Apple, Inc. (NASDAQ: AAPL) is undertaking a series of calculated steps to mitigate its operational expenses in light of the current economic climate marked by unprecedented uncertainty and volatility. According to Bloomberg, the Cupertino giant intends to delay bonuses for some of its corporate divisions and limit hiring while also ramping up its existing cost-cutting efforts.
In an effort to control costs, Apple has put a pause on hiring for most positions outside of research and development towards the end of 2022, following a slowdown in hiring and spending in July 2022. Although certain teams focused on upcoming devices and long-term initiatives were exempt from the hiring freeze at the time, now it applies to a broader range of job roles.
Apart from scaling back on hiring, Apple is taking steps to minimize the frequency of bonuses for its corporate workforce. Typically, the tech giant offers bonuses and promotions once or twice per year based on the division, with extra compensation disbursed in April and October. However, the company has decided to transition entirely to an annual bonus schedule.
However, all teams will receive their full bonuses in October of this year, just in one instalment rather than two. This decision underscores Apple’s determination to manage its resources while valuing and rewarding its employees prudently.
Apple’s CEO, Tim Cook, is set to receive a significantly reduced package this year. As per reports, Cook will receive a total of $50 million in the form of salary, bonuses, and stock awards, a stark decline from the impressive $99 million he received last year.
Despite the pay cut, Cook remains a highly respected and accomplished leader who continues to steer Apple towards a successful and profitable future.
Apple’s cost-cutting measures and their impact on employees
Apple’s decision to cut down on bonus payments will not affect the total amount of bonus that employees are entitled to receive. Despite the move towards a single annual bonus payout, the Cupertino giant remains committed to ensuring that its workforce gets a fair bonus for their contributions to the company’s success.
In November 2022, Apple reduced hiring activity, taking a cautious and deliberate approach in some business areas.
In addition, the Cupertino giant has reportedly cut down on travel expenditures for its teams as part of its ongoing cost-control initiatives. This requires the company’s senior vice presidents to approve more budget items.
Apart from reducing costs, Apple’s human resources division has been closely examining the frequency of employees’ office attendance. The company mandates its staff to work from the office at least three days a week. This policy had raised concerns among several employees when it was initially introduced last year. Several employees now worry that the company’s heightened focus on office attendance is a prelude to potential job cuts for those who fail to meet the three-day-a-week requirement.
Till now, Apple has managed to avoid any layoffs within the company, despite implementing various cost-cutting measures. It is worth noting, however, that some contractors have been laid off as part of these efforts. On the other hand, other tech giants such as Twitter, Facebook, and Google have all recently implemented layoffs for various reasons.
Meta announced further job cuts to improve its “financial performance in a difficult environment”. “We expect to reduce our team size by around 10,000 people and to close around 5,000 additional open roles that we haven’t yet hired,” said CEO Mark Zuckerberg. This is in addition to the 11,000 employees the tech giant fired just months ago.
Apple reported a 5% YoY decline in revenue during the first fiscal quarter of 2023. The company is expecting a significant decrease in revenue from its Mac and iPad products for the second fiscal quarter, leading to a similar sales performance. Despite these challenges, Apple remains steadfast in its commitment to managing its finances prudently and charting a path to sustainable growth.
Apple’s revolutionary cost-cutting strategies have shown that a company can make necessary financial adjustments without laying off employees. By implementing bonus payment changes and a hiring freeze, Apple has demonstrated that they value their employees and are willing to take bold steps to protect their jobs during challenging times. This approach not only helps the company save money but also maintains employee morale and loyalty.
Apple’s move is a wise example for other companies to follow, demonstrating that there are alternative ways to cut costs without sacrificing employee welfare. Investing in the workforce and finding innovative solutions can lead to a sustainable future for the business, its employees, and the broader community.