Apple’s Cupertino-Based Employees Earned $2 Billion in 2012

| Analysis

Apple released a report on the economic impact of its operations on Cupertino, Santa Clara, Sunnyvale, and the greater Santa Clara County on Tuesday. Amongst the factoids in the report is the fact that employees based in Cupertino collectively earned US$2 billion in 2012.

Money Money Money

Note that employees based in Cupertino don't include any retail employees save the relatively small staff that mans the company's corporate store on Infinite Loop. Apple doesn't have an Apple Store based in Cupertino, though the Cupertino city council is keen on getting one.

Apple said it's the second largest employer in Silicon Valley. Though it didn't name who it thinks is larger, Google and Intel are two companies with total headcounts larger than Apple's, and both companies have a heavy concentration of staff in the Silicon Valley area.

OK, we're kidding. It's Google.

Some 16,000 people work in Apple's Cupertino offices—3,000 of them at Infinite Loop and another 13,000 at leased space throughout the city. The company said that its headcount in Cupertino has increased an average of 18 percent each year for the last five years.

Going forward, however, Apple said it planning a more conservative 10 percent annual growth rate through the year 2016, when will have a local headcount of 23,400. Apple's so-called "UFO" headquarters is expected to be complete in 2016 and house 13,000 employees. Another 1,320 employees will be added to a "Phase 2" building that wasn't factored into this report.

For perspective, here's a map included in the map that shows the scope of Apple's two main campuses.

Apple Campuses

Click the map for a larger version

Apple's 16,000 employees are 40 percent of Cupertino's job base. Once Apple Campus 2 is completed, Apple said it will support more than 24,000 jobs in Cupertino counting "indirect and induced impacts." Looking at the broader Santa Clara County, Apple said it will be supporting 41,100 jobs.

When the UFO takes off, Apple said that its Cupertino-based employees will earn a collective $2.9 billion. That's a lot of moolah being spent in the Silicon Valley area, and Apple also claimed that it made $4.6 billion in purchases from 700 Silicon Valley-based businesses.

"Including the multiplier effect of its purchases on other local businesses down the supply chain, Apple generated about $5.9 billion of gross sales for non-Apple businesses in the three cities in 2011/12," Apple wrote in its report. "With the increased employment afforded by Apple Campus 2, local business revenues generated by Apple Campus 2 are expected at about $8.6 billion."

Taxes

Speaking of taxes, Apple said that it contributed $9.2 million in annual tax revenues to the city of Cupertino in fiscal 2012 and 2013. Apple said that was 18 percent of Cupertino's annual General Fund Budget.

Additionally, Apple said it generated $6.5 million of sales and use taxes for Cupertino, which is 45 percent of those kind of taxes that Cupertino collected in fiscal 2011 and 2012.

But wait, there's more: If you look at all the property that Apple leased, the company said that it generated some $25 million in local property taxes. That includes money collected by, "the City of Cupertino, local schools, the Santa Clara County Library, the Central Fire Protection District, Santa Clara County, and other local service/taxing agencies."

Some of that money will shift to Apple Campus 2 when it comes online in 2016, and Apple said it expects to generate an additional $32 million per year in property taxes from the new location. If you then combine indirect property taxes and property taxes paid directly by Apple, the company said it will be contributing $50 million per year.

Construction

In building Apple Campus 2, Apple said that some 9,200 construction-related full-time jobs. If you look at the "indirect and induced impacts" from that construction process, "Apple Campus 2 will generate 12,600 full-time jobs in Santa Clara County over the construction period."

At the same time, Apple said the construction process will generate, "an unprecedented amount of 'one-time' revenues to the City of Cupertino in the form of construction taxes and fees, totaling approximately $38.1 million."

Public Improvements

Apple said that it will fund over $66 million in public improvements.

"These include $50.2 million of roadway, traffic, intersection, landscape and utility improvements, $10 million of bicycle and pedestrian facilities, $3.7 million in park land, and a $2.5 million dollar contribution for affordable housing," Apple said.

The company said it will also, "spend approximately $35 million on a transportation demand management program" as part of its "alternative commute program."

So What?

Apple is a huge company, and while this may not be clear to those living outside of the Bay Area, Cupertino is a small town. Most of Silicon Valley is made up of relatively small towns. Mountain View is a small town, Santa Clara and Sunnyvale are small towns.

These small towns look like one huge big city when you're driving through the South Bay, but each is a political entity unto its own.

That makes companies like Google, Apple, Intel, Facebook, and even HP very big deals to the local economies. Apple contributing 18 percent of Cupertino's total budget is a big deal to Cupertino, even if it's a tiny part of Apple's annual revenues.

That's the message Apple wanted to deliver by releasing this report. It's a message mostly meant for locals, and maybe for other cities around the U.S. where Apple is building new operations.

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