Apple is limiting hiring and pausing bonuses for workers company-wide in an effort to reduce costs.
Key Details
- Apple faced a 5% revenue decline during the holiday quarter and is expected to face another similar decrease over the next quarter and is having to make budget cuts.
- Apple typically gave bonuses to certain divisions twice a year, but now all bonuses and promotions have been reduced to only being offered once in October.
- The company has also paused hiring and reduced budgets company-wide to avoid any future layoffs.
Why it’s news
Apple did not layoff many like many other large companies in the tech sector did, but the computer giant has paused hiring to reduce costs and avoid layoffs.
The economic outlook has been dark as inflation has risen prices and recession fears loom. The poor outlook has affected many businesses, including tech giant Apple.
As inflation continues, many consumers have limited their spending to only buying necessities and leaving out luxuries such as phone, watch, and computer upgrades, hurting Apple.
Nearly 60% of Americans who own a smartphone have an Apple product, according to Statista data. Many consumers who own an Apple product aren’t getting the newest version as they save money to afford daily necessities.
The pause in technology purchasing has led Apple to make budget cuts company-wide, including pausing hiring and bonuses.
“We’re being very prudent and thoughtful on spending, and we continue to be very deliberate when it comes to hiring,” says CEO Tim Cook.
The company moved most bonus schedules to annual pay, but some sectors received bonuses bi-annually. The company moved everyone to the once-a-year plan in the latest budget cuts.
The employees who relied on the twice-per-year bonus feel snubbed, as many reported not receiving notice that the bonus schedule was being redacted. Some believe Apple moved the budget payout so employees would not leave after receiving this quarter’s pay.
The budget cuts have even affected CEO Tim Cook, who is taking a pay cut to lessen spending. The company recently announced that his pay for 2023 would fall by more than 40% to about $49 million.
