As Apple’s acquisition of Beats Electronics and Beats Music nears completion this financial quarter, the Cupertino and Culver City, California-based companies have begun work on transitioning select employees and technology resources from Beats to Apple, according to sources briefed on the transition. Apple executives have visited Beats’ Southern California headquarters this week and last week to offer groups of employees positions at Apple and to notify some members of the Beats staff that they will not be included in the transition.
Many Beats employees in development and creative roles have been offered positions at Apple. Many of these employees will be offered space in Apple’s Cupertino offices, but Apple is said to plan to retain the Los Angeles-area offices, and select engineers on the Beats Music streaming service will continue working out of Southern California. An email from Apple CEO Tim Cook detailed earlier this year that Beats hardware employees would transition to Phil Schiller’s team in Cupertino, so it seems likely that the headphone and speaker makers will make up the majority of the new Cupertino staff…
Beats employees in certain overhead positions, however, are said to not be so lucky. Beats’ support, finance and HR departments are said to have already been largely dismantled, with some workers being laid off in the past few weeks, a few offered definite positions in Cupertino, and others being offered positions until the end of January 2015. Apple is said to have this week set up a dedicated phone hotline for Beats employees to speak with Apple Human Resources staff about severance packages or transition plans.
Besides the transitioning of employees, Apple has begun work on transitioning the Beats Music technology to its own iTunes infrastructure. According to sources, the Beats technology is not easily compatible with Apple’s existing servers, so it is likely that parts of Beats Music will need to be re-architected in the near-future.
Apple confirmed our report on July 31st with a statement. “We’re excited to have the Beats team join Apple, and we have extended job offers to every Beats employee,” an Apple spokesperson said. “Because of some overlap in our operations, some offers are for a limited period and we’ll work hard during this time to find as many of these Beats employees as we can another permanent job within Apple,” the spokesperson added.
As for Beats’ top executive brass, both co-founders Jimmy Iovine and Dr. Dre have committed to working at Apple in some capacity for the foreseeable future. While, there is still some uncertainty regarding the fate of Beats Chief Creative Officer Trent Reznor, and Beats Music CEO Ian Rogers, sources say that the pair of executives will, in fact, join Apple upon the closing of the acquisition on August 1st. Apple and Beats announced their merger earlier this year with the goal of improving Apple’s music services. Apple currently offers the Pandora-like iTunes Radio service, the iTunes Store, and iTunes Match, but as services like Spotify and Rdio continue growing in popularity, it is important for Apple to move forward with a true streaming service such as Beats by way of bringing on the best possible personnel and technology resources.
Seth Weintraub contributed to this report.
Top image via Re/Code.