According to sources, Apple is delaying bonuses for some company divisions and expanding cost-cutting in uncertain times.
The people, who requested anonymity because the plan hasn’t been disclosed, said the shift will reduce bonuses for a portion of Apple’s corporate staff. The firm also limits hiring and leaves open positions when employees leave.
Apple used to give bonuses and promotions twice a year, based on the division. April and October were typical for twice-yearly teams. That group won’t get bonuses or promotions next month, and all sections will switch to an annual schedule with payments in October.
Operations, corporate retail, and other sections were still on the biannual bonus and promotion schedule, but software engineering and services had already switched.
Apple, the world’s most valuable firm, tightened its belt last July due to rising inflation and recession fears. The iPhone maker has cut budgets, headcount goals, and hiring across several sectors, but it has avoided mass layoffs like most tech companies.
Apple fell to a session low after Bloomberg reported the news on Tuesday. The price rose 0.3% to $150.96 at 1:48 p.m. in New York.
Instead of two installments, employees will receive their full pay. However, Apple’s lack of notice may hurt staff. Workers budget with such awards. The move may also help retain employees who planned to quit after the April payout.
Engineers and mid-level managers are affected, but directors and above are not. Top Apple workers receive bonuses quarterly. A Cupertino-based company spokesman refused to comment.
Apple must cut costs due to a sales slump. iPhone production issues and weak Mac and wearable gadget sales lowered holiday quarter revenue by 5%, more than Wall Street expected. Current sales are likely to drop similarly.
Last week at Apple’s shareholder meeting, CEO Tim Cook said the firm remains frugal.
“We’re very prudent and thoughtful on spending and we continue to be very deliberate when it comes to hiring,” he told stockholders. Cook noted that holiday quarter operating costs were below guidance and grew more slowly. Still, Apple “invests in innovation.”
Apple has cut travel funds and now needs the senior vice president’s approval for more budget items. It also fired contract staff.
Apple workers have fared better than those at Meta Platforms Inc. and Alphabet Inc.’s Google, which have cut deeply. Apple avoided cuts during the pandemic by hiring and spending more cautiously.
Cook is also cutting his pay. Apple cut his 2023 pay by 40% to $49 million in January. Apple shareholders accepted executive pay packages last Friday.
Apple’s HR staff is also monitoring employee attendance to cut costs. Last year’s controversial policy forced employees to work from an Apple building three times a week. Some employees worry that the company will fire those who miss three days a week due to the increased focus on office attendance.
Apple store employees are worried. Several workers said stores are increasingly monitoring hours and attendance. Part-time retail workers say being urged to work more hours and days than they agreed to encourage them to quit.