Layoffs Soon? Tech Giant Apple Joins Cost-Cutting Club With Delayed Bonuses And Hiring Freeze?

The world¡¯s most valuable company, Apple, which has so far been an exception among the tech giants who have conducted mass layoffs in recent months, seems to be getting closer to joining the list.

Hiring Freeze & Bonus Delays At Apple

bloomberg

In its latest efforts to trim costs, Apple is delaying bonuses for some corporate divisions, thus joining other tech giants such as Google, Meta and Microsoft in trying to streamline operations during uncertain times, according to people with knowledge of the situation.

The cost cutting efforts will reduce the frequency of bonuses for a portion of Apple¡¯s corporate workforce, said the people, as per a Bloomberg report. Separately, the company is also freezing hiring for more jobs and leaving additional positions open when employees depart.

In the past, Apple typically used to give out bonuses and promotions once or twice per year, depending on the division. The twice-a-year teams usually saw that happen in April and October. Under the new plan, that group won¡¯t see bonuses or promotions next month, and all divisions will move to an annual schedule, with payments occurring only in October.

The majority of Apple¡¯s divisions had already moved to a once-a-year schedule for bonuses and promotions, including software engineering and services, but staff in operations, corporate retail, and other groups had still been on the outgoing biannual plan.

Also Read: Explained: How Apple Is Becoming More Like A Bank

Employees To Get Bonuses In 2 Installments

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Apple employees are still slated to receive their full bonuses, just in one installment rather than two. Even so, the change could come as a blow to staff, especially because Apple hasn¡¯t provided much advance notice in some cases. Workers often count on such bonuses for their personal budgeting. The move could also potentially help retain employees who may have planned to leave the company after receiving the April payout.

This move reportedly applies to engineers and other non-managers, as well as mid-level managers, but not senior employees at the director level and above. Apple¡¯s highest-ranking employees typically see their bonuses paid quarterly.

"Apple Continues To Be Careful With Money"

Reuters

Tech giant Apple has been facing a sales slowdown, adding pressure to keep its operations lean. Revenue declined 5% during the holiday quarter, a steeper drop than Wall Street projected, hurt by iPhone production snags and sluggish demand for Macs and wearable devices. Sales are expected to fall by a similar amount in the current period, as per the Bloomberg report.

During Apple¡¯s shareholder meeting last week, CEO Tim Cook said the company continues to be especially careful with money.

¡°We¡¯re being very prudent and thoughtful on spending, and we continue to be very deliberate when it comes to hiring," said Tim Cook to shareholders. Operating expenses during the holiday quarter came in below guidance and grew more slowly than in the past, Cook noted. Still, he added that Apple continues to ¡°invest in innovation."

Apple's Efforts To Avoid Mass Layoffs

Apple began a belt-tightening effort in July last year, when galloping inflation and recession fears spurred it to take a more cautious stance. The tech giant has so far avoided the kind of mass layoffs underway at most of its tech peers, but it has reduced budgets, cut headcount goals and frozen hiring across several divisions.

As part of this more cautious approach to spending, Apple has reined in travel budgets and is now requiring senior vice president approval ¡ª the highest executive level at the company below the CEO and operating chief ¡ª for more budget items. It also laid off some contract workers across the company.

Still, Apple employees have generally been in a less precarious position than those at other big Silicon Valley companies, such as Meta Platforms Inc. and Alphabet Inc.¡¯s Google, which have undergone deep cuts. Apple has been able to avoid layoffs in part because it was more measured in its hiring and spending during the pandemic.

As part of the moves, CEO Tim Cook is taking a 50% pay cut himself. In January, Apple announced that his compensation for 2023 would fall to about $49 million. Shareholders approved executive pay packages at Apple¡¯s annual meeting last Friday., as per the report.

In addition to trimming costs, Apple¡¯s human resources department has been taking a closer look at how often employees come to the office. The company¡¯s current policy requires employees to work from an Apple building three times per week ¡ª a policy that was contentious when imposed last year. Some staffers are now worried that the increased scrutiny on office attendance is a precursor to the company firing workers who don¡¯t meet the three-days-a-week threshold.

Also Read: How A Lost iPhone Led To Warren Buffett Investing Billions In Apple

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