Recent Apple Cost-Saving Measures Include Delaying Bonuses And Limiting Hiring

In an effort to consolidate operations during uncertain times, Apple Inc. has decided to delay bonuses for some corporate divisions and expand a cost-cutting program, joining Silicon Valley peers in attempting to streamline operations during uncertain times, according to sources who are familiar with the matter.

‍

It is expected that Apple's corporate workforce will receive fewer bonuses as a result of the change, according to the people, who asked not to be identified since the plan has yet to be revealed publicly. On top of that, the company is limiting the number of job openings it will fill and leaving additional positions open when employees leave the company. 

‍

Apple used to offer bonuses and promotions once or twice a year, depending on the division. It usually happens in April and October for the twice-a-year teams. In the new plan, that group will not receive bonuses or promotions next month, and all divisions will only receive payments in October.

‍

Apple had already moved most of its divisions to a once-a-year bonus and promotion schedule, including software engineering and services, but operations, corporate retail, and other groups remained on a biannual plan.

‍

The world's most valuable company, Apple, began a belt-tightening effort last July as a result of galloping inflation and recession fears that prompted it to assume a more cautious stance regarding the economy. While Apple has avoided mass layoffs currently underway at most of its tech peers, it has cut budgets, lowered headcount goals, and paused hiring across a number of its divisions to cut costs.

‍

Apple Suffers Sales Slowdown This Year

‍

Fiscal 2023 is expected to be a challenging year after a run-up in pandemic-related revenue.

‍

Apple shares pared their gains after Bloomberg reported the news on Tuesday, dropping to a session low as a result. There was a 0.3% rise in the stock to $150.96 as of 1:48 p.m. in New York. 

‍

It is still expected that employees will receive their full bonuses, but they will only receive one installment as opposed to two. In spite of that, the change may come as a shock to some staff members, especially as Apple hasn't provided much notice as far as some employees are concerned. Often, workers rely on such bonuses as part of their personal budgeting process. It is also possible that the move will help retain employees that may have planned to leave the company after receiving the April payout after receiving the payout in April. 

‍

The move applies to engineers and other non-managers, as well as mid-level managers, but not to senior employees above the director level. Apple's highest-ranking employees typically receive their bonuses quarterly. The Cupertino-based company spokesman declined to comment.

‍

Sales are slowing down at Apple, adding pressure to its lean operations. Despite snags in iPhone production and sluggish demand for Macs and wearable devices, revenue declined 5% in the holiday quarter, a steeper drop than Wall Street anticipated. Current sales are expected to decline by a similar amount.

‍

Tim Cook, Apple's chief executive officer, made a statement during Apple's shareholder meeting last week in which he said the company continues to take special care with its funds.

‍

“It is our commitment to being very prudent and thoughtful when it comes to spending and we continue to take a very deliberate approach when it comes to hiring," he explained to shareholders. There was a decline in operating expenses in the holiday quarter that was below guidance, and the rate of growth was slower than in previous years, Cook noted. Apple, however, continues to “invest in innovation,” he added.

‍

Apple has, as part of this more prudent approach to spending, reined in its travel budget and is now requiring senior vice president approval - the second highest level of an executive at the company below the CEO and operating chief - in order to approve more budget items. It has also laid off some contract workers across the company as well.

‍

While Apple employees have faced deep cuts, they are generally in a better position than their counterparts at Meta Platforms Inc. and Alphabet Inc.'s Google. Due to Apple's careful hiring and spending during the pandemic, it has been able to avoid layoffs.

‍

Apple Hired More Moderately Than Tech Peers During Pandemic

‍

Staff growth hasn't been outsized at the company.

‍

Cook is taking a pay cut as part of the move, as part of which he will be taking a pay cut on his own. Apple announced in January that the compensation he will receive for his work in 2023 will fall by more than 40%, to about $49 million. At Apple's annual meeting last Friday, shareholders approved the pay packages for Apple's executive team. 

‍

Besides trimming costs, Apple's human resources department has been examining how often employees come to work. Apple's current policy requires employees to work from an Apple building three times a week - a policy that was contentious last year. There are now concerns among some employees that the increased scrutiny on office attendance might lead to the company terminating workers who aren't in the office three days a week. 

‍

Apple's retail staff has been affected by the concerns. Many of these employees reported that stores are scrutinizing hours worked and attendance more closely. In addition, some part-time employees who work in the retail industry have complained that they feel as if they are being encouraged to quit because they are asked to work more hours and days than they agreed to when they were hired.

‍