Apple Intensifies Cost-Cutting Efforts, Delays Bonuses For Employees Amid Sales Slowdown

Apple began a belt-tightening effort last July, reducing budgets, cutting headcount goals, and freezing hiring across several divisions.

Apple is reportedly delaying bonuses for some corporate divisions and intensifying its cost-cutting efforts as the company aims to streamline operations in the face of uncertain times. The move will reduce the frequency of bonuses for some of the company's corporate workforce, reports Bloomberg. Apple typically distributes bonuses and promotions once or twice per year, depending on the division. However, the majority of Apple's divisions have already moved to a once-a-year schedule for bonuses and promotions, including software engineering and services, while staff in operations, corporate retail, and other groups had still been on the outgoing biannual plan.

Apple began a belt-tightening effort last July, reducing budgets, cutting headcount goals, and freezing hiring across several divisions as it sought to take a more cautious stance in the face of galloping inflation and recession fears. The company has avoided the mass layoffs currently taking place at many of its tech peers. Still, the change in the bonus payment schedule could come as a blow to employees, who often rely on such bonuses for their personal budgeting. The move could also potentially help retain employees who may have planned to leave the company after receiving the April payout.

The change applies to engineers and other non-managers as well as mid-level managers but not senior employees at the director level and above, who typically see their bonuses paid quarterly. Apple's highest-ranking employees are not affected. A spokesman for the Cupertino-based company declined to comment.

Apple is facing a sales slowdown, adding pressure to keep its operations lean. Revenue declined 5 percent during the holiday quarter, a steeper drop than Wall Street projected, hurt by iPhone production snags and sluggish demand for Macs and wearable devices. Sales are expected to fall by a similar amount in the current period.

As part of a more cautious approach to spending, Apple has reined in travel budgets and is now requiring senior vice president approval for more budget items. It has also laid off some contract workers across the company. Apple CEO Tim Cook said the company continues to be especially careful with money, adding that operating expenses during the holiday quarter came in below guidance and grew more slowly than in the past.

In addition to trimming costs, Apple's HR department has been taking a closer look at how often employees come to the office. The company's current policy requires employees to work from an Apple building three times per week. Some employees are now worried that the increased scrutiny on office attendance is a precursor to the company firing workers who don't meet the three-days-a-week threshold.

The concerns have spread to Apple's retail staff, with several employees saying that stores are increasingly scrutinizing hours worked and attendance. Some part-time retail employees have said they feel like they're being encouraged to quit by being asked to work more hours and days than they agreed to when they were hired.

As part of its cost-cutting measures, Cook is also taking a pay cut himself. In January, Apple announced that his compensation for 2023 would fall by more than 40 percent to about $49 million. Shareholders approved executive pay packages at Apple's annual meeting last Friday.

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