Fewer bonuses for Apple staff in latest cost-cutting measure
Don't worry about Tim – executive's rewards are reportedly unaffected. Phew
Apple still isn't giving into Silicon Valley peer pressure to lay off swaths of its staff to cut costs, and is instead reportedly extending its hiring freeze and changing the way it awards employee bonuses.
The change is expected to see some Apple divisions switch from a twice-a-year bonus to an annual payout schedule, extend hiring freezes to other divisions, and leave more positions open if and when folks leave.
Bloomberg, which cited sources who wished to remain anonymous since Apple hadn't made its plans public, said that bonuses won't be shrinking – they'd simply be awarded in a single lump sum. Apple has classically paid bonuses in April and October, it said, and some divisions have already shifted to an annual model.
Groups being transitioned to the annual bonus plan include operations and corporate retail, sources from Apple told the newswire, which also relayed that Apple employees at the director level and above, who typically receive quarterly bonus payouts, aren't affected by this latest cost-savings measure.
We'll save your little money for our rainy day
Given the current state of the tech industry it makes sense Apple would want to save those employee bonuses given the storms forecasted for Silicon Valley's immediate future: By kicking the can down the road a couple of quarters Apple can report more money in the bank, after all.
In its latest earnings reported in early February, Apple said quarterly revenue of $117.2 billion was 5 percent lower than it was last year in the same quarter. CEO Tim Cook described the current commercial environment as "challenging," but noted Apple still set an all-time revenue record in its growing Services side during Q1 2023.
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Apple started cutting costs in earnest last July when it announced a hiring freeze across several divisions. The company has since laid off thousands of contractors, which it seems to have decided to do in lieu of laying off permanent staff, a move it still hasn't taken.
Apple staff have fared relatively well compared to some of their regional brethren, who've been laid off by the thousands since things got gloomy in the Valley as the pandemic earnings boom gave way to a different commercial reality.
Reducing bonuses to a single payout in October, however, could be seen as a way to get people to leave on their own accord. Sure, that bonus is safe in Apple's coffers until October – if the person it's allocated for still works there in half a year. So far, so good, but Apple appears to be battening the hatches for rough weather, and layoffs could still be in the company's future.
Even poor Tim Cook is taking a 40 percent pay cut, meaning he'll earn just $49 million this year – with an assumedly intact quarterly bonus, of course, which we'd love to rule out if Apple would respond to our emails. ®