Apple has thus far been lauded for a deliberate hiring approach that saved the company from the mass layoffs conducted by top competitors like Alphabet and Amazon. But not even the iPhone maker is immune from economic headwinds. In quarterly earnings posted today, the company notched its first year-over-year loss since before the pandemic.

The company’s quarterly revenue, for the quarter ending December 31, 2022, was $117.2 billion, down 5% year over year, according to a release tied to the news. 

CEO Tim Cook attempted to accentuate the positive in the earnings report. “As we all continue to navigate a challenging environment, we are proud to have our best lineup of products and services ever, and as always, we remain focused on the long term and are leading with our values in everything we do,” Cook wrote.

The executive opened up a bit more in an interview with CNBC, noting a trio of key headwinds, including iPhone production issues in China, the broader economic climate and the strength of the U.S. dollar. He noted that Apple, much like the rest of the world, will be making strategic cutbacks. “We’re also recognizing the environment that we’re in is tough,” Cook added. “And so we’re cutting costs. We’re cutting hiring, we’re being very prudent and deliberate on people that we hire.”

After enjoying boosted hardware sales over the pandemic as people restructured their professional and school lives during a relative economic boom time, the company is now seeing that sales activity fall off. The last quarter represented the biggest drop in quarterly revenue for the company since 2016.

Mac and iPad revenue dropped nearly 30% each from the previous year, while revenue for the iPhone was down 8%. Supply chain and manufacturing issues have created a major bottleneck for the handset in recent year. Meanwhile, a new wave of lockdowns in China exacerbated issues during what is traditionally the company’s most profitable time of year. Apple says it is now comfortable with iPhone production levels.

Last month the company announced that Cook would receive a nearly 50% pay cut for the year, pulling in a mere $49 million annual salary.

With Cook’s latest comments around strategic cutbacks, matched with what we now know about company’s financial performance, it’s fair to wonder if workforce reductions are coming for the company. What we do know is just how hard the macroeconomic environment has been on the hardware giant — which, per its latest milestone, has more than 2 billion active devices in its installed base.