AAPL Apple Inc

By Timothy W. Martin and Yoko Kubota 

Apple Inc. plans to invest $1 billion building a new corporate campus in Austin, Texas, that could eventually create 15,000 jobs, the company said Thursday, as the iPhone maker seeks to make good on its promises to strengthen its contributions to the American economy.

The Cupertino, Calif.-based technology giant said it would also establish new offices in three cities--Seattle, San Diego and Culver City, Calif.--where it would add more than 1,000 employees in each place. Over the next three years, Apple said it would add hundreds of jobs in cities including New York, Boston and Portland, Ore.

Apple's new campus in Austin, where the company already has two large offices, will initially hire 5,000 workers. That total could triple in future years, Apple said.

"Talent, creativity and tomorrow's breakthrough ideas aren't limited by region or zip code, and, with this new expansion, we're redoubling our commitment to cultivating the high-tech sector and workforce nationwide, " Apple CEO Tim Cook said in a news release announcing the move.

Earlier this year, Apple said it would invest $30 billion in capital spending in the U.S. over five years, creating more than 20,000 jobs. That sum included a new campus, which initially will house technical support for customers, and $10 billion toward data centers across the country.

Mr. Cook has been under pressure by President Donald Trump over the company's outsourcing of the iPhone and other devices' production to factories in China. In an interview with The Wall Street Journal in 2017, Mr. Trump said Mr. Cook has committed to building three big manufacturing plants in the U.S.

Apple shares have sunk more than 25% since early October, shedding more than $300 billion in market value, driven in part by investors' concerns about the future of the iPhone. Consumers are holding on to their devices longer and resisting price tags soaring past $1,000, causing smartphone sales to slide this year.

Since Apple's January announcement about plans for a new campus to house technical support staff, it has said little about the search effort--in contrast with Amazon.com Inc.'s well-publicized effort to find a second headquarters city. The e-commerce giant last month picked New York City and northern Virginia, attracting billions of dollars in investments and the prospect of 50,000 jobs.

Apple says it employs 90,000 people in the U.S. and has added 6,000 jobs to the American workforce this year.

The new 133-acre Austin campus will be located less than a mile from Apple's existing facilities. The tech giant is no stranger to the city, where it already employs 6,200 people, the largest group of employees outside of its Cupertino headquarters. Newly created jobs will be in areas such as engineering, finance and sales, Apple said.

The Austin area is also home to Dell Technologies Inc., while chip giant NXP Semiconductors NV has a major presence there after buying Freescale Semiconductor in 2015. Many videogame companies have studios around the Texas capital, which has a population of roughly 950,000.

Kylie Huang, a Taiwan-based analyst at Daiwa Capital Markets, said the U.S. job expansions won't likely have a significant effect on Apple's supply chain. "I think it's more a gesture" that shows Apple's intention to invest more into the U.S., Ms. Huang said.

Most of Apple's devices, including the iPhone and iPad, are assembled in China by its contract manufacturers such as Taiwan-based Foxconn Technology--formally known as Hon Hai Precision Industry Co.--and Pegatron Corp.

Analysts and people familiar with Apple's operations say it is not easy to shift production out of China. Much of the electronics supply chain is based in China and neighboring countries, and the assembling of the iPhones still rely on the hands of hundreds of thousands of workers. To shift iPhone production to the U.S. from China would mean Apple must secure an army of seasonal workers capable of doing precision assembly--not an easy task, they said.

The Thursday release didn't mention whether Apple had received any tax incentives to locate its campus in Austin. In 2012, Apple unveiled plans to roughly double its workforce in Austin, adding 3,600 jobs over the next 10 years.

Stu Woo contributed to this article.

Write to Timothy W. Martin at timothy.martin@wsj.com and Yoko Kubota at yoko.kubota@wsj.com

(END) Dow Jones Newswires

December 13, 2018 06:44 ET (11:44 GMT)

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