According to people familiar with the issue, Apple Inc. is deferring bonuses for some corporate divisions and expanding a cost-cutting drive, joining Silicon Valley counterparts in attempting to streamline operations during uncertain times. According to the people, who asked not to be identified because the plan has not yet been implemented, the change will lower the frequency of incentives for a segment of Apple’s corporate personnel.
Apple used to give out incentives and promotions once or twice a year, depending on the division
Apple used to give out incentives and promotions once or twice a year, depending on the division. It was typical for the twice-yearly teams in April and October. According to the new plan, that group will not receive any bonuses or promotions next month, and all divisions will transition to an annual schedule, with payouts coming only in October.
The majority of Apple’s divisions, including software engineering and services, had already transitioned to a once-a-year timetable for bonuses and promotions, but employees in operations, corporate retail, and other departments were still on the previous biannual schedule. Apple, the world’s most valuable business, began a belt-tightening exercise in July when skyrocketing inflation and economic fears prompted it to take a more cautious approach. The iPhone maker has avoided the major layoffs that are happening at most of its industry contemporaries, but it has trimmed budgets, reduced headcount goals, and delayed hiring across multiple businesses.
The company’s shares dropped to a session low after Bloomberg published the news on Tuesday
Apple shares dropped to a session low after Bloomberg published the news on Tuesday. As of 1:48 p.m., the stock was up roughly 0.3% at $150.96. Workers will still receive their entire bonuses, but just in one installment rather than two. Even so, the adjustment may come as a surprise to employees, especially since Apple hasn’t provided any previous notice in certain circumstances. Employees frequently rely on such bonuses to supplement their own budgets. The move may also assist keep staff who had intended to depart the company after collecting their April salary.
Engineers and other non-managers, as well as mid-level managers, are affected by the change, although senior staff at the director level and above are not. Apple’s highest-ranking employees often receive quarterly incentives. The Cupertino, California-based company’s representative declined to comment. Apple’s sales are slowing, putting pressure on the company to keep its operations minimal. Sales fell 5% over the holiday quarter, a larger drop than expected by Wall Street, due to iPhone supply issues and slow demand for Macs and wearable gadgets. In the current quarter, sales are likely to fall by a similar amount.
Apple has also laid off several contract workers within the organization
During Apple’s shareholder meeting last week, Chief Executive Officer 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,” he told shareholders. Operating expenses during the holiday quarter came in below guidance and grew more slowly than in the past, Cook note. Still, he added that Apple continues to “invest in innovation.”
Apple has reduced trip budgets and now requires senior vice president clearance — the highest management level at the business below the CEO and operations chief — for more budget items as part of this more careful approach to spending. It has also laid off several contract workers within the organization.
Still, Apple employees have been in a better situation than those at other major Silicon Valley firms, such as Meta Platforms Inc. and Alphabet Inc.’s Google, which have seen significant layoffs. Apple avoided layoffs in part because it was more cautious in its hiring and spending during the outbreak.
Cook is accepting a wage cut as part of the changes. Apple said in January that his remuneration for 2023 would be reduced by more than 40% to around $49 million. At Apple’s annual meeting on Friday, shareholders approved executive pay packages.
In addition to cutting costs, Apple’s human resources department has been scrutinising how frequently people come to work. The company’s current policy requires workers to work from an Apple building three times each week, which was controversial when it was implemented last year. Some employees are concerned that the heightened focus on office attendance would lead to the corporation terminating employees who do not satisfy the three-day-a-week requirement.
Concerns have spread to Apple’s retail employees. According to several of those employees, stores are aggressively scrutinizing hours worked and attendance. Several part-time retail workers have expressed concern that they are being encouraged to quit by being asked to work more hours and days than they agreed to when employed.