employees climbed by 93 last year, according to independent accounting reports filed with the city, compared with 609 new jobs added in 2015 and an average annual pace of about 460 since the project’s inception. 

Apple’s long-term incentives agreement with the city — which remains in its early stages — only calls for the company to have added 300 new jobs at the Parmer campus by the end of last year and to have maintained a workforce of 3,100 pre-existing jobs, including contractors but not employees at its retail stores. Under those criteria, the most-recent independent report pegged Apple’s Austin headcount at a total of 5,358 workers at the close of 2016. 

Apple put the figures slightly higher in its own report to the city, saying it had 2,247 new hires at the campus at the end of 2016 and, based on the criteria, an overall Austin headcount of 5,443. 

Regardless, an Apple spokesman downplayed the significance of last year’s slower pace of new hires at the Parmer campus, saying the hiring pace was affected by the capacity of the various campus buildings and when they have been completed. 

The final phase of the seven-building campus — in which Apple already has invested at least $282.5 million — was finished in the summer of 2016. 

Austin Mayor Steve Adler, who was not in office when the city's incentives agreement with Apple was negotiated, said he wasn’t aware of the precise hiring trends for last year but noted that it “makes sense the hiring rate wouldn’t be linear over time” at the facility. 

“What we know is the return the city has received (in the early stages of the deal) has exceeded the return agreed to” by Apple so far, Adler said. “Clearly, they have a really strong presence here — and that’s an understatement.” 

City documents also show that Apple has already met its total investment benchmark of $282.5 million under the city agreement, even though it had until the end of 2021 to do so. 

In addition, an Apple executive wrote in a report to state economic development officials this year that the average annual wage for new hires and contractors at the Austin facility last year topped $73,500, not including benefits. The sum substantially exceeds the city wage target for 2016 of $54,000 annually, as well as the state target of $58,000. 

By the close of 2025, Apple is required under the city deal to have a cumulative total of 3,635 new hires at the Parmer facility, as well as maintaining 3,100 pre-existing jobs. 

The company already has received $15.75 million of $21 million in state incentives money pledged to it through the Texas Enterprise Fund — most recently a $5.25 million payment in July. 

The city, which has earmarked $8.6 million in incentives for the project, made its first payment to the company in late October, totaling $1.4 million. Travis County has paid the company slightly more than $1.5 million this year — including about $857,000 earlier this month — marking the county’s initial payments out of about $6 million set aside for the project. 

Austin economist Angelos Angelou, who headed the Greater Austin Chamber of Commerce recruiting team that brought Apple’s first operations to the city in the early 1990s, called the 2012 incentive agreement that lured its Americas Operations Center “a fantastic deal” for taxpayers. 

“Cities would kill to have an employer like Apple,” Angelou said. “To have attracted a campus from Apple in Austin of over 1 million square feet, and to be employing as many people as they have in the local economy, it was well worth it.” 

An Apple spokesman said this week that the company’s overall Austin workforce currently totals about 6,500, including new hires at the Parmer campus in 2017, employees at its other Austin facilities, retail workers at its local stores and contractors. 

Direct Apple employment in Austin has tripled in the last 10 years, according to the company, making it Apple’s second-largest U.S. hub outside of its headquarters in Cupertino, Calif. 

Apple CEO Tim Cook, who visited the new Austin campus in August, told the American-Statesman at the time that the company aims to continue expanding in the city

“Literally, many, many pieces of our company are here,” Cook said. “The team here is a very critical part of our company, and we’ve been very happy here. Over the years during hard times and great times and all times, we have always wanted to grow here, and we want to continue to grow here.”